Press Release
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Align Technology Announces First Quarter 2023 Financial Results
Delivers revenue and EPS ahead of expectations, with total Invisalign® patients treated surpassing 15 million globally
Completes
- Q1'23 total revenues of
$943.1 million , increased 4.6% sequentially, and diluted net income per share of$1.14 , non-GAAP diluted net income per share of$1.82 - Q1'23 revenues were favorably impacted by foreign exchange of approximately
$25.8 million sequentially and unfavorably impacted by approximately$34.9 million year over year(1) - Q1'23 operating income of
$133.5 million and operating margin of 14.2%, non-GAAP operating margin of 18.5% - Q1'23 GAAP operating margin was favorably impacted by foreign exchange of approximately 1.5 points sequentially and unfavorably impacted by approximately 2.0 points year over year.(1)
- Q1'23 Clear Aligner revenues of
$789.8 million , increased 7.9% sequentially, and Clear Aligner volume of 575.4 thousand cases, decreased 1.4% sequentially - Q1'23 Imaging Systems and CAD/CAM Services revenues of
$153.3 million , decreased 9.7% sequentially - Purchased approximately 942 thousand shares of Align's common stock at an average price of
$307.74 per share for a total purchase price of$290.0 million , completing Align'sMay 13, 2021 $1 Billion Stock Repurchase Program
(1) Non-GAAP measure
Commenting on Align's Q1'23 results,
Financial Summary - First Quarter Fiscal 2023
|
|
Q1'23 |
|
Q4'22 |
|
Q1'22 |
|
Q/Q Change |
|
Y/Y Change |
|||||||||
|
Clear Aligner Shipments |
|
575,395 |
|
|
583,720 |
|
|
598,835 |
|
(1.4 |
)% |
|
|
(3.9 |
)% |
|||
|
GAAP |
|
|
|
|
|
|
|
|
|
|||||||||
|
Net Revenues |
$ |
943.1M |
|
$ |
901.5M |
|
$ |
973.2M |
|
+4.6 |
% |
|
|
(3.1 |
)% |
|||
|
Clear Aligner |
$ |
789.8M |
|
$ |
731.7M |
|
$ |
809.7M |
|
+7.9 |
% |
|
|
(2.5 |
)% |
|||
|
Imaging Systems and CAD/CAM Services |
$ |
153.3M |
|
$ |
169.9M |
|
$ |
163.5M |
|
(9.7 |
)% |
|
|
(6.2 |
)% |
|||
|
Net Income |
$ |
87.8M |
|
$ |
41.8M |
|
$ |
134.3M |
|
+110.2 |
% |
|
|
(34.6 |
)% |
|||
|
Diluted EPS |
$ |
1.14 |
|
$ |
0.54 |
|
$ |
1.70 |
|
|
|
($ |
0.56 |
) |
||||
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|||||||||
|
Net Income |
$ |
140.6M |
|
$ |
134.2M |
|
$ |
178.0M |
|
+4.8 |
% |
|
|
(21.0 |
)% |
|||
|
Diluted EPS |
$ |
1.82 |
|
$ |
1.73 |
|
$ |
2.25 |
|
|
|
($ |
0.43 |
) |
||||
|
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. |
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As of
Q1'23 Announcement Highlights
- On
February 6, 2023 , we announced that we entered into a new ASR agreement withCitibank, N.A ., to repurchase$250.0 million of our common stock under ourMay 13, 2021 ,$1.0 Billion Stock Repurchase Program. In addition to the ASR, Align announced thatJoe Hogan , president and CEO andJohn Morici , CFO and executive vice president, global finance intended to personally purchase$1.0 million and$0.2 million , respectively, of Align's common stock. - On
February 8, 2023 , we announced the appointment of Karim Boussebaa as executive vice president and managing director of iTero scanner and services business. Mr. Boussebaa is an experienced healthcare executive with more than 28 years of industry leadership and a proven track record of innovation and organizational development, and extensive regulatory experience.
Fiscal 2023 Business Outlook
For 2023, Align provides the following business outlook:
- For Q2'23, we anticipate Clear Aligner volume and ASP to be up sequentially. We also anticipate Systems and Services revenue to be up sequentially. We anticipate Q2’23 revenues to be in the range of
$980 million to$1,000 million . We expect our Q2'23 GAAP and Non-GAAP gross margin to be flat to slightly up from Q1’23, and our Q2’23 GAAP and Non-GAAP operating margin to be up by approximately 1 point sequentially, as we continue to strategically prioritize our investments in go-to-market activities and R&D to drive growth. - For full year 2023, assuming no circumstances beyond our control occur, we are reiterating our 2023 GAAP operating margin to be slightly above 16% and our 2023 Non-GAAP operating margin to be slightly above 20%.
- For 2023, we expect investments in capital expenditures to exceed
$200 million . Capital expenditures are expected to primarily relate to building construction and improvements as well as additional manufacturing capacity in support of our continued international expansion.
Align Web Cast and Conference Call
We will host a conference call today,
About Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in
Our management believes that the use of certain non-GAAP financial measures provides meaningful supplemental information regarding our recurring core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the performance of our business.
There are limitations to using non-GAAP financial measures as they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact upon our reported financial results. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges are excluded from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on a GAAP as well as a non-GAAP basis and by providing GAAP measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for or in isolation from, the directly comparable financial measures prepared in accordance with GAAP. We urge investors to review the reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures included herein and not to rely on any single financial measure to evaluate our business. For more information on these non-GAAP financial measures, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
About
For additional information about the Invisalign System or to find an Invisalign doctor in your area, please visit www.invisalign.com. For additional information about the iTero digital scanning system, please visit www.itero.com. For additional information about exocad dental CAD/CAM offerings and a list of exocad reseller partners, please visit www.exocad.com.
Invisalign, iTero, exocad, Align, and Align Digital Platform are trademarks of
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding market opportunities, our ability to deliver products and technologies, anticipated clear aligner volumes and ASP, anticipated Systems and Services revenue, our expectations for Q2'23 revenues, GAAP and Non-GAAP gross margin and GAAP and Non-GAAP operating margin, and 2023 GAAP and Non-GAAP operating margin, as well as capital expenditures. Forward-looking statements contained in this news release relating to expectations about future events or results are based upon information available to Align as of the date hereof. Readers are cautioned that these forward-looking statements reflect our best judgments based on currently known facts and circumstances and are subject to risks, uncertainties, and assumptions that are difficult to predict. As a result, actual results may differ materially and adversely from those expressed in any forward-looking statement.
Factors that might cause such a difference include, but are not limited to:
- macroeconomic conditions, including inflation, fluctuations in currency exchange rates, rising interest rates, market volatility, weakness in general economic conditions and recessions and the impact of efforts by central banks and federal, state and local governments to combat inflation and recession;
- customer and consumer purchasing behavior and changes in consumer spending habits as a result of, among other things, prevailing macro-economic conditions, levels of employment, salaries and wages, debt obligations, discretionary income, inflationary pressure, declining consumer confidence, and the military conflict in
Ukraine ; - the economic and geopolitical ramifications of the military conflict in
Ukraine , including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, any of which may or will continue to adversely impact our operations and research and development activities inside and outside ofRussia ; - variations in our product mix and selling prices regionally and globally;
- the timing and availability and cost of raw materials, components, products and other shipping and supply chain constraints;
- unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
- competition from existing and new competitors;
- rapidly evolving and groundbreaking advances that fundamentally alter the dental industry or the way new and existing customers market and provide products and services to consumers;
- the ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- declines in, or the slowing of the growth of, sales of our clear aligners and intraoral scanners domestically and/or internationally and the impact either would have on the adoption of Invisalign products;
- the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers;
- the possibility that the development and release of new products or enhancements to existing products do not proceed in accordance with the anticipated timeline or may themselves contain bugs, errors or defects in software or hardware requiring remediation and that the market for the sale of these new or enhanced products may not develop as expected;
- a tougher consumer demand environment in
China generally, especially for manufacturers and service providers whose headquarters or primary operations are not based inChina ; - the risks relating to our ability to sustain or increase profitability or revenue growth in future periods (or minimize declines) while controlling expenses;
- expansion of our business and products;
- the impact of excess or constrained capacity at our manufacturing and treat operations facilities and pressure on our internal systems and personnel;
- the compromise of our systems or networks, including any customer and/or patient data contained therein, for any reason;
- the timing of case submissions from our doctor customers within a quarter as well as an increased manufacturing costs per case;
- foreign operational, political, military and other risks relating to our operations; and
- the loss of key personnel, labor shortages or work stoppages for us or our suppliers.
The foregoing and other risks are detailed from time to time in our periodic reports filed with the
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
|
(in thousands, except per share data) |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
2023 |
|
2022 |
||||
|
Net revenues |
|
$ |
943,147 |
|
|
$ |
973,219 |
|
|
Cost of net revenues |
|
|
282,493 |
|
|
|
263,873 |
|
|
Gross profit |
|
|
660,654 |
|
|
|
709,346 |
|
|
Operating expenses: |
|
|
|
|
||||
|
Selling, general and administrative |
|
|
439,691 |
|
|
|
439,457 |
|
|
Research and development |
|
|
87,447 |
|
|
|
71,807 |
|
|
Total operating expenses |
|
|
527,138 |
|
|
|
511,264 |
|
|
Income from operations |
|
|
133,516 |
|
|
|
198,082 |
|
|
Interest income and other income (expense), net: |
|
|
|
|
||||
|
Interest income |
|
|
2,337 |
|
|
|
677 |
|
|
Other income (expense), net |
|
|
(1,229 |
) |
|
|
(11,273 |
) |
|
Total interest income and other income (expense), net |
|
|
1,108 |
|
|
|
(10,596 |
) |
|
Net income before provision for income taxes |
|
|
134,624 |
|
|
|
187,486 |
|
|
Provision for income taxes |
|
|
46,826 |
|
|
|
53,188 |
|
|
Net income |
|
$ |
87,798 |
|
|
$ |
134,298 |
|
|
|
|
|
|
|
||||
|
Net income per share: |
|
|
|
|
||||
|
Basic |
|
$ |
1.14 |
|
|
$ |
1.71 |
|
|
Diluted |
|
$ |
1.14 |
|
|
$ |
1.70 |
|
|
Shares used in computing net income per share: |
|
|
|
|
||||
|
Basic |
|
|
76,921 |
|
|
|
78,742 |
|
|
Diluted |
|
|
77,111 |
|
|
|
79,193 |
|
|
|
||||||
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
|
(in thousands) |
||||||
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
832,383 |
|
$ |
942,050 |
|
Marketable securities, short-term |
|
|
51,644 |
|
|
57,534 |
|
Accounts receivable, net |
|
|
884,430 |
|
|
859,685 |
|
Inventories |
|
|
311,885 |
|
|
338,752 |
|
Prepaid expenses and other current assets |
|
|
251,540 |
|
|
226,370 |
|
Total current assets |
|
|
2,331,882 |
|
|
2,424,391 |
|
|
|
|
|
|
||
|
Marketable securities, long-term |
|
|
37,379 |
|
|
41,978 |
|
Property, plant and equipment, net |
|
|
1,262,815 |
|
|
1,231,855 |
|
Operating lease right-of-use assets, net |
|
|
117,889 |
|
|
118,880 |
|
|
|
|
414,222 |
|
|
407,551 |
|
Intangible assets, net |
|
|
93,320 |
|
|
95,720 |
|
Deferred tax assets |
|
|
1,589,640 |
|
|
1,571,746 |
|
Other assets |
|
|
54,301 |
|
|
55,826 |
|
|
|
|
|
|
||
|
Total assets |
|
$ |
5,901,448 |
|
$ |
5,947,947 |
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
||
|
Accounts payable |
|
$ |
130,561 |
|
$ |
127,870 |
|
Accrued liabilities |
|
|
497,248 |
|
|
454,374 |
|
Deferred revenues |
|
|
1,376,789 |
|
|
1,343,643 |
|
Total current liabilities |
|
|
2,004,598 |
|
|
1,925,887 |
|
|
|
|
|
|
||
|
Income tax payable |
|
|
126,541 |
|
|
124,393 |
|
Operating lease liabilities |
|
|
99,002 |
|
|
100,334 |
|
Other long-term liabilities |
|
|
191,258 |
|
|
195,975 |
|
Total liabilities |
|
|
2,421,399 |
|
|
2,346,589 |
|
|
|
|
|
|
||
|
Total stockholders’ equity |
|
|
3,480,049 |
|
|
3,601,358 |
|
|
|
|
|
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
5,901,448 |
|
$ |
5,947,947 |
|
|
||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
(in thousands) |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
2023 |
|
2022 |
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
|
Net cash provided by operating activities |
|
$ |
199,895 |
|
|
$ |
30,498 |
|
|
|
|
|
|
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in investing activities |
|
|
(52,829 |
) |
|
|
(90,198 |
) |
|
|
|
|
|
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in financing activities |
|
|
(258,961 |
) |
|
|
(111,742 |
) |
|
|
|
|
|
|
||||
|
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
2,221 |
|
|
|
(1,826 |
) |
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(109,674 |
) |
|
|
(173,268 |
) |
|
Cash, cash equivalents, and restricted cash at beginning of the period |
|
|
942,355 |
|
|
|
1,100,139 |
|
|
Cash, cash equivalents, and restricted cash at end of the period |
|
$ |
832,681 |
|
|
$ |
926,871 |
|
|
|
|||||||||||||||
|
INVISALIGN BUSINESS METRICS |
|||||||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|||||
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|||||
|
Number of Invisalign Trained Doctors Cases Were Shipped To |
|
|
82,440 |
|
|
82,275 |
|
|
84,410 |
|
|
82,865 |
|
|
82,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Invisalign Trained Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
9.2 |
|
|
9.3 |
|
|
8.9 |
|
|
8.8 |
|
|
9.0 |
|
North American Orthodontists |
|
|
26.8 |
|
|
26.8 |
|
|
25.9 |
|
|
24.8 |
|
|
26.2 |
|
North American GP Dentists |
|
|
5.0 |
|
|
5.1 |
|
|
4.8 |
|
|
5.0 |
|
|
4.9 |
|
International |
|
|
6.4 |
|
|
6.4 |
|
|
6.0 |
|
|
6.5 |
|
|
6.2 |
|
Total Utilization Rates** |
|
|
7.3 |
|
|
7.3 |
|
|
6.8 |
|
|
7.0 |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,350 |
|
$ |
1,335 |
|
$ |
1,270 |
|
$ |
1,255 |
|
$ |
1,375 |
|
* # of cases shipped / # of doctors to whom cases were shipped |
|||||||||||||||
|
** LATAM utilization rate is not separately disclosed but included in the total utilization rates |
|||||||||||||||
|
*** Clear Aligner revenues / Case shipments |
|||||||||||||||
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|
STOCK-BASED COMPENSATION |
||||||||||||||||||
|
(in thousands) |
||||||||||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
||||||
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
||||||
|
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
SBC included in Gross Profit |
|
$ |
1,514 |
|
$ |
1,614 |
|
$ |
1,651 |
|
$ |
1,659 |
|
$ |
6,438 |
|
$ |
1,807 |
|
SBC included in Operating Expenses |
|
|
30,107 |
|
|
32,526 |
|
|
31,267 |
|
|
33,029 |
|
|
126,929 |
|
|
35,928 |
|
Total SBC |
|
$ |
31,621 |
|
$ |
34,140 |
|
$ |
32,918 |
|
$ |
34,688 |
|
$ |
133,367 |
|
$ |
37,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
||||||||||
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION |
||||||||||
|
CONSTANT CURRENCY NET REVENUES |
||||||||||
|
(in thousands, except percentages) |
||||||||||
|
Sequential constant currency analysis: |
||||||||||
|
|
|
Three Months Ended |
|
|
||||||
|
|
|
|
|
|
|
Impact % of |
||||
|
GAAP net revenues |
|
$ |
943,147 |
|
|
$ |
901,515 |
|
|
|
|
Constant currency impact (1) |
|
|
(25,798 |
) |
|
|
|
(2.8 |
) % |
|
|
Constant currency net revenues (1) |
|
$ |
917,349 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Clear Aligner net revenues |
|
$ |
789,804 |
|
|
$ |
731,654 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
(21,780 |
) |
|
|
|
(2.8 |
) % |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
768,024 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
153,343 |
|
|
$ |
169,861 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
(4,018 |
) |
|
|
|
(2.7 |
) % |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
149,325 |
|
|
|
|
|
||
|
Year-over-year constant currency analysis: |
|||||||||
|
|
|
Three Months Ended |
|
|
|||||
|
|
|
2023 |
|
2022 |
|
Impact % of |
|||
|
GAAP net revenues |
|
$ |
943,147 |
|
$ |
973,219 |
|
|
|
|
Constant currency impact (1) |
|
|
34,885 |
|
|
|
3.6 |
% |
|
|
Constant currency net revenues (1) |
|
$ |
978,032 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Clear Aligner net revenues |
|
$ |
789,804 |
|
$ |
809,696 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
29,079 |
|
|
|
3.6 |
% |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
818,883 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
153,343 |
|
$ |
163,523 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
5,806 |
|
|
|
3.6 |
% |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
159,149 |
|
|
|
|
||
|
Note: |
||
|
(1) |
We define constant currency net revenues as total net revenues excluding the effect of foreign exchange rate movements and use it to determine the percentage for the constant currency impact on net revenues on a sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues. The percentage for the constant currency impact on net revenues is calculated by dividing the constant currency impact in dollars (numerator) by constant currency net revenues in dollars (denominator). Refer to "About Non-GAAP Financial Measures" section of press release. |
|
|
|
|||||||
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
|||||||
|
CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN |
|||||||
|
(in thousands, except percentages) |
|||||||
|
Sequential constant currency analysis: |
|||||||
|
|
|
Three Months Ended |
|||||
|
|
|
|
|
|
|||
|
GAAP gross profit |
|
$ |
660,654 |
|
|
$ |
617,701 |
|
Constant currency impact on net revenues |
|
|
(25,798 |
) |
|
|
|
|
Constant currency gross profit |
|
$ |
634,856 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP gross margin |
|
70.0 |
% |
|
68.5 |
% |
|
Gross margin constant currency impact (1) |
|
(0.8 |
) |
|
|
|
|
Constant currency gross margin (1) |
|
69.2 |
% |
|
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP gross profit |
|
$ |
660,654 |
|
$ |
709,346 |
|
Constant currency impact on net revenues |
|
|
34,884 |
|
|
|
|
Constant currency gross profit |
|
$ |
695,538 |
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP gross margin |
|
70.0 |
% |
|
72.9 |
% |
|
Gross margin constant currency impact (1) |
|
1.1 |
|
|
|
|
|
Constant currency gross margin (1) |
|
71.1 |
% |
|
|
|
|
Note: |
||
|
(1) |
We define constant currency gross margin as constant currency gross profit as a percentage of constant currency net revenues. Gross margin constant currency impact is the increase or decrease in constant currency gross margin compared to the GAAP gross margin. |
|
|
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
|
|
|||||||
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
|||||||
|
CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING MARGIN |
|||||||
|
(in thousands, except percentages) |
|||||||
|
Sequential constant currency analysis: |
|||||||
|
|
|
Three Months Ended |
|||||
|
|
|
|
|
|
|||
|
GAAP income from operations |
|
$ |
133,516 |
|
|
$ |
112,661 |
|
Income from operations constant currency impact (1) |
|
|
(16,998 |
) |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
116,518 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP operating margin |
|
14.2 |
% |
|
12.5 |
% |
|
Operating margin constant currency impact (2) |
|
(1.5 |
) |
|
|
|
|
Constant currency operating margin (2) |
|
12.7 |
% |
|
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP income from operations |
|
$ |
133,516 |
|
$ |
198,082 |
|
Income from operations constant currency impact (1) |
|
|
24,772 |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
158,288 |
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP operating margin |
|
14.2 |
% |
|
20.4 |
% |
|
Operating margin constant currency impact (2) |
|
2.0 |
|
|
|
|
|
Constant currency operating margin (2) |
|
16.2 |
% |
|
|
|
|
Notes: |
||
|
(1) |
We define constant currency income from operations as GAAP income from operations excluding the effect of foreign exchange rate movements for GAAP net revenues and operating expenses on a sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues and operating expenses using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues and operating expenses. |
|
|
|
||
|
(2) |
We define constant currency operating margin as constant currency income from operations as a percentage of constant currency net revenues. Operating margin constant currency impact is the increase or decrease in constant currency operating margin compared to the GAAP operating margin. |
|
|
|
||
|
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
|
|
||||||||
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
||||||||
|
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY |
||||||||
|
(in thousands, except per share data) |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
2023 |
|
2022 |
||||
|
GAAP gross profit |
|
$ |
660,654 |
|
|
$ |
709,346 |
|
|
Stock-based compensation |
|
|
1,807 |
|
|
|
1,514 |
|
|
Amortization of intangibles (1) |
|
|
2,774 |
|
|
|
2,487 |
|
|
Restructuring charges (2) |
|
|
(8 |
) |
|
|
— |
|
|
Non-GAAP gross profit |
|
$ |
665,227 |
|
|
$ |
713,347 |
|
|
|
|
|
|
|
||||
|
GAAP gross margin |
|
|
70.0 |
% |
|
|
72.9 |
% |
|
Non-GAAP gross margin |
|
|
70.5 |
% |
|
|
73.3 |
% |
|
|
|
|
|
|
||||
|
GAAP total operating expenses |
|
$ |
527,138 |
|
|
$ |
511,264 |
|
|
Stock-based compensation |
|
|
(35,928 |
) |
|
|
(30,107 |
) |
|
Amortization of intangibles (1) |
|
|
(867 |
) |
|
|
(910 |
) |
|
Restructuring and other charges (2) |
|
|
177 |
|
|
|
— |
|
|
Non-GAAP total operating expenses |
|
$ |
490,520 |
|
|
$ |
480,247 |
|
|
|
|
|
|
|
||||
|
GAAP income from operations |
|
$ |
133,516 |
|
|
$ |
198,082 |
|
|
Stock-based compensation |
|
|
37,735 |
|
|
|
31,621 |
|
|
Amortization of intangibles (1) |
|
|
3,641 |
|
|
|
3,397 |
|
|
Restructuring and other charges (2) |
|
|
(185 |
) |
|
|
— |
|
|
Non-GAAP income from operations |
|
$ |
174,707 |
|
|
$ |
233,100 |
|
|
|
|
|
|
|
||||
|
GAAP operating margin |
|
|
14.2 |
% |
|
|
20.4 |
% |
|
Non-GAAP operating margin |
|
|
18.5 |
% |
|
|
24.0 |
% |
|
|
|
|
|
|
||||
|
GAAP net income before provision for income taxes |
|
$ |
134,624 |
|
|
$ |
187,486 |
|
|
Stock-based compensation |
|
|
37,735 |
|
|
|
31,621 |
|
|
Amortization of intangibles (1) |
|
|
3,641 |
|
|
|
3,397 |
|
|
Restructuring and other charges (2) |
|
|
(185 |
) |
|
|
— |
|
|
Non-GAAP net income before provision for income taxes |
|
$ |
175,815 |
|
|
$ |
222,504 |
|
|
|
||||||||
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED |
||||||||
|
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED |
||||||||
|
(in thousands, except per share data) |
||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
2023 |
|
2022 |
||||
|
GAAP provision for income taxes |
|
$ |
46,826 |
|
|
$ |
53,188 |
|
|
Tax impact on non-GAAP adjustments (3) |
|
|
(11,626 |
) |
|
|
(8,687 |
) |
|
Non-GAAP provision for income taxes (3) |
|
$ |
35,200 |
|
|
$ |
44,501 |
|
|
|
|
|
|
|
||||
|
GAAP effective tax rate |
|
|
34.8 |
% |
|
|
28.4 |
% |
|
Non-GAAP effective tax rate (3) |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
||||
|
GAAP net income |
|
$ |
87,798 |
|
|
$ |
134,298 |
|
|
Stock-based compensation |
|
|
37,735 |
|
|
|
31,621 |
|
|
Amortization of intangibles (1) |
|
|
3,641 |
|
|
|
3,397 |
|
|
Restructuring and other charges (2) |
|
|
(185 |
) |
|
|
— |
|
|
Tax impact on non-GAAP adjustments (3) |
|
|
11,626 |
|
|
|
8,687 |
|
|
Non-GAAP net income (3) |
|
$ |
140,615 |
|
|
$ |
178,003 |
|
|
|
|
|
|
|
||||
|
GAAP diluted net income per share |
|
$ |
1.14 |
|
|
$ |
1.70 |
|
|
Non-GAAP diluted net income per share (3) |
|
$ |
1.82 |
|
|
$ |
2.25 |
|
|
|
|
|
|
|
||||
|
Shares used in computing diluted net income per share |
|
|
77,111 |
|
|
|
79,193 |
|
|
Notes: |
||
|
(1) |
Amortization of intangible assets related to certain acquisitions. |
|
|
(2) |
Restructuring and other charges recorded in Gross Profit and Operating expenses primarily relate to severance costs, lease termination charges and asset impairments. |
|
|
(3) |
In Q4'22, we changed our methodology for the computation of the non-GAAP effective tax rate to a long-term projected tax rate and have given effect to the new methodology from |
|
|
|
||
|
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
|
|
||
|
Q2 2023 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
|
|
|
Three Months Ended |
|
|
|
|
|
GAAP gross margin |
|
slightly above 70% |
|
Stock-based compensation |
|
~0.2% |
|
Amortization of intangibles (1) |
|
~0.3% |
|
Non-GAAP gross margin |
|
slightly above 70.5% |
|
|
|
Three Months Ended |
|
|
|
|
|
GAAP operating margin |
|
~15.4% |
|
Stock-based compensation |
|
~3.7% |
|
Amortization of intangibles (1) |
|
~0.4% |
|
Non-GAAP operating margin |
|
~19.5% |
|
|
||
|
FISCAL 2023 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
|
|
|
Year Ended |
|
|
|
|
|
GAAP operating margin |
|
slightly above 16% |
|
Stock-based compensation |
|
~4% |
|
Amortization of intangibles (1) |
|
~0.4% |
|
Non-GAAP operating margin |
|
slightly above 20% |
|
(1) Amortization of intangible assets related to certain acquisitions. |
||
|
Refer to "About Non-GAAP Financial Measures" section of press release. |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230425006223/en/
(909) 833-5839
mvalente@aligntech.com
(828) 551-4201
sarah.johnson@zenogroup.com
Source: