Press Release
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Align Technology Announces Fourth Quarter and Fiscal 2023 Financial Results
Unveils Next-Generation iTero Lumina™ Intraoral Scanner Featuring a 3X Wider Field of Capture1 in a 50% Smaller Wand2 that Delivers Faster Scanning, Higher Accuracy3, and Superior Visualization4 for Greater Practice Efficiency
Q4 and FY2023 total revenues up 6.1% year over year and up 3.4% year over year, respectively
Major 2023 milestones: 17 million Invisalign® patients, 4 million Vivera™ retainers, and 100 thousand iTero™ scanner units
- 2023 total revenues of
$3.9 billion , Clear Aligner revenues of$3.2 billion and Systems and Services revenues of$662.9 million - 2023 revenues were unfavorably impacted by foreign exchange of approximately
$36.3 million compared to 2022(5) - 2023 operating margin of 16.7%, non-GAAP operating margin of 21.4%, and diluted net income per share of
$5.81 , non-GAAP diluted net income per share of$8.61 - 2023 operating margin was favorably impacted by foreign exchange of approximately 0.7 points compared to 2022(5)
- Repurchased
$600 million of common stock in 2023 - Q4 total revenues of
$956.7 million , and diluted net income per share of$1.64 , non-GAAP diluted net income per share of$2.42 - Q4 revenues were unfavorably impacted by foreign exchange of approximately
$12.8 million sequentially and favorably impacted by approximately$13.8 million year over year(5)
2023 Clear Aligner revenues of
Commenting on Align's Q4'23 and 2023 results,
Hogan continued by announcing the launch of the company's latest iTero Lumina scanner, "Today, I’m excited to unveil a breakthrough technology — the iTero Lumina™ intraoral scanner - with 3X wider field of capture in a 50% smaller wand that delivers faster scanning, higher accuracy, and superior visualization for greater practice efficiency. iTero Lumina quickly, easily, and accurately captures more data while delivering exceptional scan quality and photorealistic visuals that remove the need for intraoral photos altogether. Doctors can now scan at twice the speed with a wide field of capture, multi angled scanning, and a large capture distance, meaning they can capture more dentition in greater detail throughout the scanning process. Align has filed over 30 patent applications covering technology related to the iTero Lumina intraoral scanner. I believe iTero Lumina has the potential to set a new standard of care for dental practices by simplifying the scanning of complex oral regions, while offering superior chair-side visualization and a more comfortable experience for patients, especially kids.”
(1) Compared to the field of view of the iTero Element™ 5D imaging system, when the iTero Lumina™ intraoral scanner’s scanning distance is 12 mm.*
(2) Compared to iTero Element™ 5D imaging system wand, excluding the wand cable.*
(3) The iTero Lumina™ intraoral scanner has scientifically proven greater accuracy* for your clinical orthodontic needs.
(4) For Invisalign record-taking cases only. Based on a survey in
*Data on file at
(5) For more information, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
Financial Summary - Fourth Quarter Fiscal 2023
|
|
Q4'23 |
|
Q3'23 |
|
Q4'22 |
|
Q/Q Change |
|
Y/Y Change |
|
Clear Aligner Shipments* |
592,635 |
|
602,335 |
|
596,155 |
|
(1.6)% |
|
(0.6)% |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
Net Revenues |
|
|
|
|
|
|
(0.4)% |
|
+6.1% |
|
Clear Aligner |
|
|
|
|
|
|
(1.6)% |
|
+6.9% |
|
Imaging Systems and CAD/CAM Services |
|
|
|
|
|
|
+5.8% |
|
+2.9% |
|
Net Income |
|
|
|
|
|
|
+2.1% |
|
+196.9% |
|
Diluted EPS |
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
Net Income(6) |
|
|
|
|
|
|
+11.7% |
|
+36.7% |
|
Diluted EPS(6) |
|
|
|
|
|
|
|
|
|
Financial Summary - Fiscal 2023
|
|
2023 |
|
2022 |
|
Y/Y Change |
|
Clear Aligner Shipments* |
2,408,520 |
|
2,398,370 |
|
+0.4% |
|
GAAP |
|
|
|
|
|
|
Net Revenues |
|
|
|
|
+3.4% |
|
Clear Aligner |
|
|
|
|
+4.1% |
|
Imaging Systems and CAD/CAM Services |
|
|
|
|
+0.1% |
|
Net Income |
|
|
|
|
+23.1% |
|
Diluted EPS |
|
|
|
|
|
|
Non-GAAP |
|
|
|
|
|
|
Net Income(6) |
|
|
|
|
+8.4% |
|
Diluted EPS(6) |
|
|
|
|
|
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding.
*Clear Aligner shipments include Doctor Subscription Program Touch-Up cases.
(6) 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
As of
Commenting on Align's 2023 results, Align Technology CFO and EVP Global Finance,
Q4'23 Announcement Highlights
- On
November 6, 2023 , we announced the opening of Align's 2024 Annual Research Award Program to support clinical and scientific dental research in universities across the globe. Under the program, up to$300,000 is being awarded to university faculty for scientific and technological research initiatives to advance patient care in the fields of orthodontics and dentistry. Align Technology’s Research Award Program has funded approximately$3 million in research since the program’s inception in 2010. - On
December 5, 2023 , we announced the appointments to Align's board of directors ofMojdeh Poul , former EVP and Group President of 3M Health Care, andKevin Conroy , President, Chief Executive Officer, and Chairman of the Board of Exact Sciences. - On
December 13, 2023 , we announced thatHealth Canada issued an updated medical device license to Align for the Invisalign® Palatal Expander system* ("IPE"). The updated license for broad patient applicability includes growing children, teens, and adults (with surgery or other techniques). - On
December 18, 2023 , we announced that theU.S. Food and Drug Administration ("FDA") cleared Align’s IPE system* for commercial availability in theU.S. The FDA 510(k) clearance is for broad patient applicability, including growing children, teens, and adults (with surgery or other techniques). The IPE system is available on a limited basis inCanada and theU.S. It is expected to be available in other markets pending future applicable regulatory approvals. - On
January 2, 2024 , Align completed the acquisition of privately-heldCubicure GmbH , a pioneer in direct 3D printing solutions for polymer additive manufacturing that develops, produces, and distributes innovative materials, equipment, and processes for novel 3D printing solutions.
*Based on a survey in
Q4'23 Stock Repurchases
In
We have
*Contract was open, as of
Fiscal 2024 Business Outlook
Turning to our outlook, assuming no circumstances occur beyond our control, we provide the following framework for Q1 and fiscal 2024:
First quarter 2024 outlook:
- For Q1’24, we expect our worldwide revenues to be in the range of
$960M to$980M , up slightly from Q4’23. - We expect clear aligner volume and ASPs to be up slightly sequentially.
- We expect systems and services revenue to be down slightly sequentially, although less than the historical seasonal decline given the launch of the iTero Lumina™ for ortho workflows in Q1’24.
- We expect our Q1’24 GAAP operating margin and non-GAAP operating margin to be slightly above Q1’23 GAAP operating margin and non-GAAP operating margin, respectively.
Full year 2024 outlook:
- We expect our 2024 total revenues to be up mid-single digits over 2023.
- We expect our 2024 clear aligner and systems and services revenues to grow year over year in the same approximate range as 2024 total revenues.
- We expect our 2024 clear aligner ASPs to be up slightly year-over-year, primarily due to price increases and favorable foreign exchange, partially offset by a higher mix of non-comprehensive products which have lower ASPs.
- We expect our full year 2024 GAAP operating margin and non-GAAP operating margin to be slightly above the 2023 GAAP operating margin and non-GAAP operating margin, respectively.
- For 2024, we expect investments in capital expenditures to be approximately
$100M . Capital expenditures are expected to primarily relate to building construction and improvements as well as manufacturing capacity in support of our continued 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 also 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, Align Digital Platform, iTero Element and iTero-exocad Connector are trademarks of
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding anticipated capital expenditures, clear aligner volumes, clear aligner ASPs, iTero scanner and services revenue, total revenues and operating margin, customer and consumer demand trends and market opportunities, our ability to successfully control our business and operations and pursue our strategic growth drivers, our expectations regarding the timing and impact of new products and technologies, our beliefs for the impacts of our stock repurchase programs and our ability to generate cash flow, and our beliefs regarding the trajectory of our business. 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 military conflicts in
Ukraine and theMiddle East ; - the economic and geopolitical ramifications of the hostilities in the
Middle East as well as the military conflict inUkraine , including sanctions, retaliatory sanctions, nationalism, supply chain disruptions and other consequences, any of which may or will continue to adversely impact our operations and assets and our research and development activities; - variations in our product mix, product adoption and selling prices regionally and globally;
- competition from existing and new competitors;
- declines in, or the slowing of growth of, sales of our clear aligners or intraoral scanners domestically and/or internationally and the impact either would have on the adoption of Invisalign products;
- the timing and availability and cost of raw materials, components, products and other shipping and supply chain constraints, disruptions or costs;
- unexpected or rapid changes in the growth or decline of our domestic and/or international markets;
- 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 and enforce our intellectual property rights;
- continued compliance with regulatory requirements;
- the willingness and ability of our customers to maintain and/or increase product utilization;
- 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
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net revenues |
|
$ |
956,726 |
|
|
$ |
901,515 |
|
|
$ |
3,862,260 |
|
|
$ |
3,734,635 |
|
|
Cost of net revenues |
|
|
287,202 |
|
|
|
283,814 |
|
|
|
1,155,397 |
|
|
|
1,100,860 |
|
|
Gross profit |
|
|
669,524 |
|
|
|
617,701 |
|
|
|
2,706,863 |
|
|
|
2,633,775 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
|
402,503 |
|
|
|
410,067 |
|
|
|
1,703,379 |
|
|
|
1,674,469 |
|
|
Research and development |
|
|
82,160 |
|
|
|
83,520 |
|
|
|
346,830 |
|
|
|
305,258 |
|
|
Restructuring and other charges |
|
|
13,316 |
|
|
|
11,453 |
|
|
|
13,316 |
|
|
|
11,453 |
|
|
Total operating expenses |
|
|
497,979 |
|
|
|
505,040 |
|
|
|
2,063,525 |
|
|
|
1,991,180 |
|
|
Income from operations |
|
|
171,545 |
|
|
|
112,661 |
|
|
|
643,338 |
|
|
|
642,595 |
|
|
Interest income and other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
|
|
4,978 |
|
|
|
2,760 |
|
|
|
17,258 |
|
|
|
5,367 |
|
|
Other income (expense), net |
|
|
(3,643 |
) |
|
|
(100 |
) |
|
|
(19,392 |
) |
|
|
(48,905 |
) |
|
Total interest income and other income (expense), net |
|
|
1,335 |
|
|
|
2,660 |
|
|
|
(2,134 |
) |
|
|
(43,538 |
) |
|
Net income before provision for income taxes |
|
|
172,880 |
|
|
|
115,321 |
|
|
|
641,204 |
|
|
|
599,057 |
|
|
Provision for income taxes |
|
|
48,866 |
|
|
|
73,546 |
|
|
|
196,151 |
|
|
|
237,484 |
|
|
Net income |
|
$ |
124,014 |
|
|
$ |
41,775 |
|
|
$ |
445,053 |
|
|
$ |
361,573 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
$ |
1.64 |
|
|
$ |
0.54 |
|
|
$ |
5.82 |
|
|
$ |
4.62 |
|
|
Diluted |
|
$ |
1.64 |
|
|
$ |
0.54 |
|
|
$ |
5.81 |
|
|
$ |
4.61 |
|
|
Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
75,703 |
|
|
|
77,541 |
|
|
|
76,426 |
|
|
|
78,190 |
|
|
Diluted |
|
|
75,802 |
|
|
|
77,683 |
|
|
|
76,568 |
|
|
|
78,420 |
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
937,438 |
|
$ |
942,050 |
|
Marketable securities, short-term |
|
|
35,304 |
|
|
57,534 |
|
Accounts receivable, net |
|
|
903,424 |
|
|
859,685 |
|
Inventories |
|
|
296,902 |
|
|
338,752 |
|
Prepaid expenses and other current assets |
|
|
273,550 |
|
|
226,370 |
|
Total current assets |
|
|
2,446,618 |
|
|
2,424,391 |
|
|
|
|
|
|
||
|
Marketable securities, long-term |
|
|
8,022 |
|
|
41,978 |
|
Property, plant and equipment, net |
|
|
1,290,863 |
|
|
1,231,855 |
|
Operating lease right-of-use assets, net |
|
|
117,999 |
|
|
118,880 |
|
|
|
|
419,530 |
|
|
407,551 |
|
Intangible assets, net |
|
|
82,118 |
|
|
95,720 |
|
Deferred tax assets |
|
|
1,590,045 |
|
|
1,571,746 |
|
Other assets |
|
|
128,682 |
|
|
55,826 |
|
|
|
|
|
|
||
|
Total assets |
|
$ |
6,083,877 |
|
$ |
5,947,947 |
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
||
|
Accounts payable |
|
$ |
113,125 |
|
$ |
127,870 |
|
Accrued liabilities |
|
|
525,780 |
|
|
454,374 |
|
Deferred revenues |
|
|
1,427,706 |
|
|
1,343,643 |
|
Total current liabilities |
|
|
2,066,611 |
|
|
1,925,887 |
|
|
|
|
|
|
||
|
Income tax payable |
|
|
116,744 |
|
|
124,393 |
|
Operating lease liabilities |
|
|
96,968 |
|
|
100,334 |
|
Other long-term liabilities |
|
|
173,065 |
|
|
195,975 |
|
Total liabilities |
|
|
2,453,388 |
|
|
2,346,589 |
|
|
|
|
|
|
||
|
Total stockholders’ equity |
|
|
3,630,489 |
|
|
3,601,358 |
|
|
|
|
|
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
6,083,877 |
|
$ |
5,947,947 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
Year Ended |
||||||
|
|
|
|
2023 |
|
|
|
2022 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
|
Net cash provided by operating activities |
|
$ |
785,776 |
|
|
$ |
568,732 |
|
|
|
|
|
|
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in investing activities |
|
|
(195,943 |
) |
|
|
(213,316 |
) |
|
|
|
|
|
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in financing activities |
|
|
(598,340 |
) |
|
|
(501,686 |
) |
|
|
|
|
|
|
||||
|
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
4,671 |
|
|
|
(11,514 |
) |
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(3,836 |
) |
|
|
(157,784 |
) |
|
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 |
|
$ |
938,519 |
|
|
$ |
942,355 |
|
INVISALIGN BUSINESS METRICS
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
||||||||
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
||||||||
|
Number of Invisalign Trained Doctors Cases Were Shipped To |
|
|
82,445 |
|
|
82,290 |
|
|
84,430 |
|
|
82,895 |
|
|
82,730 |
|
|
83,440 |
|
|
85,195 |
|
|
83,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Invisalign Trained Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
9.4 |
|
|
9.6 |
|
|
9.2 |
|
|
9.2 |
|
|
9.5 |
|
|
9.8 |
|
|
9.6 |
|
|
9.1 |
|
North American Orthodontists |
|
|
27.8 |
|
|
28.1 |
|
|
27.6 |
|
|
26.7 |
|
|
28.7 |
|
|
29.2 |
|
|
28.8 |
|
|
25.9 |
|
North American GP Dentists |
|
|
5.0 |
|
|
5.1 |
|
|
4.8 |
|
|
5.0 |
|
|
4.9 |
|
|
5.2 |
|
|
4.9 |
|
|
5.0 |
|
International |
|
|
6.4 |
|
|
6.4 |
|
|
6.0 |
|
|
6.5 |
|
|
6.2 |
|
|
6.6 |
|
|
6.1 |
|
|
6.5 |
|
Total Utilization Rates** |
|
|
7.3 |
|
|
7.4 |
|
|
7.0 |
|
|
7.2 |
|
|
7.1 |
|
|
7.5 |
|
|
7.1 |
|
|
7.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,335 |
|
$ |
1,315 |
|
$ |
1,245 |
|
$ |
1,225 |
|
$ |
1,335 |
|
$ |
1,335 |
|
$ |
1,320 |
|
$ |
1,320 |
* # 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 as of Q4'23
Note: During the third quarter of 2023, we began including Touch Up cases revenues that were previously included in
Non-Case revenues and have recast business metrics for the periods presented above accordingly.
STOCK-BASED COMPENSATION
(in thousands)
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
||||||||||
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
||||||||||
|
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
SBC included in Gross Profit |
|
$ |
1,514 |
|
$ |
1,614 |
|
$ |
1,651 |
|
$ |
1,659 |
|
$ |
6,438 |
|
$ |
1,807 |
|
$ |
1,901 |
|
$ |
1,974 |
|
$ |
1,780 |
|
$ |
7,462 |
|
SBC included in Operating Expenses |
|
|
30,107 |
|
|
32,526 |
|
|
31,267 |
|
|
33,029 |
|
|
126,929 |
|
|
35,928 |
|
|
35,959 |
|
|
37,628 |
|
|
37,049 |
|
$ |
146,564 |
|
Total SBC |
|
$ |
31,621 |
|
$ |
34,140 |
|
$ |
32,918 |
|
$ |
34,688 |
|
$ |
133,367 |
|
$ |
37,735 |
|
$ |
37,860 |
|
$ |
39,602 |
|
$ |
38,829 |
|
$ |
154,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
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 |
|
$ |
956,726 |
|
$ |
960,214 |
|
|
|
|
Constant currency impact (1) |
|
|
12,782 |
|
|
|
1.3 |
% |
|
|
Constant currency net revenues (1) |
|
$ |
969,508 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Clear Aligner net revenues |
|
$ |
781,912 |
|
$ |
794,939 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
10,711 |
|
|
|
1.4 |
% |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
792,623 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
174,814 |
|
$ |
165,275 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
2,071 |
|
|
|
1.2 |
% |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
176,885 |
|
|
|
|
||
Year-over-year constant currency analysis:
|
|
|
Three Months Ended |
|
|
||||||
|
|
|
|
2023 |
|
|
|
2022 |
|
Impact % of Revenue |
|
|
GAAP net revenues |
|
$ |
956,726 |
|
|
$ |
901,515 |
|
|
|
|
Constant currency impact (1) |
|
|
(13,818 |
) |
|
|
|
(1.5 |
) % |
|
|
Constant currency net revenues (1) |
|
$ |
942,908 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Clear Aligner net revenues |
|
$ |
781,912 |
|
|
$ |
731,654 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
(11,957 |
) |
|
|
|
(1.6 |
) % |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
769,955 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
174,814 |
|
|
$ |
169,861 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
(1,860 |
) |
|
|
|
(1.1 |
) % |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
172,954 |
|
|
|
|
|
||
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+
CONSTANT CURRENCY NET REVENUES CONTINUED
(in thousands, except percentages)
Current year versus prior year constant currency analysis:
|
|
|
Year Ended |
|
|
|||||
|
|
|
|
2023 |
|
|
2022 |
|
Impact % of |
|
|
GAAP net revenues |
|
$ |
3,862,260 |
|
$ |
3,734,635 |
|
|
|
|
Constant currency impact (1) |
|
|
36,267 |
|
|
|
0.9 |
% |
|
|
Constant currency net revenues (1) |
|
$ |
3,898,527 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Clear Aligner net revenues |
|
$ |
3,199,329 |
|
$ |
3,072,585 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
29,683 |
|
|
|
0.9 |
% |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
3,229,012 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
662,931 |
|
$ |
662,050 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
6,583 |
|
|
|
1.0 |
% |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
669,514 |
|
|
|
|
||
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, year-over-year and current year versus prior 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).
(+) Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. 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 |
|
$ |
669,524 |
|
$ |
663,076 |
|
Constant currency impact on net revenues |
|
|
12,782 |
|
|
|
|
Constant currency gross profit |
|
$ |
682,306 |
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP gross margin |
|
70.0 |
% |
|
69.1 |
% |
|
Gross margin constant currency impact (1) |
|
0.4 |
|
|
|
|
|
Constant currency gross margin (1) |
|
70.4 |
% |
|
|
|
Year-over-year constant currency analysis:
|
|
|
Three Months Ended |
|||||
|
|
|
|
2023 |
|
|
|
2022 |
|
GAAP gross profit |
|
$ |
669,524 |
|
|
$ |
617,701 |
|
Constant currency impact on net revenues |
|
|
(13,805 |
) |
|
|
|
|
Constant currency gross profit |
|
$ |
655,719 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
|
2022 |
|
|
GAAP gross margin |
|
70.0 |
% |
|
68.5 |
% |
|
Gross margin constant currency impact (1) |
|
(0.4 |
) |
|
|
|
|
Constant currency gross margin (1) |
|
69.5 |
% |
|
|
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+
CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN
(in thousands, except percentages)
Current year versus prior year constant currency analysis:
|
|
|
Year Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP gross profit |
|
$ |
2,706,863 |
|
$ |
2,633,775 |
|
Constant currency impact on net revenues |
|
|
36,310 |
|
|
|
|
Constant currency gross profit |
|
$ |
2,743,174 |
|
|
|
|
|
|
Year Ended |
||||
|
|
|
2023 |
|
2022 |
||
|
GAAP gross margin |
|
70.1 |
% |
|
70.5 |
% |
|
Constant currency impact on net revenues(1) |
|
0.3 |
|
|
|
|
|
Constant currency gross margin(1) |
|
70.4 |
% |
|
|
|
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.
(+) Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. 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 |
|
$ |
171,545 |
|
$ |
166,346 |
|
Income from operations constant currency impact (1) |
|
|
8,226 |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
179,771 |
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP operating margin |
|
17.9 |
% |
|
17.3 |
% |
|
Operating margin constant currency impact (2) |
|
0.6 |
|
|
|
|
|
Constant currency operating margin (2) |
|
18.5 |
% |
|
|
|
Year-over-year constant currency analysis:
|
|
|
Three Months Ended |
|||||
|
|
|
|
2023 |
|
|
|
2022 |
|
GAAP income from operations |
|
$ |
171,545 |
|
|
$ |
112,661 |
|
Income from operations constant currency impact (1) |
|
|
(8,305 |
) |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
163,240 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
2023 |
|
|
2022 |
|
|
GAAP operating margin |
|
17.9 |
% |
|
12.5 |
% |
|
Operating margin constant currency impact (2) |
|
(0.6 |
) |
|
|
|
|
Constant currency operating margin (2) |
|
17.3 |
% |
|
|
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED+
CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING MARGIN CONTINUED
(in thousands, except percentages)
Current year versus prior year constant currency analysis:
|
|
|
Year Ended |
||||
|
|
|
|
2023 |
|
|
2022 |
|
GAAP income from operations |
|
$ |
643,338 |
|
$ |
642,595 |
|
Income from operations constant currency impact (1) |
|
|
31,988 |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
675,326 |
|
|
|
|
|
|
Year Ended |
||||
|
|
|
2023 |
|
|
2022 |
|
|
GAAP operating margin |
|
16.7 |
% |
|
17.2 |
% |
|
Operating margin constant currency impact (2) |
|
0.7 |
|
|
|
|
|
Constant currency operating margin (2) |
|
17.3 |
% |
|
|
|
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, year-over-year and current year versus prior 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.
(+) Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. 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 |
|
Year Ended |
||||||||||||
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
GAAP gross profit |
|
$ |
669,524 |
|
|
$ |
617,701 |
|
|
$ |
2,706,863 |
|
|
$ |
2,633,775 |
|
|
Stock-based compensation |
|
|
1,780 |
|
|
|
1,659 |
|
|
|
7,462 |
|
|
|
6,438 |
|
|
Amortization of intangibles (1) |
|
|
2,773 |
|
|
|
2,610 |
|
|
|
11,182 |
|
|
|
10,134 |
|
|
Restructuring charges (2) |
|
|
673 |
|
|
|
2,866 |
|
|
|
673 |
|
|
|
2,866 |
|
|
Non-GAAP gross profit |
|
$ |
674,750 |
|
|
$ |
624,836 |
|
|
$ |
2,726,180 |
|
|
$ |
2,653,213 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP gross margin |
|
|
70.0 |
% |
|
|
68.5 |
% |
|
|
70.1 |
% |
|
|
70.5 |
% |
|
Non-GAAP gross margin |
|
|
70.5 |
% |
|
|
69.3 |
% |
|
|
70.6 |
% |
|
|
71.0 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP total operating expenses |
|
$ |
497,979 |
|
|
$ |
505,040 |
|
|
$ |
2,063,525 |
|
|
$ |
1,991,180 |
|
|
Stock-based compensation |
|
|
(37,049 |
) |
|
|
(33,029 |
) |
|
|
(146,564 |
) |
|
|
(126,929 |
) |
|
Amortization of intangibles (1) |
|
|
(866 |
) |
|
|
(810 |
) |
|
|
(3,497 |
) |
|
|
(3,417 |
) |
|
Restructuring and other charges (2) |
|
|
(13,316 |
) |
|
|
(11,453 |
) |
|
|
(13,316 |
) |
|
|
(11,453 |
) |
|
Non-GAAP total operating expenses |
|
$ |
446,748 |
|
|
$ |
459,748 |
|
|
$ |
1,900,148 |
|
|
$ |
1,849,381 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP income from operations |
|
$ |
171,545 |
|
|
$ |
112,661 |
|
|
$ |
643,338 |
|
|
$ |
642,595 |
|
|
Stock-based compensation |
|
|
38,829 |
|
|
|
34,688 |
|
|
|
154,026 |
|
|
|
133,367 |
|
|
Amortization of intangibles (1) |
|
|
3,639 |
|
|
|
3,420 |
|
|
|
14,679 |
|
|
|
13,551 |
|
|
Restructuring and other charges (2) |
|
|
13,989 |
|
|
|
14,319 |
|
|
|
13,989 |
|
|
|
14,319 |
|
|
Non-GAAP income from operations |
|
$ |
228,002 |
|
|
$ |
165,088 |
|
|
$ |
826,032 |
|
|
$ |
803,832 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP operating margin |
|
|
17.9 |
% |
|
|
12.5 |
% |
|
|
16.7 |
% |
|
|
17.2 |
% |
|
Non-GAAP operating margin |
|
|
23.8 |
% |
|
|
18.3 |
% |
|
|
21.4 |
% |
|
|
21.5 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP net income before provision for income taxes |
|
$ |
172,880 |
|
|
$ |
115,321 |
|
|
$ |
641,204 |
|
|
$ |
599,057 |
|
|
Stock-based compensation |
|
|
38,829 |
|
|
|
34,688 |
|
|
|
154,026 |
|
|
|
133,367 |
|
|
Amortization of intangibles (1) |
|
|
3,639 |
|
|
|
3,420 |
|
|
|
14,679 |
|
|
|
13,551 |
|
|
Restructuring and other charges (2) |
|
|
13,989 |
|
|
|
14,319 |
|
|
|
13,989 |
|
|
|
14,319 |
|
|
Non-GAAP net income before provision for income taxes |
|
$ |
229,337 |
|
|
$ |
167,748 |
|
|
$ |
823,898 |
|
|
$ |
760,294 |
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED
FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED
(in thousands, except per share data)
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
GAAP provision for income taxes |
|
$ |
48,866 |
|
|
$ |
73,546 |
|
|
$ |
196,151 |
|
|
$ |
237,484 |
|
|
Tax impact on non-GAAP adjustments (3) |
|
|
(2,998 |
) |
|
|
(39,997 |
) |
|
|
(31,415 |
) |
|
|
(85,426 |
) |
|
Non-GAAP provision for income taxes (3) |
|
$ |
45,868 |
|
|
$ |
33,549 |
|
|
$ |
164,736 |
|
|
$ |
152,058 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP effective tax rate |
|
|
28.3 |
% |
|
|
63.8 |
% |
|
|
30.6 |
% |
|
|
39.6 |
% |
|
Non-GAAP effective tax rate (3) |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP net income |
|
$ |
124,014 |
|
|
$ |
41,775 |
|
|
$ |
445,053 |
|
|
$ |
361,573 |
|
|
Stock-based compensation |
|
|
38,829 |
|
|
|
34,688 |
|
|
|
154,026 |
|
|
|
133,367 |
|
|
Amortization of intangibles (1) |
|
|
3,639 |
|
|
|
3,420 |
|
|
|
14,679 |
|
|
|
13,551 |
|
|
Restructuring and other charges (2) |
|
|
13,989 |
|
|
|
14,319 |
|
|
|
13,989 |
|
|
|
14,319 |
|
|
Tax impact on non-GAAP adjustments (3) |
|
|
2,998 |
|
|
|
39,997 |
|
|
|
31,415 |
|
|
|
85,426 |
|
|
Non-GAAP net income (3) |
|
$ |
183,469 |
|
|
$ |
134,199 |
|
|
$ |
659,162 |
|
|
$ |
608,236 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP diluted net income per share |
|
$ |
1.64 |
|
|
$ |
0.54 |
|
|
$ |
5.81 |
|
|
$ |
4.61 |
|
|
Non-GAAP diluted net income per share (3) |
|
$ |
2.42 |
|
|
$ |
1.73 |
|
|
$ |
8.61 |
|
|
$ |
7.76 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Shares used in computing diluted net income per share |
|
|
75,802 |
|
|
|
77,683 |
|
|
|
76,568 |
|
|
|
78,420 |
|
Notes:
(1) Amortization of intangible assets related to certain acquisitions
(2) During the fourth quarters of 2022 and 2023, we initiated restructuring plans to increase efficiencies across the organization and lower the overall cost structure. Restructuring charges recorded to Cost of net revenues and operating expenses primarily related to post-employment benefits, lease termination charges and asset impairments in 2022 and post-employment benefits in 2023.
(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
(+) Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.
Q1 2024 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION
|
GAAP Operating Margin |
|
slightly above 14.2% |
|
Stock-based compensation |
|
~4.0% |
|
Amortization of intangibles (1) |
|
~0.4% |
|
Non-GAAP Operating Margin |
|
slightly above 18.5% |
FISCAL 2024 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION
|
GAAP Operating Margin |
|
slightly above 16.7% |
|
Stock-based compensation |
|
~4.4% |
|
Amortization of intangibles (1) |
|
~0.4% |
|
Non-GAAP Operating Margin |
|
slightly above 21.4% |
(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/20240131111055/en/
(909) 833-5839
mvalente@aligntech.com
(828) 551-4201
sarah.johnson@zenogroup.com
Source:
