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ALIGN TECHNOLOGY ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS
Company expects to repurchase up to
-
Q3'24 total revenues of
$977.9 million , increased 1.8% year-over-year, and Q3'24 diluted net income per share was$1.55 , or$2.35 on a non-GAAP diluted basis -
Q3'24 total revenues were unfavorably impacted by foreign exchange by approximately
$14.6 million year-over-year(1), and were not significantly impacted sequentially -
Q3'24 operating income of
$162.3 million and operating margin of 16.6%, non-GAAP operating margin of 22.1% - Q3'24 GAAP operating margin was unfavorably impacted by foreign exchange by approximately 0.8 points year-over-year(1), and was not significantly impacted sequentially
-
Q3'24 Clear Aligner revenues of
$786.8 million decreased 5.4% sequentially, and decreased 1.0% year-over-year - Q3'24 Clear Aligner volume of 617.2 thousand cases decreased 4.0% sequentially, and increased 2.5% year-over-year
- Q3'24 Clear Aligner volume for teens increased 6.7% year-over-year and 9.1% sequentially to 236.3 thousand cases
-
Q3'24 Imaging Systems and CAD/CAM Services revenues of
$191.0 million , increased 15.6% year-over-year -
Cash and cash equivalents was
$1.0 billion as of Q3'24 compared to$761.4 million as of Q2'24
Q3'24 operating income was
Commenting on Align's Q3'24 results,
Financial Summary - Third Quarter Fiscal 2024
|
|
Q3'24 |
|
Q2'24 |
|
Q3'23 |
|
Q/Q Change |
|
Y/Y Change |
|
|
Clear Aligner Shipments* |
617,220 |
|
642,725 |
|
602,335 |
|
(4.0)% |
|
+2.5% |
|
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
Net Revenues |
|
|
|
|
|
|
(4.9)% |
|
+1.8% |
|
|
Clear Aligner |
|
|
|
|
|
|
(5.4)% |
|
(1.0)% |
|
|
Imaging Systems and CAD/CAM Services |
|
|
|
|
|
|
(2.9)% |
|
+15.6% |
|
|
Net Income |
|
|
|
|
|
|
+20.1% |
|
(4.5)% |
|
|
Diluted EPS |
|
|
|
|
|
|
|
|
( |
|
|
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
|
|
|
|
|
(3.0)% |
|
+6.9% |
|
|
Diluted EPS |
|
|
|
|
|
|
( |
|
|
|
|
Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. |
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*Clear Aligner shipments include Doctor Subscription Program Touch-Up cases. |
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As of
Align also announced today a global organizational restructuring plan that eliminates or transfers identified positions to other locations. There are impacted employees in every region and they will receive severance and other benefits based on applicable laws, severance plans, or contracts governing their position and country of employment. As part of the restructuring plan, Raj Pudipeddi’s position as executive vice president and managing director of the
Commenting on Align’s restructuring actions today, Align Technology CFO and EVP Global Finance,
Announcement Highlights
-
On
October 23, 2024 , Align announced thatFrank Quinn , formerly Align vice president and general manager ofthe United States , will rejoin the company as executive vice president and managing director of theAmericas region, reporting toJoe Hogan , Align president and CEO. -
On
August 22, 2024 , Align announced the pilot of a newU.S. Invisalign treatment promotional program for Costco members on Costco.com. Costco members in the in theU.S. can purchase an Invisalign treatment e-card and Invisalign™ Essentials Bundle+ on Costco.com for$99.99 to receive a$400 discount off Invisalign treatment with participatingU.S. Invisalign providers.
Q4'24 Stock Repurchase
-
As of
September 30, 2024 ,$500.0 million remains available for repurchases of our common stock under our stock repurchase program approved inJanuary 2023 . -
Beginning in Q4'24 and continuing into the first quarter of 2025, we expect to repurchase up to
$275.0 million of our common stock through either, or a combination of, open market repurchases or an accelerated stock repurchase agreement.
Fiscal 2024 Business Outlook
Turning to our outlook, assuming no circumstances occur beyond our control, including foreign exchange, we provide the following business outlook:
-
For Q4'24, we expect worldwide revenues to be in the range of
$995M to$1,015M - For Q4'24, we expect Clear Aligner volume and ASP to be slightly up sequentially
- We also expect Systems and Services revenue to be up in Q4'24 sequentially consistent with typical Q4 seasonality
- We expect Q4’24 GAAP operating margin to be slightly lower than 14.0% primarily due to restructuring charges related to severance as we adjust headcount for the existing business environment. We estimate these restructuring charges to impact Q4’24 GAAP operating margin by approximately 3 points
- We anticipate Q4’24 non-GAAP operating margin to be slightly up sequentially
-
For fiscal 2024, we expect investments in capital expenditures to be above
$100M . Capital expenditures primarily relate to building construction and improvements as well as manufacturing capacity in support of continued expansion
Align Webcast 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 ("GAAP") in
These non-GAAP financial measures exclude certain items that may not be indicative of our fundamental operating performance, including foreign currency exchange rate impacts, the effects of stock-based compensation, amortization of intangible assets related to certain acquisitions, restructuring and other charges, acquisition-related costs, associated tax impacts and discrete cash and non-cash charges or gains that are included in the most directly comparable GAAP financial measure.
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 material limitations to using non-GAAP financial measures as they are not prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Non-GAAP financial measures exclude certain items that may have a material impact upon our reported financial results, which can limit their usefulness for comparison purposes. 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 both a GAAP and non-GAAP basis and by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial 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, superior to, 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 and a reconciliation of GAAP to non-GAAP 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 and iTero Lumina are trademarks of
Forward-Looking Statements
This news release, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding our ability to successfully control our business and operations and pursue our strategic growth drivers, our expectations regarding our stock repurchase programs, our expectations for market opportunities, our expectations for the restructuring actions and their impact, our expectations for Q4'24 worldwide revenues, Clear Aligner volume, Clear Aligner ASP, Systems and Services revenues and GAAP and non-GAAP operating margin, and 2024 capital expenditures. Forward-looking statements contained in this press 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, higher 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 macroeconomic conditions, levels of employment, salaries and wages, debt obligations, discretionary income, inflationary pressure, declining consumer confidence, and the military conflicts in the
Middle East andUkraine ; - variations in our geographic, channel and product mix, product adoption, and selling prices regionally and globally, including product mix shifts to lower priced products or to products with a higher percentage of deferred revenue;
- competition from existing and new competitors;
- 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 economic and geopolitical ramifications of the military conflicts in the
Middle East andUkraine , including supply chain and trade disruptions, tariffs, trade sanctions, customs inquiries or restrictions, boycotts, retaliatory sanctions, nationalism, and other consequences, any of which could adversely impact our operations and assets; - 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;
- the timing and availability and cost of raw materials, components, products and other shipping and supply chain constraints and disruptions;
- 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;
- our ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- the willingness and ability of our customers to maintain and/or increase product utilization in sufficient numbers;
- 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; 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
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Net revenues |
|
$ |
977,872 |
|
|
$ |
960,214 |
|
|
$ |
3,003,793 |
|
|
$ |
2,905,534 |
|
|
Cost of net revenues |
|
|
296,098 |
|
|
|
297,138 |
|
|
|
901,575 |
|
|
|
868,195 |
|
|
Gross profit |
|
|
681,774 |
|
|
|
663,076 |
|
|
|
2,102,218 |
|
|
|
2,037,339 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
|
434,138 |
|
|
|
407,992 |
|
|
|
1,338,222 |
|
|
|
1,300,876 |
|
|
Research and development |
|
|
85,272 |
|
|
|
88,738 |
|
|
|
269,324 |
|
|
|
264,670 |
|
|
Legal settlement loss |
|
|
66 |
|
|
|
— |
|
|
|
31,193 |
|
|
|
— |
|
|
Total operating expenses |
|
|
519,476 |
|
|
|
496,730 |
|
|
|
1,638,739 |
|
|
|
1,565,546 |
|
|
Income from operations |
|
|
162,298 |
|
|
|
166,346 |
|
|
|
463,479 |
|
|
|
471,793 |
|
|
Interest income and other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
|
|
4,003 |
|
|
|
5,522 |
|
|
|
11,696 |
|
|
|
12,280 |
|
|
Other income (expense), net |
|
|
(371 |
) |
|
|
(9,757 |
) |
|
|
(6,993 |
) |
|
|
(15,749 |
) |
|
Total interest income and other income (expense), net |
|
|
3,632 |
|
|
|
(4,235 |
) |
|
|
4,703 |
|
|
|
(3,469 |
) |
|
Net income before provision for income taxes |
|
|
165,930 |
|
|
|
162,111 |
|
|
|
468,182 |
|
|
|
468,324 |
|
|
Provision for income taxes |
|
|
49,967 |
|
|
|
40,684 |
|
|
|
150,627 |
|
|
|
147,285 |
|
|
Net income |
|
$ |
115,963 |
|
|
$ |
121,427 |
|
|
$ |
317,555 |
|
|
$ |
321,039 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
$ |
1.55 |
|
|
$ |
1.59 |
|
|
$ |
4.23 |
|
|
$ |
4.19 |
|
|
Diluted |
|
$ |
1.55 |
|
|
$ |
1.58 |
|
|
$ |
4.23 |
|
|
$ |
4.18 |
|
|
Shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
|
Basic |
|
|
74,736 |
|
|
|
76,569 |
|
|
|
75,031 |
|
|
|
76,670 |
|
|
Diluted |
|
|
74,757 |
|
|
|
76,826 |
|
|
|
75,149 |
|
|
|
76,849 |
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) |
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|
|
|
|
|
|
||
|
ASSETS |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
1,041,935 |
|
$ |
937,438 |
|
Marketable securities, short-term |
|
|
— |
|
|
35,304 |
|
Accounts receivable, net |
|
|
1,010,601 |
|
|
903,424 |
|
Inventories |
|
|
254,119 |
|
|
296,902 |
|
Prepaid expenses and other current assets |
|
|
290,732 |
|
|
273,550 |
|
Total current assets |
|
|
2,597,387 |
|
|
2,446,618 |
|
|
|
|
|
|
||
|
Marketable securities, long-term |
|
|
— |
|
|
8,022 |
|
Property, plant and equipment, net |
|
|
1,290,427 |
|
|
1,290,863 |
|
Operating lease right-of-use assets, net |
|
|
121,079 |
|
|
117,999 |
|
|
|
|
471,512 |
|
|
419,530 |
|
Intangible assets, net |
|
|
115,905 |
|
|
82,118 |
|
Deferred tax assets |
|
|
1,569,950 |
|
|
1,590,045 |
|
Other assets |
|
|
199,714 |
|
|
128,682 |
|
|
|
|
|
|
||
|
Total assets |
|
$ |
6,365,974 |
|
$ |
6,083,877 |
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
||
|
Accounts payable |
|
$ |
109,035 |
|
$ |
113,125 |
|
Accrued liabilities |
|
|
574,556 |
|
|
525,780 |
|
Deferred revenues |
|
|
1,380,022 |
|
|
1,427,706 |
|
Total current liabilities |
|
|
2,063,613 |
|
|
2,066,611 |
|
|
|
|
|
|
||
|
Income tax payable |
|
|
111,558 |
|
|
116,744 |
|
Operating lease liabilities |
|
|
96,435 |
|
|
96,968 |
|
Other long-term liabilities |
|
|
150,014 |
|
|
173,065 |
|
Total liabilities |
|
|
2,421,620 |
|
|
2,453,388 |
|
|
|
|
|
|
||
|
Total stockholders’ equity |
|
|
3,944,354 |
|
|
3,630,489 |
|
|
|
|
|
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
6,365,974 |
|
$ |
6,083,877 |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
|
|
|
Nine Months Ended
|
||||||
|
|
|
2024 |
|
2023 |
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
|
Net cash provided by operating activities |
|
$ |
452,153 |
|
|
$ |
738,878 |
|
|
|
|
|
|
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in investing activities |
|
|
(200,996 |
) |
|
|
(182,619 |
) |
|
|
|
|
|
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
|
Net cash used in financing activities |
|
|
(152,703 |
) |
|
|
(248,059 |
) |
|
|
|
|
|
|
||||
|
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
6,008 |
|
|
|
(11,205 |
) |
|
Net increase in cash, cash equivalents, and restricted cash |
|
|
104,462 |
|
|
|
296,995 |
|
|
Cash, cash equivalents, and restricted cash at beginning of the period |
|
|
938,519 |
|
|
|
942,355 |
|
|
Cash, cash equivalents, and restricted cash at end of the period |
|
$ |
1,042,981 |
|
|
$ |
1,239,350 |
|
|
INVISALIGN BUSINESS METRICS |
|||||||||||||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|||||||
|
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
|
2024 |
|||||||
|
Number of Invisalign Trained Doctors Cases Were Shipped To |
|
|
82,730 |
|
|
83,440 |
|
|
85,195 |
|
|
83,700 |
|
|
83,510 |
|
|
86,135 |
|
|
87,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Invisalign Trained Doctor Utilization Rates*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
9.5 |
|
|
9.8 |
|
|
9.6 |
|
|
9.1 |
|
|
9.5 |
|
|
9.9 |
|
|
9.7 |
|
North American Orthodontists |
|
|
28.7 |
|
|
29.2 |
|
|
28.8 |
|
|
25.9 |
|
|
28.2 |
|
|
28.8 |
|
|
28.3 |
|
North American GP Dentists |
|
|
4.9 |
|
|
5.2 |
|
|
4.9 |
|
|
5.0 |
|
|
4.9 |
|
|
5.3 |
|
|
5.0 |
|
International |
|
|
6.2 |
|
|
6.6 |
|
|
6.1 |
|
|
6.5 |
|
|
6.3 |
|
|
6.7 |
|
|
6.2 |
|
Total Utilization Rates** |
|
|
7.1 |
|
|
7.5 |
|
|
7.1 |
|
|
7.1 |
|
|
7.2 |
|
|
7.5 |
|
|
7.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Clear Aligner Revenue Per Case Shipment***: |
|
$ |
1,335 |
|
$ |
1,335 |
|
$ |
1,320 |
|
$ |
1,320 |
|
$ |
1,350 |
|
$ |
1,295 |
|
$ |
1,275 |
|
* # 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 |
|
STOCK-BASED COMPENSATION (in thousands) |
||||||||||||||||||||||||
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Fiscal |
|
Q1 |
|
Q2 |
|
Q3 |
||||||||
|
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
2024 |
|
2024 |
||||||||
|
Stock-based Compensation (SBC): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
SBC included in Gross Profit |
|
$ |
1,807 |
|
$ |
1,901 |
|
$ |
1,974 |
|
$ |
1,780 |
|
$ |
7,462 |
|
$ |
2,064 |
|
$ |
2,582 |
|
$ |
3,070 |
|
SBC included in Operating Expenses |
|
|
35,928 |
|
|
35,959 |
|
|
37,628 |
|
|
37,049 |
|
|
146,564 |
|
|
36,724 |
|
|
44,446 |
|
|
45,969 |
|
Total SBC |
|
$ |
37,735 |
|
$ |
37,860 |
|
$ |
39,602 |
|
$ |
38,829 |
|
$ |
154,026 |
|
$ |
38,788 |
|
$ |
47,028 |
|
$ |
49,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
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 |
|
$ |
977,872 |
|
|
$ |
1,028,490 |
|
|
|
|
Constant currency impact (1) |
|
|
(125 |
) |
|
|
|
0.0 |
% |
|
|
Constant currency net revenues (1) |
|
$ |
977,747 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Clear Aligner net revenues |
|
$ |
786,844 |
|
|
$ |
831,738 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
(124 |
) |
|
|
|
0.0 |
% |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
786,720 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
191,028 |
|
|
$ |
196,752 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
(1 |
) |
|
|
|
0.0 |
% |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
191,027 |
|
|
|
|
|
||
|
Year-over-year constant currency analysis: |
|||||||||
|
|
|
Three Months Ended
|
|
|
|||||
|
|
|
2024 |
|
2023 |
|
Impact % of
|
|||
|
GAAP net revenues |
|
$ |
977,872 |
|
$ |
960,214 |
|
|
|
|
Constant currency impact (1) |
|
|
14,649 |
|
|
|
1.5 |
% |
|
|
Constant currency net revenues (1) |
|
$ |
992,521 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Clear Aligner net revenues |
|
$ |
786,844 |
|
$ |
794,939 |
|
|
|
|
Clear Aligner constant currency impact (1) |
|
|
11,700 |
|
|
|
1.5 |
% |
|
|
Clear Aligner constant currency net revenues (1) |
|
$ |
798,544 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
GAAP Imaging Systems and CAD/CAM Services net revenues |
|
$ |
191,028 |
|
$ |
165,275 |
|
|
|
|
Imaging Systems and CAD/CAM Services constant currency impact (1) |
|
|
2,949 |
|
|
|
1.5 |
% |
|
|
Imaging Systems and CAD/CAM Services constant currency net revenues (1) |
|
$ |
193,977 |
|
|
|
|
||
|
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). |
|
|
(+) |
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 |
|
$ |
681,774 |
|
|
$ |
722,628 |
|
Constant currency impact on net revenues |
|
|
(125 |
) |
|
|
|
|
Constant currency gross profit |
|
$ |
681,648 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP gross margin |
|
69.7 |
% |
|
70.3 |
% |
|
Gross margin constant currency impact (1) |
|
0.0 |
|
|
|
|
|
Constant currency gross margin (1) |
|
69.7 |
% |
|
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
|
Three Months Ended
|
||||
|
|
|
2024 |
|
2023 |
||
|
GAAP gross profit |
|
$ |
681,774 |
|
$ |
663,076 |
|
Constant currency impact on net revenues |
|
|
14,649 |
|
|
|
|
Constant currency gross profit |
|
$ |
696,422 |
|
|
|
|
|
|
Three Months Ended
|
||||
|
|
|
2024 |
|
2023 |
||
|
GAAP gross margin |
|
69.7 |
% |
|
69.1 |
% |
|
Gross margin constant currency impact (1) |
|
0.4 |
|
|
|
|
|
Constant currency gross margin (1) |
|
70.2 |
% |
|
|
|
|
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 |
|
$ |
162,298 |
|
|
$ |
147,046 |
|
Income from operations constant currency impact (1) |
|
|
(1,374 |
) |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
160,924 |
|
|
|
|
|
|
|
Three Months Ended |
||||
|
|
|
|
|
|
||
|
GAAP operating margin |
|
16.6 |
% |
|
14.3 |
% |
|
Operating margin constant currency impact (2) |
|
(0.1 |
) |
|
|
|
|
Constant currency operating margin (2) |
|
16.5 |
% |
|
|
|
|
Year-over-year constant currency analysis: |
||||||
|
|
|
Three Months Ended
|
||||
|
|
|
2024 |
|
2023 |
||
|
GAAP income from operations |
|
$ |
162,298 |
|
$ |
166,346 |
|
Income from operations constant currency impact (1) |
|
|
9,973 |
|
|
|
|
Constant currency income from operations (1) |
|
$ |
172,271 |
|
|
|
|
|
|
Three Months Ended
|
||||
|
|
|
2024 |
|
2023 |
||
|
GAAP operating margin |
|
16.6 |
% |
|
17.3 |
% |
|
Operating margin constant currency impact (2) |
|
0.8 |
|
|
|
|
|
Constant currency operating margin (2) |
|
17.4 |
% |
|
|
|
|
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. |
|
|
(+) |
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
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
GAAP gross profit |
|
$ |
681,774 |
|
|
$ |
663,076 |
|
|
$ |
2,102,218 |
|
|
$ |
2,037,339 |
|
|
Stock-based compensation |
|
|
3,070 |
|
|
|
1,974 |
|
|
|
7,716 |
|
|
|
5,682 |
|
|
Amortization of intangibles (1) |
|
|
3,702 |
|
|
|
2,825 |
|
|
|
11,104 |
|
|
|
8,409 |
|
|
Restructuring charges (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8 |
) |
|
Non-GAAP gross profit |
|
$ |
688,546 |
|
|
$ |
667,875 |
|
|
$ |
2,121,038 |
|
|
$ |
2,051,422 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP gross margin |
|
|
69.7 |
% |
|
|
69.1 |
% |
|
|
70.0 |
% |
|
|
70.1 |
% |
|
Non-GAAP gross margin |
|
|
70.4 |
% |
|
|
69.6 |
% |
|
|
70.6 |
% |
|
|
70.6 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP total operating expenses |
|
$ |
519,476 |
|
|
$ |
496,730 |
|
|
$ |
1,638,739 |
|
|
$ |
1,565,546 |
|
|
Stock-based compensation |
|
|
(45,969 |
) |
|
|
(37,628 |
) |
|
|
(127,139 |
) |
|
|
(109,515 |
) |
|
Amortization of intangibles (1) |
|
|
(880 |
) |
|
|
(885 |
) |
|
|
(2,618 |
) |
|
|
(2,631 |
) |
|
Restructuring and other charges (2) |
|
|
89 |
|
|
|
— |
|
|
|
446 |
|
|
|
300 |
|
|
Legal settlement loss |
|
|
(66 |
) |
|
|
— |
|
|
|
(31,193 |
) |
|
|
— |
|
|
Non-GAAP total operating expenses |
|
$ |
472,650 |
|
|
$ |
458,217 |
|
|
$ |
1,478,235 |
|
|
$ |
1,453,700 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP income from operations |
|
$ |
162,298 |
|
|
$ |
166,346 |
|
|
$ |
463,479 |
|
|
$ |
471,793 |
|
|
Stock-based compensation |
|
|
49,039 |
|
|
|
39,602 |
|
|
|
134,855 |
|
|
|
115,197 |
|
|
Amortization of intangibles (1) |
|
|
4,582 |
|
|
|
3,710 |
|
|
|
13,722 |
|
|
|
11,040 |
|
|
Restructuring and other charges (2) |
|
|
(89 |
) |
|
|
— |
|
|
|
(446 |
) |
|
|
(308 |
) |
|
Legal settlement loss |
|
|
66 |
|
|
|
— |
|
|
|
31,193 |
|
|
|
— |
|
|
Non-GAAP income from operations |
|
$ |
215,896 |
|
|
$ |
209,658 |
|
|
$ |
642,803 |
|
|
$ |
597,722 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP operating margin |
|
|
16.6 |
% |
|
|
17.3 |
% |
|
|
15.4 |
% |
|
|
16.2 |
% |
|
Non-GAAP operating margin |
|
|
22.1 |
% |
|
|
21.8 |
% |
|
|
21.4 |
% |
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP net income before provision for income taxes |
|
$ |
165,930 |
|
|
$ |
162,111 |
|
|
$ |
468,182 |
|
|
$ |
468,324 |
|
|
Stock-based compensation |
|
|
49,039 |
|
|
|
39,602 |
|
|
|
134,855 |
|
|
|
115,197 |
|
|
Amortization of intangibles (1) |
|
|
4,582 |
|
|
|
3,710 |
|
|
|
13,722 |
|
|
|
11,040 |
|
|
Restructuring and other charges (2) |
|
|
(89 |
) |
|
|
— |
|
|
|
(446 |
) |
|
|
(308 |
) |
|
Legal settlement loss |
|
|
66 |
|
|
|
— |
|
|
|
31,193 |
|
|
|
— |
|
|
Non-GAAP net income before provision for income taxes |
|
$ |
219,528 |
|
|
$ |
205,423 |
|
|
$ |
647,506 |
|
|
$ |
594,253 |
|
|
UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED (in thousands, except per share data) |
||||||||||||||||
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
GAAP provision for income taxes |
|
$ |
49,967 |
|
|
$ |
40,684 |
|
|
$ |
150,627 |
|
|
|
147,285 |
|
|
Tax impact on non-GAAP adjustments |
|
|
(6,061 |
) |
|
|
418 |
|
|
|
(21,156 |
) |
|
|
(28,417 |
) |
|
Non-GAAP provision for income taxes |
|
$ |
43,906 |
|
|
$ |
41,102 |
|
|
$ |
129,471 |
|
|
$ |
118,868 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP effective tax rate |
|
|
30.1 |
% |
|
|
25.1 |
% |
|
|
32.2 |
% |
|
|
31.4 |
% |
|
Non-GAAP effective tax rate |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP net income |
|
$ |
115,963 |
|
|
$ |
121,427 |
|
|
$ |
317,555 |
|
|
$ |
321,039 |
|
|
Stock-based compensation |
|
|
49,039 |
|
|
|
39,602 |
|
|
|
134,855 |
|
|
|
115,197 |
|
|
Amortization of intangibles (1) |
|
|
4,582 |
|
|
|
3,710 |
|
|
|
13,722 |
|
|
|
11,040 |
|
|
Restructuring and other charges (2) |
|
|
(89 |
) |
|
|
— |
|
|
|
(446 |
) |
|
|
(308 |
) |
|
Legal settlement loss |
|
|
66 |
|
|
|
— |
|
|
|
31,193 |
|
|
|
— |
|
|
Tax impact on non-GAAP adjustments |
|
|
6,061 |
|
|
|
(418 |
) |
|
|
21,156 |
|
|
|
28,417 |
|
|
Non-GAAP net income |
|
$ |
175,622 |
|
|
$ |
164,321 |
|
|
$ |
518,035 |
|
|
$ |
475,385 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP diluted net income per share |
|
$ |
1.55 |
|
|
$ |
1.58 |
|
|
$ |
4.23 |
|
|
$ |
4.18 |
|
|
Non-GAAP diluted net income per share |
|
$ |
2.35 |
|
|
$ |
2.14 |
|
|
$ |
6.89 |
|
|
$ |
6.19 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Shares used in computing diluted net income per share |
|
|
74,757 |
|
|
|
76,826 |
|
|
|
75,149 |
|
|
|
76,849 |
|
|
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 or revisions to initial severance cost estimates. |
|
|
(+) |
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. |
|
|
Q4 2024 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION |
||
|
GAAP operating margin |
|
Slightly below 14.0% |
|
Stock-based compensation |
|
~5.0% |
|
Amortization of intangibles (1) |
|
~0.5% |
|
Restructuring charges (2) |
|
~3.0% |
|
Non-GAAP operating margin |
|
Slightly above 22.1% |
|
(1) |
Amortization of intangible assets related to certain acquisitions. |
|
|
(2) |
Restructuring charges primarily related to severance. |
Refer to "About Non-GAAP Financial Measures" section of press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241023467147/en/
(909) 833-5839
mvalente@aligntech.com
(828) 551-4201
sarah.johnson@zenogroup.com
Source: