Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Oct. 31, 2016
Document Information [Line Items]
Trading Symbol	ALGN
Entity Registrant Name	ALIGN TECHNOLOGY INC
Entity Central Index Key	0001097149
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		79,689,402

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Sep. 30, 2016

Sep. 30, 2015

Income Statement [Abstract]

Net revenues

^[1]

$ 278,589

$ 207,636

$ 786,671

$ 615,210

Cost of net revenues

69,387

50,060

191,626

147,910

Gross profit

209,202

157,576

595,045

467,300

Operating expenses:

Selling, general and administrative

126,708

101,751

360,385

290,657

Research and development

20,415

17,779

54,111

47,348

Total operating expenses

147,123

119,530

414,496

338,005

Income from operations

62,079

38,046

180,549

129,295

Interest and other income (expenses), net

1,463

(1,568)

1,161

(2,846)

Net income before provision for income taxes and equity in losses of investee

63,542

36,478

181,710

126,449

Provision for income taxes

11,698

8,862

39,172

31,306

Equity in losses of investee, net of tax

477

Net income

$ 51,367

$ 27,616

$ 142,061

$ 95,143

Net income per share:

Basic (in usd per share)

$ 0.64

$ 0.35

$ 1.78

$ 1.19

Diluted (in usd per share)

$ 0.63

$ 0.34

$ 1.74

$ 1.17

Shares used in computing net income per share:

Basic (in shares)

79,977

79,808

79,920

80,173

Diluted (in shares)

81,466

81,092

81,523

81,576

[1]	{F\|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmE4MmYxNjA2YzdiMDQ5ZjQ4NWQ0OTY5NTEzMGQ5ZmQ1fFRleHRTZWxlY3Rpb246QkQyQjNFOThCNEVFMUZBRUExM0M3MDg5MjYwRjAzQzAM}

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 51,367	$ 27,616	$ 142,061	$ 95,143
Net change in currency translation adjustment	(76)	114	(143)	(95)
Change in unrealized gains (losses) on available-for-sale securities, net of tax	(437)	98	1,038	260
Other comprehensive income (loss)	(513)	212	895	165
Comprehensive income	$ 50,854	$ 27,828	$ 142,956	$ 95,308

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 419,948	$ 167,714
Marketable securities, short-term	193,018	359,581
Accounts receivable, net of allowances for doubtful accounts and returns of $3,925 and $2,472, respectively	244,992	158,550
Inventories	26,341	19,465
Prepaid expenses and other current assets	27,469	26,700
Total current assets	911,768	732,010
Marketable securities, long-term	62,820	151,370
Property, plant and equipment, net	172,658	136,473
Equity method investments	46,268	0
Goodwill and intangible assets, net	82,987	79,162
Deferred tax assets	68,918	51,416
Other assets	13,474	8,202
Total assets	1,358,893	1,158,633
Current liabilities:
Accounts payable	33,104	34,354
Accrued liabilities	132,538	107,765
Deferred revenues	177,409	129,553
Total current liabilities	343,051	271,672
Taxes Payable	42,539	37,512
Other long-term liabilities	993	1,523
Total liabilities	386,583	310,707
Commitments and contingencies (Note 7 and 8)
Stockholders' equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)	0	0
Common stock, $0.0001 par value (200,000 shares authorized; 79,867 and 79,500 issued and outstanding, respectively)	8	8
Additional paid-in capital	854,422	821,507
Accumulated other comprehensive income (loss), net	(85)	(980)
Retained earnings	117,965	27,391
Total stockholders’ equity	972,310	847,926
Total liabilities and stockholders’ equity	$ 1,358,893	$ 1,158,633

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts receivable, allowance for doubtful accounts and returns	$ 3,925	$ 2,472
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	79,867	79,500
Common stock, shares outstanding	79,867	79,500

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 142,061	$ 95,143
Adjustments to reconcile net profit to net cash provided by operating activities:
Deferred taxes	(17,476)	(4,646)
Depreciation and amortization	16,786	13,141
Stock-based compensation	39,934	39,135
Tax (shortfalls) benefits from stock-based awards	13,057	8,663
Excess tax benefit from share-based payment arrangements	(13,943)	(8,663)
Equity in losses of investee, net of tax	477	0
Other non-cash operating activities	9,525	9,252
Changes in assets and liabilities, net of acquired assets and liabilities:
Accounts receivable	(93,122)	(27,123)
Inventories	(6,873)	(3,033)
Prepaid expenses and other assets	(5,069)	(2,529)
Accounts payable	(4,134)	4,408
Accrued and other long-term liabilities	38,969	6,712
Deferred revenues	46,482	28,182
Net cash provided by operating activities	166,674	158,642
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment	(56,368)	(36,663)
Purchase of marketable securities	(283,797)	(306,938)
Proceeds from maturities of marketable securities	328,498	238,412
Purchase of equity method investments	(46,745)	0
Proceeds from sales of marketable securities	209,302	12,518
Other investing activities	(8,031)	46
Net cash used in investing activities	142,859	(92,625)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	12,877	10,559
Common stock repurchases	(58,174)	(90,603)
Excess tax benefit from share-based payment arrangements	13,943	8,663
Employees’ taxes paid upon the vesting of restricted stock units	(26,265)	(17,574)
Net cash used in financing activities	(57,619)	(88,955)
Effect of foreign exchange rate changes on cash and cash equivalents	320	(2,893)
Net increase (decrease) in cash and cash equivalents	252,234	(25,831)
Cash and cash equivalents, beginning of the period	167,714	$ 199,871
Cash and cash equivalents, end of the period	$ 419,948

Summary of Significant Accounting Policies	9 Months Ended
Summary of Significant Accounting Policies	Sep. 30, 2016
Notes To Financial Statements [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, or “Align”) in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and contain all adjustments, including normal recurring adjustments, necessary to state fairly our results of operations for the three and nine months ended September 30, 2016 and 2015, our comprehensive income for the three and nine months ended September 30, 2016 and 2015, our financial position as of September 30, 2016 and our cash flows for the nine months ended September 30, 2016 and 2015. The Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from the December 31, 2015 audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 or any other future period, and we make no representations related thereto. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A and 8, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2015. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") in the United States of America (“U.S.”) requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to the fair values of financial instruments, long-lived assets and goodwill, useful lives of intangible assets and property and equipment, revenue recognition, stock-based compensation, income taxes, and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Variable Interest Entities We have interests in entities determined to be Variable Interest Entities (“VIEs”). If we determine we are the primary beneficiary of these VIEs, we would consolidate the VIE into our financial statements. In determining if we are the primary beneficiary, we evaluate whether we have the power to direct the activities that most significantly impact the VIEs economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our evaluation includes identification of significant activities and an assessment of our ability to direct those activities based on governance provisions and arrangements to provide or receive product and process technology, product supply, operations services, equity funding, financing, and other applicable agreements and circumstances. Our assessments of whether we are the primary beneficiary of our VIEs require significant assumptions and judgments. We have concluded that we are not the primary beneficiary of our VIE investments; therefore, we do not consolidate their results into our consolidated financials. Investments in Privately-Held Companies Investments in privately held companies in which we can exercise significant influence but do not own a majority equity interest or otherwise control, are accounted for under the equity method of accounting. Equity method investments are reported on our balance sheet as a single amount, and we record our share of their operating results within equity in losses of investee in our results of operation. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (" FASB") released Accounting Standards Update ("ASU") 2014-9 "Revenue from Contracts with Customers" (Topic 606) to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services. The new standard defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We are required to adopt this standard starting in the first quarter of fiscal year 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within the standard; or (ii) retrospective with the cumulative effect of initially applying the standard recognized at the date of initial application and providing certain additional disclosures as defined per the standard. We have not yet selected a transition method, and are in the process of determining the impact that the new standard will have on our consolidated financial statements. In April 2016, the Financial Accounting Standards Board (" FASB") released ASU No. 2016-10 "Revenue from Contracts with Customers" to clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the principles for those areas of the ASU 2014-9 issued in May 2014. The effective date and the transition requirement of the amendments in this update are the same as the effective date and transition requirements of Topic 606. In May 2016, the Financial Accounting Standards Board (" FASB") released ASU No. 2016-12 "Revenue from Contracts with Customers" to address certain issues in the Topic 606 guidance on assessing the collectibility, presentation of sales taxes, non-cash consideration, and completed contracts and contract modifications at transition. The ASU provides narrow-scope improvements and practical expedients to the ASU 2014-9 issued in May 2014. The effective date and the transition requirement of the amendments in this update are the same as the effective date and transition requirements of Topic 606. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842). The FASB issued this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The updated guidance is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the standard is permitted. The Company is evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting" This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions, which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. This ASU will become effective for Align on January 1, 2017. Early adoption is permitted in any interim or annual period. We are currently evaluating the impact of this guidance on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses” (Topic 326). The FASB issued this update to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the existing guidance of incurred loss impairment methodology with an approach that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The updated guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption of the update is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the impact of the adoption of this update on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). ASU 2016-15 clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted. We are currently assessing the potential impact of ASU 2016-15 on our financial statements and related disclosures.

Marketable Securities and Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Marketable Securities and Fair Value Measurements

Note 2. Marketable Securities and Fair Value Measurements

As of September 30, 2016 and December 31, 2015, the estimated fair value of our short-term and long-term marketable securities, classified as available for sale, are as follows (in thousands):

Short-term



September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	19,029	$	—	$	—		$	19,029
Corporate bonds	81,955		18		(29		)	81,944
Municipal securities	9,205		—		(4		)	9,201
U.S. government agency bonds	30,587		24		—			30,611
U.S. government treasury bonds	47,702		31		—			47,733
Certificates of deposits	4,500		—		—			4,500
Total Marketable Securities, Short-Term	$	192,978	$	73	$	(33	)	$	193,018

Long-term



September 30, 2016	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	9,249	$	11	$	—		$	9,260
Corporate bonds	43,101		118		(7		)	43,212
U.S. government treasury bonds	10,027		21		—			10,048
Asset-backed securities	300		—		—			300
Total Marketable Securities, Long-Term	$	62,677	$	150	$	(7	)	$	62,820

Short-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper	$	38,537	$	—	$	—		$	38,537
Corporate bonds	179,765		6		(251		)	179,520
U.S. dollar denominated foreign corporate bonds	510		—		(2		)	508
Municipal securities	14,209		7		(2		)	14,214
U.S. government agency bonds	75,172		—		(53		)	75,119
U.S. government treasury bonds	51,763		1		(81		)	51,683
Total Marketable Securities, Short-Term	$	359,956	$	14	$	(389	)	$	359,581

Long-term



December 31, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. government agency bonds	$	43,853	$	—	$	(178	)	$	43,675
Corporate bonds	64,012		9		(218		)	63,803
U.S. government treasury bonds	37,673		—		(107		)	37,566
Municipal securities	3,993		—		(2		)	3,991
Asset-backed securities	2,338		—		(3		)	2,335
Total Marketable Securities, Long-Term	$	151,869	$	9	$	(508	)	$	151,370

Cash and cash equivalents are not included in the table above as the gross unrealized gains and losses are not material. We have no material short-term or long-term investments that have been in a continuous unrealized loss position for greater than twelve months as of September 30, 2016 and December 31, 2015. Amounts reclassified to earnings from accumulated other comprehensive income related to unrealized gains or losses were immaterial for the three and nine months ended September 30, 2016 and 2015. For the three and nine months ended September 30, 2016 and 2015, realized gains or losses were immaterial.

Our fixed-income securities investment portfolio consists of commercial paper, corporate bonds, municipal securities, U.S. government agency bonds, U.S. government treasury bonds, U.S. dollar denominated foreign corporate bonds, certificates of deposits, and asset-backed securities that have a maximum effective maturity of 27 months. The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. The unrealized losses are due primarily to changes in credit spreads and interest rates. We expect to realize the full value of these investments upon maturity or sale. The weighted average remaining duration of these securities was approximately 8 months and 9 months as of September 30, 2016 and December 31, 2015, respectively.

As the carrying value approximates the fair value for our short-term and long-term marketable securities shown in the tables above, the following table summarizes the fair value of our short-term and long-term marketable securities classified by maturity as of September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016		December 31, 2015
Due in one year or less	$	193,018	$	359,581
Due in greater than one year	62,820		151,370
Total available for sale short-term and long-term marketable securities	$	255,838	$	510,951

Fair Value Measurements

We measure the fair value of our cash equivalents and marketable securities as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Our Level 1 assets consist of money market funds and U.S. government treasury bonds. We did not hold any Level 1 liabilities as of September 30, 2016 and December 31, 2015.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Our Level 2 assets consist of commercial paper, corporate bonds, certificates of deposits, U.S. government agency bonds, asset-backed securities, municipal securities, U.S. dollar denominated foreign corporate bonds and our Israeli funds that are mainly invested in insurance policies and foreign currency forward contracts. We obtain fair values for our Level 2 investments. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates. The foreign currency forward contracts are valued using observable inputs such as quotations on forward foreign exchange rates. We did not hold any Level 2 liabilities as of September 30, 2016 or December 31, 2015.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

Our Level 3 assets consist of long-term notes receivable and are included in other assets on our consolidated balance sheet. In the third quarter of 2016, we entered into long-term notes receivable and, as of September 30, 2016, the fair value approximated its carrying value of $2.0 million.

The following tables summarize our financial assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands):



Description	Balance as of September 30, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Observable Inputs (Level 3)
Cash equivalents:
Money market funds	$	92,931	$	92,931	$	—	$	—
Short-term investments:
Commercial paper	19,029		—		19,029		—
Corporate bonds	81,944		—		81,944		—
Municipal securities	9,201		—		9,201		—
U.S. government agency bonds	30,611		—		30,611		—
U.S. government treasury bonds	47,733		47,733		—		—
Certificates of deposits	4,500		—		4,500		—
Long-term investments:
U.S. government agency bonds	9,260		—		9,260		—
Corporate bonds	43,212		—		43,212		—
U.S. government treasury bonds	10,048		10,048		—		—
Asset-backed securities	300		—		300		—
Prepaid expenses and other current assets:
Israeli funds	2,527		—		2,527		—
Other assets:
Long-term notes receivable	2,000		—		—		2,000
	$	353,296	$	150,712	$	200,584	$	2,000



Description	Balance as of December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents:
Money market funds	$	70,148	$	70,148	$	—
Commercial paper	36,887		—		36,887
U.S. government agency bonds	3,599		—		3,599
Corporate bonds	625		—		625
Short-term investments:
Commercial paper	38,537		—		38,537
Corporate bonds	179,520		—		179,520
U.S. dollar denominated foreign corporate bonds	508		—		508
Municipal securities	14,214		—		14,214
U.S. government agency bonds	75,119		—		75,119
U.S. government treasury bonds	51,683		51,683		—
Long-term investments:
U.S. government agency bonds	43,675		—		43,675
Corporate bonds	63,803		—		63,803
U.S. government treasury bonds	37,566		37,566		—
Municipal securities	3,991		—		3,991
Asset-backed securities	2,335		—		2,335
Prepaid expenses and other current assets:
Israeli funds	2,436		—		2,436
	$	624,646	$	159,397	$	465,249

Derivative Financial Instruments

We have in the past and may in the future enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain trade and intercompany receivables and payables, which are classified within level 2 of the fair value hierarchy. The net loss on these forward contracts was immaterial for the nine months ended September 30, 2016. The net gain or loss from the settlement of these foreign currency forward contracts is recorded in Interest and other income (expenses), net in the Consolidated Statement of Operations. We had no foreign exchange forward contracts outstanding as of September 30, 2016. Certain of our investment in private companies contain embedded derivatives, which do not require bifurcation as we have elected to measure these investments at fair value.

Balance Sheet Components

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Balance Sheet Components

Inventories

Inventories consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Raw materials	$	12,018	$	9,950
Work in process	1,488		7,067
Finished goods	12,835		2,448
Total Inventories	$	26,341	$	19,465

Work in process includes costs to produce our clear aligner and intra-oral products. Finished goods primarily represent our intra-oral scanners and ancillary products that support our clear aligner products.

Accrued liabilities

Accrued liabilities consist of the following (in thousands):



	September 30, 2016		December 31, 2015
Accrued payroll and benefits	$	65,848	$	55,430
Accrued sales and marketing expenses	14,303		7,071
Accrued sales rebates	9,258		8,486
Accrued sales tax and value added tax	6,087		4,801
Accrued income taxes	5,043		2,646
Accrued professional fees	4,947		2,775
Accrued warranty	3,397		2,638
Other accrued liabilities	23,655		23,918
Total Accrued Liabilities	$	132,538	$	107,765

Warranty

We regularly review the accrued warranty balances and update these balances based on historical warranty trends. Actual warranty costs incurred have not materially differed from those accrued; however, future actual warranty costs could differ from the estimated amounts.

Clear Aligner

We warrant our Invisalign products against material defects until the Invisalign case is complete. We accrue for warranty costs in cost of net revenues upon shipment of products. The amount of accrued estimated warranty costs is primarily based on historical experience as to product failures as well as current information on replacement costs.

Scanners

We warrant our scanners for a period of one year and accrue for these warranty costs which includes materials and labor based on estimated historical repair costs. Extended service packages may be purchased for additional fees.

Warranty accrual as of September 30, 2016 and 2015 consists of the following activity (in thousands):



	Nine Months Ended September 30,
	2016			2015
Balance at beginning of period	$	2,638		$	3,148
Charged to cost of net revenues	3,440			1,308
Actual warranty expenditures	(2,681		)	(1,745		)
Balance at end of period	$	3,397		$	2,711

Equity Method Investments	9 Months Ended
Equity Method Investments	Sep. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]
Equity Method Investments	Equity Method Investments On July 25, 2016, we acquired a 17% equity interest, on a fully diluted basis, in SmileDirectClub, LLC (“SDC”) for $46.7 million, and account for this as an equity method investment. Thus, we include our proportional share of SDC's earnings or losses in our consolidated statement of operations. The investment is reported on our consolidated balance sheet as a single amount under Equity Method Investments, and we record our share of their operating results within Equity in losses of investee in our consolidated statement of operations. As of September 30, 2016, the balance of our equity method investments was $46.3 million. Concurrently with the investment, on July 25, 2016, we also entered into a supply agreement with SDC to manufacture clear aligners for SDC's doctor-led, at-home program for simple teeth straightening. The term of the supply agreement expires on December 31, 2019. We commenced supplying aligners to SDC in October 2016. The sale of aligners to SDC and the income from under the supply agreement will be reported in our Clear Aligner business segment after eliminating outstanding intercompany transactions.

Goodwill and Long-lived Assets

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Goodwill and Long-lived Assets

Goodwill and Intangible Long-lived Assets

Goodwill

The change in the carrying value of goodwill for the nine months ended September 30, 2016, all attributable to our Clear Aligner reporting unit, is as follows (in thousands):



	Clear Aligner
Balance as of December 31, 2015	$	61,074
Adjustments ¹	121
Balance as of September 30, 2016	$	61,195

¹The adjustments to goodwill during the nine months ended September 30, 2016 were due to foreign currency translation.

During the fourth quarter of fiscal 2015, we performed the annual goodwill impairment testing and found no impairment events as the fair value of our Clear Aligner reporting unit was significantly in excess of the carrying value.

Intangible Long-Lived Assets

Acquired intangible assets are being amortized as follows (in thousands):



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of September 30, 2016		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of September 30, 2016
Trademarks	14	$	7,100	$	(1,597	)	$	(4,179	)	$	1,324
Existing technology	13	12,600		(4,000		)	(4,328		)	4,272
Customer relationships	11	33,500		(12,353		)	(10,751		)	10,396
Patents	8	6,316		(516		)	—			5,800
Total Intangible Assets		$	59,516	$	(18,466	)	$	(19,258	)	$	21,792



	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2015		Accumulated Amortization			Accumulated Impairment Loss			Net Carrying Value as of December 31, 2015
Trademarks	15	$	7,100	$	(1,492	)	$	(4,179	)	$	1,429
Existing technology	13	12,600		(3,577		)	(4,328		)	4,695
Customer relationships	11	33,500		(10,957		)	(10,751		)	11,792
Patents	8	285		(113		)	—			172
Total Intangible Assets		$	53,485	$	(16,139	)	$	(19,258	)	$	18,088

During the second quarter of 2016, we acquired a patent for $6.0 million, which will be amortized over its remaining useful life of approximately eight years.

The total estimated annual future amortization expense for these acquired intangible assets as of September 30, 2016 is as follows (in thousands):




Remainder of 2016	$	840
2017	3,353
2018	3,353
2019	3,346
2020	3,336
Thereafter	7,564
Total	$	21,792

Amortization for the nine months ended September 30, 2016 was $2.2 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Credit Facilities	9 Months Ended
Credit Facilities	Sep. 30, 2016
Notes To Financial Statements [Abstract]
Credit Facilities	Credit Facilities On March 17, 2016, we amended the credit facility and extended the maturity date to March 22, 2017. The credit facility provides for a $50.0 million revolving line of credit, with a $10.0 million letter of credit sublimit. The credit facility also requires us to maintain a minimum unrestricted cash balance of $50.0 million and comply with specific financial conditions and performance requirements. The loan bears interest, at our option, at a fluctuating rate per annum equal to the daily one-month adjusted LIBOR rate plus a spread of 1.75% or an adjusted LIBOR rate (based on one, three, six or twelve-month interest periods) plus a spread of 1.75%. As of September 30, 2016, we had no outstanding borrowings under this credit facility and were in compliance with the conditions and performance requirements.

Legal Proceedings (Notes)	9 Months Ended
Legal Proceedings (Notes)	Sep. 30, 2016
Legal Proceedings [Abstract]
Legal Proceedings	Legal Proceedings Securities Class Action Lawsuit On November 28, 2012, plaintiff City of Dearborn Heights Act 345 Police & Fire Retirement System filed a lawsuit against Align, Thomas M. Prescott (“Mr. Prescott”), Align’s former President and Chief Executive Officer, and Kenneth B. Arola (“Mr. Arola”), Align’s former Vice President, Finance and Chief Financial Officer, in the United States District Court for the Northern District of California on behalf of a purported class of purchasers of our common stock (the “Securities Action”). On July 11, 2013, an amended complaint was filed, which named the same defendants, on behalf of a purported class of purchasers of our common stock between January 31, 2012 and October 17, 2012. The amended complaint alleged that Align, Mr. Prescott and Mr. Arola violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and that Mr. Prescott and Mr. Arola violated Section 20(a) of the Securities Exchange Act of 1934. Specifically, the amended complaint alleged that during the purported class period defendants failed to take an appropriate goodwill impairment charge related to the April 29, 2011 acquisition of Cadent Holdings, Inc. in the fourth quarter of 2011, the first quarter of 2012 or the second quarter of 2012, which rendered our financial statements and projections of future earnings materially false and misleading and in violation of U.S. GAAP. The amended complaint sought monetary damages in an unspecified amount, costs and attorneys’ fees. On December 9, 2013, the court granted defendants’ motion to dismiss with leave for plaintiff to file a second amended complaint. Plaintiff filed a second amended complaint on January 8, 2014 on behalf of the same purported class. The second amended complaint states the same claims as the amended complaint. On August 22, 2014, the court granted our motion to dismiss without leave to amend. On September 22, 2014, Plaintiff filed a notice of appeal to the Ninth Circuit Court of Appeals. Briefing for the appeal was completed in May 2015 and the Ninth Circuit held oral arguments in October 2016. Align intends to vigorously defend itself against these allegations. Align is currently unable to predict the outcome of this amended complaint and therefore cannot determine the likelihood of loss nor estimate a range of possible loss, if any. Shareholder Derivative Lawsuit On February 1, 2013, plaintiff Gary Udis filed a shareholder derivative lawsuit against several of Align’s current and former officers and directors in the Superior Court of California, County of Santa Clara. The complaint alleges that our reported income and earnings were materially overstated because of a failure to timely write down goodwill related to the April 29, 2011 acquisition of Cadent Holdings, Inc., and that defendants made allegedly false statements concerning our forecasts. The complaint asserts various state law causes of action, including claims of breach of fiduciary duty, unjust enrichment, and insider trading, among others. The complaint seeks unspecified damages on behalf of Align, which is named solely as nominal defendant against whom no recovery is sought. The complaint also seeks an order directing Align to reform and improve its corporate governance and internal procedures, and seeks restitution in an unspecified amount, costs, and attorneys’ fees. On July 8, 2013, an Order was entered staying this derivative lawsuit until an initial ruling on our first motion to dismiss the Securities Action. On January 15, 2014, an Order was entered staying this derivative lawsuit until an initial ruling on our second motion to dismiss the Securities Action. On October 14, 2014, an Order was entered staying this derivative lawsuit until a ruling by the Ninth Circuit in the Securities Action discussed above. Align is currently unable to predict the outcome of this complaint and therefore cannot determine the likelihood of loss nor estimate a range of possible losses, if any. In addition, in the course of Align's operations, Align is involved in a variety of claims, suits, investigations, and proceedings, including actions with respect to intellectual property claims, patent infringement claims, government investigations, labor and employment claims, breach of contract claims, tax, and other matters. Regardless of the outcome, these proceedings can have an adverse impact on us because of defense costs, diversion of management resources, and other factors. Although the results of complex legal proceedings are difficult to predict and Align's view of these matters may change in the future as litigation and events related thereto unfold; Align currently does not believe that these matters, individually or in the aggregate, will materially affect Align's financial position, results of operations or cash flows.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Commitments and Contingencies

Operating Leases

As of September 30, 2016, minimum future lease payments for non-cancelable operating leases are as follows (in thousands):



Fiscal Year Ending December 31,	Operating leases
Remainder of 2016	$	3,354
2017	10,258
2018	6,441
2019	4,161
2020	3,671
Thereafter	4,732
Total minimum future lease payments	$	32,617

Other Commitments

On July 25, 2016, we entered into a Loan and Security Agreement (the "Loan Agreement") with SDC where we agreed to provide a loan of up to $15.0 million in one or more advances to SDC (the "Loan Facility"). Available advances under the Loan Facility are subject to a borrowing base of 80% of SDC's eligible accounts receivable, determined in accordance with the terms of the Loan Agreement, and the satisfaction of other customary conditions. The advances bear interest, paid quarterly, at the rate of 7% per annum. Advances that are repaid or prepaid may be reborrowed. All outstanding principal and accrued and unpaid interest on the advances are due and payable on July 25, 2021. SDC's obligations in respect of the Loan Agreement are secured by a security interest in substantially all of SDC's assets. As of September 30, 2016, no advances on the Loan Facility were issued or outstanding. (Refer to Note 4 "Equity Method Investments" of the Notes of these Condensed Consolidated Financial Statements for more information on our investments in SDC.)

We have entered into certain investments with a privately held company where we have committed to purchase up to $5.0 million in convertible promissory notes. The first convertible promissory note for $2.0 million was issued in July 2016 and is outstanding as of September 30, 2016. The remaining $3.0 million is conditioned upon achievement of various business milestones. The notes all mature on December 30, 2018 and accrue interest annually at 2.5%.

Off-balance Sheet Arrangements

As of September 30, 2016, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources.

Indemnification Provisions

In the normal course of business to facilitate transactions in our services and products, we indemnify certain parties: customers, vendors, lessors and other parties with respect to certain matters, including, but not limited to, services to be provided by us and intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and our executive officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim.

It is not possible to make a reasonable estimate of the maximum potential amount under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period. As of September 30, 2016, we did not have any material indemnification claims that were probable or reasonably possible.

Stock-based Compensation

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Stock-based Compensation

Summary of stock-based compensation expense

As of September 30, 2016, the 2005 Incentive Plan (as amended) has a total reserve of 30,169,000 shares of which 8,036,000 shares are available for issuance.

Stock-based compensation is based on the estimated fair value of awards, net of estimated forfeitures, and recognized over the requisite service period. Estimated forfeitures are based on historical experience at the time of grant and may be revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation related to all of our stock-based awards and employee stock purchases for the three and nine months ended September 30, 2016 and 2015 is as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Cost of net revenues	$	995	$	984	$	2,888	$	2,929
Selling, general and administrative	10,797		11,564		31,474		30,106
Research and development	1,919		2,113		5,572		6,100
Total stock-based compensation	$	13,711	$	14,661	$	39,934	$	39,135

Options

Activity for the nine months ended September 30, 2016 under the stock option plans is set forth below (in thousands, except years and per share amounts):



	Stock Options Number of Shares Underlying Stock Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (In Years)	Aggregate Intrinsic Value

Outstanding as of December 31, 2015	496		$	15.14
Granted	—		—
Exercised	(224	)	14.69
Cancelled or expired	—		—
Outstanding as of September 30, 2016	272		$	15.52	1.25	$	21,248
Vested and expected to vest at September 30, 2016	272		$	15.52	1.25	$	21,248
Exercisable at September 30, 2016	272		$	15.52	1.25	$	21,248

There were no stock options granted during the nine months ended September 30, 2016 and 2015. All compensation costs relating to stock options have been recognized as of September 30, 2016.

Restricted Stock Units (“RSU”)

A summary of the RSU activity for the nine months ended September 30, 2016 is as follows (in thousands, except years):



	Number of Shares Underlying RSU		Weighted Average Grant Date Fair Value		Weighted Remaining Contractual Period	Aggregate Intrinsic Value
					(in years)
Nonvested as of December 31, 2015	2,079		$	49.45
Granted	683		66.64
Vested and released	(774	)	44.89
Forfeited	(120	)	52.86
Nonvested as of September 30, 2016	1,868		$	57.42	1.29	$	175,091

As of September 30, 2016, the total unamortized compensation cost related to RSU, net of estimated forfeitures, was $71.2 million, which we expect to recognize over a weighted average period of 2.2 years.

We have granted market-performance based restricted stock units (“MSU”) to our executive officers. Each MSU represents the right to one share of Align’s common stock and will be issued through our amended 2005 Incentive Plan. The actual number of MSU which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of the NASDAQ Composite Index over the vesting period, generally two to three years, up to 150% of the MSU initially granted.

The following table summarizes the MSU activity for the nine months ended September 30, 2016 (in thousands, except years):



	Number of Shares Underlying MSU		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Period	Aggregate Intrinsic Value
					(in years )
Nonvested as of December 31, 2015	611		$	51.41
Granted	219		55.77
Vested and released	(271	)	36.73
Forfeited	(39	)	56.41
Nonvested as of September 30, 2016	520		$	60.49	1.35	$	48,783

As of September 30, 2016, the total unamortized compensation costs related to the MSU, net of estimated forfeitures, was $13.4 million, which we expect to recognize over a weighted average period of 1.4 years.

Employee Stock Purchase Plan ("ESPP")

In May 2010, our stockholders approved the 2010 Employee Stock Purchase Plan ("2010 Purchase Plan") which will continue until terminated by either the Board of Directors or its administrator. The maximum number of shares available for purchase under the 2010 Purchase Plan is 2,400,000 shares. As of September 30, 2016, 937,000 shares remain available for purchase under the 2010 Purchase Plan.

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Expected term (in years)	1.2			1.2			1.2			1.2
Expected volatility	27.4		%	27.9		%	30.5		%	31.1		%
Risk-free interest rate	0.53		%	0.41		%	0.65		%	0.29		%
Expected dividends	—			—			—			—
Weighted average fair value at grant date	$	24.44		$	17.10		$	22.23		$	16.19

As of September 30, 2016, the total unamortized compensation cost related to employee purchases was $1.2 million, which we expect to recognize over a weighted average period of 0.5 year.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Common Stock Repurchase Program	9 Months Ended
Common Stock Repurchase Program	Sep. 30, 2016
Notes To Financial Statements [Abstract]
Common Stock Repurchase	Common Stock Repurchase April 2014 Repurchase Program In April 2014, we announced that our Board of Directors had authorized a stock repurchase program ("April 2014 Repurchase Program") pursuant to which we may purchase up to $300.0 million of our common stock over the next three years. On May 3, 2016, as part of our $300.0 million April 2014 Repurchase Program, we entered into an accelerated share repurchase agreement ("ASR") to repurchase $50.0 million of our common stock (the "2016 ASR".) Under the terms of the 2016 ASR, we paid $50.0 million and received an initial delivery of approximately 0.5 million shares. The 2016 ASR was completed on September 6, 2016 with a final delivery of approximately 0.1 million shares. We received a total of approximately 0.6 million shares under the 2016 ASR at a weighted average share price of $81.89. The final number of shares repurchased was based on our volume-weighted average stock price during the term of the transaction, less an agreed upon discount. During 2016, we have repurchased on the open market approximately 0.1 million shares of our common stock at a weighted average of $93.21 per share, including commissions, for an aggregate purchase price of approximately $8.2 million. All repurchased shares were retired. As of September 30, 2016, we have $41.8 million remaining under the April 2014 Repurchase Program. April 2016 Repurchase Program On April 28, 2016, we announced that our Board of Directors had authorized an additional plan to repurchase up to $300.0 million of the Company's stock ("the April 2016 Repurchase Plan"). Any purchases under this stock repurchase program may be made, from time-to-time, pursuant to open market purchases (including pursuant to Rule 10b5-1 plans), privately-negotiated transactions, accelerated stock repurchases, block trades or derivative contracts or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934. As of September 30, 2016, there have not been any repurchases under this plan.

Net Profit Per Share

9 Months Ended

Sep. 30, 2016

Net Profit Per Share

Net Income Per Share

Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed using the weighted average number of shares of common stock, adjusted for any dilutive effect of potential common stock. Potential common stock, computed using the treasury stock method, includes RSU, MSU, stock options and ESPP.

The following table sets forth the computation of basic and diluted net income per share attributable to common stock (in thousands, except per share amounts):



	Three Months Ended, September 30,				Nine Months Ended, September 30,
	2016		2015		2016		2015
Numerator:
Net income	$	51,367	$	27,616	$	142,061	$	95,143
Denominator:
Weighted-average common shares outstanding, basic	79,977		79,808		79,920		80,173
Dilutive effect of potential common stock	1,489		1,284		1,603		1,403
Total shares, diluted	81,466		81,092		81,523		81,576

Net income per share, basic	$	0.64	$	0.35	$	1.78	$	1.19
Net income per share, diluted	$	0.63	$	0.34	$	1.74	$	1.17

For the nine months ended September 30, 2016 and 2015, the anti-dilutive effect from RSU, MSU, stock options and ESPP was not material.

Segments and Geographical Information

9 Months Ended

Sep. 30, 2016

Notes To Financial Statements [Abstract]

Segments and Geographical Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. We report segment information based on the management approach. The management approach designates the internal reporting used by the CODM for decision making and performance assessment as the basis for determining our reportable segments. The performance measures of our reportable segments include net revenues and gross profit.

We have grouped our operations into two reportable segments which are also our reporting units: Clear Aligner segment and Scanner segment.


•	Our Clear Aligner segment consists of our Invisalign system which includes Invisalign Full, Express/Lite, Teen, Assist, Vivera retainers, along with our training and ancillary products for treating malocclusion.


•	Our Scanner segment consists of intra-oral scanning systems and additional services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. This segment includes our iTero scanner and OrthoCAD services.

These reportable operating segments are based on how our CODM views and evaluates our operations as well as allocation of resources. The following information relates to these segments (in thousands):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Net Revenues	2016		2015		2016		2015
Clear Aligner	$	243,668	$	198,292	$	706,802	$	586,138
Scanner	34,921		9,344		79,869		29,072
Total net revenues	$	278,589	$	207,636	$	786,671	$	615,210

Gross profit
Clear Aligner	$	189,270	$	156,205	$	552,663	$	461,502
Scanner	19,932		1,371		42,382		5,798
Total gross profit	$