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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________ 
FORM 10-Q
____________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to
Commission file number: 000-32259
____________________________
ALIGN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
____________________________ 
Delaware94-3267295
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
410 North Scottsdale Road, Suite 1300
Tempe, Arizona 85288
(Address of principal executive offices, including zip code)
(602) 742-2000
(Registrant’s telephone number, including area code)
 ____________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueALGNThe NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No 
The number of shares outstanding of the registrant’s Common Stock, $0.0001 par value, as of April 28, 2023 was 76,516,951.

1

Table of Contents


ALIGN TECHNOLOGY, INC.
TABLE OF CONTENTS
 
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Invisalign, Align, the Invisalign logo, ClinCheck, Invisalign Assist, Invisalign Teen, Invisalign Go, Vivera, SmartForce, SmartTrack, SmartStage, SmileView, iTero, iTero Element, Orthocad, iCast, iRecord and exocad, among others, are trademarks and/or service marks of Align Technology, Inc. or one of its subsidiaries or affiliated companies and may be registered in the United States and/or other countries.
2

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1.        Financial Statements.

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

Three Months Ended
March 31,
 20232022
Net revenues$943,147 $973,219 
Cost of net revenues282,493 263,873 
Gross profit660,654 709,346 
Operating expenses:
Selling, general and administrative439,691 439,457 
Research and development87,447 71,807 
Total operating expenses527,138 511,264 
Income from operations133,516 198,082 
Interest income and other income (expense), net:
Interest income2,337 677 
Other income (expense), net(1,229)(11,273)
      Total interest income and other income (expense), net1,108 (10,596)
Net income before provision for income taxes134,624 187,486 
Provision for income taxes46,826 53,188 
Net income$87,798 $134,298 
Net income per share:
Basic
$1.14 $1.71 
Diluted
$1.14 $1.70 
Shares used in computing net income per share:
Basic
76,921 78,742 
Diluted
77,111 79,193 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended
March 31,
 20232022
Net income$87,798 $134,298 
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax10,474 (7,311)
Change in unrealized gains (losses) on investments, net of tax1,645 (2,728)
Other comprehensive income (loss)12,119 (10,039)
Comprehensive income$99,917 $124,259 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
March 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$832,383 $942,050 
Marketable securities, short-term51,644 57,534 
Accounts receivable, net of allowance for doubtful accounts of $11,192 and $10,343, respectively
884,430 859,685 
Inventories311,885 338,752 
Prepaid expenses and other current assets251,540 226,370 
Total current assets2,331,882 2,424,391 
Marketable securities, long-term37,379 41,978 
Property, plant and equipment, net1,262,815 1,231,855 
Operating lease right-of-use assets, net117,889 118,880 
Goodwill414,222 407,551 
Intangible assets, net93,320 95,720 
Deferred tax assets1,589,640 1,571,746 
Other assets54,301 55,826 
Total assets$5,901,448 $5,947,947 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$130,561 $127,870 
Accrued liabilities497,248 454,374 
Deferred revenues 1,376,789 1,343,643 
Total current liabilities2,004,598 1,925,887 
Income tax payable126,541 124,393 
Operating lease liabilities99,002 100,334 
Other long-term liabilities191,258 195,975 
Total liabilities2,421,399 2,346,589 
Commitments and contingencies (Notes 6 and 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)
  
Common stock, $0.0001 par value (200,000 shares authorized; 76,516 and 77,267 issued and outstanding, respectively)
8 8 
Additional paid-in capital1,104,693 1,044,946 
Accumulated other comprehensive income (loss), net1,835 (10,284)
Retained earnings2,373,513 2,566,688 
Total stockholders’ equity3,480,049 3,601,358 
Total liabilities and stockholders’ equity$5,901,448 $5,947,947 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Three Months Ended March 31, 2023SharesAmount
Balance as of December 31, 202277,267 $8 $1,044,946 $(10,284)$2,566,688 $3,601,358 
Net income— — — — 87,798 87,798 
Net change in unrealized gains (losses) from investments— — — 1,645 — 1,645 
Net change in foreign currency translation adjustment— — — 10,474 — 10,474 
Issuance of common stock relating to employee equity compensation plans191 — 14,256 — — 14,256 
Tax withholdings related to net share settlements of equity awards— — (20,857)— — (20,857)
Common stock repurchased and retired(942)— (11,387)— (280,973)(292,360)
Equity forward contract related to accelerated stock repurchase— — 40,000 — — 40,000 
Stock-based compensation— — 37,735 — 37,735 
Balance as of March 31, 202376,516 $8 $1,104,693 $1,835 $2,373,513 $3,480,049 


Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Three Months Ended March 31, 2022SharesAmount
Balance as of December 31, 202178,710 $8 $999,006 $4,326 $2,619,374 $3,622,714 
Net income— — — — 134,298 134,298 
Net change in unrealized gains (losses) from investments— — — (2,728)— (2,728)
Net change in foreign currency translation adjustment— — — (7,311)— (7,311)
Issuance of common stock relating to employee equity compensation plans239 — 14,827 — — 14,827 
Tax withholdings related to net share settlements of equity awards— — (51,533)— — (51,533)
Common stock repurchased and retired(144)— (1,634)— (73,402)(75,036)
Stock-based compensation— — 31,621 — — 31,621 
Balance as of March 31, 202278,805 $8 $992,287 $(5,713)$2,680,270 $3,666,852 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.











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ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 Three Months Ended
March 31,
 20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $87,798 $134,298 
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes(18,417)17,464 
Depreciation and amortization35,820 29,626 
Stock-based compensation37,735 31,621 
Non-cash operating lease cost7,755 7,526 
Other non-cash operating activities11,586 8,612 
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable(32,734)(55,543)
Inventories24,008 (49,455)
Prepaid expenses and other assets(26,850)(48,665)
Accounts payable5,993 7,025 
Accrued and other long-term liabilities37,420 (126,400)
Long-term income tax payable2,119 5,405 
Deferred revenues27,662 68,984 
Net cash provided by operating activities
199,895 30,498 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment(64,119)(87,328)
Purchase of marketable securities(2,371)(15,041)
Proceeds from maturities of marketable securities10,870 6,095 
Proceeds from sales of marketable securities2,785 8,528 
Other investing activities6 (2,452)
Net cash used in investing activities(52,829)(90,198)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock14,256 14,827 
Common stock repurchases(292,360)(75,036)
Payments for equity forward contracts related to accelerated share repurchase agreements40,000  
Payroll taxes paid upon the vesting of equity awards(20,857)(51,533)
Net cash used in financing activities(258,961)(111,742)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash2,221 (1,826)
Net decrease in cash, cash equivalents, and restricted cash(109,674)(173,268)
Cash, cash equivalents, and restricted cash at beginning of the period942,355 1,100,139 
Cash, cash equivalents, and restricted cash at end of the period$832,681 $926,871 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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ALIGN TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, "Company", or “Align”) on a consistent basis with the audited Consolidated Financial Statements for the year ended December 31, 2022, and contains all adjustments, including normal recurring adjustments, necessary to fairly state the information set forth herein. The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosures necessary to present the unaudited Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S.”).

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or any other future period, and we make no representations related thereto. 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the 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 revenue recognition, useful lives of intangible assets and property and equipment, long-lived assets and goodwill, income taxes, contingent liabilities, the fair values of financial instruments, stock-based compensation and the valuation of investments in privately held companies 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.

Certain Risks and Uncertainties

Our business has been materially impacted by fluctuations in macroeconomic conditions and exacerbated by ongoing geopolitical issues. While the situation is highly uncertain and evolving, we have been and continue to be impacted by factors such as inflation, supply chain challenges, rising interest rates, volatilities in the financial market, foreign currency exchange rate fluctuations, impacts on consumer confidence and purchasing power, and global recession concerns which could further subject our business to materially adverse consequences should any portion of its impacts become prolonged or escalate beyond its current scope. Additionally, we could also be materially adversely affected by uncertain or reduced demand, labor shortages, delays in collection of outstanding receivables and the impact of any initiatives or programs that we may undertake to address financial and operational challenges faced by our customers.

While the overall impact of the COVID-19 pandemic is gradually declining, we continue to be exposed to risks and uncertainties posed by it which varies by geographic regions at different levels. The extent to which our business could be impacted in the future by the pandemic is highly uncertain and difficult to predict.

Recent Accounting Pronouncements

(i) Recent Accounting Pronouncements Not Yet Effective

We continue to monitor new accounting pronouncements issued by the FASB and do not believe any of the recently issued accounting pronouncements will have a material impact on our consolidated financial statements or related disclosures.

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Note 2. Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash and cash equivalents, and marketable securities on our Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (in thousands):
Reported as:
March 31, 2023Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair ValueCash and Cash EquivalentsMarketable securities, short-termMarketable securities, long-term
Cash$650,946 $— $— $650,946 $650,946 $— $— 
Money market funds181,437 — — 181,437 181,437 — — 
Corporate bonds62,003  (2,187)59,816 — 35,284 24,532 
U.S. government treasury bonds
17,057 7 (356)16,708 — 12,039 4,669 
Asset-backed securities4,859 2 (24)4,837 — 1,887 2,950 
Municipal bonds2,470  (36)2,434 — 2,434  
U.S. government agency bonds5,280 2 (54)5,228 — — 5,228 
Total$924,052 $11 $(2,657)$921,406 $832,383 $51,644 $37,379 

Reported as:
December 31, 2022Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair ValueCash and Cash EquivalentsMarketable securities, short-termMarketable securities, long-term
Cash$712,921 $— $— $712,921 $712,921 $— $— 
Money market funds229,129 —  229,129 229,129 — — 
Corporate bonds69,390  (2,915)66,475  36,510 29,965 
U.S. government treasury bonds
20,559  (549)20,010 — 15,404 4,606 
Asset-backed securities4,514 1 (37)4,478 — 2,909 1,569 
Municipal bonds3,447  (61)3,386  2,711 675 
U.S. government agency bonds5,231 1 (69)5,163 — — 5,163 
Total$1,045,191 $2 $(3,631)$1,041,562 $942,050 $57,534 $41,978 

The following table summarizes the fair value of our available-for-sale marketable securities classified by contractual maturity as of March 31, 2023 and December 31, 2022 (in thousands):

March 31, 2023December 31, 2022
Due in 1 year or less $45,512 $51,037 
Due in 1 year through 5 years43,511 48,475 
Total$89,023 $99,512 

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. Our unrealized losses as of March 31, 2023 and December 31, 2022 are primarily due to changes in interest rates and credit spreads.

The following tables summarize the gross unrealized losses as of March 31, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position (in thousands):

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As of March 31, 2023
Less than 12 months12 Months of GreaterTotal
March 31, 2023Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Corporate bonds$1,793 $(9)$58,022 $(2,178)$59,815 $(2,187)
U.S. government treasury bonds
  14,698 (356)14,698 (356)
Asset-backed securities2,780 (13)1,053 (11)3,833 (24)
Municipal bonds  2,154 (36)2,154 (36)
U.S. government agency bonds2,037 (1)1,150 (53)3,187 (54)
Total$6,610 $(23)$77,077 $(2,634)$83,687 $(2,657)

As of December 31, 2022
Less than 12 months12 Months of GreaterTotal
December 31, 2022Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Corporate bonds$10,639 $(440)$54,634 $(2,475)$65,273 $(2,915)
U.S. government treasury bonds
5,262 (177)14,748 (372)20,010 (549)
Asset-backed securities2,636 (17)1,275 (20)3,911 (37)
Municipal bonds  2,412 (61)2,412 (61)
U.S. government agency bonds3,017 (5)1,136 (64)4,153 (69)
Total$21,554 $(639)$74,205 $(2,992)$95,759 $(3,631)

Accounts Receivable Factoring

We enter into factoring transactions on a non-recourse basis with financial institutions to sell certain of our non-U.S. accounts receivable. We account for these transactions as sales of accounts receivables and include the cash proceeds as a part of our cash flows from operations in the Condensed Consolidated Statements of Cash Flows. Total accounts receivable sold under the factoring arrangements was $8.0 million during the three months ended March 31, 2023. Factoring fees on the sales of receivables were recorded in other income (expense), net in our Condensed Consolidated Statement of Operations and were not material.

Fair Value Measurements

Fair value is an exit price, representing the amount 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.

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. 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.

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.
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The following tables summarize our financial assets measured at fair value as of March 31, 2023 and December 31, 2022 (in thousands):
DescriptionBalance as of
March 31, 2023
Level 1

Level 2
Cash equivalents:
Money market funds$181,437 $181,437 $ 
Short-term investments:
U.S. government treasury bonds12,039 12,039  
Corporate bonds35,284  35,284 
Municipal bonds2,434  2,434 
Asset-backed securities1,887  1,887 
Long-term investments:
U.S. government treasury bonds4,669 4,669  
Corporate bonds24,532  24,532 
Municipal bonds   
U.S. government agency bonds5,228  5,228 
Asset-backed securities2,950  2,950 
$270,460 $198,145 $72,315 

DescriptionBalance as of December 31, 2022Level 1Level 2
Cash equivalents:
Money market funds$229,129 $229,129 $ 
Corporate bonds   
Municipal bonds   
Short-term investments:
U.S. government treasury bonds15,404 15,404  
Corporate bonds36,510  36,510 
Municipal bonds2,711  2,711 
Asset-backed securities2,909  2,909 
Long-term investments:
U.S. government treasury bonds
4,606 4,606  
Corporate bonds29,965  29,965 
Municipal bonds
675  675 
U.S. government agency bonds
5,163  5,163 
Asset-backed securities
1,569  1,569 
$328,641 $249,139 $79,502 

Investments in Privately Held Companies

Our investments in privately held companies in which we cannot exercise significant influence and do not own a majority equity interest or otherwise control are accounted for under the measurement alternative. Under the measurement alternative, the carrying value of our equity investment is adjusted to fair value for observable transactions for identical or similar investments of the same issuer. Investments in equity securities are reported on our Consolidated Balance Sheet as other assets, and we periodically evaluate them for impairment. We record any change in carrying value of our equity securities, in other income (expense), net in our Consolidated Statement of Operations. The carrying value of our equity investments in privately held companies without readily determinable fair values were not material as of March 31, 2023 or 2022 and the associated adjustments to the carrying values of the investments were not material during the quarter ended March 31, 2023 and 2022.

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Derivatives Not Designated as Hedging Instruments

We 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. These forward contracts are classified within Level 2 of the fair value hierarchy. As a result of the settlement of foreign currency forward contracts, we recognized a net loss of $6.4 million during the three months ended March 31, 2023 and the net losses we recognized during the three months ended March 31, 2022 were not material. As of March 31, 2023 and December 31, 2022, the fair value of foreign exchange forward contracts outstanding was not material.

The following tables present the gross notional value of all our foreign exchange forward contracts outstanding as of March 31, 2023 and December 31, 2022 (in thousands):

March 31, 2023
Local Currency AmountNotional Contract Amount (USD)
Euro203,780$222,215 
Canadian DollarC$97,50072,007 
Chinese Yuan¥478,80569,842 
Polish ZlotyPLN277,00064,459 
British Pound£42,92053,198 
Japanese Yen¥6,170,00046,513 
Brazilian RealR$158,80031,055 
Swiss FrancCHF25,60028,081 
Israeli ShekelILS53,60014,864 
Mexican PesoM$230,00012,744 
New Zealand DollarNZ$10,5006,575 
Korean Won6,400,0004,946 
New Taiwan DollarNT$83,0002,737 
Australian DollarA$3,900$2,615 
Czech Koruna56,0002,589 
$634,440 

December 31, 2022
Local Currency AmountNotional Contract Amount (USD)
Euro186,900$200,010 
Polish ZlotyPLN365,98883,307 
Canadian Dollar$109,00080,514 
Chinese Yuan¥471,00068,223 
British Pound£41,20049,677 
Japanese Yen¥6,200,00047,196 
Israeli ShekelILS110,03031,383 
Swiss FrancCHF25,00027,165 
Brazilian RealR$141,20026,839 
Mexican PesoM$230,000 11,746 
New Zealand DollarNZ$6,0003,806 
Australian DollarA$4,0002,721 
Czech Koruna56,0002,469 
New Taiwan DollarNT$60,0001,959 
$637,015 
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Note 3. Balance Sheet Components

Inventories consist of the following (in thousands):
March 31,
2023
December 31,
2022
Raw materials$146,435 $172,758 
Work in process91,325 96,558 
Finished goods74,125 69,436 
Total inventories$311,885 $338,752 

Prepaid expenses and other current assets consist of the following (in thousands):
March 31,
2023
December 31,
2022
Value added tax receivables$144,668 $140,484 
Prepaid expenses84,363 69,124 
Other current assets22,509 16,762 
Total prepaid expenses and other current assets$251,540 $226,370 

Accrued liabilities consist of the following (in thousands): 
March 31,
2023
December 31,
2022
Accrued payroll and benefits$171,354 $149,508 
Accrued income taxes105,038 74,323 
Accrued expenses51,212 64,341 
Accrued sales and marketing expenses36,227 36,407 
Current operating lease liabilities27,776 26,574 
Accrued property, plant and equipment18,186 19,922 
Other accrued liabilities87,455 83,299 
Total accrued liabilities$497,248 $454,374 

Accrued warranty, which is included in the "Other accrued liabilities" category of the accrued liabilities table above, consists of the following activity (in thousands):
Three Months Ended
March 31,
 20232022
Balance at beginning of period$17,873 $16,169 
Charged to cost of net revenues4,532 3,536 
Actual warranty expenditures(3,476)(3,612)
Balance at end of period$18,929 $16,093 

Deferred revenues consist of the following (in thousands):
March 31,
2023
December 31,
2022
Deferred revenues - current$1,376,789 $1,343,643 
Deferred revenues - long-term 1
$157,341 $160,662 

1 Included in Other long-term liabilities within our Condensed Consolidated Balance Sheet

During the three months ended March 31, 2023 and 2022, we recognized $943.1 million and $