Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Align Technology Inc (ALGN, Financial) reported first-quarter revenues, operating margin, and earnings in line with their outlook, indicating a strong start to fiscal 2025.
• Clear Aligner volumes increased both sequentially and year over year, with notable strength in the Asia Pacific, EMEA regions, and growth in North America.
• The company saw a record number of doctor submitters and utilization for GP dentists, reflecting increased adoption of their products.
• Align Technology Inc (ALGN) launched new products, such as the Invisalign Palate Expander system and the iTero Lumina scanner with restorative software, which are expected to drive future growth.
• The company reported strong growth in the Teen and Growing Kids segment, with a 13.3% year-over-year increase in Invisalign Clear Aligner treatments for this demographic.

Negative Points

• Total revenues for the first quarter were down 1.6% from the prior quarter and down 1.8% from the corresponding quarter a year ago, impacted by unfavorable foreign exchange.
• Clear Aligner average per case shipment price decreased due to unfavorable foreign exchange and a product mix shift to lower-priced products.
• Systems and Services revenue was down 9.2% sequentially, primarily due to lower scanner systems revenues and unfavorable foreign exchange.
• Operating margin decreased by 1.1 points sequentially and 2.1 points year over year, with foreign exchange negatively impacting the margin.
• Align Technology Inc (ALGN) faces potential challenges from tariffs and macroeconomic conditions, which could impact future performance.

Q & A Highlights

Q: Can you explain why Align Technology's business is performing well despite a decline in consumer sentiment? A: Joseph Hogan, President and CEO, noted that the company saw strong volume growth across North America, APAC, and Europe. The introduction of the Lumina scanner with restorative capability provided additional momentum. Growth was observed across product lines and regions, including both teen and adult segments, indicating a broad-based demand.

Q: How is Align Technology planning to mitigate the impact of tariffs? A: Joseph Hogan, President and CEO, stated that Align is well-positioned with its global supply chain. The company manufactures in China for the Chinese market and in Mexico for the U.S. market, which helps mitigate tariff impacts. Align is also prepared to address any issues with iTero shipments from Israel.

Q: What can investors expect from the upcoming Investor Day? A: Joseph Hogan, President and CEO, mentioned that the Investor Day will provide a comprehensive overview of Align's portfolio, demand outlook, and positioning from both a technology and commercial standpoint. The company plans to share developments since the last meeting and its future strategy.

Q: Can you provide more details on the ASP (Average Selling Price) dynamics and expectations? A: John Morici, CFO, explained that the ASP decline was primarily due to unfavorable foreign exchange and a shift to lower-priced products. However, the introduction of higher-priced products like the Mandibular Advancement with Occlusal Blocks could help stabilize ASPs. The company is also considering adjustments based on VAT rulings in the UK.

Q: How is Align Technology addressing financing challenges for consumers and providers? A: John Morici, CFO, highlighted that Align has partnered with HFD to offer better financing options, helping consumers manage costs. The company also provides favorable payment terms to providers, allowing them to extend financing to patients, which supports practice growth and Invisalign adoption.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.