Company operating well through unprecedented
global economic headwinds and continued impacts of COVID-19
variants in certain markets
- Q2'22 total revenues of $969.6 million were down slightly
sequentially and year over year
- Q2’22 revenues were unfavorably impacted by foreign exchange of
approximately $15.3 million sequentially and approximately $39.9
million year over year (1)
- Q2'22 operating income of $188.2 million and operating margin
of 19.4%, which was unfavorably impacted by foreign exchange of
approximately 1.1 points sequentially and approximately 2.4 points
year over year (1)
- Q2'22 diluted net income per share of $1.44; Q2'22 non-GAAP
diluted net income per share of $2.00
- Q2'22 Clear Aligner revenues of $798.4 million and Clear
Aligner volume of 599.0 thousand cases
- Q2'22 Imaging Systems and CAD/CAM Services revenues of $171.2
million, up 4.7% sequentially and up 0.8% year over year
- Purchased approximately 757 thousand shares of Align common
stock at an average price of $264.37 per share for a total purchase
price of $200.0 million
Align Technology, Inc. (Nasdaq: ALGN), a leading global medical
device company that designs, manufactures, and sells the
Invisalign® system of clear aligners, iTero™ intraoral scanners,
and exocad™ CAD/CAM software for digital orthodontics and
restorative dentistry, today reported financial results for the
second quarter of fiscal 2022 ("Q2'22"). Q2'22 total revenues were
$969.6 million, down 0.4% sequentially and down 4.1%
year-over-year. Q2'22 Clear Aligner revenues were $798.4 million,
down 1.4% sequentially and down 5.1% year-over-year. Q2'22 Imaging
Systems and CAD/CAM Services revenues were $171.2 million, up 4.7%
sequentially and up 0.8% year-over-year. Q2'22 Clear Aligner volume
was flat sequentially and down 10.0% year-over-year. Q2’22 Imaging
Systems and CAD/CAM Services revenues were unfavorably impacted by
foreign exchange of approximately $2.9 million or 1.7% sequentially
and approximately $7.0 million or 3.9% year over year.(1) Q2’22
Clear Aligner revenues were unfavorably impacted by foreign
exchange of approximately $12.3 million or 1.5% sequentially and
approximately $32.9 million or 4.0% year over year.(1) Q2'22
operating income was $188.2 million resulting in an operating
margin of 19.4%. Q2'22 net income was $112.8 million, or $1.44 per
diluted share. On a non-GAAP basis, Q2'22 net income was $157.0
million or $2.00 per diluted share.
Commenting on Align's second quarter results, Align Technology
President and CEO Joe Hogan said, “I’m pleased to report solid
second quarter results with top line revenues relatively unchanged
from Q1 and operating margin of approximately 20% despite the
impact from unfavorable foreign exchange. The underlying market for
orthodontics continues to be impacted by macro-economic
environmental factors and lingering effects of COVID-19 variants in
certain markets. Notwithstanding these headwinds, we continued to
deliver on our strategic initiatives, including opening new offices
in the Middle East and Africa and our new manufacturing facility in
Poland, launching new solutions to better support the way our
customers want to do business, such as the Doctor Subscription
Program and Teen case packs, and announcing new products and
innovation to help our doctors and their patients. These new
innovations are revolutionizing digital treatment planning and
helping to drive the evolution of digital orthodontics and
comprehensive dentistry. Align is well positioned to withstand the
current market conditions to lead the digital revolution in
orthodontics and dentistry as the environment and growth trends
improve."
Financial Summary
Q2'22
Q1'22
Q2'21
Q/Q Change
Y/Y Change
Invisalign Case Shipments
598,990
598,835
665,575
0.0
%
(10.0
)%
GAAP
Net Revenues
$969.6M
$973.2M
$1,010.8M
(0.4
)%
(4.1
)%
Clear Aligner
$798.4M
$809.7M
$841.0M
(1.4
)%
(5.1
)%
Imaging Systems and CAD/CAM Services
$171.2M
$163.5M
$169.8M
+4.7
%
+0.8
%
Net Income
$112.8M
$134.3M
$199.7M
(16.0
)%
(43.5
)%
Diluted EPS
$1.44
$1.70
$2.51
($0.26
)
($1.07
)
Non-GAAP
Net Income
$157.0M
$168.7M
$242.1M
(7.0
)%
(35.2
)%
Diluted EPS
$2.00
$2.13
$3.04
($0.13
)
($1.04
)
As of June 30, 2022, we had $977.2 million in cash, cash
equivalents and short-term and long-term marketable securities
compared to $1.1 billion as of March 31, 2022. In Q2'22, we
purchased approximately 757 thousand shares of our common stock at
an average price of $264.37 per share for a total purchase price of
$200.0 million. We have approximately $450.0 million remaining
available for repurchase of our common stock under our May 2021
$1.0 Billion Repurchase Program.
As of June 30, 2022, we also have $300.0 million available under
a revolving line of credit.
Commenting on Align's Q2'22 results, Align Technology CFO and
EVP Global Finance, John Morici said, “In times like these, our
strong fundamental business differentiates Align and we are
grateful to have a profitable underlying business model that
generates strong cash flow, as well as a healthy balance sheet that
provides flexibility to invest in our growth while supporting our
employees, customers, and stockholders. As we move into the second
half of the year, we will continue to manage investments to account
for headwinds and uncertainty, while focusing on successfully
delivering on our strategic growth drivers.”
Q2'22 Announcement
Highlights
- On May 19, 2022, we introduced Invisalign Outcome Simulator
Pro, the next generation of our advanced patient communication
tool, enabling doctors to show patients their potential new smile
after Invisalign treatment, using in-face visualization and/or 3D
dentition view, all done chairside in minutes. Invisalign Outcome
Simulator Pro is currently in limited market release and will be
available on all iTero Element™ Plus Series scanners and imaging
systems starting in the second half of 2022.
- On May 20, 2022, we announced a strategic partnership with
Asana to offer Asana Smiles™ for Align®, to Invisalign trained
doctors in the U.S., a new work management solution providing a
customizable workflow solution that helps orthodontic and dental
practices keep track of tasks connected to the lifecycle of a
patient's Invisalign treatment journey. Booking consultations,
submitting prescriptions, monitoring ClinCheck® software treatment
plans, and preparing for aligner delivery appointments can be
easily organized, tracked, and communicated across a practice with
Asana Smiles for Align. This solution can be implemented directly
or as an additive solution for practices with other software
currently in place.
- On June 22, 2022, we announced a $250.0 thousand donation to JA
(Junior Achievement) Worldwide through the Align Foundation,
Align’s donor-advised charitable fund through Fidelity Charitable.
This donation commemorates Align’s 25th anniversary milestone as a
company that has transformed smiles and changed lives for millions
of people around the world through Align’s pioneering technology
innovations and doctor-driven business model.
- On June 6, 2022, we announced the award of eleven research
grants totaling $275.0 thousand to universities under Align's
twelfth Annual Research Award Program. The funded research studies
cover a wide range of topics for projects seeking to better
understand treatment in orthodontics and dentistry including
distalization, stability in retention, pre-surgical treatment of
cleft palate, maintenance of space in mixed dentition with
aligners, consideration of periodontal conditions in treatment, and
the demand for education regarding treatment with aligners.
Align Web Cast and Conference
Call
We will host a conference call today, July 27, 2022, at 4:30
p.m. ET, 1:30 p.m. PT, to review our second quarter 2022 results,
discuss future operating trends, and our business outlook. The
conference call will also be webcast live via the Internet. To
access the webcast, go to the "Events & Presentations" section
under Company Information on Align's Investor Relations website at
http://investor.aligntech.com. To access the conference call,
please dial 844-200-6205 with access code 947492. An archived audio
webcast will be available beginning approximately one hour after
the call's conclusion and will remain available for approximately
one month. Additionally, a telephonic replay of the call can be
accessed by dialing 866-813-9403 with access code 137829. For
international callers, please dial 929-458-6194 and use the same
access code referenced above. The telephonic replay will be
available through 5:30 p.m. ET on August 10, 2022.
About Non-GAAP Financial
Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with generally
accepted accounting principles in the United States ("GAAP"), we
may provide investors with certain non-GAAP financial measures
which may include constant currency net revenues, gross profit,
gross margin, operating expenses, income from operations, operating
margin, constant currency income from operations, constant currency
operating margin, interest income and other income (expense), net,
net income before provision for income taxes, provision for income
taxes, effective tax rate, net income and/or diluted net income per
share, which excludes certain items that may not be indicative of
our fundamental operating performance including, foreign currency
exchange rate impacts, discrete cash and non-cash charges or gains
that are included in the most directly comparable GAAP measure.
Unless otherwise indicated, when we refer to non-GAAP financial
measures they will exclude the effects of stock-based compensation,
amortization of certain acquired intangibles, deferred tax asset
amortization related to the intra-entity transfer of non-inventory
assets, acquisition-related costs, and arbitration award gain, and,
if applicable, any associated tax impacts.
We use non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. Our management believes that the use of certain
non-GAAP financial measures provide 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. These
non-GAAP financial measures also facilitate management's internal
evaluation of period-to-period comparisons. We believe these
non-GAAP financial measures are useful to investors both because
(1) they allow for greater transparency with respect to key metrics
used by management in its financial and operational decision-making
and (2) they are used by our institutional investors and the
analyst community to help them analyze the performance of our
business.
There are limitations to using non-GAAP financial measures,
though, because they are not prepared in accordance with GAAP and
may be different from non-GAAP financial measures used by other
companies. The non-GAAP financial measures are limited in value
because they exclude certain items that may have a material impact
upon our reported financial results. In addition, they are subject
to inherent limitations as they reflect the exercise of judgments
by management about which charges are excluded from the non-GAAP
financial measures. We compensate for these limitations by
analyzing current and future results on a GAAP as well as a
non-GAAP basis and also by providing GAAP measures in our public
disclosures. The presentation of non-GAAP financial information is
meant to be considered in addition to, not as a substitute for or
in isolation from, the directly comparable financial measures
prepared in accordance with GAAP. We urge investors to review the
reconciliation of our GAAP financial measures to the comparable
non-GAAP financial measures included herein and not to rely on any
single financial measure to evaluate our business. For more
information on these non-GAAP financial measures, please see the
tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."
About Align Technology,
Inc.
Align Technology designs and manufactures the Invisalign®
system, the most advanced clear aligner system in the world, iTero®
intraoral scanners and services, and exocad® CAD/CAM software.
These technology building blocks enable enhanced digital
orthodontic and restorative workflows to improve patient outcomes
and practice efficiencies for over 229 thousand doctor customers
and is key to accessing Align’s 500 million consumer market
opportunity worldwide. Align has helped doctors treat over 13.4
million patients with the Invisalign system and is driving the
evolution in digital dentistry through the Align™ Digital Platform,
our integrated suite of unique, proprietary technologies and
services delivered as a seamless, end-to-end solution for patients
and consumers, orthodontists and GP dentists, and lab/partners.
Visit www.aligntech.com for more information.
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.
Forward-Looking
Statements
This news release, including the tables below, contains
forward-looking statements, including statements of beliefs and
expectations regarding market opportunities, factors, events and
circumstances impacting macro-economic conditions and
predictability, the impact of new products and innovations, our
positioning and ability to lead the digital revolution of
orthodontic treatment, the benefits of our operating model and
balance sheet, our ability to manage investments and our areas of
focus and commitment. Forward-looking statements contained in this
news release relating to expectations about future events or
results are based upon information available to Align as of the
date hereof. Readers are cautioned that these forward-looking
statements reflect our best judgments based on currently known
facts and circumstances and are subject to risks, uncertainties,
and assumptions that are difficult to predict. As a result, actual
results may differ materially and adversely from those expressed in
any forward-looking statement.
Factors that might cause such a difference include, but are not
limited to:
- macroeconomic conditions, including inflation, fluctuations in
currency exchange rates, weakness in general economic conditions
and recessions;
- customer and consumer purchasing behavior and changes in
consumer spending habits as a result of, among other things,
prevailing economic conditions, levels of employment, salaries and
wages, inflationary pressure, declining consumer confidence, the
military conflict in Ukraine, fluctuations in currency exchange
rates, and the impact of efforts by central banks to combat
inflation and recession;
- the impact of the COVID-19 pandemic and its variants on the
health and safety of our employees, customers, patients, and our
suppliers, as well as the physical and economic impacts of the
various recommendations, orders, and protocols issued by local and
national governmental agencies in light of continual evolution of
the pandemic, including any periodic reimplementation of
preventative measures in various global locations;
- the economic and geopolitical ramifications of the military
conflict in Ukraine, including sanctions, retaliatory sanctions,
nationalism, supply chain disruptions and other consequences, any
of which may or continue to adversely impact our commercial and
research and development activities inside and outside of
Russia;
- the timing and availability and cost of raw materials,
components, products and other shipping and supply chain
constraints;
- unexpected or rapid changes in the growth or decline of our
domestic and/or international markets;
- competition from existing and new competitors;
- rapidly evolving and groundbreaking advances that fundamentally
alter the dental industry or the way new and existing customers
market and provide products and services to consumers;
- the ability to protect our intellectual property rights;
- continued compliance with regulatory requirements;
- declines in, or the slowing of the growth of, sales of our
intraoral scanners domestically and/or internationally and the
impact either would have on the adoption of Invisalign
products;
- the willingness and ability of our customers to maintain and/or
increase product utilization in sufficient numbers;
- the possibility that the development and release of new
products or enhancements to existing products do not proceed in
accordance with the anticipated timeline or may themselves contain
bugs, errors or defects in software or hardware requiring
remediation and that the market for the sale of these new or
enhanced products may not develop as expected;
- a tougher consumer demand environment in China generally,
especially for manufacturers and service providers whose
headquarters or primary operations are not based in China;
- the risks relating to our ability to sustain or increase
profitability or revenue growth in future periods (or minimize
declines) while controlling expenses;
- expansion of our business and products;
- the impact of excess or constrained capacity at our
manufacturing and treat operations facilities and pressure on our
internal systems and personnel;
- the compromise of our systems or networks, including any
customer and/or patient data contained therein, for any
reason;
- the timing of case submissions from our doctors within a
quarter as well as an increased manufacturing costs per case;
- foreign operational, political, military and other risks
relating to our operations; and
- the loss of key personnel, labor shortages or work stoppages
for us or our suppliers.
The foregoing and other risks are detailed from time to time in
our periodic reports filed with the Securities and Exchange
Commission, including, but not limited to, our Annual Report on
Form 10-K for the year ended December 31, 2021, which was filed
with the Securities and Exchange Commission ("SEC") on February 25,
2022 and our latest Quarterly Report on Form 10-Q for the quarter
ended March 31, 2022, which was filed with the SEC on May 5, 2022.
Align undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Net revenues
$
969,553
$
1,010,808
$
1,942,772
$
1,905,579
Cost of net revenues
281,994
252,270
545,867
469,943
Gross profit
687,559
758,538
1,396,905
1,435,636
Operating expenses:
Selling, general and administrative
426,398
431,921
865,855
829,036
Research and development
72,965
57,715
144,772
112,252
Total operating expenses
499,363
489,636
1,010,627
941,288
Income from operations
188,196
268,902
386,278
494,348
Interest income and other income
(expense), net:
Interest income
245
383
922
2,026
Other income (expense), net
(14,832
)
(483
)
(26,105
)
34,049
Total interest income and other income
(expense), net
(14,587
)
(100
)
(25,183
)
36,075
Net income before provision for income
taxes
173,609
268,802
361,095
530,423
Provision for income taxes
60,809
69,088
113,997
130,333
Net income
$
112,800
$
199,714
$
247,098
$
400,090
Net income per share:
Basic
$
1.44
$
2.53
$
3.15
$
5.06
Diluted
$
1.44
$
2.51
$
3.13
$
5.02
Shares used in computing net income per
share:
Basic
78,395
79,008
78,568
79,004
Diluted
78,545
79,638
78,840
79,737
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30, 2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
877,501
$
1,099,370
Marketable securities, short-term
22,138
71,972
Accounts receivable, net
931,854
897,198
Inventories
310,046
230,230
Prepaid expenses and other current
assets
235,265
195,305
Total current assets
2,376,804
2,494,075
Marketable securities, long-term
77,551
125,320
Property, plant and equipment, net
1,182,444
1,081,926
Operating lease right-of-use assets,
net
117,912
121,257
Goodwill
390,100
418,547
Intangible assets, net
93,817
109,709
Deferred tax assets
1,518,648
1,533,767
Other assets
52,843
57,509
Total assets
$
5,810,119
$
5,942,110
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
145,607
$
163,886
Accrued liabilities
416,459
607,315
Deferred revenues
1,242,348
1,152,870
Total current liabilities
1,804,414
1,924,071
Income tax payable
116,414
118,072
Operating lease liabilities
98,332
102,656
Other long-term liabilities
191,878
174,597
Total liabilities
2,211,038
2,319,396
Total stockholders’ equity
3,599,081
3,622,714
Total liabilities and stockholders’
equity
$
5,810,119
$
5,942,110
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended June
30,
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by operating
activities
$
157,543
$
544,691
CASH FLOWS FROM INVESTING
ACTIVITIES
Net cash used in investing activities
(72,078
)
(123,920
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used in financing activities
(312,396
)
(291,756
)
Effect of foreign exchange rate changes on
cash, cash equivalents, and restricted cash
4,978
(3,511
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(221,953
)
125,504
Cash, cash equivalents, and restricted
cash at beginning of the period
1,100,139
961,474
Cash, cash equivalents, and restricted
cash at end of the period
$
878,186
$
1,086,978
ALIGN TECHNOLOGY, INC.
INVISALIGN BUSINESS METRICS
Q1
Q2
Q3
Q4
Q1
Q2
2021
2021
2021
2021
2022
2022
Invisalign Average Selling Price
(ASP):
Comprehensive Products ASP
$
1,265
$
1,250
$
1,255
$
1,270
$
1,315
$
1,280
Non-Comprehensive Products ASP
$
1,030
$
1,040
$
1,050
$
1,040
$
1,080
$
1,085
Number of Invisalign Doctors Cases Were
Shipped To:
Americas
38,975
40,740
41,310
40,460
39,455
39,815
International
39,630
42,725
44,190
43,080
42,985
42,460
Total Doctors Cases Shipped To
78,605
83,465
85,500
83,540
82,440
82,275
Invisalign Doctor Utilization
Rates*:
North America
9.1
9.9
9.8
9.3
9.2
9.3
North American Orthodontists
26.8
29.4
29.7
26.9
26.8
26.8
North American GP Dentists
4.8
5.3
5.0
5.1
5.0
5.1
International
6.8
7.1
6.5
6.8
6.4
6.4
Total Utilization Rates**
7.6
8.0
7.7
7.6
7.3
7.3
* # of cases shipped / # of doctors to
whom cases were shipped
** LATAM utilization rate is not
separately disclosed but included in the total utilization
rates
ALIGN TECHNOLOGY, INC.
STOCK-BASED COMPENSATION
(in thousands)
Q1
Q2
Q3
Q4
Fiscal
Q1
Q2
2021
2021
2021
2021
2021
2022
2022
Stock-based Compensation (SBC):
SBC included in Gross Profit
$
1,306
$
1,418
$
1,451
$
1,458
$
5,633
$
1,514
$
1,614
SBC included in Operating Expenses
25,935
27,437
26,951
28,380
108,703
30,107
32,526
Total SBC
$
27,241
$
28,855
$
28,402
$
29,838
$
114,336
$
31,621
$
34,140
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP
RECONCILIATION
CONSTANT CURRENCY REVENUES
(in thousands, except percentages)
Sequential constant currency analysis:
Three Months Ended
June 30, 2022
March 31, 2022
Impact % of
Revenue
GAAP net revenues
$
969,553
$
973,219
Constant currency impact (1)
15,268
1.6
%
Constant currency net revenues
(1)
$
984,821
GAAP Clear Aligner net revenues
$
798,398
$
809,696
Clear Aligner constant currency impact
(1)
12,323
1.5
%
Clear Aligner constant currency net
revenues (1)
$
810,721
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
171,155
$
163,523
Imaging Systems and CAD/CAM Services
constant currency impact (1)
2,945
1.7
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
174,100
Year-over-year constant currency
analysis:
Three Months Ended June
30,
2022
2021
Impact % of Revenue
GAAP net revenues
$
969,553
$
1,010,808
Constant currency impact (1)
39,888
4.0
%
Constant currency net revenues
(1)
$
1,009,441
GAAP Clear Aligner net revenues
$
798,398
$
840,959
Clear Aligner constant currency impact
(1)
32,935
4.0
%
Clear Aligner constant currency net
revenues (1)
$
831,333
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
171,155
$
169,849
Imaging Systems and CAD/CAM Services
constant currency impact (1)
6,953
3.9
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
178,108
Note:
(1)
We define constant currency
revenues as total revenues excluding the effect of foreign exchange
rate movements and use it to determine the constant currency
revenue percentage change on year-on-year and quarter-on-quarter
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 is
calculated by dividing the constant currency impact in dollars
(numerator) by constant currency net revenues in dollars
(denominator). Refer to "About Non-GAAP Financial Measures" section
of press release.
ALIGN TECHNOLOGY, INC.
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
June 30, 2022
March 31, 2022
GAAP income from operations
$
188,196
$
198,082
Income from operations constant currency
impact (1)
13,917
Constant currency income from
operations (1)
$
202,113
Three Months Ended
June 30, 2022
March 31, 2022
GAAP operating margin
19.4
%
20.4
%
Operating margin constant currency impact
(2)
1.1
Constant currency operating margin
(2)
20.5
%
Year-over-year constant currency
analysis:
Three Months Ended June
30,
2022
2021
GAAP income from operations
$
188,196
$
268,902
Income from operations constant currency
impact (1)
31,871
Constant currency income from
operations (1)
$
220,067
Three Months Ended June
30,
2022
2021
GAAP operating margin
19.4
%
26.6
%
Operating margin constant currency impact
(2)
2.4
Constant currency operating margin
(2)
21.8
%
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. 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.
Refer to "About Non-GAAP Financial Measures" section of press
release.
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED
FINANCIAL MEASURES OTHER THAN CONSTANT
CURRENCY
(in thousands, except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
GAAP gross profit
$
687,559
$
758,538
$
1,396,905
$
1,435,636
Stock-based compensation
1,614
1,418
3,128
2,724
Amortization of intangibles (1)
2,393
2,175
4,880
4,350
Non-GAAP gross profit
$
691,566
$
762,131
$
1,404,913
$
1,442,710
GAAP gross margin
70.9
%
75.0
%
71.9
%
75.3
%
Non-GAAP gross margin
71.3
%
75.4
%
72.3
%
75.7
%
GAAP total operating expenses
$
499,363
$
489,636
$
1,010,627
$
941,288
Stock-based compensation
(32,526
)
(27,437
)
(62,633
)
(53,372
)
Amortization of intangibles (1)
(872
)
(887
)
(1,782
)
(1,775
)
Acquisition-related costs (2)
—
(68
)
—
(104
)
Non-GAAP total operating
expenses
$
465,965
$
461,244
$
946,212
$
886,037
GAAP income from operations
$
188,196
$
268,902
$
386,278
$
494,348
Stock-based compensation
34,140
28,855
65,761
56,096
Amortization of intangibles (1)
3,265
3,062
6,662
6,125
Acquisition-related costs (2)
—
68
—
104
Non-GAAP income from operations
$
225,601
$
300,887
$
458,701
$
556,673
GAAP operating margin
19.4
%
26.6
%
19.9
%
25.9
%
Non-GAAP operating margin
23.3
%
29.8
%
23.6
%
29.2
%
GAAP total interest income and other
income (expense), net
$
(14,587
)
$
(100
)
$
(25,183
)
$
36,075
Arbitration award gain (3)
—
—
—
(43,403
)
Non-GAAP total interest income and
other income (expense), net
$
(14,587
)
$
(100
)
$
(25,183
)
$
(7,328
)
GAAP net income before provision for
income taxes
$
173,609
$
268,802
$
361,095
$
530,423
Stock-based compensation
34,140
28,855
65,761
56,096
Amortization of intangibles (1)
3,265
3,062
6,662
6,125
Acquisition-related costs (2)
—
68
—
104
Arbitration award gain (3)
—
—
—
(43,403
)
Non-GAAP net income before provision
for income taxes
$
211,014
$
300,787
$
433,518
$
549,345
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED
FINANCIAL MEASURES OTHER THAN CONSTANT
CURRENCY CONTINUED
(in thousands, except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
GAAP provision for income taxes
$
60,809
$
69,088
$
113,997
$
130,333
Tax impact on non-GAAP adjustments
4,317
6,218
15,105
13,373
Tax related non-GAAP items (4)
(11,065
)
(16,651
)
(21,234
)
(34,845
)
Non-GAAP provision for income
taxes
$
54,061
$
58,655
$
107,868
$
108,861
GAAP effective tax rate
35.0
%
25.7
%
31.6
%
24.6
%
Non-GAAP effective tax rate
25.6
%
19.5
%
24.9
%
19.8
%
GAAP net income
$
112,800
$
199,714
$
247,098
$
400,090
Stock-based compensation
34,140
28,855
65,761
56,096
Amortization of intangibles (1)
3,265
3,062
6,662
6,125
Acquisition-related costs (2)
—
68
—
104
Arbitration award gain (3)
—
—
—
(43,403
)
Tax impact on non-GAAP adjustments
(4,317
)
(6,218
)
(15,105
)
(13,373
)
Tax related non-GAAP items (4)
11,065
16,651
21,234
34,845
Non-GAAP net income
$
156,953
$
242,132
$
325,650
$
440,484
GAAP diluted net income per
share
$
1.44
$
2.51
$
3.13
$
5.02
Non-GAAP diluted net income per
share
$
2.00
$
3.04
$
4.13
$
5.52
Shares used in computing diluted net
income per share
78,545
79,638
78,840
79,737
Notes:
(1)
Amortization of intangible assets related
to certain acquisitions
(2)
Acquisition-related costs for professional
fees related to our 2020 exocad acquisition
(3)
Gain from the SDC arbitration award
regarding the value of Align's capital account balance
(4)
Amortization and related adjustments to
the benefit from the transferred intangible assets of our Swiss
entity
Refer to "About Non-GAAP Financial Measures" section of press
release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727005363/en/
Align Technology Madelyn Valente
(909) 833-5839 mvalente@aligntech.com
Zeno Group Sarah Johnson (828)
551-4201 sarah.johnson@zenogroup.com
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