Company delivering on innovation roadmap;
expanding geographically with first EMEA manufacturing facility;
and celebrating 14 millionth Invisalign patient milestone
- Q3'22 total revenues of $890.3 million, and diluted net income
per share of $0.93
- Q3’22 revenues were unfavorably impacted by foreign exchange of
approximately $25.1 million sequentially and approximately $57.4
million year over year (1)
- Q3'22 operating income of $143.7 million and operating margin
of 16.1%
- Q3'22 operating margin was unfavorably impacted by foreign
exchange of approximately 1.6 points sequentially and approximately
3.5 points year over year (1)
- Q3'22 Clear Aligner revenues of $732.8 million and Clear
Aligner volume of 577.2 thousand cases
- Q3'22 Imaging Systems and CAD/CAM Services revenues of $157.5
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
third quarter of fiscal 2022 ("Q3'22"). Q3'22 total revenues were
$890.3 million, down 8.2% sequentially and down 12.4%
year-over-year. Q3'22 Clear Aligner revenues were $732.8 million,
down 8.2% sequentially and down 12.5% year-over-year. Q3'22 Clear
Aligner volume was down 3.6% sequentially and down 11.9%
year-over-year. Q3'22 Imaging Systems and CAD/CAM Services revenues
were $157.5 million, down 8.0% sequentially and down 11.7%
year-over-year. Q3’22 Clear Aligner revenues were unfavorably
impacted by foreign exchange of approximately $21.0 million or 2.8%
sequentially and approximately $47.4 million or 6.1% year over
year.(1) Q3'22 Imaging Systems and CAD/CAM Services revenues were
unfavorably impacted by foreign exchange of approximately $4.1
million or 2.5% sequentially and approximately $9.9 million or 5.9%
year over year.(1) Q3'22 operating income was $143.7 million
resulting in an operating margin of 16.1%. Q3'22 net income was
$72.7 million, or $0.93 per diluted share. On a non-GAAP basis,
Q3'22 net income was $106.5 million, or $1.36 per diluted
share.
(1) Non-GAAP measure.
Commenting on Align's third quarter results, Align Technology
President and CEO Joe Hogan said, "Our third quarter results
reflect continued macro-economic uncertainty and weaker consumer
confidence, as well as a significant impact from unfavorable
foreign exchange rates across all currencies that affect our
operations. On a constant currency basis, total Q3 revenues were
reduced by $25.1 million or 2.7% sequentially and $57.4 million or
6.1% year over year – one of the largest foreign exchange impacts
we have ever experienced in one quarter.* We remain confident in
the execution of our strategic growth drivers despite the
continuing economic headwinds. In Q3, we reached our 14 millionth
Invisalign patient milestone – which includes nearly 4 million
teenagers and kids as young as 6 years old who have been treated
with Invisalign clear aligners. Also, in Q3, teen case starts of
200 thousand were up 13% sequentially and off slightly compared to
Q3'21 when a record 206 thousand teenagers started Invisalign
treatment. We’re also excited to be launching several new products
and technologies that further enhance the Align Digital Platform™,
leading the digital transformation of the practice of dentistry.
During the quarter, we began to commercialize ClinCheck® Live
Update software, Invisalign® Practice App, Invisalign® Personal
Plan, Invisalign Smile Architect™, the Invisalign® Outcome
Simulator Pro with in-face visualization, Cone Beam Computed
Tomography integration with ClinCheck® software, Invisalign®
Virtual Care AI software, and the iTero-exocad Connector™. These
technology advancements represent an important expansion of our
digital platform that we believe will help our doctor customers
increase treatment efficiency and deliver superior clinical
outcomes and patient experiences positioning us to drive growth
when the markets inevitably rebound."
*Non-GAAP measure
Financial Summary
Q3'22
Q2'22
Q3'21
Q/Q Change
Y/Y Change
Invisalign Case Shipments
577,170
598,990
655,150
(3.6
)%
(11.9
)%
GAAP
Net Revenues
$890.3M
$969.6M
$1,015.9M
(8.2
)%
(12.4
)%
Clear Aligner
$732.8M
$798.4M
$837.6M
(8.2
)%
(12.5
)%
Imaging Systems and CAD/CAM Services
$157.5M
$171.2M
$178.3M
(8.0
)%
(11.7
)%
Net Income
$72.7M
$112.8M
$181.0M
(35.5
)%
(59.8
)%
Diluted EPS
$
0.93
$
1.44
$
2.28
($
0.51
)
($
1.35
)
Non-GAAP
Net Income
$106.5M
$157.0M
$228.6M
(32.2
)%
(53.4
)%
Diluted EPS
$
1.36
$
2.00
$
2.87
($
0.64
)
($
1.51
)
As of September 30, 2022, we had over $1.1 billion in cash, cash
equivalents and short-term and long-term marketable securities
compared to $977.2 million as of June 30, 2022. As of September 30,
2022, we also have $300.0 million available under a revolving line
of credit.
Align continues to deliver on its innovation roadmap and during
Q3'22, we began to commercialize several new products and services
we had previously announced would come to market in the second half
of 2022, including the following:
- ClinCheck® Live Update for 3D controls enables real-time
ClinCheck treatment plan modifications that improve practice
productivity significantly, while also improving quality of
treatment plans;
- Invisalign® Practice App provides mobile integration with the
Invisalign® Doctor Site and enables doctors to manage their
practice at their fingertips;
- Invisalign® Personal Plan automatically applies a doctor's
specific treatment preferences for comprehensive cases, enhancing
efficiency and step-changing treatment planning consistency;
- Invisalign Smile Architect™ software is designed for GP
dentists to create and visualize orthodontic-restorative treatment
plans for their patients using iTero digital scans, and wide-smile
photo on the Invisalign Go™ platform; and
- Cone Beam Computed Tomography integration feature for ClinCheck
digital treatment planning software, a user-friendly tool that
combines roots, bone, and crowns into a single three-dimensional
model that enables doctors to visualize a patient’s roots as part
of the digital treatment planning process.
Q3'22 Announcement
Highlights
- On September 15, 2022, we announced the official opening of the
first Europe, Middle East & Africa ("EMEA") manufacturing
facility in Wroclaw, Poland. The new plant is Align’s third
regional manufacturing facility worldwide, after Juarez, Mexico and
Ziyang, China. The state-of-the-art facility serves as an
operations site for Align’s EMEA business and be part of the global
manufacturing of almost 1 million unique clear aligner parts per
day.
- On September 28, 2022, we introduced Invisalign® Virtual Care
AI software, our next generation remote monitoring solution with
new artificial intelligence-assisted capabilities that streamline
workflows for doctors and their staff. It includes features such as
patient enrollment, setup, and review directly on the Invisalign®
Doctor Site without the need to use separate standalone solutions.
Invisalign Virtual Care AI software helps doctors remotely monitor
Invisalign treatment progress based on their own pre-approved
clinical settings and AI-assisted algorithms for Automatic
Assessment calibrated to each doctor’s ClinCheck® treatment
features. AI-assisted Automated Notifications, based on doctor
settings, guide patients to either advance to the next aligner
stage if their treatment is tracking well or to stay on their
current stage for longer or to contact their doctor if their
treatment is not tracking.
- On October 3, 2022, we introduced the latest release of the
iTero-exocad Connector™, which integrates iTero™ intraoral camera
and Near-infrared imaging ("NIRI") images within exocad DentalCAD
3.1 Rijeka software. This new integration, introduced at the exocad
Insights 2022 event in Mallorca, Spain, was designed to support the
goal of a seamless, end-to-end workflow for doctors and lab
technicians. It optimizes design and fabrication of highly esthetic
restorations by providing the ability for dental professionals to
visualize the internal and external structure of teeth.
Q4'22 Stock Repurchase
- We have approximately $450.0 million remaining available for
repurchase of our common stock under our May 2021 $1.0 Billion
Repurchase Program.
- During Q4'22, we expect to repurchase up to $200.0 million of
our common stock through either, or a combination of, open market
repurchases or an accelerated stock repurchase agreement.
Align Web Cast and Conference
Call
We will host a conference call today, October 26, 2022, at 4:30
p.m. ET, 1:30 p.m. PT, to review our third 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 246060. 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 119351. 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 November 9, 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, constant currency
gross profit, constant currency gross margin, constant currency
income from operations, constant currency operating margin, gross
profit, gross margin, operating expenses, income from operations,
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 and 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 intra-entity transfer of
intangible assets, acquisition-related costs, and arbitration award
gain, and, if applicable, any associated tax impacts.
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. 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 as
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 234 thousand doctor customers
and is key to accessing Align’s 500 million consumer market
opportunity worldwide. Over the past 25 years, Align has helped
doctors treat 14 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.
Invisalign, iTero, exocad, Align, Align Digital Platform, Smile
Architect, Invisalign Go, and ClinCheck are trademarks of Align
Technology, Inc.
Forward-Looking
Statements
This news release, including the tables below, contains
forward-looking statements, including statements of beliefs and
expectations regarding our business strategies and our confidence
regarding execution of those strategies, market opportunities,
factors, events and circumstances impacting macro-economic
conditions and predictability, consumer confidence, inflation and
foreign currency exchange rates, our beliefs regarding the impact
of new products and innovations, and our positioning and ability to
lead the digital transformation of dentistry. 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, rising interest rates, market volatility,
weakness in general economic conditions and recessions and the
impact of efforts by central banks and federal, state and local
governments to combat inflation and recession;
- customer and consumer purchasing behavior and changes in
consumer spending habits as a result of, among other things,
prevailing macro-economic conditions, levels of employment,
salaries and wages, inflationary pressure, declining consumer
confidence, and the military conflict in Ukraine;
- 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 will continue to adversely impact our operations
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
clear aligners and 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 June 30, 2022, which was filed with the SEC on August 4,
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
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Net revenues
$
890,348
$
1,015,906
$
2,833,120
$
2,921,485
Cost of net revenues
271,179
260,750
817,046
730,693
Gross profit
619,169
755,156
2,016,074
2,190,792
Operating expenses:
Selling, general and administrative
398,547
428,409
1,264,402
1,257,445
Research and development
76,966
65,587
221,738
177,839
Total operating expenses
475,513
493,996
1,486,140
1,435,284
Income from operations
143,656
261,160
529,934
755,508
Interest income and other income
(expense), net:
Interest income
1,685
401
2,607
2,427
Other income (expense), net
(22,700
)
427
(48,805
)
34,476
Total interest income and other income
(expense), net
(21,015
)
828
(46,198
)
36,903
Net income before provision for income
taxes
122,641
261,988
483,736
792,411
Provision for income taxes
49,941
81,019
163,938
211,352
Net income
$
72,700
$
180,969
$
319,798
$
581,059
Net income per share:
Basic
$
0.93
$
2.29
$
4.08
$
7.36
Diluted
$
0.93
$
2.28
$
4.07
$
7.29
Shares used in computing net income per
share:
Basic
78,093
78,904
78,408
78,971
Diluted
78,237
79,516
78,652
79,677
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
September 30,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
1,044,523
$
1,099,370
Marketable securities, short-term
46,242
71,972
Accounts receivable, net
859,629
897,198
Inventories
320,903
230,230
Prepaid expenses and other current
assets
229,283
195,305
Total current assets
2,500,580
2,494,075
Marketable securities, long-term
50,256
125,320
Property, plant and equipment, net
1,199,880
1,081,926
Operating lease right-of-use assets,
net
116,031
121,257
Goodwill
377,616
418,547
Intangible assets, net
91,711
109,709
Deferred tax assets
1,524,584
1,533,767
Other assets
52,144
57,509
Total assets
$
5,912,802
$
5,942,110
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
138,918
$
163,886
Accrued liabilities
383,618
607,315
Deferred revenues
1,286,867
1,152,870
Total current liabilities
1,809,403
1,924,071
Income tax payable
127,059
118,072
Operating lease liabilities
96,694
102,656
Other long-term liabilities
185,024
174,597
Total liabilities
2,218,180
2,319,396
Total stockholders’ equity
3,694,622
3,622,714
Total liabilities and stockholders’
equity
$
5,912,802
$
5,942,110
ALIGN TECHNOLOGY, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net cash provided by operating
activities
$
424,025
$
899,695
CASH FLOWS FROM INVESTING
ACTIVITIES
Net cash used in investing activities
(157,506
)
(255,719
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net cash used in financing activities
(301,498
)
(356,759
)
Effect of foreign exchange rate changes on
cash, cash equivalents, and restricted cash
(20,422
)
(10,241
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(55,401
)
276,976
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
$
1,044,738
$
1,238,450
ALIGN TECHNOLOGY, INC.
INVISALIGN BUSINESS METRICS
Q1
Q2
Q3
Q4
Q1
Q2
Q3
2021
2021
2021
2021
2022
2022
2022
Invisalign Average Selling Price
(ASP)
$
1,195
$
1,185
$
1,195
$
1,200
$
1,250
$
1,220
$
1,150
Number of Invisalign Doctors Cases Were
Shipped To
78,605
83,465
85,500
83,540
82,440
82,275
84,410
Invisalign Doctor Utilization
Rates*:
North America
9.1
9.9
9.8
9.3
9.2
9.3
8.9
North American Orthodontists
26.8
29.4
29.7
26.9
26.8
26.8
25.9
North American GP Dentists
4.8
5.3
5.0
5.1
5.0
5.1
4.8
International
6.8
7.1
6.5
6.8
6.4
6.4
6.0
Total Utilization Rates**
7.6
8.0
7.7
7.6
7.3
7.3
6.8
Clear Aligner Revenue Per Case
Shipment***:
$
1,265
$
1,265
$
1,280
$
1,290
$
1,350
$
1,335
$
1,270
* # of cases shipped / # of doctors to
whom cases were shipped
** LATAM utilization rate is not
separately disclosed but included in the total utilization
rates
*** Clear Aligner revenues / Case
shipments
ALIGN TECHNOLOGY, INC.
STOCK-BASED COMPENSATION
(in thousands)
Q1
Q2
Q3
Q4
Fiscal
Q1
Q2
Q3
2021
2021
2021
2021
2021
2022
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
$
1,651
SBC included in Operating Expenses
25,935
27,437
26,951
28,380
108,703
30,107
32,526
31,267
Total SBC
$
27,241
$
28,855
$
28,402
$
29,838
$
114,336
$
31,621
$
34,140
$
32,918
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP
RECONCILIATION
CONSTANT CURRENCY NET REVENUES
(in thousands, except percentages)
Sequential constant currency analysis:
Three Months Ended
September 30,
2022
June 30,
2022
Impact % of
Revenue
GAAP net revenues
$
890,348
$
969,553
Constant currency impact (1)
25,072
2.7
%
Constant currency net revenues
(1)
$
915,420
GAAP Clear Aligner net revenues
$
732,837
$
798,398
Clear Aligner constant currency impact
(1)
20,957
2.8
%
Clear Aligner constant currency net
revenues (1)
$
753,794
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
157,511
$
171,155
Imaging Systems and CAD/CAM Services
constant currency impact (1)
4,115
2.5
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
161,626
Year-over-year constant currency
analysis:
Three Months Ended
September 30,
2022
2021
Impact % of
Revenue
GAAP net revenues
$
890,348
$
1,015,906
Constant currency impact (1)
57,383
6.1
%
Constant currency net revenues
(1)
$
947,731
GAAP Clear Aligner net revenues
$
732,837
$
837,593
Clear Aligner constant currency impact
(1)
47,445
6.1
%
Clear Aligner constant currency net
revenues (1)
$
780,282
GAAP Imaging Systems and CAD/CAM
Services net revenues
$
157,511
$
178,313
Imaging Systems and CAD/CAM Services
constant currency impact (1)
9,938
5.9
%
Imaging Systems and CAD/CAM Services
constant currency net revenues (1)
$
167,449
Note:
(1)
We define constant currency net revenues
as total net revenues excluding the effect of foreign exchange rate
movements and use it to determine the percentage for the constant
currency impact on net revenues on a sequential and year-over-year
basis. Constant currency impact in dollars is calculated by
translating the current period GAAP net revenues using the foreign
currency exchange rates that were in effect during the previous
comparable period and subtracting it by the current period GAAP net
revenues. The percentage for the constant currency impact on net
revenues is calculated by dividing the constant currency impact in
dollars (numerator) by constant currency net revenues in dollars
(denominator). Refer to "About Non-GAAP Financial Measures" section
of press release.
ALIGN TECHNOLOGY, INC.
UNAUDITED GAAP TO NON-GAAP RECONCILIATION
CONTINUED
CONSTANT CURRENCY GROSS PROFIT AND GROSS
MARGIN
(in thousands, except percentages)
Sequential constant currency analysis:
Three Months Ended
September 30, 2022
June 30, 2022
GAAP gross profit
$
619,169
$
687,559
Constant currency impact on net
revenues
25,072
Constant currency gross profit
$
644,241
Three Months Ended
September 30, 2022
June 30, 2022
GAAP gross margin
69.5
%
70.9
%
Gross margin constant currency impact
(1)
0.8
Constant currency gross margin
(1)
70.3
%
Year-over-year constant currency
analysis:
Three Months Ended September
30,
2022
2021
GAAP gross profit
$
619,169
$
755,156
Constant currency impact on net
revenues
57,383
Constant currency gross profit
$
676,552
Three Months Ended September
30,
2022
2021
GAAP gross margin
69.5
%
74.3
%
Gross margin constant currency impact
(1)
1.8
Constant currency gross margin
(1)
71.3
%
Note:
(1)
We define constant currency gross margin
as constant currency gross profit as a percentage of constant
currency net revenues. Gross margin constant currency impact is the
increase or decrease in constant currency gross margin compared to
the GAAP gross margin.
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
September 30,
2022
June 30, 2022
GAAP income from operations
$
143,656
$
188,196
Income from operations constant currency
impact (1)
18,279
Constant currency income from
operations (1)
$
161,935
Three Months Ended
September 30,
2022
June 30, 2022
GAAP operating margin
16.1
%
19.4
%
Operating margin constant currency impact
(2)
1.6
Constant currency operating margin
(2)
17.7
%
Year-over-year constant currency
analysis:
Three Months Ended
September 30,
2022
2021
GAAP income from operations
$
143,656
$
261,160
Income from operations constant currency
impact (1)
42,235
Constant currency income from
operations (1)
$
185,891
Three Months Ended
September 30,
2022
2021
GAAP operating margin
16.1
%
25.7
%
Operating margin constant currency impact
(2)
3.5
Constant currency operating margin
(2)
19.6
%
Notes:
(1)
We define constant currency income from
operations as GAAP income from operations excluding the effect of
foreign exchange rate movements for GAAP net revenues and operating
expenses on a sequential and year-over-year basis. Constant
currency impact in dollars is calculated by translating the current
period GAAP net revenues and operating expenses using the foreign
currency exchange rates that were in effect during the previous
comparable period and subtracting it by the current period GAAP net
revenues and operating expenses.
(2)
We define constant currency operating
margin as constant currency income from operations as a percentage
of constant currency net revenues. Operating margin constant
currency impact is the increase or decrease in constant currency
operating margin compared to the GAAP operating margin.
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
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
GAAP gross profit
$
619,169
$
755,156
$
2,016,074
$
2,190,792
Stock-based compensation
1,651
1,451
4,779
4,175
Amortization of intangibles (1)
2,644
2,354
7,524
6,704
Non-GAAP gross profit
$
623,464
$
758,961
$
2,028,377
$
2,201,671
GAAP gross margin
69.5
%
74.3
%
71.2
%
75.0
%
Non-GAAP gross margin
70.0
%
74.7
%
71.6
%
75.4
%
GAAP total operating expenses
$
475,513
$
493,996
$
1,486,140
$
1,435,284
Stock-based compensation
(31,267
)
(26,951
)
(93,900
)
(80,323
)
Amortization of intangibles (1)
(825
)
(960
)
(2,607
)
(2,735
)
Acquisition-related costs (2)
—
—
—
(104
)
Non-GAAP total operating
expenses
$
443,421
$
466,085
$
1,389,633
$
1,352,122
GAAP income from operations
$
143,656
$
261,160
$
529,934
$
755,508
Stock-based compensation
32,918
28,402
98,679
84,498
Amortization of intangibles (1)
3,469
3,314
10,131
9,439
Acquisition-related costs (2)
—
—
—
104
Non-GAAP income from operations
$
180,043
$
292,876
$
638,744
$
849,549
GAAP operating margin
16.1
%
25.7
%
18.7
%
25.9
%
Non-GAAP operating margin
20.2
%
28.8
%
22.5
%
29.1
%
GAAP total interest income and other
income (expense), net
$
(21,015
)
$
828
$
(46,198
)
$
36,903
Arbitration award gain (3)
—
—
—
(43,403
)
Non-GAAP total interest income and
other income (expense), net
$
(21,015
)
$
828
$
(46,198
)
$
(6,500
)
GAAP net income before provision for
income taxes
$
122,641
$
261,988
$
483,736
$
792,411
Stock-based compensation
32,918
28,402
98,679
84,498
Amortization of intangibles (1)
3,469
3,314
10,131
9,439
Acquisition-related costs (2)
—
—
—
104
Arbitration award gain (3)
—
—
—
(43,403
)
Non-GAAP net income before provision
for income taxes
$
159,028
$
293,704
$
592,546
$
843,049
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
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
GAAP provision for income taxes
49,941
$
81,019
$
163,938
$
211,352
Tax impact on non-GAAP adjustments
3,300
6,605
18,405
19,978
Tax related non-GAAP items (4)
(682
)
(22,494
)
(21,916
)
(57,339
)
Non-GAAP provision for income
taxes
$
52,559
$
65,130
$
160,427
$
173,991
GAAP effective tax rate
40.7
%
30.9
%
33.9
%
26.7
%
Non-GAAP effective tax rate
33.1
%
22.2
%
27.1
%
20.6
%
GAAP net income
$
72,700
$
180,969
$
319,798
$
581,059
Stock-based compensation
32,918
28,402
98,679
84,498
Amortization of intangibles (1)
3,469
3,314
10,131
9,439
Acquisition-related costs (2)
—
—
—
104
Arbitration award gain (3)
—
—
—
(43,403
)
Tax impact on non-GAAP adjustments
(3,300
)
(6,605
)
(18,405
)
(19,978
)
Tax related non-GAAP items (4)
682
22,494
21,916
57,339
Non-GAAP net income
$
106,469
$
228,574
$
432,119
$
669,058
GAAP diluted net income per
share
$
0.93
$
2.28
$
4.07
$
7.29
Non-GAAP diluted net income per
share
$
1.36
$
2.87
$
5.49
$
8.40
Shares used in computing diluted net
income per share
78,237
79,516
78,652
79,677
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/20221026005471/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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