ALIGN TECHNOLOGY INC
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
ALGN$166.00+4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001097149-24-000060
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001097149-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 114 current paragraphs.
43 unchanged; 60 reworded; 11 added; 30 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Macroeconomic Challenges, Trade Impediments and Geopolitical Tensions
Current report
Specifically, government actions in key strategic countries or regions relating to implemented or proposed tariffs and retaliatory actions, particularly in the United States, China, Europe, Israel and Mexico are expected to adversely impact our revenue and cost of goods sold. Additionally, the escalating trade war and geopolitical tensions between the United States and China may result in the limitation or prohibition of the availability of certain raw materials, components and parts necessary for our products or the products of our suppliers. The degree of our exposure is dependent on, among other things, the type of goods subject to any tariffs or trade restrictions enacted, the tariff rates or limits imposed, the timing of the tariffs or restrictions and any other retaliatory measures enacted. The impact may vary by time and region, making operational results uncertain and difficult to predict. These events may also cause a shift in public opinion about companies based in the United States and this may have an adverse impact on our reputation and business. We continue to closely monitor the foregoing issues, assess their potential impact on our operations and financial results, and implement plans to mitigate the impact of any adverse events.
Current report
•Clear Aligner revenues of $797 million, a decrease of 2.5% year-over-year;
Current report
•Effective tax rate of 33.6%;
Current report
•For the first quarter of 2025, the total number of Invisalign trained doctors cases were shipped to (doctor submitters) was 85.3 thousand compared to 83.5 thousand in first quarter of 2024, a 2.1% increase.
Current report
•The clear aligner revenue per case shipment (clear aligner revenues divided by case shipments) decreased from $1,350 in the first quarter of 2024 to $1,240 in the first quarter of 2025, an 8.1% decrease.
Current report
1 Beginning with this quarterly report on Form 10-Q for the quarter ended March 31, 2025, we are no longer disclosing Clear Aligner net revenues for Americas, International and Non-case. Rather our disclosure will align with our Clear Aligner reportable segment in total.
Current report
Clear Aligner Case Volume
Current report
For the three months ended March 31, 2025, Systems and Services net revenues increased by $2 million as compared to the same period in 2024, primarily due to an increase of $12 million in sales of scanner wands, driven by strong volume partially offset by lower ASP, and a $4 million increase from non-system sales. These increases were partially offset by lower scanner system sales of $9 million, driven by lower volume and ASP, and $5 million lower net revenues from unfavorable foreign exchange rates.
Current report
For the three months ended March 31, 2025, our gross margin percentage decreased as compared to the same period in 2024 primarily due to a decrease in scanner wand and scanner system ASPs, partially offset by lower manufacturing spend and services efficiency.
Current report
For the three months ended March 31, 2025, our operating margin percentage increased compared to the same period in 2024 primarily due to operating leverage partially offset by lower gross margin.
Removed paragraphs (30)
Previous report
•Clear Aligner revenues of $786.8 million, a decrease of 1.0% year-over-year;
Previous report
◦Americas Clear Aligner revenues of $349.2 million, a decrease of 4.7% year-over-year;
Previous report
◦International Clear Aligner revenues of $361.5 million, an increase of 1.8% year-over-year;
Previous report
•Effective tax rate of 30.1%;
Previous report
•For the third quarter of 2024, total Invisalign cases submitted with a digital scanner in the Americas increased to 96.1%, up from 94.6% in the third quarter of 2023 and international scans increased to 89.3%, up from 87.6% in the third quarter of 2023. For the third quarter of 2024, 98.2% of Invisalign cases submitted by North American orthodontists were submitted digitally.
Previous report
▪North America: The utilization rate among our North American orthodontist customers decreased to 28.3 cases per doctor in the third quarter of 2024 compared to 28.8 cases per doctor in the third quarter of 2023 and the utilization rate among our North American GP customers increased to 5.0 cases per doctor in the third quarter of 2024 compared to 4.9 cases per doctor in the third quarter of 2023.
Previous report
▪International: International doctor utilization rate was 6.2 cases per doctor in the third quarter of 2024 compared to 6.1 cases per doctor in the third quarter of 2023.
Previous report
*Invisalign utilization rates are calculated by the number of cases shipped divided by the number of doctors to whom cases were shipped. Our International region includes Europe, Middle East and Africa (“EMEA”) and Asia Pacific (“APAC”). Latin America (“LATAM”) is excluded from the International region based on its immateriality to the quarter; however is included in the Total utilization.
Previous report
For the nine months ended September 30, 2024, total net revenues increased by $98 million as compared to the same period in 2023, primarily due to an increase in Systems and Services net revenues from higher scanner ASP, increase in non-system sales and services revenue and Clear Aligner net revenues from an increase in volume, partially offset by lower Clear Aligner ASP.
Previous report
Clear Aligner - Americas
Previous report
For the nine months ended September 30, 2024, Americas net revenues decreased by $21 million as compared to the same period in 2023, primarily due to a 1.6% decrease in ASP, resulting in a decrease of net revenues of $18 million. The decrease in ASP was primarily driven by a mix shift to lower priced products and countries which reduced net revenues by $71 million and higher promotional discounts which decreased net revenues by $49 million. These decreases were partially offset by lower net deferrals which increased net revenues by $86 million and price changes which increased net revenues by $16 million.
Previous report
Clear Aligner - International
Previous report
For the three months ended September 30, 2024, International net revenues increased by $6 million as compared to the same period in 2023, primarily due to a 6.3% increase in case volumes, resulting in increased net revenues by $22 million. This increase was partially offset by a decrease of 4.3% in ASP which decreased net revenues by $16 million. Lower ASP was due to unfavorable foreign exchange rates that decreased net revenues by $5 million and a price reduction we took in the United Kingdom (“UK”) to offset VAT on our sales into the UK, which decreased net revenues by $8 million. ASP was also negatively impacted by a mix shift to lower priced products and countries, which reduced net revenues by $15 million and higher promotional discounts which reduced net revenues by $31 million. The decreases in ASP were partially offset by lower net deferrals and price changes which increased net revenues by $26 million and $15 million, respectively.
Previous report
For the nine months ended September 30, 2024, International net revenues increased by $27 million as compared to the same period in 2023, primarily due to a 6.1% increase in case volumes, resulting in increased net revenues by $67 million. This increase was partially offset by a decrease of 3.4% in ASP which decreased net revenues by $39 million. Lower ASP was due to unfavorable foreign exchange rates that decreased net revenues by $25 million, a price reduction we took in the UK to offset VAT on our sales into the UK, which decreased net revenues by $23 million, a mix shift to lower priced products and countries which reduced net revenues by $47 million and higher promotional discounts which reduced net revenues by $83 million. The decreases in ASP were partially offset by lower net deferrals and price changes which increased net revenues by $80 million and $55 million, respectively.
Previous report
Clear Aligner - Non-Case
Previous report
For the three and nine months ended September 30, 2024, non-case net revenues increased by $3 million and $12 million, respectively as compared to the same period in 2023 primarily due to increased volume of Vivera retainers which includes retention aligners ordered through our Doctor Subscription Program.
Previous report
For the three months ended September 30, 2024, Systems and Services net revenues increased by $26 million as compared to the same period in 2023 primarily due to higher scanner ASP which increased net revenues by $20 million, an increase in sales of upgrade scanner systems which increased net revenues by $7 million, and higher services revenues which increased net revenues by $7 million. These increases were partially offset by lower volume and unfavorable foreign exchange rates which decreased net revenues by $10 million and $3 million, respectively.
Previous report
For the nine months ended September 30, 2024, Systems and Services net revenues increased by $80 million as compared to the same period in 2023 primarily due to higher scanner ASP which increased net revenues by $38 million, an increase in sales of upgrade scanner systems which increased net revenues by $30 million, and higher services revenue which increased net revenues by $18 million. Additionally, CAD/CAM software revenues increased net revenues by $6 million. These increases were partially offset by lower volume and unfavorable foreign exchange rates which decreased net revenues by $3 million and $7 million, respectively.
Previous report
Clear Aligner
Previous report
For the three months ended September 30, 2024, our gross margin percentage increased as compared to the same period in 2023 primarily due to higher ASPs, partially offset by higher service and freight costs.
Previous report
For the nine months ended September 30, 2024, our gross margin percentage increased as compared to the same period in 2023 primarily due to higher ASPs, partially offset by lower service revenue mix.
Previous report
For the three months ended September 30, 2024, selling, general and administrative expense increased compared to the same period in 2023 primarily due to higher employee costs, including higher salary, fringe benefits, stock-based compensation and bonus.
Previous report
For the three months ended September 30, 2024, research and development expense decreased compared to the same period in 2023 primarily due to capitalization of labor costs related to internal use software, partially offset by higher employee costs.
Previous report
For the three months ended September 30, 2024, our operating margin percentage decreased compared to the same periods in 2023 primarilydue to increased employee costs.
Previous report
Clear Aligner
Previous report
For the three andnine months ended September 30, 2024, our operating margin percentage increased compared to the same periods in 2023 primarily due to higher gross margin, partially offset by increased employee costs.
Previous report
For the three months ended September 30, 2024, interest income decreased compared to the same period in 2023 primarily due to lower cash and cash equivalents and lower interest rates.
Previous report
As of September 30, 2024 and December 31, 2023, we had the following cash and cash equivalents and short-term and long-term marketable securities (in thousands):
Previous report
On October 25, 2024, we announced a plan to repurchase $275.0 million of our common stock through open market repurchases beginning in the fourth quarter of 2024 and continuing through the first quarter of 2025. Refer to Note 16 “Subsequent Event” of the Notes to Condensed Consolidated Financial Statements for details on this common stock repurchase.
Previous report
•On October 23, 2024, we announced a restructuring plan to reduce costs by adjusting headcount for the existing business environment. We expect to incur between approximately $25.0 million and $30.0 million of restructuring charges, primarily related to severance and other one-time post-employment benefits.
Reworded paragraphs (60)
Previous wording
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the“Exchange Act”). These statements include, among other things, our expectations and intentions regarding our strategic objectives and the means to achieve them, our beliefs and expectations regarding macroeconomic conditions, including inflation, fluctuations in currency exchange rates, higher 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, our expectations and beliefs regarding customer and consumer purchasing behavior and changes in consumer spending habits, our expectations regarding product mix and product adoption, our expectations regarding competition and our ability to compete in our target markets, our expectations regarding the sales growth of our intraoral scanners, clear aligners and other products, our expectations regarding the impact of the military conflicts in the Middle East and Ukraine and our operations and assets in Israel and Russia, our marketing and efforts to build our brand awareness, our estimates regarding the size and opportunities of the markets we are targeting along with our expectations for growth in those markets, our beliefs regarding the impact of technological innovation in general, and in our solutions and products in particular, on target markets and patient care, our beliefs regarding digital dentistry and its potential to impact our business, our intentions regarding expanding our business, including its impact on our operational flexibility and responsiveness to customer demand, our expectations regarding our tax positions and the judgements we make related to our tax obligations, our beliefs regarding the importance of our manufacturing operations on our success, our beliefs regarding the need for and benefits of our technological development on Invisalign treatment, the areas of development in which we focus our efforts, and the advantages of our intellectual property portfolio, our beliefs regarding our business strategy and growth drivers, our expectations regarding the utilization rates for our products, including the impact of marketing on those rates and causes for periodic fluctuations of the rates, our expectations regarding the existence and impact of seasonality, our expectations regarding the productivity impact sales representatives will have on our sales and the impact of specialization of those representatives in sales channels, our expectations regarding the continued expansion of our international markets and their growth, our expectations regarding staying in compliance with laws and regulations currently applicable to, or which may become applicable to, …
Excerpt shortened here; the source contains the full paragraph.
Current wording
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, among other things, our expectations and intentions regarding our strategic objectives and the means to achieve them, our beliefs and expectations regarding macroeconomic conditions, including fluctuations in currency exchange rates, inflation, higher interest rates, market volatility, threats or actual imposition of tariffs, customs duties and fees by nations and retaliatory actions, threats of or actual economic slowdowns or recessions, or escalating trade wars and geopolitical tensions, our expectations and beliefs regarding customer and consumer purchasing behavior and changes in consumer spending habits, our expectations regarding implemented or proposed tariffs and retaliatory actions or other trade restrictions or measures taken by the United States and other countries that have or could impact our products and product sales, our expectations regarding product mix, product launches, product pilots and product adoption, our expectations regarding competition and our ability to compete in our target markets, our expectations regarding the sales growth of our intraoral scanners, clear aligners and other products, our expectations regarding the impact of the military conflicts in the Middle East and Ukraine and increased geopolitical tensions involving Taiwan and the South China Sea and our operations and assets in Israel and Russia, our marketing and efforts to build our brand awareness, our estimates regarding the size and opportunities of the markets we are targeting along with our expectations for growth in those markets and potential collaboration opportunities, our beliefs regarding the impact of technological innovation in general, and in our solutions and products in particular, on target markets and patient care, our beliefs regarding digital dentistry and its potential to impact our business, our intentions regarding expanding our business, including its impact on our operational flexibility and responsiveness to customer demand, our expectations regarding our tax positions and the judgements we make related to our tax obligations, our beliefs regarding the importance of our manufacturing operations on our success, our beliefs regarding the need for and benefits of our technological development on Invisalign treatment, the areas of development in which we focus our efforts, and the advantages of our intellectual property portfolio, our beliefs regarding our business strategy and growth drivers, our expectations regarding the utilization rates for our products, including the impact of marketing on those rates and causes for periodic fluctuations of the rates, our expectations regarding the existence and impact of seasonality, our expectations regardin…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Our business strategic priorities focus on four principal pillars for growth: (i) international expansion; (ii) general dental practitioners (“GP”) treatment; (iii) patient demand; and (iv) orthodontic utilization. Our growth strategy depends on our ability to facilitate the digital transformation of dentistry happening around the world, our continuous focus on innovation, and expansion to meet and exceed evolving customer expectations as the array of products and services available to them increases. Below is a discussion of the significant trends and uncertainties that could impact our operations:
Current wording
Our strategic priorities focus on four principal pillars for growth: (i) international expansion; (ii) general dental practitioners (“GP”) treatment; (iii) patient demand; and (iv) orthodontic utilization. Our growth strategy depends on our ability to facilitate the digital transformation of dentistry happening around the world, our continuous focus on innovation, and expansion to meet and exceed evolving customer expectations as the array of products and services available to them increases. Below is a discussion of the significant trends and uncertainties that could impact our operations:
Previous wording
Our revenues are susceptible to fluctuations caused by macroeconomic conditions, inflation, changes to currency exchange rates, higher interest rates, actual and threatened wars and military actions, threats of or actual recessions, supply chain challenges, market volatility, and other factors, each of which impacts customer confidence, consumer sentiment and demand. Many of these same factors also impact our costs and those of our suppliers through higher raw material prices, transportation costs, labor costs, supply and distribution operations. During 2024, we believe sales of our products have been impacted by macroeconomic conditions that adversely impacted disposable income and consumer demand and we believe this trend will continue for the remainder of 2024. We also expect the military conflict between Russia and Ukraine to continue to create market uncertainties and dampen consumer sentiment and demand, particularly in Europe. The impact of declining demand may vary by time and region, making operational results uncertain and difficult to predict.
Current wording
Our revenues are susceptible to fluctuations resulting from events and circumstances, including macroeconomic conditions, fluctuations in foreign currency exchange rates, inflation, threats or actual imposition of tariffs, customs duties and fees by nations and retaliatory actions, threats of or actual slowdowns or recessions, supply chain challenges, market volatility, higher interest rates, employment levels, health insurance coverage, wages, debt obligations, discretionary income and other factors, each of which impacts customer confidence, consumer sentiment and demand. Many of these same factors also impact the availability of certain raw materials, parts and components used in our products as well as our costs and those of our suppliers through higher raw material prices, transportation costs, labor costs, supply and distribution operations. In the first quarter of 2025, we believe sales of our products were adversely impacted by macroeconomic conditions that negatively affected disposable income and consumer demand. We believe this will continue for the remainder of 2025, particularly if tariffs or the threat of tariffs and retaliatory actions impair discretionary spending. We also expect the geopolitical conflicts involving Ukraine, the Middle East, China and other regions to continue to create market uncertainties and dampen consumer sentiment and demand.
Previous wording
Additionally, many of our international operations are denominated in currencies other than the U.S. dollar. In the third quarter of 2024, on a sequential basis, there was no significant impact from foreign exchange on our financial condition. However, the U.S. dollar remained strong against major currencies on a year-over-year basis, which negatively impacted our financial condition and results of operations for the quarter. Foreign exchange volatility and the subsequent strengthening or weakening of the U.S dollar against other currencies remains uncertain and unpredictable.
Current wording
Additionally, a material amount of our revenues are derived internationally and many of our international operations are denominated in currencies other than the U.S. dollar. In the first quarter of 2025, the U.S. dollar strengthened against major currencies, which negatively impacted our financial condition and results of operations for the quarter. Foreign exchange volatility and the subsequent strengthening or weakening of the U.S dollar against other currencies remains uncertain and unpredictable.
Previous wording
The ongoing conflict in the Middle East may further exacerbate general and regional macroeconomic instability, particularly if fighting continues to spread to other locations, create shipping and logistical challenges or cost increases, lead to sanctions or boycotts, or otherwise may materially impact our operations. For instance, our iTero business is headquartered in Israel. To date in 2024, the timing and cost of shipping our products has not been materially impacted and we have put measures in place to help reduce the risk of experiencing significant delays in the future. Additionally, although our operations have not thus far been materially impacted by employee absences, we have employees and consultants in Israel that have been called for military service and may be unavailable for an unknown period of time. Furthermore, while there have been export and import restrictions imposed against Israel, we have not been materially impacted by any trade sanctions yet. We continue to monitor the potential for violence and military actions that may directly or indirectly impact our personnel, manufacturing, supply chain, and sales.
Current wording
We continue to monitor the potential for violence and military actions that may directly or indirectly impact our personnel, manufacturing, supply chain, and sales. For instance, ongoing conflicts in Ukraine and the Middle East as well as increased geopolitical tensions involving Taiwan and the South China Sea may further exacerbate general and regional macroeconomic instability, particularly if fighting erupts, intensifies, spreads to other locations, creates shipping and logistical challenges or cost increases, leads to sanctions or boycotts, or otherwise materially impacts our operations or consumer spending. Our iTero business is headquartered in Israel and, although the sales, delivery times and cost of shipping our products have not been materially impacted and we have put measures in place to help reduce the future risks, it remains uncertain if there will be impacts on our sales, delivery times or cost of shipping our products. While there have been export and import restrictions imposed against products originating from and businesses operating in Israel, they have not materially impacted our sales or operations to date although we continue to monitor the risk.
Previous wording
As the markets for clear aligners and digital processes and workflows used to transform the practice of dentistry continue to mature, we anticipate customer and patient expectations and demands will continue to evolve. We expect to meet customer demands with innovative treatment options that include more choices to address a wider scope of treatment goals and budgets based on our existing and new products. This may result in larger and unpredictable variations in geographic and product mix and selling prices with uncertain implications on our financial statements and business operations.
Current wording
As the markets for clear aligners and digital processes and workflows used to transform the practice of dentistry continue to mature, we continue to anticipate customer and patient expectations and demands will continue to evolve. We expect to meet customer demands with innovative treatment options that include more choices to address a wider scope of treatment goals and budgets based on our existing and new products. This may result in larger and unpredictable variations in geographic and product mix and selling prices with uncertain implications on our financial statements and business operations.
Previous wording
We strive to manage the challenges from the trends and uncertainties, including the macroeconomic conditions, military conflicts and the evolution of our target markets, by focusing on improving our operations, building flexibility and efficiencies in our processes, adjusting our business models to changing circumstances and offering products that meet market demand. Specifically, we are managing financial impacts through strategic product innovations, introductions and pricing actions, implementing cost saving measures and evaluating hiring needs.
Current wording
We strive to manage the challenges from the trends and uncertainties, including the macroeconomic conditions, tariffs and retaliatory measures, military conflicts and the evolution of our target markets, by focusing on improving our operations, further increasing flexibility and efficiencies in our processes, adjusting our business models to changing circumstances and offering products that meet market demand. Specifically, we are managing financial impacts through strategic product innovations, introductions and pricing actions, implementing cost saving measures and evaluating hiring needs.
Previous wording
As an example, there was significant adoption of the Invisalign Comprehensive 3in3 product after it was introduced in 2023 that has continued in 2024. The 3in3 configuration offers doctors Invisalign Comprehensive treatment with a three-year treatment expiration date and three additional clear aligners included prior to the treatment expiration date. The 3in3 product allows us to recognize more revenue up front but is offered at a lower price as compared to our traditional Invisalign comprehensive product that has a five-year treatment expiration date with unlimited additional clear aligners prior to the treatment end date.
Current wording
As an example, there was significant adoption of the Invisalign Comprehensive 3in3 product after it was introduced in 2023 that continued in 2024. The 3in3 configuration offers doctors Invisalign Comprehensive treatment with a three-year treatment expiration date and three additional clear aligners included prior to the treatment expiration date. The 3in3 product also allows us to recognize more revenue up front while doing so at a lower price as compared to our traditional Invisalign comprehensive product that has a five-year treatment expiration date with unlimited additional clear aligners prior to the treatment end date.
Previous wording
We measure our performance against these strategic priorities by the achievement of key financial and operating metrics.
Current wording
We measure our performance against the foregoing strategic priorities by the achievement of key financial and operating metrics. For the three months ended March 31, 2025, our business operations reflect the following:
Previous wording
•Revenues of $977.9 million, an increase of 1.8% year-over-year;
Current wording
•Revenues of $979 million, a decrease of 1.8% year-over-year;
Previous wording
◦Clear Aligner case volume increased 2.5% year-over-year and Clear Aligner case volume for teenage patients increased 6.7% year-over-year;
Current wording
•Clear Aligner case volume increased 6.2% year-over-year and Clear Aligner case volume for teens and growing patients increased from 199.2 thousand shipments to 225.8 thousand or 13.3% year-over-year;
Previous wording
•Imaging Systems and computer-aided design and computer-aided manufacturing (“CAD/CAM”) Services revenues of $191.0 million, an increase of 15.6% year-over-year;
Current wording
•Imaging Systems and computer-aided design and computer-aided manufacturing (“CAD/CAM”) Services revenues of $182 million, an increase of 1.2% year-over-year;
Previous wording
•Income from operations of $162.3 million and operating margin of 16.6%;
Current wording
•Income from operations of $131 million and operating margin of 13.4%;
Previous wording
•Net income of $116.0 million with diluted net income per share of $1.55;
Current wording
•Net income of $93 million with diluted net income per share of $1.27;
Previous wording
•Cash and cash equivalents of $1,041.9 million as of September 30, 2024;
Current wording
•Cash and cash equivalents of $873 million as of March 31, 2025;
Previous wording
•Cash provided by operating activities of $263.7 million;
Current wording
•Cash provided by operating activities of $53 million;
Previous wording
•Capital expenditures of $29.8 million, primarily related to investments in our manufacturing capacity and facilities; and
Current wording
•Capital expenditures of $25 million, primarily related to investments in our manufacturing capacity and facilities; and
Previous wording
•Number of employees was 21,690 as of September 30, 2024, a decrease of 4.4% year-over-year.
Current wording
•Number of employees was 21,200 as of March 31, 2025, a decrease of 2.2% year-over-year.
Previous wording
•As of September 30, 2024, approximately 18.9 million people worldwide have been treated with our Invisalign system. Management measures these results by comparing to the millions of people who can benefit from straighter teeth and uses this data to target opportunities to expand the market for orthodontics by educating consumers about the benefits of straighter teeth using the Invisalign system.
Current wording
•As of March 31, 2025, approximately 20 million people worldwide have been treated with our Invisalign system. Management measures these results by comparing to the millions of people who can benefit from straighter teeth and uses this data to target opportunities to expand the market for orthodontics by educating consumers about the benefits of straighter teeth using the Invisalign system.
Previous wording
•The total utilization rate in the third quarter of 2024 remained flat at 7.1 cases per doctor compared to the third quarter of 2023. Utilization rates in North America and our International locations were as follows:
Current wording
•The total utilization rate in the first quarter of 2025 increased to 7.5 cases per doctor compared to 7.2 in the first quarter of 2024. This increase was primarily driven by improved utilization in our international markets.
Previous wording
▪Comprehensive Products include, but are not limited to, Invisalign Comprehensive and Invisalign First.
Current wording
▪Comprehensive Products include, but are not limited to, Invisalign Comprehensive, Invisalign First and Invisalign Comprehensive 3in3.
Previous wording
▪In the U.S., Canada, and EMEA, we also offer a Doctor Subscription Program which is our monthly subscription-based clear aligner program. The program allows doctors the flexibility to order retainers and low-stage “touch-up” clear aligners within their subscribed tier and is designed for a segment of experienced Invisalign trained doctors who are currently not regularly using our retainers or low-stage aligners. The low-stage aligners, the Touch up product, are included as a Non-Comprehensive Product.
Current wording
▪In the United States, Canada and EMEA, we also offer a Doctor Subscription Program which is our monthly subscription-based clear aligner program. The program allows doctors the flexibility to order retainers and low-stage “touch-up” clear aligners within their subscribed tier and is designed for a segment of experienced Invisalign trained doctors who are currently not regularly using our retainers or low-stage aligners. The low-stage aligners, the Touch up product, are included as a Non-Comprehensive Product.
Previous wording
▪Non-Case products include, but are not limited to, retention products including retention aligners ordered through the Doctor Subscription Program, Invisalign training, adjusting tools used by dental professionals during the course of treatment and Invisalign Accessory Products that are complementary to our doctor-prescribed principal products such as aligner cases (clamshells), teeth whitening products, cleaning solutions (crystals, foam and other material) and other oral health products available in certain commerce channels in select markets.
Current wording
▪Non-Case revenues include, but are not limited to, retention products including retention aligners ordered through the Doctor Subscription Program, Invisalign training, adjusting tools used by dental professionals during the course of treatment and Invisalign Accessory Products that are complementary to our doctor-prescribed principal products such as aligner cases (clamshells), teeth whitening products, cleaning solutions (crystals, foam and other material) and other oral health products available in certain commerce channels in select markets.
Previous wording
▪Our Systems and Services segment consists of sales related to our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, upgrades and leases of scanner systems, sales of pre-owned scanner systems, subscription software, disposables, pay per scan services, as well as exocad’s CAD/CAM software solutions that integrate workflows to dental labs and dental practices.
Current wording
▪Our Systems and Services segment consists of sales related to our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, scanner wand upgrades, and non-system revenues from leases of scanner systems, sales of pre-owned scanner systems, subscription software, disposables, pay per scan services, as well as exocad’s CAD/CAM software solutions that integrate workflows to dental labs and dental practices.
Previous wording
Net revenues for our Clear Aligner and Systems and Services segments by region for the three and nine months ended September 30, 2024 and 2023 are as follows (in millions):
Current wording
Net revenues for our Clear Aligner and Systems and Services segments for the three months ended March 31, 2025 and 2024 are as follows (in millions)1:
Previous wording
Case volume data which represents Clear Aligner case shipments for thethree and nine months ended September 30, 2024 and 2023 is as follows (in thousands):
Current wording
Case volume data which represents Clear Aligner case shipments for thethree months ended March 31, 2025 and 2024 is as follows (in thousands):
Previous wording
For the three months ended September 30, 2024, total net revenues increased by $18 million as compared to the same period in 2023, primarily due to an increase in Systems and Services net revenue from higher scanner average selling price ("ASP"), increase in non-system sales, and Clear Aligner net revenues from an increase in volume partially offset lower Clear Aligner ASP.
Current wording
For the three months ended March 31, 2025, total net revenues decreased by $18 million as compared to the same period in 2024, primarily due to a decrease in Clear Aligner net revenues from lower average selling prices (“ASP”). The decrease in Clear Aligner net revenues was partially offset by an increase in Systems and Services net revenue primarily due to an increase in sales of scanner wands.
Previous wording
For the three months ended September 30, 2024, Americas net revenues decreased by $17 million as compared to the same period in 2023, primarily due to a 3.9% decrease in ASP, resulting in a decrease of net revenues of $14 million. The decrease in ASP was driven by unfavorable foreign exchange rates that decreased net revenues by $6 million, a mix shift to lower priced products and countries which reduced net revenues by $23 million and higher promotional discounts which decreased net revenues by $14 million. These decreases were partially offset by lower net deferrals which increased net revenues by $23 million and price changes which increased net revenues by $6 million.
Current wording
For the three months ended March 31, 2025, Clear Aligner net revenues decreased by $20 million as compared to the same period in 2024, primarily due to a decrease in ASP, driven by higher discounts and a product mix shift to lower priced products, resulting in a decrease of net revenues of $40 million and a net revenue decrease of $26 million from unfavorable foreign exchange rates. These decreases were partially offset by an increase in volume which increased net revenue by $46 million.
Previous wording
Cost of net revenues includes personnel-related costs including payroll and stock-based compensation for staff involved in the production process, the cost of materials, packaging, freight and shipping related costs, depreciation on capital equipment and facilities used in the production process, amortization of acquired intangible assets and training costs.
Current wording
Cost of net revenues includes personnel-related costs including payroll and stock-based compensation for staff involved in the production process, the cost of materials, packaging, freight and shipping, depreciation on capital equipment and facilities used in the production process, amortization of acquired intangible assets and training costs.
Previous wording
For the three and nine months ended September 30, 2024, our gross margin percentage decreased as compared to the same periods in 2023 primarily due to lower ASPs.
Current wording
For the three months ended March 31, 2025, our gross margin percentage decreased as compared to the same period in 2024 primarily due to lower ASPs partially offset by lower manufacturing spend.
Previous wording
Selling, general and administrative expense generally includes personnel-related costs, including payroll, stock-based compensation and commissions for our sales force, marketing and advertising expenses including media, clinical education, marketing materials, trade shows and industry events, legal and outside service costs, equipment, software and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and Information Technology (“IT”).
Current wording
Selling, general and administrative expense generally includes personnel-related costs, including payroll, stock-based compensation and commissions for our sales force, marketing and advertising expenses including media, market research, marketing materials, clinical education, trade shows and industry events, legal and outside service costs, equipment, software and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and IT.
Previous wording
For the nine months ended September 30, 2024, selling, general and administrative expense increased compared to the same period in 2023 primarily due to higher employee costs, including higher salary, fringe benefits, stock-based compensation and bonus partially offset by lower marketing expense.
Current wording
For the three months ended March 31, 2025, selling, general and administrative expense decreased compared to the same period in 2024 primarily due to lower employee costs, including salaries, fringe benefits, stock-based compensation and bonus and lower outside services, partially offset by higher marketing expense.
Previous wording
Research and development expense generally includes personnel-related costs, including payroll and stock-based compensation, net of capitalized labor costs related to internal use software, outside service costs associated with the research and development of new products and enhancements to existing products, software, equipment, material and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and IT.
Current wording
Research and development expense generally includes personnel-related costs, including payroll and stock-based compensation, outside service costs associated with the research and development of new products and enhancements to existing products, software, equipment, material and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and IT.
Previous wording
For the nine months ended September 30, 2024, research and development expense increased compared to the same period in 2023 primarily due to higher employee costs, including salaries, fringe benefits, stock-based compensation, net of capitalized labor costs related to internal use software, and bonus, partially offset by lower outside services expense.
Current wording
For the three months ended March 31, 2025, research and development expense increased compared to the same period in 2024 primarily due to higher employee costs, including salaries, fringe benefits, bonus, stock-based compensation, net of capitalized labor costs related to internal use software.
Previous wording
For thethree and nine months ended September 30, 2024, we recorded losses of $0.1 million and $31 million, respectively, due to legal settlements. Refer to Note 7 “Legal Proceedings” of the Notes to Condensed Consolidated Financial Statements for more information.
Current wording
For the three months ended March 31, 2025, we recorded losses of $4.2 million due to legal settlements. Refer to Note 7 “Legal Proceedings”of the Notes to Condensed Consolidated Financial Statements for more information.
Previous wording
For the nine months ended September 30, 2024, our operating margin percentage decreased compared to the same periods in 2023 primarilydue to increased employee costs and legal settlement losses. Refer to Note 7 “Legal Proceedings” of the Notes to Condensed Consolidated Financial Statements for more information.
Current wording
For the three months ended March 31, 2025, our operating margin percentage decreased compared to the same period in 2024 primarily due to lower gross margin from our clear aligner reportable segment and an increase in legal settlement losses. Refer to Note 7 “Legal Proceedings”of the Notes to Condensed Consolidated Financial Statements for more information.
Previous wording
For the three and nine months ended September 30, 2024, our operating margin percentage decreased compared to the same periods in 2023 primarilydue to a decrease in gross margin and increased employee costs.
Current wording
For the three months ended March 31, 2025, our operating margin percentage decreased compared to the same period in 2024 primarily due to a decrease in gross margin and a decrease in operating leverage primarily due to higher marketing spend.
Previous wording
For the nine months ended September 30, 2024, interest income decreased compared to the same period in 2023 primarily due to lower cash and cash equivalents.
Current wording
For the three months ended March 31, 2025, interest income increased compared to the same period in 2024 primarily due to higher cash and cash equivalents.
Previous wording
For the nine months ended September 30, 2024, other income (expense), net increased compared to the same period in 2023 primarily due to a gain recorded on our equity investments and the favorable impact of foreign exchange rates.
Current wording
For the three months ended March 31, 2025, other income (expense), net increased compared to the same period in 2024 primarily due to the favorable impact of foreign exchange rates partially offset by a gain recorded on our equity investments in the first quarter of 2024.
Previous wording
Our effective tax rate differs from the statutory federal income tax rate of 21% for both the three and nine month periods ended September 30, 2024 and 2023 primarily due to the recognition of additional tax expense resulting from U.S. taxes on foreign earnings, foreign income taxed at different rates, state income taxes, and non-deductible expense in the U.S.
Current wording
Our effective tax rate differs from the statutory federal income tax rate of 21% for both the three month periods ended March 31, 2025 and 2024 primarily due to the recognition of additional tax expense resulting from U.S. taxes on foreign earnings, foreign income taxed at different rates, state income taxes and non-deductible expense in the U.S.
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Previous report — wording carried elsewhere
Macroeconomic Challenges and Military Conflicts in Ukraine and the Middle East
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, our business operations reflect the following:
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, other income (expense), net increased compared to the same period in 2023 primarily due to the favorable impact of foreign exchange rates and losses on equity investments.