ALIGN TECHNOLOGY INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
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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, 2026 · Filed May 6, 2026
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 2025-09-30; filed 2025-11-05.
0001097149-25-000079
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001097149-26-000040
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 127 previous paragraphs and 119 current paragraphs.
57 unchanged; 48 reworded; 13 added; 20 removed; 2 previous and 1 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 (13)
Current report
Our Strategic Growth Drivers
Current report
Our revenues may fluctuate as a result of various events and circumstances impacting customer confidence, consumer sentiment, discretionary spending and ultimately demand for dental services and our products. These events and circumstances include, but are not limited to, macroeconomic conditions, fluctuations in foreign currency exchange rates, uncertainty surrounding the durability, scope, and enforceability of existing and future tariff measures, retaliatory tariffs or protectionist trade measures taken in response to such tariffs, inflation, elevated interest rates, actual or potential slowdowns or recessions, wages, employment levels and health insurance coverage, debt obligations, discretionary income, supply chain challenges, market volatility, geopolitical conditions, military actions, and other factors. For more information on events and circumstances that could impact our revenues, refer to Part II, Item 1A “Risk Factors—Macroeconomic and External Risks.”
Current report
•Revenues of $1,040 million, an increase of 6.2% year-over-year;
Current report
•Effective tax rate of 24.3%;
Current report
For the three months ended March 31, 2026, our gross margin increased compared to the same period in 2025, primarily due to higher ASPs and operational efficiencies.
Current report
For the three months ended March 31, 2026, our gross margin increased compared to the same period in 2025, primarily due to lower Cost of net revenues from operational efficiencies, partially offset by lower ASPs.
Current report
Legal settlements (in millions):
Current report
For the three months ended March 31, 2026, our operating margin increased compared to the same period in 2025, primarily due to higher gross margin and lower advertising and marketing expense, partially offset by an increase in employee costs and credit card transaction fees.
Current report
For the three months ended March 31, 2026, our operating margin increased compared to the same period in 2025, primarily due to higher gross margin and a decrease in operating expenses related to lower employee costs.
Current report
•Deferred taxes of $41 million related to a decrease in our long term deferred tax position;
Current report
•Gain on Assets held for sale of $12 million resulting from an increase in fair value less costs to sell;
Current report
•Fair value adjustment gain of $8 million related to our investment in Heartland; and
Current report
•Net outflow of $44 million in prepaid expenses and other assets primarily due to the renewal of enterprise technology service agreements;
Removed paragraphs (20)
Previous report
Our revenues and other results of operations are susceptible to fluctuations resulting from various events and circumstances, including macroeconomic conditions, threats or actual or proposed tariffs, inflation, higher interest rates, customs duties and fees by nations and retaliatory actions, threats of or actual slowdowns or recessions, wages, debt obligations, discretionary income, fluctuations in foreign currency exchange rates, supply chain challenges, market volatility, employment levels, health insurance coverage, and other factors, each of which impacts customer confidence, consumer sentiment, discretionary spending and ultimately demand for dental services and our products. Moreover, we rely on the operations of the U.S. federal government to obtain and maintain necessary clearances or approvals for the offer, sale and delivery of our products, including from the Patent and Trademark Office, Food and Drug Administration, Customs and Border Protection, and similar agencies. A prolonged government shutdown or reductions in government personnel may impede our ability to sell or deliver our products which could have a material adverse effect on our business, financial condition and results of operations.
Previous report
•Revenues of $996 million, an increase of 1.8% year-over-year;
Previous report
•Effective tax rate of 40.1%;
Previous report
1 Beginning with our 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.
Previous report
For the nine months ended September 30, 2025, total net revenues decreased by $16 million as compared to the same period in 2024, primarily driven by a decrease in Clear Aligner ASP, partially offset by an increase in Systems and Services net revenues primarily driven by strong scanner wand sales.
Previous report
For the nine months ended September 30, 2025, Clear Aligner net revenues decreased by $29 million as compared to the same period in 2024, primarily due to a decrease in ASP, driven by a product mix shift to lower priced products and higher discounts, resulting in a decrease of net revenues of $103 million. Clear Aligner net revenues were further negatively impacted by $8 million due to unfavorable foreign exchange rates. These decreases were partially offset by an increase in volume which increased net revenues by $82 million.
Previous report
For the three months ended September 30, 2025, Systems and Services net revenues decreased by $1 million as compared to the same period in 2024, due to lower scanner system sales of $10 million, primarily driven by lower scanner system volume. This decrease was partially offset by an increase of $3 million from sales of scanner wands, driven by strong volume, a $3 million increase from non-system sales and a $3 million favorable impact from foreign exchange rates.
Previous report
For the three and nine months ended September 30, 2025, our gross margin decreased as compared to the same periods in 2024 primarily due to an increase in Clear Aligner Cost of net revenues driven by restructuring charges, impairment losses on Assets held for sale and depreciation on assets disposed of other than by sale. Our gross margin was further impacted negatively by an impairment loss on inventory recorded in our Systems and Services segment. We also experienced a decline in ASP’s in both reportable segments. These decreases were partially offset by lower Cost of net revenues, excluding the items noted previously, from operational efficiencies.
Previous report
For the three and nine months ended September 30, 2025, our gross margin decreased as compared to the same period in 2024 primarily due to restructuring charges of $5 million, impairment losses on Assets held for sale of $23 million and depreciation on assets disposed of other than by sale of $14 million. Clear Aligner gross margin was also negatively impacted by lower ASP’s. These decreases were partially offset by lower Cost of net revenues, excluding the items noted previously, from operational efficiencies.
Previous report
For the three and nine months ended September 30, 2025, our gross margin decreased as compared to the same periods in 2024 primarily due to lower ASP's and an impairment loss on inventory of $15 million. These decreases were partially offset by lower Cost of net revenues, excluding the impairment loss, from operational efficiencies.
Previous report
For the three months ended September 30, 2025, selling, general and administrative expense decreased compared to the same period in 2024 primarily due to lower employee costs, including salaries, fringe benefits and bonus and lower marketing expense.
Previous report
Restructuring and other charges (in millions):
Previous report
For the three and nine months ended September 30, 2025, restructuring and other charges increased compared to the same period in 2024. Refer to Note 15 "Restructuring and other charges" of the Notes to the Condensed Consolidated Financial Statements for more information.
Previous report
Legal settlement loss (in millions):
Previous report
For the three and nine months ended September 30, 2025, our operating margin decreased compared to the same periods in 2024 primarily due to lower gross margin and higher restructuring and other charges.
Previous report
For the three and nine months ended September 30, 2025, our operating margin decreased compared to the same periods in 2024 primarily due to a decrease in gross margin.
Previous report
For the three months ended September 30, 2025, our operating margin decreased compared to the same period in 2024 primarily due to a decrease in gross margin.
Previous report
For the nine months ended September 30, 2025, our operating margin increased compared to the same period in 2024 primarily due to improved operating leverage primarily from lower employee spend, partially offset by a decrease in gross margin.
Previous report
•Impairment loss on Assets held for sale of $23 million.
Previous report
•Net outflow of $68 million in accrued and other long-term liabilities primarily due to the payment of fiscal year 2024 bonuses in the first quarter of 2025; and
Reworded paragraphs (48)
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 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, business strategy and growth drivers, and the means to achieve them; our beliefs and expectations regarding macroeconomic conditions, including fluctuations in currency exchange rates, higher interest rates, market volatility, threats or actual imposition of tariffs, customs duties and fees by nations and retaliatory actions, inflation, threats of or actual economic slowdowns or recessions, or trade wars and geopolitical tensions; our expectations and beliefs regarding customer and consumer confidence, purchasing behavior and demand for dental services 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 clear aligners, intraoral scanners and other products; our expectations regarding the impact of the military conflicts in Ukraine and the Middle East, including military actions in Israel and increased geopolitical tensions involving Taiwan and the South China Sea, on our employees, operations and assets, particularly in Israel and Russia; our ability to implement and realize the anticipated benefits currently expected from our restructuring plan initiated in the third quarter of 2025, as well as the anticipated expenses we will incur pursuant to the plan; our marketing and efforts to build our brand awareness; our estimates regarding the size and opportunities of our target markets along with our expectations for growth in those markets and potential collaboration opportunities; our beliefs regarding the general impact of technological innovation and on our particular solutions and products; our beliefs regarding digital dentistry and its potential to impact our business and transform dentistry; our intentions regarding expansion of our business and any impacts on our operational flexibility and responsiveness to customer demand; our expectations regarding our tax positions and the judgments 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; ou…
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, business strategy and growth drivers, and the means to achieve them; our beliefs and expectations regarding macroeconomic conditions, including fluctuations in currency exchange rates, higher interest rates, market volatility, uncertainty surrounding future United States trade policies, tariffs, customs duties and fees, and retaliatory actions by other nations in light of recent U.S. Supreme Court decision on the constitutionality of tariffs, inflation, threats of or actual economic slowdowns or recessions and geopolitical tensions; our expectations and beliefs regarding customer and consumer confidence, purchasing behavior and demand for dental services and changes in consumer spending habits; 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 clear aligners, intraoral scanners and other products; our expectations regarding the impact of the military conflicts in the Middle East, Ukraine and China, on our employees, operations and assets; our marketing and efforts to build our brand awareness; our estimates regarding the size and opportunities of our target markets along with our expectations for growth in those markets and potential collaboration opportunities; our beliefs regarding the general impact of technological innovation and on our particular solutions and products; our beliefs regarding digital dentistry and its potential to impact our business and transform dentistry; our intentions regarding expansion of our business and any impacts on our operational flexibility and responsiveness to customer demand; our expectations regarding our tax positions and the judgments 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 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 continued expansion of our international markets and their growth; our expectations regarding impacts or staying in compliance with laws and regulations currently applicable to, or which may become applicable to, our busines…
Excerpt shortened here; the source contains the full paragraph.
Previous 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, 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
We strive to help our doctor customers move their practices forward by connecting them with new patients, providing digital solutions to help increase practice efficiency and helping them deliver the best possible treatment outcomes and experiences to millions of people around the world. We strive to achieve this through our continued focus on, and execution of, our strategic growth drivers: (i) International Expansion; (ii) General Practitioner dentists (“GP”) treatment; (iii) Patient Demand; and (iv) Orthodontic Utilization. Our growth strategy depends on our ability to facilitate the digital transformation of dentistry, 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.
Previous wording
Many of these 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. We believe that since the second quarter of 2025, sales of our products have been adversely impacted by certain macroeconomic conditions, including global tariff volatility, inflation, and higher interest rates, which we believe have and may continue to impede dental patient demand. For example, patient traffic growth has been uneven for many doctors, with orthodontic starts down for four consecutive years. We believe uncertainty not only impacts consumer purchasing decisions but also the decisions and recommendations that doctors make, especially doctors who offer both clear aligners and wires and brackets in their practices and have the additional time to treat patients with wires and brackets when orthodontic starts are slowing or diminishing. We believe this has resulted in an increase in orthodontic starts using wires and brackets in lieu of clear aligners that was more pronounced in the second quarter of 2025. However, we believe these trends are continuing and will impede future sales for so long as consumer economic uncertainty persists, particularly to the extent it impairs discretionary spending. We also anticipate the geopolitical conflicts involving Ukraine, the Middle East, China and other regions will continue to add to market uncertainties and dampen consumer sentiment and demand.
Current wording
Many of these factors may contribute to, among other things, higher raw material prices, increased transportation and labor costs, and interruptions in supply and distribution operations, each of which can 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. For example, we believe that in the beginning of the second quarter of 2025, sales of our products were adversely impacted compared to the same period in prior years by certain macroeconomic conditions, including global tariff volatility, inflation, and higher interest rates, which we believe may continue to impede dental patient demand. For example, patient traffic growth has been uneven for many doctors, with orthodontic starts down for four consecutive years. We believe uncertainty not only impacts consumer purchasing decisions but also the decisions and recommendations that doctors make, especially doctors who offer both clear aligners and wires and brackets in their practices and have the additional time to treat patients with wires and brackets when orthodontic starts are slowing or diminishing. We believe this has resulted in an increase in orthodontic starts using wires and brackets in lieu of clear aligners that was more pronounced in the second quarter of 2025. However, we believe these trends are continuing and will impede future sales for so long as consumer economic uncertainty persists, particularly to the extent it impairs discretionary spending. We believe that in the first quarter of 2026, the outbreak of military conflict between the United States and Iran on February 28, 2026, together with elevated gasoline and energy costs and related market volatility, contributed to declines in widely reported measures of consumer confidence, and we anticipate these conditions will continue to add to market uncertainties and dampen consumer sentiment and demand.
Previous 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 third quarter of 2025, the U.S. dollar weakened against major currencies, which positively 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 2026, the U.S. dollar remained weakened against major currencies, which positively 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
•In the third quarter of 2025, we initiated a restructuring plan which will continue through the fourth quarter of 2025. We anticipate incurring between approximately $40.0 million and $50.0 million in total restructuring expenses, primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.
Current wording
In the third quarter of 2025, we initiated a plan to realign certain business groups and reduce our global workforce as part of our continued effort to right size our labor force in response to the current macroeconomic environment. As of March 31, 2026, we incurred a total of approximately $42 million in restructuring charges under this plan, of which $6.3 million remained unpaid. These charges were primarily related to involuntary termination benefits, including employee severance and other post-employment benefits in connection with the 2025 restructuring plan, which was substantially completed in the fourth quarter of 2025.
Previous wording
Beginning in in the third quarter of 2025 and continuing into the fourth quarter, we initiated a plan to realign certain business groups and reduce our global workforce in response to the current macroeconomic environment. We anticipate incurring between $40.0 million and $50.0 million in total restructuring expenses, primarily related to involuntary termination benefits, including employee severance and other post-employment benefits. The foregoing estimates that we anticipate incurring in connection with these actions are contingent upon various assumptions and actual results may differ. We may also incur additional costs not currently contemplated due to events related to or resulting from any such action. Our management or board of directors may determine not to pursue certain portions of any of these actions and any actions ultimately pursued may not achieve the benefits currently anticipated. For more information, see Note 15.“Restructuring and Other Charges” of the Notes to Condensed Consolidated Financial Statements
Current wording
For more information, see Note 14.“Restructuring and Other Charges” of the Notes to Condensed Consolidated Financial Statements
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. For example, we have and may continue to experience a shift from certain products with higher average selling prices (“ASP”) to those with lower ASPs.
Current 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, such as streamlined Clear Aligner configurations with limited or no additional aligners. 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. For example, we have and may continue to experience a shift from certain products with higher average selling prices (“ASP”) to those with lower ASPs.
Previous wording
•Clear Aligner revenues of $806 million, an increase of 2.4% year-over-year;
Current wording
•Clear Aligner revenues of $856 million, an increase of 7.4% year-over-year;
Previous wording
•Clear Aligner case volume increased 4.9% year-over-year and Clear Aligner case volume for teens and growing patients increased from 236.3 thousand shipments to 256.0 thousand or 8.3% year-over-year;
Current wording
•Clear Aligner case volume increased 6.7% year-over-year and Clear Aligner case volume for teens and growing patients increased from 225.8 thousand shipments to 236.6 thousand or 4.8% year-over-year;
Previous wording
•Imaging Systems and CAD/CAM services revenues of $190 million, a decrease of 0.6% year-over-year;
Current wording
•Imaging Systems and CAD/CAM services revenues of $184 million, an increase of 0.9% year-over-year;
Previous wording
•Income from operations of $96 million and operating margin of 9.7%;
Current wording
•Income from operations of $142 million and operating margin of 13.6%;
Previous wording
•Net income of $57 million with diluted net income per share of $0.78;
Current wording
•Net income of $113 million with diluted net income per share of $1.57;
Previous wording
•Cash and cash equivalents of $1,005 million as of September 30, 2025;
Current wording
•Cash and cash equivalents of $1,060 million as of March 31, 2026;
Previous wording
•Cash provided by operating activities of $189 million;
Current wording
•Cash provided by operating activities of $151 million;
Previous wording
•Capital expenditures of $20 million, primarily related to investments in our manufacturing capacity and facilities; and
Current wording
•Capital expenditures of $31 million, primarily related to investments in our manufacturing capacity and facilities; and
Previous wording
•Number of employees was 21,065 as of September 30, 2025, a decrease of 2.9% year-over-year.
Current wording
•Number of employees was 20,275 as of March 31, 2026, a decrease of 4.4% year-over-year.
Previous wording
•As of September 30, 2025, approximately 21 million people worldwide have been treated with our Invisalign system.
Current wording
•As of March 31, 2026, approximately 23 million people worldwide have been treated with our Invisalign system.
Previous wording
•For the third quarter of 2025, the total number of Invisalign trained doctors cases were shipped to (doctor submitters) was 88.2 thousand compared to 87.4 thousand in the third quarter of 2024, a 0.9% increase.
Current wording
•For the first quarter of 2026, the total number of Invisalign trained doctors cases were shipped to (doctor submitters) was 88.1 thousand compared to 85.3 thousand in the first quarter of 2025, a 3.3% increase.
Previous wording
•The total utilization rate in the third quarter of 2025 increased to 7.3 cases per doctor compared to 7.1 cases per doctor in the third quarter of 2024.
Current wording
•The total utilization rate in the first quarter of 2026 increased to 7.8 cases per doctor compared to 7.5 cases per doctor in the first quarter of 2025.
Previous wording
•Clear aligner revenue per case shipment (clear aligner revenues divided by case shipments) decreased from $1,275 in the third quarter of 2024 to $1,245 in the third quarter of 2025, a 2.4% decrease.
Current wording
•Clear aligner revenue per case shipment (clear aligner revenues divided by case shipments) increased from $1,240 in the first quarter of 2025 to $1,250 in the first quarter of 2026, a 0.8% increase.
Previous wording
Net revenues for our Clear Aligner and Systems and Services segments for the three and nine months ended September 30, 2025 and 2024 are as follows (in millions)1:
Current wording
Net revenues for our Clear Aligner and Systems and Services segments for the three months ended March 31, 2026 and 2025 are as follows (in millions):
Previous wording
Case volume data which represents Clear Aligner case shipments for thethree and nine months ended September 30, 2025 and 2024 is as follows (in thousands):
Current wording
Case volume data which represents Clear Aligner case shipments for thethree months ended March 31, 2026 and 2025 is as follows (in thousands):
Previous wording
For the three months ended September 30, 2025, total net revenues increased by $18 million as compared to the same period in 2024, primarily due to an increase in Clear Aligner volume.
Current wording
For the three months ended March 31, 2026, total net revenues increased by $61 million compared to the same period in 2025, primarily due to an increase in Clear Aligner volume and increased ASPs.
Previous wording
For the three months ended September 30, 2025, Clear Aligner net revenues increased by $19 million as compared to the same period in 2024, primarily due to an increase in volume and favorable foreign exchange rates, which increased net revenues by $35 million and $13 million, respectively. These increases were partially offset by a decrease in ASP, driven by a product mix shift to lower priced countries and products and higher discounts, resulting in a decrease of net revenues of $29 million.
Current wording
For the three months ended March 31, 2026, Clear Aligner net revenues increased by $59 million compared to the same period in 2025, primarily due to an increase in volume and favorable foreign exchange rates, which increased net revenues by $49 million and $38 million, respectively. These increases were partially offset by higher discounts and product mix shift to lower-priced countries and products resulting in a decrease in net revenues of $28 million.
Previous wording
For the nine months ended September 30, 2025, Systems and Services net revenues increased by $12 million as compared to the same period in 2024, primarily due to an increase of $27 million in sales of scanner wands, driven by strong volume partially offset by lower scanner wand ASP, and a $13 million increase from non-system sales. These increases were partially offset by lower scanner system sales of $25 million, driven by lower volume and ASP, and a $2 million negative impact from unfavorable foreign exchange rates.
Current wording
For the three months ended March 31, 2026, Systems and Services net revenues increased by $2 million compared to the same period in 2025, primarily due to $7 million from favorable foreign exchange rates, $5 million from higher scanner system sales, driven by increased scanner system volume, and $3 million from higher non-system sales. These increases were partially offset by a decrease of $14 million from mix shift to lower priced products and lower sales of scanner wands.
Previous wording
For the nine months ended September 30, 2025, selling, general and administrative expense decreased compared to the same period in 2024 primarily due to lower employee costs, including salaries, fringe benefits, and bonus and lower outside services, partially offset by higher clinical education expense.
Current wording
For the three months ended March 31, 2026, selling, general and administrative expense increased compared to the same period in 2025, primarily due to higher spend on outside services, higher employee costs, including salaries, fringe benefits and bonus, and higher equipment and software costs, partially offset by lower advertising and marketing expense, commissions, and stock-based compensation.
Previous wording
For the three and nine months ended September 30, 2025, research and development expense increased compared to the same periods in 2024 primarily due to higher employee costs, including salaries, fringe benefits and stock-based compensation, partially offset by lower bonus cost.
Current wording
For the three months ended March 31, 2026, research and development expense increased compared to the same period in 2025, primarily due to higher employee costs, including salaries, fringe benefits and bonus costs, partially offset by lower capitalized labor costs related to internal-use software, lower stock-based compensation, and reduced outside service provider spend.
Previous wording
For the nine months ended September 30, 2025, we recorded losses of $4 million 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, 2026, we recorded $31 million related to legal settlements. Refer to Note 6 “Legal Proceedings”of the Notes to Condensed Consolidated Financial Statements for more information.
Previous wording
For the three and nine months ended September 30, 2025, interest income decreased slightly compared to the same period in 2024 primarily due to lower interest rates earned on cash and cash equivalent balances.
Current wording
For the three months ended March 31, 2026, interest income decreased compared to the same period in 2025, primarily due to lower interest rates earned on cash and cash equivalent balances.
Previous wording
For the nine months ended September 30, 2025, other income (expense), net increased compared to the same period in 2024 primarily due to changes in foreign exchange rates partially offset by a gain recorded on our equity investments in the first quarter of 2024.
Current wording
For the three months ended March 31, 2026, other income (expense), net decreased compared to the same period in 2025, primarily due to an unfavorable impact from foreign exchange rates, partially offset by a gain recorded on our equity investment.
Previous wording
Our effective tax rate differs from the U.S. statutory federal income tax rate of 21% for the three and nine month periods ended September 30, 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.
Current wording
Our effective tax rate differs from the U.S. statutory federal income tax rate of 21% for the three month period ended March 31, 2026 and 2025, primarily due to the recognition of additional tax expense resulting from U.S. taxes on foreign earnings, state income taxes, and non-deductible expense in the U.S., partially offset by the foreign income taxed at different rates.
Previous wording
The increase in our effective tax rate for the three months ended September 30, 2025 compared to the same period in 2024 is primarily attributable to the change in our jurisdictional mix of income, partially offset by the decrease in U.S. taxes on foreign earnings.
Current wording
The decrease in our effective tax rate for the three months ended March 31, 2026 compared to the same period in 2025 is primarily attributable to the change in our jurisdictional mix of income, and decreases in U.S. taxes on foreign earnings and state income taxes.
Previous wording
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $1,005 million and $1,044 million, respectively, of which approximately $814 million and $855 million, respectively, were held by our foreign subsidiaries. We continue to evaluate opportunities to repatriate our foreign earnings if or when needed. We do not expect to incur significant additional costs upon repatriation of these foreign earnings. We generate sufficient operating cash flow from our domestic operations and have access to $300 million under our revolving line of credit. We believe that our current cash balances and the borrowing capacity under our credit facility, if necessary, will be sufficient to fund our business for at least the next 12 months.
Current wording
As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents of $1,060 million and $1,095 million, respectively, of which approximately $853 million and $929 million, respectively, were held by our foreign subsidiaries. We continue to evaluate opportunities to repatriate our foreign earnings if or when needed. We do not expect to incur significant additional costs upon repatriation of these foreign earnings. We generate sufficient operating cash flow from our domestic operations and have access to $300 million under our revolving line of credit. We believe that our current cash balances and the borrowing capacity under our credit facility, if necessary, will be sufficient to fund our business for at least the next 12 months.
Previous wording
•Our purchase commitments consist primarily of open purchase orders for goods and services, including manufacturing inventory, supplies and services, sales and marketing, research and development services and technological services, issued in the normal course of business. There have been no material changes to our purchase commitments for goods and services during the nine months ended September 30, 2025 as compared to the year ended December 31, 2024.
Current wording
•Our purchase commitments consist primarily of open purchase orders for goods and services, including manufacturing inventory, supplies and services, sales and marketing, research and development services and technological services, issued in the normal course of business. There have been no material changes to our purchase commitments for goods and services during the three months ended March 31, 2026 as compared to the year ended December 31, 2025.
Previous wording
•There have been no material changes to our future operating lease payments during the nine months ended September 30, 2025 as compared to the year ended December 31, 2024.
Current wording
•There have been no material changes to our future operating lease payments, including leases that have not yet commenced, during the three months ended March 31, 2026 as compared to the year ended December 31, 2025.
Previous wording
•We anticipate our investments in capital expenditures for fiscal year 2025 to be approximately $100 million. Capital expenditures primarily relate to technology upgrades and investments in manufacturing and treatment planning to meet actual and anticipated demand.
Current wording
•We expect our investments in capital expenditures for fiscal year 2026 to be $125 million to $150 million. Capital expenditures primarily relate to technology upgrades, additional manufacturing capacity as well as ongoing maintenance.
Previous wording
•In April 2025, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock. The April 2025 Repurchase Program is expected to be completed over a period of up to three years. We continually evaluate opportunities to repurchase shares of our common stock depending on various factors including our share price and current liquidity requirements. We expect to repurchase $128.4 million during the fourth quarter of 2025 and through January 2026 pursuant to the open market repurchase program announced in August 2025. Refer to Note 10 “Common Stock Repurchase Program” of the Notes to Condensed Consolidated Financial Statements for details on our stock repurchase programs.
Current wording
•In April 2025, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock. The April 2025 Repurchase Program is expected to be completed over a period of up to three years. We continually evaluate opportunities to repurchase shares of our common stock depending on various factors including our share price and current liquidity requirements. We repurchased approximately $31 million during the first quarter of 2026, leaving $800 million available for future repurchase under the April 2025 Repurchase Program. We expect to repurchase up to $200 million of our common stock over a six-month period beginning on May 1, 2026. Refer to Note 9 “Common Stock Repurchase Program” of the Notes to Condensed Consolidated Financial Statements for details on our stock repurchase programs.
Previous wording
The following table summarizes our Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (in thousands):
Current wording
The following table summarizes our Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
For the nine months ended September 30, 2025, cash flows from operations of $370 million resulted primarily from our net income of approximately $275 million as well as the following:
Current wording
For the three months ended March 31, 2026, cash flows from operations of $151 million resulted primarily from our net income of approximately $113 million as well as the following:
Previous wording
•Depreciation and amortization of $135 million related to our investments in property, plant and equipment and intangible assets;
Current wording
•Depreciation and amortization of $57 million related to our investments in property, plant and equipment and intangible assets;
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Below is a discussion of the significant trends and uncertainties that could impact our operations:
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
For the three months ended September 30, 2025, other income (expense), net decreased compared to the same period in 2024 primarily due to changes in foreign exchange rates.
Previous report — wording carried elsewhere
The increase in our effective tax rate for the nine months ended September 30, 2025 compared to the same period in 2024 is primarily attributable to the change in our jurisdictional mix of income, lower tax deduction from stock-based compensation, partially offset by the decrease in U.S. taxes on foreign earnings.