ALIGN TECHNOLOGY INC

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, 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.

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, elevated gasoline and other energy costs, market volatility, uncertainty surrounding future United States trade policies, tariffs, customs duties and fees, and retaliatory actions by other nations, 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; 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 the timing and amount of future stock repurchases; our expectations regarding our tax positions and the judgments we make related to our tax obligations, including value-added tax positions and related contingent liabilities; our beliefs regarding the importance of our manufacturing operations on our success and our plans to open a manufacturing facility in Hyderabad, India in 2027; 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 expectation…

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

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. 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. 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. Additionally, we believe that the ongoing military conflicts in the Middle East, including the hostilities involving Israel, Iran, and the United States that began or escalated in 2025 and 2026, together with elevated gasoline and energy costs and related market volatility, have and may continue to contribute 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 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.

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 second quarter of 2026, foreign currency movements favorably impacted our revenues compared to the prior-year period. 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 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.

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 June 30, 2026, we incurred a total of approximately $40.2 million in restructuring charges under this plan, of which $2.5 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 has been completed. We do not expect to incur additional restructuring expenses in connection with the 2025 restructuring plan.

Previous wording

•Clear Aligner revenues of $856 million, an increase of 7.4% year-over-year;

Current wording

•Clear Aligner revenues of $871 million, an increase of 8.2% year-over-year;

Previous 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;

Current wording

•Clear Aligner case volume increased 7.4% year-over-year and Clear Aligner case volume for teens and growing patients increased from 223.2 thousand shipments to 239.2 thousand or 7.2% year-over-year;

Previous wording

•Imaging Systems and CAD/CAM services revenues of $184 million, an increase of 0.9% year-over-year;

Current wording

•Imaging Systems and CAD/CAM services revenues of $185 million, a decrease of 10.8% year-over-year;

Previous wording

•Income from operations of $142 million and operating margin of 13.6%;

Current wording

•Income from operations of $154 million and operating margin of 14.6%;

Previous wording

•Net income of $113 million with diluted net income per share of $1.57;

Current wording

•Net income of $108 million with diluted net income per share of $1.51;

Previous wording

•Cash and cash equivalents of $1,060 million as of March 31, 2026;

Current wording

•Cash and cash equivalents of $1,103 million as of June 30, 2026;

Previous wording

•Cash provided by operating activities of $151 million;

Current wording

•Cash provided by operating activities of $193 million;

Previous wording

•Capital expenditures of $31 million, primarily related to investments in our manufacturing capacity and facilities; and

Current wording

•Capital expenditures of $36 million, primarily related to investments in our manufacturing capacity and facilities; and

Previous wording

•Number of employees was 20,275 as of March 31, 2026, a decrease of 4.4% year-over-year.

Current wording

•Number of employees was 20,435 as of June 30, 2026, a decrease of 4.9% year-over-year primarily due to workforce reduction associated with the 2025 restructuring plan.

Previous 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.

Current wording

•For the second quarter of 2026, the total number of Invisalign-trained doctors that submitted cases and received shipments (doctor submitters) was 89.2 thousand compared to 86.3 thousand in the second quarter of 2025, a 3.4% increase.

Previous 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.

Current wording

•The total utilization rate (case shipments divided by the number of doctor submitters) in the second quarter of 2026 increased to 7.8 cases per doctor compared to 7.5 cases per doctor in the second quarter of 2025.

Previous 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.

Current wording

•Clear aligner revenue per case shipment (clear aligner revenues divided by case shipments) increased from $1,250 in the second quarter of 2025 to $1,260 in the second quarter of 2026, a 0.8% increase.

Previous 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):

Current wording

Net revenues for our Clear Aligner and Systems and Services segments for the three and six months ended June 30, 2026 and 2025 are as follows (in millions):

Previous wording

Case volume data which represents Clear Aligner case shipments for thethree months ended March 31, 2026 and 2025 is as follows (in thousands):

Current wording

Case volume data which represents Clear Aligner case shipments for thethree and six months ended June 30, 2026 and 2025 is as follows (in thousands):

Previous 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.

Current wording

For the three and six months ended June 30, 2026, total net revenues increased by $44 million and $105 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 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.

Current wording

For the six months ended June 30, 2026, Clear Aligner net revenues increased by $125 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 $102 million and $49 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 $26 million.

Previous 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.

Current wording

For the three months ended June 30, 2026, Systems and Services net revenues decreased by $23 million compared to the same period in 2025, primarily due to decrease of $27 million from mix shift to lower-priced products and $15 million from lower scanner wand sales. These decreases were partially offset by higher system volume of $11 million and an increase of $8 million from higher non-system sales and favorable foreign exchange.

Previous wording

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 wording

For the three and six months ended June 30, 2026, our gross margin increased compared to the same period in 2025, primarily due to higher ASPs, roll-off accelerated depreciation and operational efficiencies, partially offset by higher freight costs.

Previous wording

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 wording

For the three and six months ended June 30, 2026, our gross margin increased compared to the same period in 2025, primarily due to lower Cost of net revenues from tariff refunds and operational efficiencies, partially offset by lower ASPs.

Previous 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.

Current wording

For the three months ended June 30, 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 maintenance costs, partially offset by lower advertising and marketing expense, and stock-based compensation.

Previous 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.

Current wording

For the three months ended June 30, 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, outside services, and depreciation on capitalized labor costs related to internal-use software, partially offset by lower stock-based compensation.

Previous 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.

Current wording

For the three months ended June 30, 2026, we recorded $1.2 million and $37.5 million related to legal settlements and UK VAT contingency loss, respectively. Refer to Note 6 “Legal Proceedings” and Note 7 “Commitments and Contingencies”of the Notes to Condensed Consolidated Financial Statements for more information.

Previous wording

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 wording

For the three months ended June 30, 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 advertising and marketing costs.

Previous 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.

Current wording

For the three and six months ended June 30, 2026, interest income increased compared to the same period in 2025, primarily due to interest earned on cash and cash equivalent balances.

Previous 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.

Current wording

For the six months ended June 30, 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 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.

Current wording

Our effective tax rate differed from the U.S. statutory federal income tax rate of 21% for the three and six months period ended June 30, 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 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.

Current wording

The decrease in our effective tax rate for the three months ended June 30, 2026 compared to the same period in 2025 is primarily attributable to the change in our jurisdictional mix of income.

Previous 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.

Current wording

As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $1,103 million and $1,095 million, respectively, of which approximately $861 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 three months ended March 31, 2026 as compared to the year ended December 31, 2025.

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 six months ended June 30, 2026 as compared to the year ended December 31, 2025.

Previous 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.

Current wording

•There have been no material changes to our future operating lease payments, including leases that have not yet commenced, during the six months ended June 30, 2026 as compared to the year ended December 31, 2025.

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 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.

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 $98 million during the first half of 2026, leaving $733 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 Programs” 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 three months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table summarizes our Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (in thousands):

Previous 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:

Current wording

For the six months ended June 30, 2026, cash flows from operations of $344 million resulted primarily from our net income of approximately $221 million as well as the following:

Previous wording

•Deferred taxes of $41 million related to a decrease in our long term deferred tax position;

Current wording

•Deferred taxes of $31 million related to a decrease in our long term deferred tax position;

Previous wording

•Depreciation and amortization of $57 million related to our investments in property, plant and equipment and intangible assets;

Current wording

•Depreciation and amortization of $97 million related to our investments in property, plant and equipment and intangible assets;

Previous wording

•Stock-based compensation of $41 million related to equity awards granted to employees and directors;

Current wording

•Stock-based compensation of $86 million related to equity awards granted to employees and directors;