ALIGN TECHNOLOGY INC

Previous wording

Tariffs or proposed tariffs, customs duties, or fees, and any retaliatory tariffs, international trade disputes, or protectionist trade measures taken in response to such tariffs may increase the cost of our products and the components or the raw materials used to make them, reduce demand for our products and adversely impact our gross margin and results of operations, limit our ability to sell to certain customers, limit or prohibit the availability of certain raw materials, components and parts necessary for our products or the products of our suppliers, or impede or slow the movement of our goods across borders. For example, the U.S. Department of Commerce has completed its investigation under Section 232 of the Trade Expansion Act of 1962, as amended, to determine the effects on the national security of imports of personal protective equipment (PPE), medical consumables, and medical equipment including devices. No actions with respect to the investigation have been announced to date, and the timing, scope and outcome of any resulting trade measures remain uncertain.

Current wording

Tariffs or proposed tariffs, customs duties, or fees, and any retaliatory tariffs, international trade disputes, or protectionist trade measures taken in response to such tariffs may increase the cost of our products and the components or the raw materials used to make them, reduce demand for our products and adversely impact our gross margin and results of operations, limit our ability to sell to certain customers, limit or prohibit the availability of certain raw materials, components and parts necessary for our products or the products of our suppliers, or impede or slow the movement of our goods across borders. For example, the U.S. Department of Commerce has initiated its investigation under Section 232 of the Trade Expansion Act of 1962, as amended, to determine the effects on the national security of imports of personal protective equipment (PPE), medical consumables, and medical equipment including devices. No actions with respect to the investigation have been announced to date, and the timing, scope and outcome of any resulting trade measures remain uncertain.

Previous wording

Military conflicts, wars, and escalation of terrorist or gang activities have and may in the future materially adversely impact the economies in which we operate. Our iTero operations, headquartered in Israel, are close to areas that have been affected by 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, which have resulted in instability in the region and disrupted global oil and gas shipments, with cascading effects on energy prices and global economic conditions, including consumer discretionary spending. Additionally, our supply chains and demand for our products could be impaired as a result of political instability, drug trafficking, the continuation or escalation of terrorist or gang activities (particularly with respect to our manufacturing operations in Mexico), hostilities, export and import restrictions, sanctions or boycotts. These events could disrupt ongoing operations and may materially impact the logistics, timing and cost of shipping of our products and materials or our ability to operate out of impacted areas, and our ongoing contingency planning and business continuity measures to mitigate these risks may not be sufficient. Additionally, China’s territorial conflicts with other neighboring countries may impact our operations and sales in China. We cannot predict the progress or outcome of these events or the reactions by governments, businesses or consumers and each event could, individually or in the aggregate, materially adversely affect our business, financial condition and results of operations.

Current wording

Military conflicts, wars, and escalation of terrorist or gang activities have and may in the future materially adversely impact the economies in which we operate. Our iTero operations, headquartered in Israel, are close to areas that have been affected by ongoing military conflicts in the Middle East, including the hostilities involving Israel, Iran, and the United States that began in 2025 and escalated in 2026, which have resulted in instability in the region and disrupted global oil and gas shipments, with cascading effects on energy prices and global economic conditions, including consumer discretionary spending. Additionally, our supply chains and demand for our products could be impaired as a result of political instability, drug trafficking, the continuation or escalation of terrorist or gang activities (particularly with respect to our manufacturing operations in Mexico), hostilities, export and import restrictions, sanctions or boycotts. These events could disrupt ongoing operations and may materially impact the logistics, timing and cost of shipping of our products and materials or our ability to operate out of impacted areas, and our ongoing contingency planning and business continuity measures to mitigate these risks may not be sufficient. Additionally, China’s territorial conflicts with other neighboring countries may impact our operations and sales in China. We cannot predict the progress or outcome of these events or the reactions by governments, businesses or consumers and each event could, individually or in the aggregate, materially adversely affect our business, financial condition and results of operations.

Previous wording

The dental industry is experiencing immense and rapid digital transformation and we may be unable to compete with existing competitors and emerging companies that introduce new technologies, products or services, and customers who alone or with others create orthodontic appliances and solutions or other products or services that compete with us. While our product portfolio facilitates this transition, our competitors may render our technology or products obsolete or economically unattractive, particularly as competitors incorporate AI and machine learning into new or existing services and technologies that facilitate changes in doctor-patient interactions, expectations and treatment workflows. We may be unable to devote adequate financial resources to develop or acquire new AI technologies and systems in the future and sufficiently meet evolving industry trends and consumer demands.

Current wording

The dental industry is experiencing immense and rapid digital transformation and we may be unable to compete with existing competitors and emerging companies that introduce new technologies, products or services, and customers who alone or with others create orthodontic appliances and solutions or other products or services that compete with us. While our product portfolio facilitates this transition, our competitors may render our technology or products obsolete or economically unattractive, particularly as competitors incorporate AI into new or existing services and technologies that facilitate changes in doctor-patient interactions, expectations and treatment workflows. We may be unable to devote adequate financial resources to develop or acquire new AI technologies and systems in the future and sufficiently meet evolving industry trends and consumer demands.

Previous wording

We also face competition from traditional products and services, such as wires and brackets, which doctors have historically been able to purchase at a lower price point. We have and will likely continue to experience price-focused competition as we continue to expand into new markets, which could contribute to the commoditization of our products or services if we are unable to otherwise differentiate our offerings from those of our competitors.

Current wording

We also face competition from traditional products and services, such as wires and brackets, which doctors have historically been able to purchase at a lower price. We have and will likely continue to experience price-focused competition as we continue to expand into new markets, which could contribute to the commoditization of our products or services if we are unable to otherwise differentiate our offerings from those of our competitors.

Previous wording

The number and types of competitors we face are diverse and growing rapidly. The Invisalign System competes primarily against traditional wires and brackets and increasingly with clear aligners manufactured and distributed by new market entrants and existing competitors, including traditional medical device companies, laboratories, startups and, in some cases, doctors and DSOs. Our competitors also include DTC companies that provide clear aligners using a business model requiring little to no in-office care from trained and licensed doctors, and doctors and DSOs who manufacture custom aligners or procure products from third-party white-label providers. Large consumer product companies may also start supplying orthodontic products. Orthodontists, GPs and DSOs have and may continue to sample competitive and alternative products, take advantage of competitive promotions and sale opportunities, or engage in “bait and switch,” “margin steering” or similar practices that take advantage of the significant brand recognition of Invisalign to offer alternative products.

Current wording

The number and types of competitors we face are diverse and growing rapidly. The Invisalign System competes primarily against traditional wires and brackets and increasingly with clear aligners manufactured and distributed by new market entrants and existing competitors, including traditional medical device companies, laboratories, startups and, in some cases, doctors and dental service organizations (“DSOs”). Our competitors also include direct to consumer (“DTC”) companies that provide clear aligners using a business model requiring little to no in-office care from trained and licensed doctors, and doctors and DSOs who manufacture custom aligners or procure products from third-party white-label providers. Large consumer product companies may also start supplying orthodontic products. Orthodontists, GPs and DSOs have and may continue to sample competitive and alternative products, take advantage of competitive promotions and sale opportunities, or engage in “bait and switch,” “margin steering” or similar practices that take advantage of the significant brand recognition of Invisalign to offer alternative products.

Previous wording

We have and may in the future acquire, or make investments in, companies, businesses, products, technologies or other assets, which may not ultimately strengthen our competitive position or achieve our desired synergies and integration. Alternatively, we may be unable to find suitable investment or acquisition opportunities or be unable to complete investments or acquisitions on favorable terms. We are subject to various risks when making a strategic investment or acquisition and integrating the operations and cultures of acquired businesses within our own, including that we may:

Current wording

Alternatively, we may be unable to find suitable investment or acquisition opportunities or be unable to complete investments or acquisitions on favorable terms. We are subject to various risks when making a strategic investment or acquisition and integrating the operations and cultures of acquired businesses within our own, including that we may:

Previous wording

•the timing of clear aligner treatment order submissions, acceptance, processing and fulfillment, which can cause fluctuations in our backlog;

Current wording

•the timing of clear aligner treatment order submissions, acceptance, processing and fulfillment and scanner orders and shipments, which can cause fluctuations in our backlog;

Previous wording

To manage current and anticipated future operations effectively, we must continually implement and improve our operational, financial and management information systems, hire, train, motivate, manage and retain employees, and ensure our suppliers remain diverse and capable of meeting demand for the systems, raw materials, parts and components essential to product manufacturing and delivery. We may fail to balance near-term efforts to meet existing demand with future demand, including adding personnel, creating scalable, secure and robust systems and operations, and automating processes for long-term efficiencies. Production of the Invisalign System and iTero intraoral scanners could also be limited by capacity constraints due to a variety of factors, including labor shortages, shipping delays, our dependency on third-party vendors for key materials, parts, components and equipment, the quality of or changes in product components, and limited production yields. Any such failure could materially impact our business, financial condition and results of operations.

Current wording

To manage current and anticipated future operations effectively, we must continually implement and improve our operational, financial and management information systems, hire, train, motivate, manage and retain employees, and ensure our supply chain is diversified and resilient, and is capable of meeting demand for the systems, raw materials, parts and components essential to product manufacturing and delivery. We may fail to balance near-term efforts to meet existing demand with future demand, including adding personnel, creating scalable, secure and robust systems and operations, and automating processes for long-term efficiencies. Production of the Invisalign System and iTero intraoral scanners could also be limited by capacity constraints due to a variety of factors, including labor shortages, shipping delays, our dependency on third-party vendors, including contract manufacturers and logistics providers, for key materials, parts, components and equipment, the quality of or changes in product components, and limited production yields. Any such failure could materially impact our business, financial condition and results of operations.

Previous wording

Additionally, we have established treatment planning and manufacturing facilities closer to our international customers to provide better experiences, create efficiencies and provide redundancy should other facilities become unavailable. If one of these facilities is temporarily, partially or fully shut down, we may be unable to timely fulfill orders, which may negatively impact our reputation, business, financial condition and results of operations.

Current wording

Additionally, we have established treatment planning and manufacturing facilities closer to our international customers to provide better experiences, create efficiencies and provide redundancy should other facilities become unavailable. Despite these benefits, if one of these facilities is temporarily, partially or fully shut down, we may still be unable to timely fulfill orders, which may negatively impact our reputation, business, financial condition and results of operations.

Previous wording

Our cybersecurity risk management program and processes, including our policies, controls or procedures, may not be successfully implemented, complied with or effective in protecting our systems and information or any other information we maintain or otherwise process. Further, the frequency and sophistication of third-party cybersecurity attacks are increasing, particularly with the advancement of AI technologies. For example, threat actors are increasingly using AI technologies, including generative and agentic AI and frontier models, to identify previously unknown vulnerabilities, automate complex, multi-stage attacks and create more convincing social engineering campaigns, including fraud that relies on “deepfake”

Current wording

Our cybersecurity risk management program and processes, including our policies, controls or procedures, may not be successfully implemented, complied with or effective in protecting our systems and information or any other information we maintain or otherwise process. Further, the frequency and sophistication of third-party cybersecurity attacks are increasing, particularly with the advancement of AI technologies. For example, threat actors are increasingly using AI technologies, including generative and agentic AI and frontier models, to identify previously unknown vulnerabilities, automate complex, multi-stage attacks and create more convincing social engineering campaigns, including fraud that relies on “deepfake” impersonation, which has increased and may continue to increase the frequency, speed, scale and sophistication of cyber threats. These developments may compress the time available for us and our vendors to detect, patch and remediate vulnerabilities before they are exploited and may require more frequent emergency remediation efforts, which could increase our costs and heighten the risk of operational disruption.

Previous wording

Our Systems and Services segment is subject to software and hardware risks related to the manufacturing, design, quality and safety of our complex, global installed base of iTero intraoral scanners, which are continually updated to add, expand or improve features with new hardware or software, to integrate new or existing software or other components manufactured by third parties, or to provide repair or replacement parts, any of which may contain errors or exhibit failures, especially when products are first introduced. We may be unable to ensure that third-party components or changes to them will be completely compatible with our scanners, which could cause our scanners to fail to perform as anticipated. Additionally, the third-party software integrated into or interoperable with our scanners routinely reach end of life, and as a consequence, certain applications and models may be exposed to additional vulnerabilities, including security risks, errors, and malfunctions that may be irreparable or difficult to repair. We may not timely and adequately remediate or implement corrective measures for such failures, including due to reliance on third-party providers or suppliers. Consequently, any remediation may be time-consuming or difficult to achieve, which may materially impact our customers and business partners, damage our reputation, and result in lost business and revenue opportunities, and could be materially costly. If our products experience component aging, errors, or performance problems, or do not otherwise satisfy our stringent quality processes and controls we may choose to or be compelled to recall certain products, which may include, product withdrawals from the market, labeling changes, design changes, customer notifications, and notifications to global regulatory bodies.

Current wording

Our Systems and Services segment is subject to software and hardware risks related to the manufacturing, design, quality and safety of our complex, global installed base of iTero intraoral scanners, which are continually updated to add, expand or improve features with new hardware or software, to integrate new or existing software or other components manufactured by third parties, or to provide repair or replacement parts, any of which may contain errors or exhibit failures, especially when products are first introduced. We may be unable to ensure that third-party components or changes to them will be completely compatible with our scanners, which could cause our scanners to fail to perform as anticipated. Additionally, the third-party software, operating systems and other components integrated into or interoperable with our scanners routinely reach end of life or end of support, and as a consequence, certain applications and models may be exposed to additional vulnerabilities, including security risks, errors, and malfunctions that may be irreparable or difficult to repair. We may not timely and adequately remediate or implement corrective measures for such failures, including due to reliance on third-party providers or suppliers. Consequently, any remediation may be time-consuming or difficult to achieve, which may materially impact our customers and business partners, damage our reputation, and result in lost business and revenue opportunities, and could be materially costly. If our products experience component aging, errors, or performance problems, or do not otherwise satisfy our stringent quality processes and controls we may choose to or be compelled to recall certain products, which may include, product withdrawals from the market, labeling changes, design changes, customer notifications, and notifications to global regulatory bodies.

Previous wording

We are highly dependent on our supply chain, particularly manufacturers of specialized and customized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our iTero scanners. We maintain single and sole supply relationships in limited locations for materials and manufacturing, which exposes us to multiple supply chain vulnerabilities. We are reliant upon manufacturers that we contract with for quality and stability and any failures on their part may have an impact on our ability to supply our products.

Current wording

We are highly dependent on our supply chain, particularly suppliers, extruders, and manufacturers of specialized and customized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our iTero scanners. We maintain single and sole supply relationships in limited locations for materials and manufacturing, which exposes us to multiple supply chain vulnerabilities. We are reliant upon manufacturers that we contract with for quality and stability and any failures on their part may have an impact on our ability to supply our products.

Previous wording

We depend on commercial freight carriers, primarily United Parcel Service, Inc., to deliver our products. If the operations of commercial freight carriers are disrupted or we fail to mitigate any disruptions, we may be unable to timely deliver products to our customers who may choose alternative products, causing our net revenues and gross margin to decline, possibly materially. Moreover, when fuel costs increase, our freight costs generally do as well, including through carrier fuel surcharges applied in future periods. In addition, we earn an increasingly larger portion of our total revenues from international sales, which carry higher shipping costs that negatively impact our gross margin and results of operations. If freight costs materially increase and we are unable to successfully pass all or significant portions of the increases along to our customers, or we cannot otherwise offset such increases, our gross margin and financial results could be materially affected.

Current wording

We depend on commercial freight carriers, primarily United Parcel Service, Inc., to deliver our products. If the operations of commercial freight carriers are disrupted or we fail to mitigate any disruptions, we may still be unable to timely deliver products to our customers who may choose alternative products, causing our net revenues and gross margin to decline, possibly materially. Moreover, when fuel costs increase, our freight costs generally do as well, including through carrier fuel surcharges applied in future periods. In addition, we earn an increasingly larger portion of our total revenues from international sales, which carry higher shipping costs that negatively impact our gross margin and results of operations. If freight costs materially increase and we are unable to successfully pass all or significant portions of the increases along to our customers, or we cannot otherwise offset such increases, our gross margin and financial results could be materially affected.

Previous wording

Our marketing efforts and costs are significant and include national and regional campaigns in multiple countries involving television, film, print, social media and alliances with professional sports teams, athletes, social media influencers and other strategic partners. Our advertising campaigns may not achieve the desired returns on advertising spend, increase brand, product or services awareness sufficiently or generate goodwill and positive reputational goals among the teen and adult markets, enable us to maintain commercial relationships with social media influencers and other strategic partners, or differentiate our products from those featured in the growing number of advertising campaigns by competitors promoting similar products and messaging. Moreover, should any entity or individual endorsing us, our products or services take actions, make or publish statements in support of, or lend support to events or causes which are perceived by a portion of society negatively, our sponsorships or support of these entities or individuals may be questioned, our products and services boycotted and our brand image and reputation harmed, any of which could materially affect our business, financial condition and results of operations. The harm of negative publicity, particularly on social media platforms, may be immediate, without affording us an opportunity for redress or correction.

Current wording

Our marketing efforts and costs are significant and include national and regional campaigns in multiple countries involving television, film, print, search, digital media, social media, and alliances with professional sports teams, athletes, social media influencers and other strategic partners. Our advertising campaigns may not achieve the desired returns on advertising spend, increase brand, product or services awareness sufficiently or generate goodwill and positive reputational goals among the non-adult and adult markets, enable us to maintain commercial relationships with social media influencers and other strategic partners, or differentiate our products from those featured in the growing number of advertising campaigns by competitors promoting similar products and messaging. Moreover, should any entity or individual endorsing us, our products or services take actions, make or publish statements in support of, or lend support to events or causes which are perceived by a portion of society negatively, our sponsorships or support of these entities or individuals may be questioned, our products and services boycotted and our brand image and reputation harmed, any of which could materially affect our business, financial condition and results of operations. The harm of negative publicity, particularly on social media platforms, may be immediate, without affording us an opportunity for redress or correction.

Previous wording

In addition, many countries prohibit certain types of marketing activities, such as direct to consumer advertising of medical devices. We have and may in the future be alleged to violate marketing restrictions and be ordered to stop certain marketing activities or prevented from selling our products and services. Moreover, competitors do not always follow these restrictions, which can create an unfair advantage and make it more difficult and costly to compete.

Current wording

In addition, many countries prohibit certain types of marketing activities, such as DTC advertising of medical devices. We have and may in the future be alleged to violate marketing restrictions and be ordered to stop certain marketing activities or prevented from selling our products and services. Moreover, competitors do not always follow these restrictions, which can create an unfair advantage and make it more difficult and costly to compete.

Previous wording

We currently are and may in the future be subject to antitrust, competition or unfair competition-related investigations, enforcement actions or claims by governmental agencies, competitors, consumers, customers and others which, even if unfounded, could cause us to incur substantial costs (including fines), enter into settlements or consent decrees, be subject to judgments, receive negative publicity, forego certain mergers, acquisitions, business combinations, investments or other transactions, divert management time and attention, or change our business in ways that could have a material adverse effect on our business practices, revenues and results of operations, such as limiting our ability to provide certain benefits to our customers and consumers, reducing the attractiveness of our products, services and the net revenue derived from them. Governments and regulators are actively developing new competition laws, regulations and actions aimed at the technology sector, AI and digital platforms, and global activities and expansion, including in large markets such as the United States, the EU, and China.

Current wording

We currently are and may in the future be subject to antitrust, competition or unfair competition-related investigations, enforcement actions or claims by governmental agencies, competitors, consumers, customers and others which, even if unfounded, could cause us to incur substantial costs (including fines), enter into settlements or consent decrees, be subject to judgments, receive negative publicity, forego certain mergers, acquisitions, business combinations, investments or other transactions, divert management time and attention, or change our business in ways that could have a material adverse effect on our business practices, revenues and results of operations, such as limiting our ability to provide certain benefits to our customers and consumers, reducing the attractiveness of our products, services and the net revenue derived from them. Governments and regulators are actively developing new competition laws, regulations and actions aimed at the technology sector, AI and digital platforms, and global activities and expansion, including in large markets such as the United States, the EU, and China, compliance with which may incur additional costs, time, effort, and financial resources.

Previous wording

On June 29, 2026, the European Commission announced a formal investigation to assess whether our practices relating to our Invisalign clear aligners and iTero intraoral scanners in the European Economic Area infringe EU competition rules prohibiting the abuse of a dominant market position. We cannot predict the duration or outcome of the investigation, and an adverse outcome could subject us to substantial fines, require us to modify our business practices or accept binding commitments, and expose us to follow-on private litigation, any of which could materially affect our business, financial condition and results of operations. For more information, see Note 7 “Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

On June 29, 2026, the European Commission announced a formal investigation to assess whether our practices relating to our Invisalign clear aligners and iTero intraoral scanners in the European Economic Area infringe EU competition rules prohibiting the abuse of a dominant market position. We cannot predict the duration or outcome of the investigation, and an adverse outcome could subject us to substantial fines, require us to modify our business practices or accept binding commitments, and expose us to follow-on private litigation, any of which could materially affect our business, financial condition and results of operations.

Previous wording

•prohibitions against the offer, payment or receipt of remuneration to induce referrals to entities providing healthcare services or goods or to induce the order, purchase or recommendation of our products and services; and

Current wording

•prohibitions against the offer, payment or receipt of remuneration to induce referrals to entities providing healthcare services or goods or to induce the order, purchase or recommendation of our products and services, and requirements to track and report payments and other transfers of value to healthcare professionals;