ALIGN TECHNOLOGY INC

Align Technology, Inc. is a global medical device company primarily engaged in the design, manufacture and marketing of Invisalign clear aligners for the treatment of malocclusions, Vivera retainers for retention, iTero intraoral scanners and services for dentistry, and exocad CAD/CAM software for dental laboratories and dental practitioners. The company operates in the orthodontic and restorative dentistry industry, which is undergoing a digital transformation. Malocclusion affects approximately 60% to 75% of the global population, and Align estimates there are approximately 600 million people globally with malocclusion who could benefit from straightening their teeth, yet annually only approximately 22 million people globally elect treatment by orthodontists. Align's vision and strategy is to revolutionize orthodontic and restorative dentistry through digital treatment planning and implementation using the Align Digital Platform, an integrated suite of proprietary technologies and services designed to deliver a seamless, end-to-end solution for patients, consumers, orthodontists, GPs and lab partners.

Align's primary competitors include traditional orthodontic treatments using wires and brackets, as well as clear aligner products from various companies, direct-to-consumer companies, and doctors who manufacture retainers and custom clear aligners using 3D printing technology. The company also faces competition in the intraoral scanner and CAD/CAM software markets. Align believes it is well positioned to compete due to its thousands of dedicated sales force employees, significant historical and ongoing investments in research and development, SmartTrack aligner materials and design, intraoral scanning, 3D manufacturing, global scale of manufacturing and treatment planning, strong brand name recognition, diversified customer base, geographic expansion, leading digital platform, technology and IP, next wave of innovation with direct 3D printing, and innovations powered by AI. As of December 31, 2025, Align had approximately 130,015 active Invisalign-trained doctors, defined as those who submitted at least one Invisalign case in the prior 12-month period. Of the 22 million annual orthodontic case starts, Align estimates its share through orthodontists is approximately 10% globally.

Align generates revenue primarily through the sale of Invisalign clear aligners, iTero intraoral scanners, and exocad CAD/CAM software and services. The company sells the majority of its products and services directly through a dedicated sales force to orthodontists, GPs, and dental laboratories, and also through sales agents and distributors in certain countries. For the year ended December 31, 2025, Clear Aligner net revenues represented approximately 80% of worldwide net revenues, while Systems and Services net revenues represented the remaining 20%. The company also sells Invisalign Accessory Products through online e-commerce websites, its doctor portal, and in-store through large retailers and pharmacy stores. The Align Digital Platform is an end-to-end digital platform that combines software, systems and services designed to provide a seamless experience and end-to-end workflow integrating doctors, labs, patients and consumers.

The Clear Aligner segment consists of Comprehensive Products, Non-Comprehensive Products, and Non-Case revenues. Comprehensive Products include Invisalign Comprehensive, Invisalign First, and Invisalign Comprehensive 3in3. Non-Comprehensive Products include Invisalign Moderate, Lite and Express packages, Invisalign Go and Invisalign Go Plus, and Invisalign Palatal Expander. Non-Case revenues include retention products, Invisalign training, adjusting tools, and Invisalign Accessory Products. The Invisalign System is a proprietary method for treating malocclusion based on a computer-simulated virtual treatment plan and a series of custom manufactured clear polymer removable aligners. The company received 510(k) clearance from the FDA to market the Invisalign System in 1998. To date, over 22 million people worldwide have been treated with the Invisalign System. Invisalign Comprehensive Packages are used to treat adults and teens over a wide spectrum of mild to severe malocclusion. Invisalign First Phase 1 Package is designed for younger patients generally between the ages of six and ten. The Invisalign System with mandibular advancement featuring occlusal blocks expands Align's Class II treatment portfolio for growing patients with late mixed or early permanent dentition (ages 10-16). Invisalign Non-comprehensive Packages include Invisalign Express, Invisalign Lite, and Invisalign Moderate. Invisalign Go Packages are streamlined non-comprehensive packages designed for GPs. The Invisalign Palatal Expander System, a direct 3D printed orthodontic appliance, received 510(k) clearance in the United States in December 2023 and is currently available in the United States, Canada, Australia, New Zealand, Hong Kong, Singapore, Vietnam, Japan, Thailand, India and certain countries in EMEA. The Doctor Subscription Program (DSP) is a monthly subscription-based clear aligner program currently available in North America, Latin America, and certain countries in Europe.

The Systems and Services segment consists of sales related to iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, scanner wand upgrades, and non-system revenues from leases of scanner systems, sales of pre-owned scanner systems, subscription software, disposables, pay per scan services, as well as exocad CAD/CAM software solutions. The iTero Element portfolio includes the iTero Element 2, iTero Element Flex, iTero Element 5D imaging system, iTero Element Plus Series, and the iTero Lumina. The iTero Element 5D imaging system is the first integrated dental imaging system that simultaneously records 3D, intraoral color camera images, NIRI technology and enables comparison over time using iTero TimeLapse technology. A clinical study demonstrated that the NIRI technology of the iTero Element 5D imaging system was 66% more sensitive than bitewing x-ray radiography for detection of interproximal lesions. In January 2024, Align launched the iTero Lumina intraoral scanner, designed with iTero Multi-Direct Capture technology that captures more data quickly and accurately. The iTero Lumina scanner has a capture distance of up to 25mm, a 50% smaller and 45% lighter wand (as compared to iTero Element 5D imaging system wand, excluding the wand cable), and enables scanning at two times the speed. In March 2025, Align announced the addition of restorative capabilities to the iTero Lumina intraoral scanner (without iTero NIRI technology) and the new iTero Lumina Pro dental imaging system (with NIRI technology). In October 2025, Align announced a series of new innovations for iTero Digital Solutions, including enhancements to the Align Oral Health Suite, Invisalign Outcome Simulator Pro with ClinCheck Smile Video, and the iTero Design Suite. The exocad CAD/CAM software platform addresses restorative needs in an end-to-end digital platform workflow to facilitate ortho-restorative and comprehensive dentistry.

In January 2024, Align completed the acquisition of Cubicure GmbH, a company that develops, produces and distributes proprietary direct 3D printing technologies, for total purchase consideration of $85.8 million ¹. The acquisition is intended to support and scale Align's strategic innovation roadmap and strengthen the Align Digital Platform. In April 2025, the Board of Directors authorized a plan to repurchase up to $1.0 billion ² of common stock (the April 2025 Repurchase Program). During the year ended December 31, 2025, Align repurchased $466 million ³ of common stock under both the April 2025 Repurchase Program and the January 2023 Repurchase Program. As of December 31, 2025, approximately $831 million ⁴ remained available for future repurchase under the April 2025 Repurchase Program. In the third quarter of 2025, Align initiated a restructuring plan to streamline operations, realign parts of the organization, and optimize its global manufacturing footprint, incurring $41 million ⁵ of expenses through December 31, 2025, primarily related to involuntary termination benefits. Align also recorded $76.9 million ⁶ of accelerated depreciation associated with certain manufacturing assets disposed of other than by sale, and an impairment charge of $23.1 million ⁷ related to the planned sale of its manufacturing facility in Juarez, Mexico. In March 2025, Align agreed to a revised settlement to resolve all Section 1 claims in the Misty Snow antitrust lawsuit for a $31.75 million ⁸ cash payment, which was paid in 2025. In 2025, Align also announced several new product enhancements, including the launch in European Union countries and the United Kingdom of Align X-ray Insights, a new software-based computer aided detection solution that uses AI to automatically analyze 2D radiographs, and in December 2025, announced limited commercial availability of the Invisalign System with mandibular advancement featuring occlusal blocks.

For the fiscal year ended December 31, 2025, Align reported total net revenues of $4,035.0 million ⁹, an increase of 0.9% ¹⁰ year-over-year from $3,999.0 million ¹¹ in 2024. Clear Aligner net revenues were $3,245.4 million ¹², an increase of 0.5% ¹³ year-over-year, driven by a 4.7% ¹⁴ increase in case volume partially offset by a 3.9% ¹⁵ decrease in average selling price. Systems and Services net revenues were $789.6 million ¹⁶, an increase of 2.7% ¹⁷ year-over-year. Gross profit was $2,711.0 million ¹⁸, with a gross margin of 67.2% ¹⁹, compared to 70.0% ²⁰ in 2024. Income from operations was $545.8 million ²¹, with an operating margin of 13.5% ²², compared to 15.2% ²³ in 2024. Net income was $410.4 million ²⁴, with diluted net income per share of $5.65 ²⁵, compared to net income of $421.4 million ²⁶ and diluted EPS of $5.62 ²⁷ in 2024. Cash provided by operating activities was $593.2 million ²⁸, and capital expenditures were $102.4 million ²⁹. As of December 31, 2025, Align had cash and cash equivalents of $1,094.9 million ³⁰ and total assets of $6,233.7 million ³¹.

Align's first major growth vector is International Expansion. The company continues to grow its global presence by increasing awareness of its products and making them available in more countries. As of the end of 2025, Align is selling directly or through authorized distributors in more than 100 countries ³². The company has 11 fabrication and treatment planning locations throughout the world, with manufacturing facilities in each of its three key regions: Americas (Mexico), APAC (China), and EMEA (Poland). Align expects to continue expanding its business by investing in resources, infrastructure and initiatives that help drive Invisalign treatment growth, position iTero intraoral scanners as the preferred scanning technology, and establish exocad CAD/CAM software as the solution of choice for dental labs in existing and new markets. Over the longer-term, Align expects international revenues to grow faster than Americas' revenues as a result of growing international demand, continued investment in international market expansion, the size of the market opportunities, and its relatively low market penetration in these regions.

Align's second major growth vector is Orthodontic Utilization and innovation. The company continues to innovate and increase product applicability and predictability to address a wide range of cases, from simple to complex, enabling doctors to confidently diagnose and treat children and adults with the Invisalign System. This is especially important for treating teenage patients who make up the largest portion of the 22 million annual orthodontic case starts. In 2025, a record number of teens and kids started treatment with Invisalign clear aligners. Align continues to make improvements to its Invisalign treatment software, ClinCheck Pro, and has introduced new products such as the Invisalign Palatal Expander System and the Invisalign System with mandibular advancement featuring occlusal blocks. The company also continues to invest in AI infrastructure, specialized talent, and strategic partnerships to further enhance the capabilities of the Align Digital Platform. Align expects utilization rates to rise over time, although they are likely to fluctuate from period to period. The total utilization rate in 2025 was 20.1 cases per doctor ³³ compared to 19.1 ³⁴ in both 2024 and 2023.

Align's gross margin decreased in 2025 compared to 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 accelerated depreciation on assets disposed of other than by sale. The gross margin was further impacted negatively by an impairment loss on inventory recorded in the Systems and Services segment and a decline in ASPs in both reportable segments. These decreases were partially offset by lower cost of net revenues from operational efficiencies. The Clear Aligner gross margin percentage decreased primarily due to accelerated depreciation on assets disposed of other than by sale of $77 million ³⁵ and lower ASPs, partially offset by operational efficiencies. The Systems and Services gross margin percentage decreased primarily due to lower ASPs and an impairment loss on inventory of $15 million ³⁶, partially offset by lower cost of net revenues from operational efficiencies. Selling, general and administrative expense decreased in 2025 compared to 2024 primarily due to lower employee costs and lower marketing and outside services expense, partially offset by higher clinical education expense.

Align expects its investments in capital expenditures to be between $125 million ³⁷ and $150 million ³⁸ for the next 12 months, primarily relating to technology upgrades, additional manufacturing capacity, and ongoing maintenance. The company has future operating lease payments of $184 million ³⁹, which includes $58 million ⁴⁰ for leases that have not yet commenced as of December 31, 2025. Align has a manufacturing facility in each of its three key regions, which form the foundation of its manufacturing strategy that continues to evolve to increase flexibility and optimize capacity and cost structure. The company has begun limited manufacturing of certain appliances using direct fabrication technology and expects to pilot additional devices, including retainers and certain pre-fab attachments, in limited releases in 2026. As of December 31, 2025, Align had approximately 20,290 employees ⁴¹, a decrease of approximately 3.1% ⁴² over December 31, 2024.

Research and development expense was $369.9 million ⁴³ for the year ended December 31, 2025, representing 9.2% ⁴⁴ of net revenues, compared to $364.2 million ⁴⁵ and 9.1% ⁴⁶ in 2024. Capital expenditures were $102.4 million ⁴⁷ for the year ended December 31, 2025. In April 2025, the Board of Directors authorized a plan to repurchase up to $1.0 billion ⁴⁸ of common stock (the April 2025 Repurchase Program), which is expected to be completed over a period of up to three years. As of December 31, 2025, approximately $831 million ⁴⁹ remained available for future repurchase under this program. Align has never declared or paid any cash dividends on its common stock and currently intends to retain earnings for use in the operations and expansion of its business.

Align faces several headwinds and constraints. Macroeconomic conditions, including global tariff volatility, inflation, and higher interest rates, have adversely impacted sales, particularly in the beginning of the second quarter of 2025, and Align believes these conditions may continue to impede dental patient demand. Patient traffic growth has been uneven for many doctors, with orthodontic starts down for four consecutive years. Align believes uncertainty impacts consumer purchasing decisions and doctor recommendations, resulting 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. Align anticipates these trends will continue for so long as consumer economic uncertainty persists. Government actions relating to actual or proposed tariffs and retaliatory actions in key strategic countries or regions, particularly in the United States, China, Europe, Brazil, Canada, Israel and Mexico, may adversely impact revenue and cost of goods sold. The trade war and geopolitical tensions between the United States and China may result in the limitation or prohibition of the availability of certain raw materials, components and parts. Align also faces risks from geopolitical conflicts involving Ukraine, the Middle East, China and other regions, which continue to add to market uncertainties and dampen consumer sentiment and demand.

Align's net revenues depend primarily on sales of the Invisalign System and iTero intraoral scanners, and declines in volume or average selling price (ASP) may adversely affect results. ASPs are influenced by product mix, geographical mix, channel mix, promotions, discounts, inflation, and foreign currency exchange rates. In 2025, Clear Aligner ASP decreased by 3.9% ⁵⁰ year-over-year, driven by product mix shift to lower priced products and higher discounts, resulting in a $127 million ⁵¹ decrease in net revenue. Competition in the markets for Align's products is increasing, with the Invisalign System competing against traditional wires and brackets, clear aligners from new market entrants and existing competitors, direct-to-consumer companies, and doctors who manufacture custom aligners. The iTero intraoral scanners compete with numerous new and existing intraoral scanners and traditional impression methods. Align is highly dependent on third-party suppliers, some of whom are sole source suppliers, for certain key machines, components and materials. The company maintains single or sole source supplier relationships for CT scanning and stereolithography equipment used in clear aligner manufacturing, many critical components for the optics of intraoral scanners, and resin and polymer, the primary raw materials used in manufacturing clear aligners. Align is subject to antitrust and competition regulations, litigation and enforcement, including the antitrust class actions and the Straumann litigation described in the filing. In June 2024, Align reached a settlement in principle with Section 1 plaintiffs to resolve all remaining claims in the Misty Snow lawsuit, and in March 2025 agreed to a revised settlement for a $31.75 million ⁵² cash payment. Align is also subject to extensive and evolving regulations regarding privacy, data protection, data governance, and cybersecurity, including the GDPR and HIPAA, and faces risks related to the data it collects, processes, and shares.

Management's message emphasizes the company's strategic growth drivers: International Expansion, GP Dentist Treatment, Patient Demand, and Orthodontic Utilization. Management states that Align strives to help 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. The company's growth strategy depends on its ability to facilitate the digital transformation of dentistry, continuous focus on innovation, and expansion to meet evolving customer expectations. Key themes include continuing penetration and adoption of Invisalign clear aligners, iTero intraoral scanners, and exocad CAD/CAM solutions in international markets; targeting growth opportunities with international orthodontists and GP customers; building confidence within the GP and orthodontic communities through training and education; investing in research and development to innovate and bring to market products that deliver clinical precision and predictability; creating demand and enabling patient conversion with targeted investments in advertising; pursuing new product lines; and increasing global orthodontic utilization rates. Management notes that in 2025, a record number of teens and kids started treatment with Invisalign clear aligners. The company expects utilization rates to continue to rise, although they will fluctuate from period to period. Management also discusses the 2025 restructuring actions initiated to streamline operations, realign parts of the organization, and optimize the global manufacturing footprint in response to the current macro environment.