Slide 1: Q3 2024 Financial Results
Q3 2024 Financial Results Align Technology, Inc. October 23, 2024 ©2024 Align Technology Inc. All rights reserved. 1
Slide 2: Q3 2024 Conference Call Details
Q3 2024 Conference Call Details Conference call Speakers: Joe Hogan, President and CEO John Morici, CFO Shirley Stacy, VP, Finance, Investor Relations and Corporate Communications Webcast Archive: Audio webcast archive will be available at http://investor.aligntech.com for one month Contacts Website
Slide 3: Safe Harbor and Forward-Looking Statements
Safe Harbor and Forward-Looking Statements This presentation, including the tables below, contains forward-looking statements, including statements of beliefs and expectations regarding our ability to successfully control our business and operations and pursue our strategic growth drivers, our expec
Slide 4: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures • To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles ("GAAP") in the United States, we use the following non-GAAP financial measures: constant currency net reven
Slide 5: Invisalign Smiles
INVISALIGN® SMILES Invisalign patients treated including ~18.9M ~5.4M Teens & Kids ©2024 Align Technology Inc. All rights reserved. *As of Q3’24
Slide 6: Making clear aligner treatment available for everyone through doctors
Making clear aligner treatment available for EVERYONE through DOCTORS
Slide 7: 600M potential patients through 2M+ doctors
600M POTENTIAL PATIENTS through +2M DOCTORS with an iTero scanner at EVERY CHAIR
Slide 8: From appliance to platform
2024 From appliance to platform iTero Lumina intraoral scanner iTero Multi-Direct Capture technology 2017 – 2023 ClinCheck® Smile Video Revenue Y/Y% iTero Design Suite Invisalign First 2001–2023 Smile Architect with Multiple Treatment Plans +22.5% My Invisalign app LTM 20% - 30% iTero Element 5D ima
Slide 9: ©2024 Align Technology Inc. All rights reserved.
©2024 Align Technology Inc. All rights reserved.
Slide 10: Align's unique position and multivariable equation
Align's unique position and multivariable equation that is very difficult to replicate RELIABLE FINANCIAL RESULTS MANUFACTURING EXCELLENCE • • Excellent Top-line & profit growth • > 1M unique clear aligner parts / day • Strong Balance Sheet • > 59K treatment plans / day Proven & Scalable Technology
Slide 11: Enormous Opportunity
ENORMOUS OPPORTUNITY 600M Consumer Opportunity 15M teens 22M Annual ortho starts 7M adults ©2024, Align Technology Inc. All rights reserved.
Slide 12: Focused Execution: Strategic Growth Drivers
INTERNATIONAL PATIENT ORTHODONTIST GP DENTIST EXPANSION DEMAND UTILIZATION TREATMENT Focused Execution STRATEGIC GROWTH DRIVERS
Slide 13: Q3 2024 Earnings Call CEO Opening Commentary
Q3 2024 Earnings Call CEO Opening commentary Overall, Q3’24 results were mixed and reflect strong Systems and Services year-over-year revenue growth, as well as good Clear Aligner volume in the Asia Pacific, EMEA and Latin America regions, partially offset by declines in the U.S. As recently reporte
Slide 14: Global organization restructuring
Global organization restructuring • We want to comment on the employment actions we announced today resulting from a global organizational restructuring. As part of Align’s 2025 annual operating plan process, we identified positions to be eliminated or transferred to other locations. These are diffi
Slide 15: Q3 2024 Highlights
Q3 2024 Highlights ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 15
Slide 16: Q3 2024 Revenues and Operating Margin
Q3 2024 Revenues and Operating Margin TOTAL REVENUES TOTAL SYSTEMS AND SERVICES REVENUES TOTAL CLEAR ALIGNER REVENUES GAAP OPERATING PROFIT / OPERATING MARGIN Q3'24 Q3'24 Q3'24 Q3'24 $977.9M $191.0M $786.8M $162.3 | 16.6% Q/Q (4.9)% Y/Y +1.8% Q/Q (2.9)% Y/Y +15.6% Q/Q (5.4)% Y/Y (1.0)% Q/Q +2.3% pts
Slide 17: Q3 2024 Clear Aligner segment
Q3 2024 Clear Aligner segment Americas International Non-Case Clear Aligner Metrics Clear Aligner Metrics Clear Aligner Metrics Americas Clear Aligner Shipments International Clear Aligner Shipments Non-Case Clear Aligner Revenues (0.9)% Y/Y +6.3% Y/Y +4.2% Y/Y (4.9)% Q/Q ($M) (1.0)% Q/Q (3.0)% Q/Q
Slide 18: Q3 2024 Invisalign Doctor Subscription Program Touch-Up Cases
Q3 2024 Invisalign® Doctor Subscription Program (“DSP”) Touch-Up Cases • DSP also includes Invisalign Touch Up cases up to 14-stages and is currently available in North America and certain countries in Europe. For Q3, total Invisalign DSP Touch Up cases were up nearly 30% Y/Y to a record-high of mor
Slide 19: DSP Touch-Up Case compared to Invisalign Express and Lite
DSP TOUCH-UP CASE: compared to Invisalign® Express and Invisalign® Lite Products DSP TOUCH-UP* Up to 14 STAGES with ANNUAL SUBSCRIPTION Discounted at slightly higher than ADVANTAGE DIAMOND+ DOCTORS Above average GROSS MARGIN Invisalign Express Invisalign System Invisalign Express Invisalign Lite 5 E
Slide 20: ~5.4M Teens and Kids treated with the Invisalign System
~5.4M Teens and Kids treated with the Invisalign® System, to date • For clear aligners, Q3 volumes were up Y/Y and down slightly Q/Q. Y/Y volumes were driven by strong growth in APAC, especially China, as well as growth from the EMEA and Latin America region. On a Q/Q basis, clear aligner volumes we
Slide 21: Q3 2024 Invisalign Brand Consumer Marketing
Q3 2024 Invisalign Brand Consumer Marketing AMERICAS EMEA APAC 13.8M 6.4B 6.4M 1.2B 24.9M 9.8B Website Visitors impressions Website Visitors impressions Website Visitors impressions • Social media and influencer marketing • Social media and influencer marketing • Social media and influencer marketin
Slide 22: Invisalign is the Most Trusted Brand in Orthodontics
Invisalign® is the Most Trusted Brand in Orthodontics Q3 2024 Consumer Demand Creation and Digital Tools • Invisalign is the most trusted brand in the Orthodontic industry globally and it is important we continue to create demand for Invisalign clear aligners, especially given macro-economic pressur
Slide 23: iTero intraoral scanners
iTero intraoral scanners Accelerating digital practice transformation The iTero scanner is at the front end of digital dentistry. Today, we have over 100K iTero scanners sold or roughly half of the intraoral scanning market globally. We have a scanner portfolio that consists of value to premium prod
Slide 24: Q3 2024 Systems and Services segment
Q3 2024 Systems and Services segment Imaging Systems and CAD/CAM Services Systems and Services Revenues ($M) +15.6% Y/Y (2.9)% Q/Q Intraoral digital scans for Invisalign® case submission $196.8 $191.0 94.6% 96.1% $165.3 92.3% 87.9% 87.6% 89.3% 84.3% 79.3% Q3'21 Q3'22 Q3'23 Q3'24 Q3'23 Q2'24 Q3'24* A
Slide 25: Good Design Award 2024 - iTero Lumina intraoral scanner
GOOD DESIGN AWARD 2024 - iTero Lumina intraoral scanner • We’re also pleased to share that Invisalign Japan was recently awarded the Good Design Award 2024 for the iTero Lumina intraoral scanner, making this the second time we received this prestigious award in the past two years. • The Good Design
Slide 26: Q3 2024 exocad Highlights
Q3 2024 exocad Highlights The iTero Design Suite is powered by exocad • exocad is proud to support scanner capabilities in the new iTero Design Suite to create in-office designs for simple 3D- printed restorations • The iTero Design Suite offers doctors an intuitive solution for in-practice 3D print
Slide 27: Q3 2024 exocad Highlights
Q3 2024 exocad Highlights exocad launches Inspira Denture Tooth Library—the first denture library designed by exocad specifically for a digital denture workflow. • Predefined contact points for automatic occlusion simplify the prosthetic set-up for digital denture design • An open output format allo
Slide 28: Q3 2024 Financial Review
Q3 2024 Financial Review ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 28
Slide 29: Trended Revenues and Volumes
Trended Revenues and Volumes Q3’24 highlights +1.8% Y/Y Q3’24 Clear Aligner Case Volume (4.9)% Q/Q +2.5% Y/Y $M $1,028.5 (4.0)% Q/Q $997.4 $977.9 $960.2 $956.7 (#K) $180.2 $196.8 $165.3 $174.8 $191.0 642.7 617.2 602.3 592.6 605.1 $794.9 $781.9 $817.3 $831.7 $786.8 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23
Slide 30: Q3 2024 Financial Summary Commentary
Q3 2024 Financial Summary Commentary • Q3'24 Total revenues of $977.9M, (4.9)% Q/Q and +1.8% Y/Y • Q/Q, Q3'24 revenues were impacted by FX of ~$0.1M or ~flat* • Y/Y, Q3'24 revenues were unfavorably impacted by FX of ~$14.6M or ~1.5%* • Q3'24 Clear Aligners revenues of $786.8M, (5.4)% Q/Q and (1.0)%
Slide 31: Trended GAAP Gross Margins
Trended GAAP Gross Margins Q3’24 highlights +0.7% pts Y/Y (0.5)% pts Q/Q • Overall, Q3'24 gross margin was 69.7%, (0.5) pts Q/Q and +0.7 pts Y/Y Q/Q, overall, the gross margin impact by FX was ~flat* Y/Y, overall gross margin was unfavorably impacted by FX of ~0.4 pts* • Q3'24 non-GAAP gross margin
Slide 32: Trended GAAP Operating Expense
Trended GAAP Operating Expense Q3’24 highlights +4.6% Y/Y (9.7)% Q/Q • Q3'24 Operating expenses were $519.5M, (9.7)% Q/Q and +4.6% Y/Y $M Q/Q, Q3'24 operating expenses $(56.1)M, due primarily to non-recurring legal settlements, advertising & marketing, and employee compensation $575.6 Y/Y, Q3'24 ope
Slide 33: GAAP Operating Margin and Earnings Per Share Trends
GAAP Operating Margin and Earnings Per Share Trends Q3’24 highlights (0.7)% pts Y/Y • Q3'24 Operating income of $162.3M resulting in an Q3'24 operating margin of 16.6%,+2.3 pts Q/Q and (0.7) pts Y/Y +2.3% pts Q/Q Q3’24 Operating margin was favorably impacted from FX of ~0.1 pts Q/Q and unfavorably i
Slide 34: Trended Quarterly Financials
Trended Quarterly Financials GAAP Gross Margin % Operating Expense ($M) Operating Margin % & EPS $543.7 $575.6 $519.5 $496.7 $498.0 69.1% 70.0% 70.0% 70.3% 69.7% 17.3% 17.9% 15.5% 14.3% 16.6% Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Diluted Earnings $
Slide 35: Q3 2024 Clear Aligner Revenue Per Case Shipment
Q3 2024 Clear Aligner Revenue Per Case Shipment Clear Aligner Revenue Per Case Shipment $1,400 $1,300 $1,200 $1,100 $1,000 $900 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Worldwide ASP $1,245 $1,225 $1,335 $1,335 $1,320 $1,320 $1,350 $1,295 $1,275 • Average Selling Price (“ASP”): Clear al
Slide 36: Balance Sheet, Cash Flow & Stock
Balance Sheet, Cash Flow & Stock • Of our $1,041.9M cash and cash equivalents balance, $285.4M was held Q3’23 Q2’24 Q3’24 in the U.S. and $756.5M was held by our international entities ($ in millions except for DSO) • We have $500.0M available for repurchases of our common stock under Accounts Recei
Slide 37: Closing Comments
Closing Comments ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 37
Slide 38: Fiscal 2024 business outlook
Fiscal 2024 business outlook Turning to our outlook, assuming no circumstances occur beyond our control, including foreign exchange, we provide the following business outlook: • For Q4’24, we expect worldwide revenues to be in the range of $995M to $1,015M • For Q4’24, we expect Clear Aligner volume
Slide 39: Q3 2024 Earnings Call CEO Closing Commentary
Q3 2024 Earnings Call CEO Closing commentary In closing, for Q3, we were pleased to report another strong Systems and Services quarter, and we are excited about our next generation Lumina scanner and its continued positive impact on our customers digital workflow, with ortho software today and resto
Slide 40: ©2024 Align Technology Inc. All rights reserved.
©2024 Align Technology Inc. All rights reserved. 40
Slide 41: Appendix
Appendix ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 41
Slide 42: GAAP to Non-GAAP Reconciliation: Constant Currency Net Revenues
Unaudited GAAP to Non- GAAP Reconciliation Constant Currency Net Revenues Note: 1) We define constant currency net revenues as total net revenues excluding the effect of foreign exchange rate movements and use it to determine the percentage for the constant currency impact on net revenues on a seque
Slide 43: GAAP to Non-GAAP Reconciliation: Constant Currency Gross Profit and Margin
Unaudited GAAP to Non- GAAP Reconciliation Constant Currency Gross Profit and Gross Margin Note: 1) We define constant currency gross margin as constant currency gross profit as a percentage of constant currency net revenues. Gross margin constant currency impact is the increase or decrease in const
Slide 44: GAAP to Non-GAAP Reconciliation: Constant Currency Income from Operations
Unaudited GAAP to Non- GAAP Reconciliation Constant Currency Income from Operations and Operating Margin Notes: 1) We define constant currency income from operations as GAAP income from operations excluding the effect of foreign exchange rate movements for GAAP net revenues and operating expenses on
Slide 45: GAAP to Non-GAAP Reconciliation: Financial Measures Other Than Constant Currency
Unaudited GAAP to Non- GAAP Reconciliation Financial Measures Other Than Constant Currency Notes: (1) Amortization of intangible assets related to certain acquisitions. (2) Restructuring and other charges recorded in gross profit and operating expenses primarily relate to severance costs or revision
Slide 46: Q4 2024 and Fiscal 2024 Outlook – GAAP to Non-GAAP Reconciliation
Q4 2024 and Fiscal 2024 Outlook – GAAP to Non-GAAP Reconciliation Notes: (1) Amortization of intangible assets related to certain acquisitions. (2) Restructuring charges primarily related to severance. ©2024 Align Technology Inc. All rights reserved.