Slide 1: Q2 2024 Financial Results
Q2 2024 Financial Results Align Technology, Inc. July 24, 2024 ©2024 Align Technology Inc. All rights reserved. 1
Slide 2: Q2 2024 Conference Call Details
Q2 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 +18M +5M Teens & Kids ©2024 Align Technology Inc. All rights reserved. *As of Q2’24
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% 2001–2023 Invisalign First™ iTero™ Design Suite My Invisalign™ app LTM 20% - 30% +22.5% iTero Element™ 5D imaging system NIRI ClinCheck® Pro 6 2013 –
Slide 9: ©2024 Align Technology Inc. All rights reserved.
©2024 Align Technology Inc. All rights reserved.
Slide 10: Enormous Opportunity
ENORMOUS OPPORTUNITY 600M Consumer Opportunity 15M teens 22M Annual ortho starts 7M adults ©2024, Align Technology Inc. All rights reserved.
Slide 11: Focused Execution: Strategic Growth Drivers
INTERNATIONAL PATIENT ORTHODONTIST GP DENTIST EXPANSION DEMAND UTILIZATION TREATMENT Focused Execution STRATEGIC GROWTH DRIVERS
Slide 12: Align's unique position and multivariable equation difficult to replicate
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 13: Q2 2024 Earnings Call CEO Opening Commentary
Q2 2024 Earnings Call CEO Opening commentary • Overall, we’re pleased to report solid second quarter results. Total Q2’24 revenues of $1,028.5 million were up 3.1% sequentially and 2.6% year-over-year, reflecting growth in both Clear Aligner volumes and Imaging Systems and CAD/CAM Services revenues.
Slide 14: Q2 2024 Highlights
Q2 2024 Highlights ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 14
Slide 15: Q2 2024 Revenues and Operating Margin
Q2 2024 Revenues and Operating Margin TOTAL REVENUES TOTAL SYSTEMS AND SERVICES REVENUES TOTAL CLEAR ALIGNER REVENUES GAAP OP PROFIT MARGIN Q2'24 Q2'24 Q2'24 Q2'24 $1,028.5M $196.8M $831.7M $147.0 | 14.3% Q/Q +3.1% Y/Y +2.6% Q/Q +9.2% Y/Y +16.1% Q/Q +1.8% Y/Y (0.1)% Q/Q (1.2)% pts Y/Y (2.9)% pts Q2’
Slide 16: Q2 2024 Clear Aligner segment
Q2 2024 Clear Aligner segment Americas International Non-Case Clear Aligner Metrics Clear Aligner Metrics Clear Aligner Metrics Americas Clear Aligner Shipments International Clear Aligner Shipments Non-Case Clear Aligner Revenues +0.2% Y/Y +6.8% Y/Y +5.1% Y/Y +3.8% Q/Q +9.0% Q/Q ($M) +3.5% Q/Q $74.
Slide 17: Q2 2024 Invisalign Doctor Subscription Program Touch-Up Cases
Q2 2024 Invisalign® Doctor Subscription Program (“DSP”) Touch-Up Cases • For Q2, total Clear Aligner shipments include ~25 thousand Invisalign DSP Touch-Up cases – a record high quarter - up 37% Y/Y from Q2 last year. • DSP continues to drive growth and is currently available in North America and ce
Slide 18: 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 19: 5M+ Teens and Kids treated with the Invisalign System
+5M Teens and Kids treated with the Invisalign® System, to date • For Q2’24, adult patient case starts were up 5.0% Q/Q and 1.0% Y/Y – reflecting our highest number of adult shipments in 8 quarters – driven by strength in the GP channel, led by North American and APAC dentists. In the teen and growi
Slide 20: Q2 2024 Invisalign Brand Consumer Marketing
Q2 2024 Invisalign® Brand Consumer Marketing AMERICAS EMEA APAC 15.5M 4.68B 8.1M 1.4B 26.5M 11.1B Website Visitors impressions Website Visitors impressions Website Visitors impressions Social media and influencer marketing Social media and influencer marketing Social media and influencer marketing T
Slide 21: Invisalign is the Most Trusted Brand in Orthodontics
Invisalign® is the Most Trusted Brand in Orthodontics Q2 2024 Consumer Demand Creation and Digital Tools • Today, Invisalign is the most recognized orthodontic brand globally and Invisalign clear aligner treatment is faster and more effective than traditional metal braces, yet the underlying market
Slide 22: 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 pro
Slide 23: Q2 2024 Systems and Services segment
Q2 2024 Systems and Services segment Imaging Systems and CAD/CAM Services Systems and Services Revenues +16.1% Y/Y ($M) +9.2% Q/Q Intraoral digital scans for Invisalign® case submission $196.8 $169.5 $180.2 95.9% 94.2% 91.4% 86.6% 87.9% 89.8% 83.7% 76.2% Q2'21 Q2'22 Q2'23 Q2'24 Q2'23 Q1'24 Q2'24* Am
Slide 24: iTero Design Suite
iTero™ Design Suite • Today, we introduced the iTero™ Design Suite, offering doctors an intuitive way to facilitate designs for 3D printing of models, bite splints, and restorations in practice. This software innovation is designed to help doctors increase their practice efficiency and elevate patie
Slide 25: Q2 2024 exocad Highlights
Q2 2024 exocad Highlights exocad Insights 2024 event in Mallorca welcomed 850 digital dental professionals exocad’s global event delivered visionary approaches on how to collaboratively improve treatment outcomes under the motto “Network. Innovate. Lead.” The educational program for dental technicia
Slide 26: Q2 2024 Financial Review
Q2 2024 Financial Review ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 26
Slide 27: Trended Revenues and Volumes
Trended Revenues and Volumes Q2’24 highlights +2.6% Y/Y Q2’24 Clear Aligner Case Volume +3.1% Q/Q +3.2% Y/Y $M $1,002.2 $997.4 $1,028.5 +6.2% Q/Q $960.2 $956.7 (#K) $169.5 $180.2 $196.8 $165.3 $174.8 622.6 642.7 602.3 592.6 605.1 $832.7 $794.9 $781.9 $817.3 $831.7 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23
Slide 28: Q2 2024 Financial Summary Commentary
Q2 2024 Financial Summary Commentary • Q2'24 Total revenues of $1,028.5M, +3.1% Q/Q and +2.6% Y/Y • Q/Q, Q2'24 revenues were unfavorably impacted by FX of ~$11.6M or ~1.1%* • Y/Y, Q2'24 revenues were unfavorably impacted by FX of ~$18.1M or ~1.7%* • Q2'24 Clear Aligners revenues of $831.7M, +1.8% Q/
Slide 29: Trended GAAP Gross Margins
Trended GAAP Gross Margins Q2’24 highlights (0.9)% pts Y/Y +0.3% pts Q/Q • Overall Q2'24 gross margin was 70.3%, +0.3 pts Q/Q and (0.9) pts Y/Y Q/Q, overall gross margin was unfavorably impacted by FX of ~0.3 pts* Y/Y, overall gross margin was unfavorably impacted by FX of ~0.5 pts* • Q2'24 non-GAAP
Slide 30: Trended GAAP Operating Expense
Trended GAAP Operating Expense Q2’24 highlights +6.3% Y/Y +5.9% Q/Q $M • Q2'24 Operating expenses were $575.6M, +5.9% Q/Q and +6.3% Y/Y Q/Q, Q2'24 operating expenses +$31.9M, due primarily to about $31 $575.6 million in legal settlements $541.7 $543.7 $496.7 $498.0 Y/Y, Q2'24 operating expenses +$33
Slide 31: GAAP Operating Margin and Earnings Per Share Trends
GAAP Operating Margin and Earnings Per Share Trends Q2’24 highlights (2.9)% pts Y/Y • Q2'24 Operating income of $147.0M resulting in an Q2'24 operating margin of 14.3%, (1.2) pts (1.2)% pts Q/Q Q/Q and (2.9) pts Y/Y Q2’24 Operating margin was unfavorably impacted from FX of ~0.6 pts Q/Q and unfavora
Slide 32: Trended Quarterly Financials
Trended Quarterly Financials GAAP Gross Margin % Operating Expense ($M) Operating Margin % & EPS $541.7 $543.7 $575.6 71.2% $496.7 $498.0 69.1% 70.0% 70.0% 70.3% 17.2% 17.3% 17.9% 15.5% 14.3% Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Diluted Earnings $
Slide 33: Q2 2024 Clear Aligner Revenue Per Case Shipment
Q2 2024 Clear Aligner Revenue Per Case Shipment Clear Aligner Revenue Per Case Shipment $1,400 $1,300 $1,200 $1,100 $1,000 $900 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Worldwide ASP $1,315 $1,245 $1,225 $1,335 $1,335 $1,320 $1,320 $1,350 $1,295 • Average Selling Price (“ASP”): Clear al
Slide 34: Balance Sheet, Cash Flow & Stock
Balance Sheet, Cash Flow & Stock • Of our $782.1M cash and investments balance, $140.0M was held Q2’23 Q1’24 Q2’24 in the U.S. and $642.1M was held by our international entities ($ in millions except for DSO) • During Q2'24, we repurchased approximately 0.6M shares of our Accounts Receivables, net $
Slide 35: Closing Comments
Closing Comments ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 35
Slide 36: Fiscal 2024 business outlook
Fiscal 2024 business outlook Fiscal 2024 business outlook Now, turning to our outlook, assuming no circumstances occur beyond our control we provide the following business outlook for Q3’24 and fiscal 2024. Third quarter 2024 outlook: For Q3’24, we are providing the following business outlook: • We
Slide 37: Q2 2024 Earnings Call CEO Closing Commentary
Q2 2024 Earnings Call CEO Closing commentary • In summary, we are pleased with our overall performance for Q2 and the growth we delivered across the business – for clear aligner volumes, as well as strong revenues from scanner and services. • Notwithstanding the impact of unfavorable foreign exchang
Slide 38: ©2024 Align Technology Inc. All rights reserved.
©2024 Align Technology Inc. All rights reserved. 38
Slide 39: Appendix
Appendix ©2024,Align ©2024 Align Technology Technology Inc.Inc. All rights All rights reserved. reserved. 39
Slide 40: 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 41: 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 42: 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 43: GAAP to Non-GAAP Reconciliation: 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, lease term
Slide 44: Q3 2024 and Fiscal 2024 Outlook – GAAP to Non-GAAP Reconciliation
Q3 2024 and Fiscal 2024 Outlook – GAAP to Non-GAAP Reconciliation Notes: (1) Amortization of intangible assets related to certain acquisitions. (2) Full-year impact of Q2’24 litigation settlement. ©2024 Align Technology Inc. All rights reserved.