Align Technology Announces Second Quarter 2026 Financial Results

Align Technology Announces Second Quarter 2026 Financial Results TEMPE, Ariz.--( BUSINESS WIRE)--Align Technology, Inc. (Nasdaq: ALGN), a leading global medical device company that designs, manufactures, and sells the Invisalign ® System of clear aligners, iTero™ intraoral scanners, and exocad™ CAD/CAM software for digital orthodontics and restorative dentistry, today reported financial results for the second quarter ("Q2'26"). Q2'26 total revenues were $1,056.2 million, up 1.5% sequentially and up 4.3% year-over-year. Q2'26 total revenues were unfavorably impacted by foreign exchange by approximately $6.1 million, or 0.6% sequentially, and favorably impacted by approximately $12.5 million, or 1.2% year-over-year. (1) Q2'26 Clear Aligner revenues were $870.9 million, up 1.7% sequentially and up 8.2% year-over-year. Q2'26 Clear Aligner revenues were unfavorably impacted by foreign exchange by approximately $5.1 million, or 0.6% sequentially, and favorably impacted by approximately $10.6 million, or 1.2% year-over-year. (1) Q2'26 Clear Aligner volume of 691.8 thousand cases was up 0.9% sequentially and up 7.4% year-over-year. Q2'26 Imaging Systems and CAD/CAM Services revenues were $185.3 million, up 0.7% sequentially and down 10.8% year-over-year. Q2'26 Imaging Systems and CAD/CAM Services revenues were unfavorably impacted by foreign exchange by approximately $1.0 million, or 0.5% sequentially, and favorably impacted by approximately $1.9 million, or 1.0% year-over-year. (1)

Q2'26 gross profit was $757.4 million, resulting in a gross margin of 71.7%. Q2'26 gross margin was unfavorably impacted by foreign exchange by approximately 0.2 points sequentially. (1) On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 gross margin would have been approximately 72.0%. On a year-over-year basis, Q2'26 gross profit was unfavorably impacted by foreign exchange by approximately 0.8 points. (1) On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 gross margin would have been approximately 72.5%. On a non-GAAP basis, Q2'26 gross profit was $763.1 million, resulting in a gross margin of 72.3%. (1)

Q2'26 operating income was $154.0 million, resulting in an operating margin of 14.6%. Q2'26 operating income was unfavorably impacted by an estimated $37.5 million liability, inclusive of interest, related to UK VAT. Q2'26 operating margin was unfavorably impacted by foreign exchange by approximately 0.6 points sequentially. (1) On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 operating margin would have been approximately 15.2%. On a year-over-year basis, Q2'26 operating margin was unfavorably impacted by foreign exchange by approximately 1.4 points. (1) On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 operating margin would have been approximately 16.0%. (1) Q2'26 net income was $108.3 million, or $1.51 per diluted share. Foreign exchange unfavorably impacted Q2'26 diluted net income per share by approximately $0.17 sequentially and by approximately $0.23 year-over-year. On a non-GAAP basis, Q2'26 net income was $189.1 million, or $2.64 per diluted share. (1)

Commenting on Align's Q2'26 results, Align Technology President and CEO Joe Hogan said, “We delivered a solid second quarter with record revenues of $1.06 billion, up 4.3% year-over-year, driven by record Clear Aligner volumes of 691.8 thousand cases and 8.2% Clear Aligner revenue growth. Q2'26 revenues and Clear Aligner volumes were in line with our outlook, while Clear Aligner ASPs and non-GAAP operating margin of 22.9% exceeded our expectations. Q2’26 year-over-year Clear Aligner volume growth of 7.4% was driven by continued double-digit expansion across APAC, EMEA, and Latin America, together with stable performance in North America. Growth reflected continuing adoption across orthodontist and GP dentist channels and across adult, teen, and growing patient segments, as well as continued double-digit growth from DSOs. Investments in patient financing, clinical support programs, doctor subscription offerings, and practice productivity solutions supported adoption and utilization across our global Invisalign business. In Systems and Services, Q2’26 revenue performance reflected persistent softness in the capital equipment market as well as a shift toward lower-priced scanners and flexible acquisition models, including leasing and rental programs, which generate lower upfront revenue than traditional scanner purchases. By lowering the upfront cost of adoption, we can expand patient access to care, grow recurring revenue, and strengthen the Align™ Digital Platform."

(1)

For more information, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."

Financial Summary - Second Quarter Fiscal 2026

Q2'26

Q1'26

Q2'25

Q/Q Change

Y/Y Change

Clear Aligner Shipments

691,785

685,650

644,370

+0.9%

+7.4%

GAAP

Net Revenues

$1,056.2M

$1,040.1M

$1,012.4M

+1.5%

+4.3%

Clear Aligner

$870.9M

$856.0M

$804.6M

+1.7%

+8.2%

Imaging Systems and CAD/CAM Services

$185.3M

$184.1M

$207.8M

+0.7%

(10.8

Net Income

$108.3M

$112.8M

$124.6M

(4.0

(13.1

Diluted EPS

1.51

1.57

1.72

($0.06

)

($0.20

)

Non-GAAP

Net Income

$189.1M

$184.6M

$181.1M

+2.5%

+4.4%

Diluted EPS

2.64

2.58

2.49

+$0.07

+$0.15

Changes and percentages are calculated using unrounded values. As a result, certain tables may not sum or recalculate precisely due to rounding.

As of June 30, 2026, we had approximately $1,102.6 million in cash and cash equivalents, compared to approximately $1,059.8 million as of March 31, 2026. As of June 30, 2026, we had $300.0 million available under our revolving line of credit and a $50.0 million letter of credit sub-limit.

Commenting on Align's Q2'26 results, Align Technology CFO and EVP Global Finance, John Morici said, "Our second quarter results reflect continued execution across the business. Solid Clear Aligner performance, disciplined expense management, and operational improvements supported revenue growth in-line with our outlook and non-GAAP operating margin above our expectations. Our growth initiatives continue to drive doctor adoption, utilization, and patient conversion. While Q2’26 Systems and Services revenue was below our original expectations, underlying scanner adoption remained healthy, and the reported lower revenues reflects lower price scanners and the transition toward lease and rental models that increase access to care by offering a broader range of purchasing options and increasing adoption of our digital scanning technology. This is a deliberate trade-off on our part. While this model may impact upfront economics and timing of revenue recognition, it enables us to serve more customers and to drive for higher-margin treatment revenue and drives durable long-term growth. Stronger Clear Aligner revenue growth and ASP performance helped offset the near-term impact. As more than 23 million patients have now been treated with the Invisalign ® System, we believe our integrated digital platform and disciplined execution position us to support customer growth, expand adoption, and drive long-term profitable growth. Our strong balance sheet and healthy free cash flow generation continue to provide flexibility to invest in innovation, support our customers, and return capital to shareholders. During the quarter we repurchased approximately 0.4 million shares, at an average price of $169.45 per share, returning approximately $67 million to shareholders, and ended the quarter with more than $1.1 billion in cash and cash equivalents. We remain committed to disciplined capital allocation, maintaining financial flexibility, and creating long-term value for shareholders."

Commenting on Align’s fiscal 2026 outlook, Hogan continued, “As we enter the second half of 2026, we believe we are well positioned to build on the momentum we saw in the first half of the year. We are entering the important teen treatment season with one of the industry's most comprehensive digital treatment portfolios for growing patients and teens. At the same time, we continue to expand opportunities in adult treatment through innovations that connect oral health, restorative workflows, and digital orthodontics, helping doctors incorporate Invisalign® treatment into broader patient care discussion. Our innovation engine remains a key differentiator and central to our growth strategy. Business model innovation, patient financing, subscription programs such as DSP, no-AA offerings, and digital workflow innovation are helping doctors improve patient conversion, increase utilization, and grow their practices. Every digital workflow begins with a scan, making scanner adoption important driver to increasing patient access to orthodontic care and long-term platform growth. As we continue to advance our innovation roadmap and direct fabrication technologies, we are creating more effective and personalized treatment solutions that improve clinical outcomes, enhance operating efficiency, and strengthen the customer experience across orthodontics and restorative dentistry.”

Align Announcement Highlights

Q2'26 Stock Repurchase

Tariff Update as of June 30, 2026

UK VAT update as of July 7, 2026

Fiscal 2026 Business Outlook

Assuming no circumstances occur beyond our control, such as foreign exchange, macroeconomic conditions, an extended war, and changes to currently applicable duties, including tariffs or other fees that could impact our business:

Q3'26:

For Fiscal 2026:

Commenting on the Company’s outlook, Morici continued, “I want to take a moment to offer some preliminary, high-level framing for 2027, especially given the work we are doing to drive growth, cost discipline and margin expansion. To be clear—we are not issuing formal guidance for next year—it’s too early and our strategic and operating model review is still underway. However, we remain laser focused on executing our strategic plan for profitable revenue growth across our two operating segments. Based on our continued progress and the initiatives we outlined in the Strategic Initiatives press release today, we are comfortable targeting at least that same level of improvement in operating margin again in fiscal 2027, on top of the approximately 100 basis points of operating margin improvement we reiterated today for fiscal 2026. For fiscal 2027, we currently expect GAAP and non-GAAP operating margins to increase at least approximately 100 basis points year-over-year. We’ll share more details after our strategic and operating model review is complete and in conjunction with formal 2027 guidance.”

Align Webcast and Conference Call

We will host a conference call today, July 29, 2026, at 4:30 p.m. EDT, 1:30 p.m. PDT, to review our Q2'26 financial results, discuss future operating trends, and our business outlook. The conference call will also be webcast live via the Internet. To access the webcast, go to the "Events & Presentations" section under "Company Information" on Align's Investor Relations website at http://investor.aligntech.com. To access the conference call, participants may register for the call at https://edge.media-server.com/mmc/p/voy55bot. An archived audio webcast will be available 2 hours after the call's conclusion and will remain available for one month.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles ("GAAP") in the United States ("U.S. GAAP"), we use the following non-GAAP financial measures: constant currency net revenues, constant currency gross profit, constant currency gross margin, constant currency income from operations, constant currency operating margin, constant currency diluted net income per share, non-GAAP constant currency gross margin, non-GAAP constant currency operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP total operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted net income per share. These non-GAAP financial measures exclude certain items that may not be indicative of our fundamental operating performance, including foreign currency exchange rate impacts, the effects of stock-based compensation, amortization of intangible assets related to certain acquisitions, restructuring and other charges, legal settlements and contingencies, acquisition-related costs, discrete cash and non-cash charges or gains and associated tax impacts that are included in the most directly comparable GAAP financial measure.

Our management believes that the use of certain non-GAAP financial measures provides meaningful supplemental information regarding our recurring core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by our institutional investors and the analyst community to help them analyze the performance of our business.

There are material limitations to using non-GAAP financial measures as they are not prepared in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Non-GAAP financial measures exclude certain items that may have a material impact upon our reported results of operations, which can limit their usefulness for comparison purposes. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges and gains are excluded or included from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on both a GAAP and non-GAAP basis and by providing specific information regarding the GAAP amounts excluded or included from these non-GAAP financial measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for, superior to, or in isolation from, the directly comparable financial measures prepared in accordance with U.S. GAAP. We urge investors to review the reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures included herein and not to rely on any single financial measure to evaluate our business. For more information on these non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."

About Align Technology, Inc.

Align Technology designs and manufactures the Invisalign ® System, the most advanced clear aligner system in the world, iTero™ intraoral scanners and services, and exocad™ CAD/CAM software. These technology building blocks enable enhanced digital orthodontic and restorative workflows to improve patient outcomes and practice efficiencies for over 302.0 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide. Over the past 29 years, Align has helped doctors treat approximately 23.5 million patients with the Invisalign System and is driving the evolution in digital dentistry through the Align™ Digital Platform, our integrated suite of unique, proprietary technologies and services delivered as a seamless, end-to-end solution for patients and consumers, orthodontists and GP dentists, and lab/partners. Visit www.aligntech.com for more information.

For additional information about the Invisalign System or to find an Invisalign doctor in your area, please visit www.invisalign.com. For additional information about the iTero digital scanning system, please visit www.itero.com. For additional information about exocad dental CAD/CAM offerings and a list of exocad reseller partners, please visit www.exocad.com.

Invisalign, iTero, exocad, Align, Align Digital Platform and iTero Lumina are trademarks of Align Technology, Inc.

Forward-Looking Statements

This press release, including the tables below, contains forward-looking statements, including statements of our current intentions, beliefs and expectations regarding our ability to expand access to care, grow recurring revenue, and strengthen the Align™ Digital Platform by lowering the upfront cost of adoption; our continuing investments in expanding our digital platform ecosystem and supporting our doctor customers as they grow their practices and deliver exceptional patient outcomes; our growth initiatives continuing to drive doctor adoption, utilization, and patient conversion; lower price scanners and the transition toward lease and rental models increasing access to care by lowering adoption barriers and accelerating installed base growth; our belief that a larger, faster-growing installed base can expand the funnel for higher-margin treatment revenue and drive durable long-term growth; our integrated digital platform and disciplined execution positioning us to support customer growth, expand adoption and drive long-term profitable growth; our flexibility to invest in innovation, support our customers, and return capital to shareholders, and our commitment to disciplined capital allocation, financial flexibility and the creation of long-term value for shareholders; our belief that we are well positioned to build on the momentum we saw in the first half of 2026, and that our innovation roadmap and direct fabrication technologies can create more effective and personalized treatment solutions that improve clinical outcomes, enhance operating efficiency, and strengthen the customer experience across orthodontics and restorative dentistry; the impact of tariffs imposed under Section 122 of the Trade Act of 1974 on our results of operations; the impact of the Upper Tribunal's determination that clear aligners do not qualify as VAT-exempt dental prostheses on our invoices issued on or after September 7, 2026, and our statement that list prices for applicable Invisalign ® aligners and Vivera™ retainers will remain unchanged; our estimated liability of approximately $37.5 million, inclusive of interest, related to UK VAT, and our intention to appeal; our expectations for Q3'26 worldwide revenues, Clear Aligner volume, Clear Aligner ASP, Systems and Services revenues (including as a result of a continued mix shift towards lower-priced scanners and flexible acquisition models), GAAP and non-GAAP gross margin (including our expectation that we will incur one-time charges expected to be approximately $20 to $30 million primarily for accelerated depreciation and restructuring and other charges in Q3'26), and GAAP and non-GAAP operating margin (including as a result of one-time charges expected to be approximately $35 to $50 million primarily for restructuring and other charges, and accelerated depreciation, in Q3'26); our expectations for fiscal year 2026 worldwide revenue growth (including our assumption that the impact of foreign exchange will be moderate in the remaining quarters, trending toward the full-year assumption of approximately 100 basis points), Clear Aligner volume growth, Clear Aligner ASP, Systems and Services revenue growth (including our assumptions regarding a continued mix shift towards lower-priced scanners and more flexible acquisition models in 2H’26, and double-digit year-over-year growth for iTero shipments, reflecting continued customer adoption and scanner placements), GAAP and non-GAAP gross margin (including our assumption regarding one-time charges expected to be approximately $30 to $40 million primarily for accelerated depreciation and restructuring and other charges, partially offset by gain on assets held for sale), GAAP and non-GAAP operating margin (including our assumption regarding one-time charges expected to be approximately $90 to $110 million, primarily related to restructuring and other charges, accelerated depreciation, and legal settlements, partially offset by gain on assets held for sale), and investments in capital expenditures; our expectations regarding the timing and amount of future stock repurchases, including our plans to repurchase $400 to $500 million of our common stock in 2026 due to the conviction of our board of directors and management in our long-term value; and our expectation that our fiscal 2027 GAAP and non-GAAP operating margins will improve by approximately 100 basis points year-over-year. Forward-looking statements contained in this press release are based upon information available to Align as of the date hereof. These forward-looking statements reflect our best judgments based on currently known facts and circumstances and are subject to risks and uncertainties, and assumptions that may be inaccurate. As a result, actual results may differ materially and adversely from those expressed or implied in any forward-looking statement.

Factors that might cause such a difference include, but are not limited to:

The foregoing and other risks are detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission ("SEC") on February 27, 2026 and our latest Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, which was filed with the SEC on May 6, 2026. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

Net revenues

1,056,192

1,012,449

2,096,279

1,991,711

Cost of net revenues

298,762

304,332

602,262

603,486

Gross profit

757,430

708,117

1,494,017

1,388,225

Operating expenses:

Selling, general and administrative

462,671

448,686

928,013

896,315

Research and development

102,032

96,398

200,690

193,599

Legal settlements and contingencies

38,714

—

69,346

4,178

Total operating expenses

603,417

545,084

1,198,049

1,094,092

Income from operations

154,013

163,033

295,968

294,133

Interest income and other income (expense), net:

Interest income

4,636

2,859

8,547

8,175

Other income (expense), net

(9,956

)

7,624

(6,936

)

11,650

Total interest income and other income (expense), net

(5,320

)

10,483

1,611

19,825

Net income before provision for income taxes

148,693

173,516

297,579

313,958

Provision for income taxes

40,399

48,908

76,514

96,120

Net income

108,294

124,608

221,065

217,838

Net income per share:

Basic

1.51

1.72

3.09

2.98

Diluted

1.51

1.72

3.09

2.98

Shares used in computing net income per share:

Basic

71,495

72,565

71,460

73,061

Diluted

71,520

72,593

71,629

73,098

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

June 30,

2026

December 31,

2025

ASSETS

Current assets:

Cash and cash equivalents

1,102,591

1,094,908

Accounts receivable, net

1,148,392

1,101,757

Inventories

212,240

226,343

Prepaid expenses and other current assets

199,826

165,571

Assets held for sale

—

27,983

Total current assets

2,663,049

2,616,562

Property, plant and equipment, net

1,114,261

1,131,453

Operating lease right-of-use assets, net

115,364

108,322

Goodwill

497,301

491,833

Intangible assets, net

94,927

93,933

Deferred tax assets

1,479,864

1,513,542

Other assets

452,815

278,048

Total assets

6,417,581

6,233,693

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

109,841

121,450

Accrued liabilities

611,568

536,749

Deferred revenues

1,187,188

1,261,816

Total current liabilities

1,908,597

1,920,015

Income tax payable

69,964

68,200

Operating lease liabilities

86,618

82,507

Other long-term liabilities

119,949

113,824

Total liabilities

2,185,128

2,184,546

Total stockholders’ equity

4,232,453

4,049,147

Total liabilities and stockholders’ equity

6,417,581

6,233,693

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Six Months Ended

June 30,

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash provided by operating activities

343,799

181,326

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities

(213,738

)

(56,768

)

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in financing activities

(115,575

)

(303,055

)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

(6,689

)

35,876

Net increase (decrease) in cash, cash equivalents, and restricted cash

7,797

(142,621

)

Cash, cash equivalents, and restricted cash at beginning of the period

1,096,186

1,044,963

Cash, cash equivalents, and restricted cash at end of the period

1,103,983

902,342

ALIGN TECHNOLOGY, INC.

INVISALIGN BUSINESS METRICS

Fiscal

2025

2026

Number of Invisalign Trained Doctors Cases Were Shipped To

85,275

86,250

88,155

87,710

130,015

88,065

89,175

Invisalign Trained Doctor Utilization Rates*

7.5

7.3

7.7

20.1

7.8

Clear Aligner Revenue Per Case Shipment**

1,240

1,250

1,245

1,240

1,245

1,250

1,260

* number of cases shipped / number of doctors to whom cases were shipped

** Clear Aligner revenues / Case shipments

ALIGN TECHNOLOGY, INC.

STOCK-BASED COMPENSATION

(in thousands)

Fiscal

2025

2026

Stock-based Compensation (SBC):

SBC included in Gross Profit

1,538

1,636

1,540

1,463

6,177

1,620

1,846

SBC included in Operating Expenses

43,459

46,572

46,837

42,825

179,693

39,304

43,714

Total SBC

44,997

48,208

48,377

44,288

185,870

40,924

45,560

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION +

CONSTANT CURRENCY NET REVENUES

(in thousands, except percentages)

Sequential constant currency analysis:

Three Months Ended

June 30,

2026

March 31,

2026

Impact % of

Revenue

GAAP net revenues

1,056,192

1,040,087

Constant currency impact (1)

6,069

0.6

Constant currency net revenues (1)

1,062,261

GAAP Clear Aligner net revenues

870,874

856,024

Clear Aligner constant currency impact (1)

5,073

0.6

Clear Aligner constant currency net revenues (1)

875,947

GAAP Imaging Systems and CAD/CAM Services net revenues

185,318

184,063

Imaging Systems and CAD/CAM Services constant currency impact (1)

996

0.5

Imaging Systems and CAD/CAM Services constant currency net revenues (1)

186,314

Year-over-year constant currency analysis:

Three Months Ended

June 30,

2026

2025

Impact % of

Revenue

GAAP net revenues

1,056,192

1,012,449

Constant currency impact (1)

(12,475

)

(1.2

Constant currency net revenues (1)

1,043,717

GAAP Clear Aligner net revenues

870,874

804,617

Clear Aligner constant currency impact (1)

(10,618

)

(1.2

Clear Aligner constant currency net revenues (1)

860,256

GAAP Imaging Systems and CAD/CAM Services net revenues

185,318

207,832

Imaging Systems and CAD/CAM Services constant currency impact (1)

(1,857

)

(1.0

Imaging Systems and CAD/CAM Services constant currency net revenues (1)

183,461

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 sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues. The percentage for the constant currency impact on net revenues is calculated by dividing the constant currency impact in dollars (numerator) by constant currency net revenues in dollars (denominator).

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN

(in thousands, except percentages)

Sequential constant currency analysis:

Three Months Ended

June 30,

2026

March 31,

2026

GAAP gross profit

757,430

736,587

Constant currency impact on gross profit (1)

6,910

Constant currency gross profit (1)

764,339

Three Months Ended

June 30,

2026

March 31,

2026

GAAP gross margin

71.7

70.8

Gross margin constant currency impact (1)

0.2

Constant currency gross margin (1)

72.0

Year-over-year constant currency analysis:

Three Months Ended

June 30,

2026

2025

GAAP gross profit

757,430

708,117

Constant currency impact on gross profit (1)

(916

)

Constant currency gross profit (1)

756,513

Three Months Ended

June 30,

2026

2025

GAAP gross margin

71.7

69.9

Gross margin constant currency impact (1)

0.8

Constant currency gross margin (1)

72.5

Note:

(1)

We define constant currency gross profit as GAAP gross profit excluding the impacts of foreign exchange rate fluctuations on net revenues and cost of net revenues. 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 constant currency gross margin compared to the GAAP gross margin.

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING MARGIN

(in thousands, except percentages)

Sequential constant currency analysis:

Three Months Ended

June 30,

2026

March 31,

2026

GAAP income from operations

154,013

141,955

Income from operations constant currency impact (1)

7,271

Constant currency income from operations (1)

161,284

Three Months Ended

June 30,

2026

March 31,

2026

GAAP operating margin

14.6

13.6

Operating margin constant currency impact (2)

0.6

Constant currency operating margin (2)

15.2

Year-over-year constant currency analysis:

Three Months Ended

June 30,

2026

2025

GAAP income from operations

154,013

163,033

Income from operations constant currency impact (1)

13,199

Constant currency income from operations (1)

167,213

Three Months Ended

June 30,

2026

2025

GAAP operating margin

14.6

16.1

Operating margin constant currency impact (2)

1.4

Constant currency operating margin (2)

16.0

Notes:

(1)

Beginning in Q1 2026, we define constant currency income from operations as GAAP income from operations excluding the effect of foreign exchange rate movements for GAAP gross profit and operating expenses on a sequential and year-over-year basis. Constant currency impact in dollars is calculated by translating the current period gross profit and operating expenses using the foreign currency exchange rates that were in effect during the previous comparable period and subtracting it by the current period GAAP net revenues and operating expenses.

(2)

We define constant currency operating margin as constant currency income from operations as a percentage of constant currency net revenues. Operating margin constant currency impact is the increase or decrease in constant currency operating margin compared to the GAAP operating margin.

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY DILUTED NET INCOME PER SHARE

(in dollars)

Sequential constant currency analysis:

Three Months Ended

June 30,

2026

March 31,

2026

GAAP diluted net income per share

1.51

1.57

Diluted net income per share constant currency impact (1)

0.17

Constant currency diluted net income per share (1)

1.69

Year-over-year constant currency analysis:

Three Months Ended

June 30,

2026

2025

GAAP diluted net income per share

1.51

1.72

Diluted net income per share constant currency impact (1)

0.23

Constant currency diluted net income per share (1)

1.75

Notes:

(1)

Constant currency diluted net income per share is computed by dividing GAAP net income excluding the impacts of foreign exchange rate fluctuations on GAAP operating income and non-operating income and expense by the weighted average diluted shares outstanding during the period. Diluted net income per share constant currency impact is the increase or decrease in constant currency diluted net income per share compared to the GAAP diluted net income per share.

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

ALIGN TECHNOLOGY, INC.

UNAUDITED CONSTANT CURRENCY IMPACT ON NON-GAAP ITEMS +

Year-over-year constant currency analysis

Three Months Ended

June 30, 2026

Non-GAAP gross margin

72.3

Non-GAAP gross margin constant currency impact

0.8

Non-GAAP constant currency gross margin

73.0

Year-over-year constant currency analysis

Three Months Ended

June 30, 2026

Non-GAAP operating margin

22.9

Non-GAAP operating margin constant currency impact

1.5

Non-GAAP constant currency operating margin

24.4

Notes:

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY

(in thousands, except per share data)

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

GAAP gross profit

757,430

708,117

1,494,017

1,388,225

Stock-based compensation

1,846

1,636

3,466

3,174

Amortization of intangibles (1)

3,843

3,752

7,723

7,301

Restructuring and other charges (2)

)

—

2,253

Gain on Assets held for sale (3)

—

(11,699

)

—

Depreciation on assets disposed of other than by sale (4)

—

15,599

—

Other non-GAAP items (5)

—

841

—

Non-GAAP gross profit

763,117

713,505

1,510,025

1,400,953

GAAP gross margin

71.7

69.9

71.3

69.7

Non-GAAP gross margin

72.3

70.5

72.0

70.3

GAAP total operating expenses

603,417

545,084

1,198,049

1,094,092

Stock-based compensation

(43,714

)

(46,572

)

(83,018

)

(90,031

)

Amortization of intangibles (1)

(940

)

(904

)

(1,897

)

(1,745

)

Restructuring and other charges (2)

1,401

—

755

197

Legal settlements and contingencies (6)

(38,714

)

—

(69,346

)

(4,178

)

Non-GAAP total operating expenses

521,450

497,608

1,044,543

998,335

GAAP income from operations

154,013

163,033

295,968

294,133

Stock-based compensation

45,560

48,208

86,484

93,205

Amortization of intangibles (1)

4,783

4,656

9,620

9,046

Restructuring and other charges (2)

(1,403

)

—

(677

)

2,056

Legal settlements and contingencies (6)

38,714

—

69,346

4,178

Gain on Assets held for Sale (3)

—

(11,699

)

—

Depreciation on assets disposed of other than by sale (4)

—

15,599

—

Other non-GAAP items (5)

—

841

—

Non-GAAP income from operations

241,667

215,897

465,482

402,618

GAAP operating margin

14.6

16.1

14.1

14.8

Non-GAAP operating margin

22.9

21.3

22.2

20.2

Three Months Ended

June 30,

Six Months Ended

June 30,

2026

2025

2026

2025

GAAP net income before provision for income taxes

148,693

173,516

297,579

313,958

Stock-based compensation

45,560

48,208

86,484

93,205

Amortization of intangibles (1)

4,783

4,656

9,620

9,046

Restructuring and other charges (2)

(1,403

)

—

(677

)

2,056

Legal settlements and contingencies (6)

38,714

—

69,346

4,178

Gain on Assets held for sale (3)

—

(11,699

)

—

Depreciation on assets disposed of other than by sale (4)

—

15,599

—

Other non-GAAP items (5)

—

841

—

Non-GAAP net income before provision for income taxes

236,347

226,380

467,093

422,443

GAAP provision for income taxes

40,399

48,908

76,514

96,120

Tax impact on non-GAAP adjustments

6,817

(3,631

)

16,851

(11,631

)

Non-GAAP provision for income taxes

47,216

45,277

93,365

84,489

GAAP effective tax rate

27.2

28.2

25.7

30.6

Non-GAAP effective tax rate

20.0

GAAP net income

108,294

124,608

221,065

217,838

Stock-based compensation

45,560

48,208

86,484

93,205

Amortization of intangibles (1)

4,783

4,656

9,620

9,046

Restructuring and other charges (2)

(1,403

)

—

(677

)

2,056

Legal settlements and contingencies (6)

38,714

—

69,346

4,178

Gain on Assets held for sale (3)

—

(11,699

)

—

Depreciation on assets disposed of other than by sale (4)

—

15,599

—

Other non-GAAP items (5)

—

841

—

Tax impact on non-GAAP adjustments

(6,817

)

3,631

(16,851

)

11,631

Non-GAAP net income

189,131

181,103

373,728

337,954

GAAP diluted net income per share

1.51

1.72

3.09

2.98

Non-GAAP diluted net income per share

2.64

2.49

5.22

4.62

Shares used in computing diluted net income per share

71,520

72,593

71,629

73,098

Notes:

(1)

Amortization of intangible assets related to certain acquisitions.

(2)

During the fourth quarter of 2024 and the third quarter of 2025, we initiated restructuring plans to reduce headcount and increase efficiency across the organization and lower the overall cost structure. Restructuring charges are primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.

(3)

During the third quarter 2025, we originally recorded an impairment loss related to a manufacturing facility disposal group that met the criteria to be classified as assets held for sale. During the first quarter of 2026, we recognized a gain of $11.7 million resulting from an increase in fair value less costs to sell related to these assets held for sale.

(4)

During the third quarter 2025, we initiated the disposal, other than by sale, of certain manufacturing fixed assets. Accordingly, we revised the useful lives of these assets and recorded accelerated depreciation expense.

(5)

During the first quarter 2026, we recorded other non-recurring charges related to the disposal of certain manufacturing fixed assets.

(6)

During the second quarter 2026, we recorded approximately $37.5 million related to UK VAT contingency loss, and approximately $1.2 million related to legal settlements.

(+)

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding. Refer to "About Non-GAAP Financial Measures" section of press release.

ALIGN TECHNOLOGY, INC.

Q3 2026 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION

GAAP gross margin

~67.5% - 68.5%

Stock-based compensation

~0.2%

Amortization of intangibles (1)

~0.4%

Depreciation on assets disposed of other than by sale (2)

~1.0% - 2.0%

Restructuring and other charges (3)

~1.0%

Non-GAAP gross margin

Approximately 71.0%

Percentages do not add up due to rounding.

GAAP operating margin

~13.5% - 15.0%

Stock-based compensation

~4.9%

Amortization of intangibles (1)

~0.5%

Depreciation on assets disposed of other than by sale (2)

~1.0% - 2.0%

Restructuring and other charges (3)

~2.5% - 3.0%

Non-GAAP operating margin

Approximately 24.0%

Percentages do not add up due to rounding.

ALIGN TECHNOLOGY, INC.

FISCAL 2026 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION

GAAP gross margin

~70.2% - 70.5%

Stock-based compensation

~0.2%

Amortization of intangibles (1)

~0.4%

Depreciation on assets disposed of other than by sale (2)

~0.6% - 0.9%

Restructuring and other charges (3)

~0.3% - 0.4%

Gain on sale of assets held for sale (4)

~(0.3%)

Non-GAAP gross margin

Approximately 71.7%

Percentages do not add up due to rounding.

GAAP operating margin

~15.1% - 15.6%

Stock-based compensation

~4.5%

Amortization of intangibles (1)

~0.5%

Depreciation on assets disposed of other than by sale (2)

~0.6% - 0.9%

Restructuring and other charges (3)

~1.1% - 1.4%

Gain on sale of assets held for sale (4)

~(0.3%)

Legal settlements and contingencies loss (5)

~1.7%

Non-GAAP operating margin

Approximately 23.7%

Percentages do not add up due to rounding.

Notes:

(1)

Amortization of intangible assets related to certain acquisitions

(2)

(3)

Restructuring and other charges are primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.

(4)

(5)

During the first quarter 2026, we recorded approximately $30.6 million related to legal settlements. During the second quarter 2026, we recorded approximately $37.5 million related to UK VAT contingency loss, and approximately $1.2 million related to legal settlements.

Refer to "About Non-GAAP Financial Measures" section of press release.