Align Technology Announces Fourth Quarter and Fiscal 2025 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 fourth quarter ("Q4'25") and year ended December 31, 2025 ("2025"). Q4'25 total revenues were $1,047.6 million, up 5.2% sequentially and up 5.3% year-over-year. Q4'25 total revenues were unfavorably impacted by foreign exchange of approximately $3.0 million or 0.3% sequentially and favorably impacted by approximately $14.8 million or 1.4% year-over-year. (1) Q4'25 Clear Aligner revenues were $838.1 million, up 4.0% sequentially and up 5.5% year-over-year. Q4'25 Clear Aligner revenues were unfavorably impacted by foreign exchange of approximately $2.3 million or 0.3% sequentially and favorably impacted by approximately $12.4 million or 1.5% year-over-year. (1) Q4'25 Clear Aligner volume of 676.9 thousand cases was up 4.5% sequentially and up 7.7% year-over-year. Q4'25 Imaging Systems and CAD/CAM Services revenues were $209.4 million, up 10.3% sequentially and up 4.2% year-over-year. Q4'25 Imaging Systems and CAD/CAM Services revenues were unfavorably impacted by foreign exchange of approximately $0.7 million or 0.3% sequentially and favorably impacted by approximately $2.5 million or 1.2% year-over-year. (1)

Q4'25 gross profit was $683.6 million resulting in a gross margin of 65.3%. Q4'25 gross margin was unfavorably impacted by foreign exchange of approximately 0.1 point sequentially and favorably impacted by approximately 0.5 points year-over-year. (1) On a non-GAAP basis, Q4’25 gross profit was $754.7 million resulting in a gross margin of 72.0%.

Q4'25 operating income was $155.3 million resulting in an operating margin of 14.8%. Q4'25 operating margin was unfavorably impacted by foreign exchange of approximately 0.3 points sequentially and favorably impacted by approximately 0.2 points year-over-year. (1) Q4'25 net income was $135.8 million, or $1.89 per diluted share. Q4'25 diluted net income per share was unfavorably impacted by a stronger U.S. dollar, which amounted to approximately $0.05 per diluted share due to foreign exchange. On a non-GAAP basis, Q4'25 net income was $236.0 million, or $3.29 per diluted share. During Q4'25, we incurred a total of $67.5 million of restructuring and accelerated depreciation charges.

2025 total revenues of $4.0 billion were favorably impacted by foreign exchange of approximately $4.9 million or 0.1% compared to 2024. (1) 2025 Clear Aligner revenues of $3.2 billion were favorably impacted by foreign exchange of approximately $4.1 million or 0.1% compared to 2024. (1) 2025 Imaging Systems and CAD/CAM Services revenues of $789.6 million were favorably impacted by foreign exchange of approximately $0.8 million or 0.1% compared to 2024. (1) 2025 Clear Aligner volume of 2.6 million cases, was up 4.7% year-over-year. During 2025, we incurred restructuring and other charges primarily related to post-employment benefits of $42.9 million, and other non-cash items, including impairment on assets held for sale, depreciation expense on assets disposed of other than by sale, and impairment loss on inventory, for an aggregate of $157.9 million.

Commenting on Align's Q4'25 and 2025 results, Align Technology President and CEO Joe Hogan said, “I am pleased to report fourth quarter results and better than expected revenues and Clear Aligner volumes, as well as non-GAAP gross margin and non-GAAP operating margin — both above our outlook. For Q4, total revenues were a record $1,047.6 million, an increase of 5.3% year-over-year and an increase of 5.2% sequentially. Q4 Clear Aligner revenues of $838.1 million increased 5.5% year-over-year and increased 4.0% sequentially. Q4 Clear Aligner volume was a record 676.9 thousand cases, up 7.7% year-over-year and up 4.5% sequentially. On a year-over-year basis, Q4 Clear Aligner volume growth was driven by strength in EMEA, Latin America and APAC — with stability in North America. Q4 Clear Aligner volume growth year-over-year reflects strength from adult and teens and growing kid patients, as well as growth in both the GP and Ortho channels. On a sequential basis, Q4 Clear Aligner volumes reflect strong growth from the EMEA region, driven primarily by adult patients, as well as continued strength in Latin America from teens, growing kids and adult patients. During Q4, 87.7 thousand doctors submitted Invisalign ® cases globally, a record high for a fourth quarter, driven primarily by a record number of Orthodontist submitters. For Systems and Services, Q4 revenues were $209.4 million, up 4.2% year-over-year and up 10.3% sequentially. Year-over-year revenue growth reflects higher volumes driven by continued iTero Lumina™ scanner sales. iTero Lumina with iTero Multi-Direct Capture™ technology elevates the scanning workflow with ease‑of‑use and exceptional visualization, helping doctors move seamlessly into our next‑generation imaging platform. For Q4, iTero Lumina represented approximately 86% of our full systems units."

Continued Hogan, "For the full year fiscal 2025, total revenues were a record $4.0 billion, up 0.9% year-over-year, and Systems and Services revenues were $789.6 million, up 2.7% year-over-year. Fiscal 2025 Clear Aligner revenues were $3.2 billion, up 0.5% year-over-year on record Clear Aligner volumes of 2.6 million cases, which were up 4.7% year-over-year. For the year, a record 935.8 thousand teens and kids started treatment with Invisalign clear aligners, up 7.8% year-over-year. For fiscal 2025, total Invisalign ® DSP Touch Up cases shipped were over 136 thousand, up 35.7% compared to 2024. We delivered fiscal 2025 non-GAAP operating margin of 22.7%, above our 2025 outlook."

(1)

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

Financial Summary - Fourth Quarter Fiscal 2025

Q4'25

Q3'25

Q4'24

Q/Q Change

Y/Y Change

Clear Aligner Shipments

676,855

647,750

628,730

+4.5%

+7.7%

GAAP

Net Revenues

$1,047.6M

$995.7M

$995.2M

+5.2%

+5.3%

Clear Aligner

$838.1M

$805.8M

$794.3M

+4.0%

+5.5%

Imaging Systems and CAD/CAM Services

$209.4M

$189.9M

$200.9M

+10.3%

+4.2%

Net Income

$135.8M

$56.8M

$103.8M

+139.2%

+30.8%

Diluted EPS

$1.89

$0.78

$1.39

$+1.11

$+0.50

Non-GAAP

Net Income

$236.0M

$189.0M

$181.6M

+24.9%

+29.9%

Diluted EPS

$3.29

$2.61

$2.44

+$0.68

+$0.85

Financial Summary - Fiscal 2025

2025

2024

Y/Y Change

Clear Aligner Shipments

2,611,280

2,493,735

+4.7%

GAAP

Net Revenues

$4,035.0M

$3,999.0M

+0.9%

Clear Aligner

$3,245.4M

$3,230.1M

+0.5%

Imaging Systems and CAD/CAM Services

$789.6M

$768.9M

+2.7%

Net Income

$410.4M

$421.4M

(2.6)%

Diluted EPS

$5.65

$5.62

$+0.03

Non-GAAP

Net Income

$763.0M

$699.7M

+9.0%

Diluted EPS

$10.51

$9.33

+$1.18

Changes and percentages are based on actual values. Certain tables may not sum or recalculate due to rounding.

As of December 31, 2025, we had $1,094.9 million in cash and cash equivalents compared to $1,004.6 million as of September 30, 2025. As of December 31, 2025, we had $300.0 million available under a revolving line of credit.

Commenting on Align's fourth quarter and fiscal 2025 results, outlook for Q1’26 and Fiscal 2026, Align Technology CFO and EVP Global Finance, John Morici said, "Q4 was a good finish to the year, with results that came in better than expected and reflect the continued strength of our business fundamentals. As we enter 2026, we’re executing with focus and discipline, and we’re encouraged by the progress we’re seeing across regions and key customer segments. Our confidence is grounded in the actions we’re taking to actively manage the business and drive growth through our core strategic priorities — expanding international adoption, increasing orthodontic utilization particularly among teens and kids, accelerating GP engagement including restorative dentistry, and strengthening consumer demand conversion with greater emphasis on local, last‑mile marketing. While the macro environment remains dynamic, we are cautiously optimistic. With a strong innovation roadmap, disciplined operational execution, and a global team committed to delivering for doctors and their patients, we believe we are well positioned to deliver growth and value in 2026 and beyond."

Align Announcement Highlights

Q4'25 and 2025 Stock Repurchases

Tariff Update as of December 31, 2025

Fiscal 2026 Business Outlook

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

Q1'26:

For fiscal 2026:

Align Web Cast and Conference Call

We will host a conference call today, February 4, 2026, at 4:30 p.m. EST, 2:30 p.m. MST, to review our fourth quarter and full year 2025 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/m68uzfsd/. Once registered, participants will receive an email with dial-in number and unique PIN number to access the live event. 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, 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, costs to resolve litigation and legal settlements, 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 approximately 295.6 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide. Over the past 28 years, Align has helped doctors treat approximately 22.1 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 news release, including the tables below, contains forward-looking statements, including statements of our current intentions, beliefs and expectations regarding our ability to deliver growth and value in 2026 and beyond, actively manage our business, drive growth through our core strategic priorities, and drive consumer demand and patient conversion; the continued strength of our business fundamentals; our progress across regions and key customer segments; our confidence and optimism during a dynamic macroeconomic environment; our expectations for implemented or proposed tariffs; our expectations for Q1'26 worldwide revenues, Clear Aligner volume, Clear Aligner ASPs, Systems and Services revenues, and GAAP and non-GAAP operating margin; our expectations for fiscal year 2026 worldwide revenue growth, Clear Aligner volume growth, GAAP and non-GAAP operating margin, and investments in capital expenditures. 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, 2024, which was filed with the Securities and Exchange Commission ("SEC") on February 28, 2025 and our latest Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, which was filed with the SEC on November 5, 2025. Align undertakes no obligation, and does not intend, 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

December 31,

Year Ended

December 31,

2025

2024

2025

2024

Net revenues

1,047,561

995,219

4,034,964

3,999,012

Cost of net revenues

363,974

298,278

1,323,951

1,199,853

Gross profit

683,587

696,941

2,711,013

2,799,159

Operating expenses:

Selling, general and administrative

441,676

424,971

1,755,791

1,763,193

Research and development

83,036

94,878

369,911

364,202

Restructuring and other charges

3,551

33,168

35,378

33,168

Legal settlement loss

—

(225

)

4,178

30,968

Total operating expenses

528,263

552,792

2,165,258

2,191,531

Income from operations

155,324

144,149

545,755

607,628

Interest income and other income (expense), net:

Interest income

4,621

8,522

16,045

20,218

Other income (expense), net

16,650

(11,894

)

23,487

(18,887

)

Total interest income and other income (expense), net

21,271

(3,372

)

39,532

1,331

Net income before provision for income taxes

176,595

140,777

585,287

608,959

Provision for income taxes

40,835

36,970

174,936

187,597

Net income

135,760

103,807

410,351

421,362

Net income per share:

Basic

1.89

1.39

5.66

5.63

Diluted

1.89

1.39

5.65

5.62

Shares used in computing net income per share:

Basic

71,684

74,419

72,542

74,877

Diluted

71,757

74,465

72,588

74,993

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

December 31,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

1,094,908

1,043,887

Accounts receivable, net

1,101,757

995,685

Inventories

226,343

254,287

Prepaid expenses and other current assets

165,571

198,582

Assets held for sale

27,983

—

Total current assets

2,616,562

2,492,441

Property, plant and equipment, net

1,131,453

1,271,134

Operating lease right-of-use assets, net

108,322

113,376

Goodwill

491,833

442,630

Intangible assets, net

93,933

103,488

Deferred tax assets

1,513,542

1,557,372

Other assets

278,048

234,159

Total assets

6,233,693

6,214,600

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

121,450

108,693

Accrued liabilities

536,749

598,188

Deferred revenues

1,261,816

1,331,146

Total current liabilities

1,920,015

2,038,027

Income tax payable

68,200

96,466

Operating lease liabilities

82,507

88,214

Other long-term liabilities

113,824

139,908

Total liabilities

2,184,546

2,362,615

Total stockholders’ equity

4,049,147

3,851,985

Total liabilities and stockholders’ equity

6,233,693

6,214,600

ALIGN TECHNOLOGY, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended

December 31,

2025

2024

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash provided by operating activities

593,223

738,231

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities

(112,445

)

(254,912

)

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash used in financing activities

(464,580

)

(355,722

)

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

35,025

(21,153

)

Net increase in cash, cash equivalents, and restricted cash

51,223

106,444

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

1,044,963

938,519

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

1,096,186

1,044,963

ALIGN TECHNOLOGY, INC.

INVISALIGN BUSINESS METRICS

Fiscal

2024

2025

Number of Invisalign Trained Doctors Cases Were Shipped To

83,510

86,135

87,380

85,685

130,370

85,275

86,250

88,155

87,710

130,015

Invisalign Trained Doctor Utilization Rates*

7.2

7.5

7.1

7.3

19.1

7.5

7.3

7.7

20.1

Clear Aligner Revenue Per Case Shipment**

1,350

1,295

1,275

1,265

1,295

1,240

1,250

1,245

1,240

1,245

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

2024

2025

Stock-based Compensation (SBC):

SBC included in Gross Profit

2,064

2,582

3,070

(721

)

6,995

1,538

1,636

1,540

1,463

6,177

SBC included in Operating Expenses

36,724

44,446

45,969

39,569

166,708

43,459

46,572

46,837

42,825

179,693

Total SBC

38,788

47,028

49,039

38,848

173,703

44,997

48,208

48,377

44,288

185,870

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION +

CONSTANT CURRENCY NET REVENUES

(in thousands, except percentages)

Sequential constant currency analysis:

Three Months Ended

December 31, 2025

September 30, 2025

Impact % of Revenue

GAAP net revenues

1,047,561

995,692

Constant currency impact (1)

2,965

0.3

Constant currency net revenues (1)

1,050,526

GAAP Clear Aligner net revenues

838,145

805,799

Clear Aligner constant currency impact (1)

2,312

0.3

Clear Aligner constant currency net revenues (1)

840,457

GAAP Imaging Systems and CAD/CAM Services net revenues

209,416

189,893

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

653

0.3

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

210,069

Year-over-year constant currency analysis:

Three Months Ended

December 31,

2025

2024

Impact % of Revenue

GAAP net revenues

1,047,561

995,219

Constant currency impact (1)

(14,810

)

(1.4

Constant currency net revenues (1)

1,032,751

GAAP Clear Aligner net revenues

838,145

794,289

Clear Aligner constant currency impact (1)

(12,351

)

(1.5

Clear Aligner constant currency net revenues (1)

825,794

GAAP Imaging Systems and CAD/CAM Services net revenues

209,416

200,930

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

(2,458

)

(1.2

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

206,958

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY NET REVENUES CONTINUED

(in thousands, except percentages)

Current year versus prior year constant currency analysis:

Year Ended December 31,

2025

2024

Impact % of Revenue

GAAP net revenues

4,034,964

3,999,012

Constant currency impact (1)

(4,875

)

(0.1

Constant currency net revenues (1)

4,030,089

GAAP Clear Aligner net revenues

3,245,404

3,230,122

Clear Aligner constant currency impact (1)

(4,077

)

(0.1

Clear Aligner constant currency net revenues (1)

3,241,327

GAAP Imaging Systems and CAD/CAM Services net revenues

789,560

768,890

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

(798

)

(0.1

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

788,762

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, year-over-year and current year versus prior 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

December 31,

2025

September 30,

2025

GAAP gross profit

683,587

639,201

Constant currency impact on net revenues

2,965

Constant currency gross profit

686,551

Three Months Ended

December 31,

2025

September 30,

2025

GAAP gross margin

65.3

64.2

Gross margin constant currency impact (1)

0.1

Constant currency gross margin (1)

65.4

Year-over-year constant currency analysis:

Three Months Ended

December 31,

2025

2024

GAAP gross profit

683,587

696,941

Constant currency impact on net revenues

(14,810

)

Constant currency gross profit

668,776

Three Months Ended

December 31,

2025

2024

GAAP gross margin

65.3

70.0

Gross margin constant currency impact (1)

(0.5

)

Constant currency gross margin (1)

64.8

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY GROSS PROFIT AND GROSS MARGIN

(in thousands, except percentages)

Current year versus prior year constant currency analysis:

Year Ended December 31,

2025

2024

GAAP gross profit

2,711,013

2,799,159

Constant currency impact on net revenues

(4,875

)

Constant currency gross profit

2,706,138

Year Ended December 31,

2025

2024

GAAP gross margin

67.2

70.0

Constant currency impact on net revenues (1)

(0.04

)

Constant currency gross margin (1)

67.1

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 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

December 31,

2025

September 30,

2025

GAAP income from operations

155,324

96,298

Income from operations constant currency impact (1)

3,554

Constant currency income from operations (1)

158,878

Three Months Ended

December 31,

2025

September 30,

2025

GAAP operating margin

14.8

9.7

Operating margin constant currency impact (2)

0.3

Constant currency operating margin (2)

15.1

Year-over-year constant currency analysis:

Three Months Ended

December 31,

2025

2024

GAAP income from operations

155,324

144,149

Income from operations constant currency impact (1)

(3,898

)

Constant currency income from operations (1)

151,426

Three Months Ended

December 31,

2025

2024

GAAP operating margin

14.8

14.5

Operating margin constant currency impact (2)

(0.2

)

Constant currency operating margin (2)

14.7

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED +

CONSTANT CURRENCY INCOME FROM OPERATIONS AND OPERATING MARGIN CONTINUED

(in thousands, except percentages)

Current year versus prior year constant currency analysis:

Year Ended December 31,

2025

2024

GAAP income from operations

545,755

607,628

Income from operations constant currency impact (1)

4,935

Constant currency income from operations (1)

550,690

Year Ended December 31,

2025

2024

GAAP operating margin

13.5

15.2

Operating margin constant currency impact (2)

0.1

Constant currency operating margin (2)

13.7

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 a sequential, year-over-year and current year versus prior year basis. Constant currency impact in dollars is calculated by translating the current period GAAP net revenues 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 +

FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY

(in thousands, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

GAAP gross profit

683,587

696,941

2,711,013

2,799,159

Stock-based compensation

1,463

(721

)

6,177

6,995

Amortization of intangibles (1)

3,841

3,699

14,979

14,803

Restructuring and other charges (2)

718

3,823

7,763

3,823

Impairment loss on assets held for sale (3)

—

23,142

—

Depreciation on assets disposed of other than sale (4)

63,257

—

76,920

—

Impairment loss on inventory (5)

—

14,924

—

Other non-GAAP items (6)

1,861

1,410

1,861

1,410

Non-GAAP gross profit

754,727

705,152

2,856,779

2,826,190

GAAP gross margin

65.3

70.0

67.2

70.0

Non-GAAP gross margin

72.0

70.9

70.8

70.7

GAAP total operating expenses

528,263

552,792

2,165,258

2,191,531

Stock-based compensation

(42,825

)

(39,569

)

(179,693

)

(166,708

)

Amortization of intangibles (1)

(940

)

(879

)

(3,624

)

(3,497

)

Restructuring and other charges (2)

(3,551

)

(33,168

)

(35,181

)

(32,722

)

Legal settlement loss

—

225

(4,178

)

(30,968

)

Other non-GAAP items (6)

—

(4,676

)

—

(4,676

)

Non-GAAP total operating expenses

480,947

474,725

1,942,582

1,952,960

GAAP income from operations

155,324

144,149

545,755

607,628

Stock-based compensation

44,288

38,848

185,870

173,703

Amortization of intangibles (1)

4,781

4,578

18,603

18,300

Restructuring and other charges (2)

4,269

36,991

42,944

36,545

Legal settlement loss

—

(225

)

4,178

30,968

Impairment loss on assets held for sale (3)

—

23,142

—

Depreciation on assets disposed of other than sale (4)

63,257

—

76,920

—

Impairment loss on inventory (5)

—

14,924

—

Other non-GAAP items (6)

1,861

6,086

1,861

6,086

Non-GAAP income from operations

273,780

230,427

914,197

873,230

GAAP operating margin

14.8

14.5

13.5

15.2

Non-GAAP operating margin

26.1

23.2

22.7

21.8

ALIGN TECHNOLOGY, INC.

UNAUDITED GAAP TO NON-GAAP RECONCILIATION CONTINUED

FINANCIAL MEASURES OTHER THAN CONSTANT CURRENCY CONTINUED

(in thousands, except per share data)

Three Months Ended

December 31,

Year Ended

December 31,

2025

2024

2025

2024

GAAP net income before provision for income taxes

176,595

140,777

585,287

608,959

Stock-based compensation

44,288

38,848

185,870

173,703

Amortization of intangibles (1)

4,781

4,578

18,603

18,300

Restructuring and other charges (2)

4,269

36,991

42,944

36,545

Legal settlement loss

—

(225

)

4,178

30,968

Impairment loss on assets held for sale (3)

—

23,142

—

Depreciation on assets disposed of other than sale (4)

63,257

—

76,920

—

Impairment loss on inventory (5)

—

14,924

—

Other non-GAAP items (6)

1,861

6,086

1,861

6,086

Non-GAAP net income before provision for income taxes

295,051

227,055

953,729

874,561

GAAP provision for income taxes

40,835

36,970

174,936

187,597

Tax impact on non-GAAP adjustments

18,175

8,441

15,810

(12,715

)

Non-GAAP provision for income taxes

59,010

45,411

190,746

174,882

GAAP effective tax rate

23.1

26.3

29.9

30.8

Non-GAAP effective tax rate

20.0

GAAP net income

135,760

103,807

410,351

421,362

Stock-based compensation

44,288

38,848

185,870

173,703

Amortization of intangibles (1)

4,781

4,578

18,603

18,300

Restructuring and other charges (2)

4,269

36,991

42,944

36,545

Legal settlement loss

—

(225

)

4,178

30,968

Impairment loss on assets held for sale (3)

—

23,142

—

Depreciation on assets disposed of other than sale (4)

63,257

—

76,920

—

Impairment loss on inventory (5)

—

14,924

—

Other non-GAAP items (6)

1,861

6,086

1,861

6,086

Tax impact on non-GAAP adjustments

(18,175

)

(8,441

)

(15,810

)

12,715

Non-GAAP net income

236,041

181,644

762,983

699,679

GAAP diluted net income per share

1.89

1.39

5.65

5.62

Non-GAAP diluted net income per share

3.29

2.44

10.51

9.33

Shares used in computing diluted net income per share

71,757

74,465

72,588

74,993

Notes:

(1)

Amortization of intangible assets related to certain acquisitions

(2)

During the fourth quarters of 2024 and the third quarter of 2025, we initiated restructuring plans to reduce headcount and increase efficiencies 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 one-time benefits.

(3)

During the third quarter of 2025, we recorded an impairment loss related to a manufacturing facility that met the criteria to be classified as assets held for sale during the quarter.

(4)

During the third quarter of 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 expenses.

(5)

During the third quarter of 2025, we recorded an impairment loss for obsolete inventory.

(6)

During the fourth quarter of 2025, we recorded costs to dispose of certain manufacturing fixed assets. Other Non-GAAP items from the fourth quarter of 2024 primarily include settlements of various indirect tax obligations related to prior years.

(+)

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.

Q1 2026 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION

GAAP operating margin

12.4% - 12.8%

Stock-based compensation

~5.0%

Amortization of intangibles (1)

~0.5%

Depreciation on assets disposed of other than by sale

~1.3% - 1.5%

Non-GAAP operating margin

Approximately 19.5%

Percentages do not add up due to rounding.

ALIGN TECHNOLOGY, INC.

FISCAL 2026 OUTLOOK - GAAP TO NON-GAAP RECONCILIATION

GAAP operating margin

Slightly below 18.0%

Stock-based compensation

~5.1%

Amortization of intangibles (1)

~0.5%

Depreciation on assets disposed of other than by sale

~0.3 - 0.4%

Non-GAAP operating margin

Approximately 23.7%

Percentages do not add up due to rounding.

(1)

Amortization of intangible assets related to certain acquisitions

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