Press release·02/28/2025 21:18:20

Align Technology’s Strong Performance Amid Challenging Conditions

Align Technology, the maker of the popular Invisalign clear aligners and iTero digital scanners, has reported solid financial results for the year 2024 despite facing significant macroeconomic headwinds. The company’s ability to innovate, adapt, and meet evolving customer demands has allowed it to navigate the turbulent environment and maintain its position as a leader in the orthodontic and dental technology industries.

Financial Highlights

In 2024, Align Technology generated total revenues of $3,999.0 million, an increase of 3.5% compared to the previous year. This growth was driven by strong performance in both the Clear Aligner and Systems and Services segments.

The Clear Aligner segment, which includes the company’s flagship Invisalign products, reported revenues of $3,230.1 million, a 1.0% increase year-over-year. Within this segment, the company saw a 3.5% increase in clear aligner case volume and a 7.7% increase in case volume for teenage and younger patients, highlighting the continued demand for Invisalign treatments.

The Systems and Services segment, which encompasses the iTero intraoral scanning systems and CAD/CAM software solutions, experienced a more robust 16.0% increase in revenues to $768.9 million. This growth was driven by higher scanner average selling prices, increased sales of scanner upgrades, and growth in services revenue.

Despite the revenue growth, Align Technology’s operating margin declined to 15.2% in 2024, down from 16.7% in the previous year. This was primarily due to increased legal settlement costs, restructuring charges, and higher employee-related expenses.

Navigating Macroeconomic Challenges

Align Technology’s performance was impacted by a range of macroeconomic factors, including fluctuations in foreign currency exchange rates, high inflation, rising interest rates, and geopolitical tensions, particularly the ongoing conflict between Russia and Ukraine.

The company’s revenues were adversely affected by these macroeconomic conditions, which negatively impacted consumer disposable income and demand. Align Technology expects these challenges to continue in 2025, and it is closely monitoring the situation and implementing mitigation strategies.

One of the key strategies the company is employing is a focus on product innovation and diversification. Align Technology has been investing in research and development to bring new and improved products to market, such as the Invisalign Comprehensive 3in3 product, which offers a shorter treatment duration and allows for faster revenue recognition.

The company is also actively managing its costs through measures such as implementing cost-saving initiatives, adjusting its business models, and evaluating hiring needs to adapt to the changing market conditions.

Evolving Customer Preferences

As the clear aligner and digital dentistry markets continue to mature, Align Technology is closely monitoring and responding to evolving customer and patient expectations. The company recognizes that these expectations are likely to continue changing, and it is committed to meeting these demands with innovative treatment options and a wider range of products to address diverse treatment goals and budgets.

This focus on adaptability and innovation has allowed Align Technology to maintain its competitive edge and market leadership position. For example, the strong adoption of the Invisalign Comprehensive 3in3 product in 2023 and 2024 demonstrates the company’s ability to anticipate and meet the needs of its customers.

Segment Performance

Clear Aligner Segment

The Clear Aligner segment, which includes the Invisalign product line, reported mixed results in 2024. Revenues from the Americas region decreased by 2.5% year-over-year, primarily due to a decline in average selling prices (ASPs) driven by a shift in product mix and higher promotional discounts.

In contrast, the International region saw a 3.5% increase in revenues, driven by a 7.0% increase in case volume, partially offset by a 3.3% decline in ASPs due to unfavorable foreign exchange rates and price reductions in certain markets.

The company’s non-case revenues, which include retention products, training, and accessory sales, increased by 5.7% year-over-year, reflecting the growing demand for these complementary offerings.

Systems and Services Segment

The Systems and Services segment, which includes the iTero intraoral scanning systems and CAD/CAM software solutions, experienced a strong 16.0% increase in revenues. This growth was driven by higher scanner ASPs, increased sales of scanner upgrades, and growth in services revenue, partially offset by unfavorable foreign exchange rates.

The improved performance of the Systems and Services segment highlights Align Technology’s ability to capitalize on the growing demand for digital dentistry solutions and its continued investment in this area.

Operational Metrics

Align Technology tracks several key operational metrics to measure the performance of its business. In 2024, the company reported the following:

• Total Invisalign case volume increased by 3.5% year-over-year, with a 7.7% increase in case volume for teenage and younger patients.
• The total number of Invisalign-trained doctor cases shipped increased by 3.6% compared to the previous year, with growth in both general practitioner and orthodontist doctor submitters.
• The company’s overall utilization rate, measured by the number of cases shipped per doctor, remained flat at 19.1 cases per doctor, slightly down from 19.3 cases per doctor in 2022.
• In North America, the utilization rate among orthodontist customers increased to 95.0 cases per doctor, while the utilization rate among general practitioner customers increased to 14.3 cases per doctor.
• The international utilization rate decreased slightly to 16.2 cases per doctor.

These operational metrics demonstrate Align Technology’s continued ability to drive adoption of its products and solutions, particularly among teenage and younger patients, as well as its success in expanding its network of trained doctors.

Outlook and Future Strategies

Looking ahead, Align Technology remains focused on addressing the evolving needs of its customers and patients through continued investment in research and development, targeted marketing and sales initiatives, and the expansion of its product portfolio.

The company is committed to investing in innovations that enhance the clinical precision and predictability of its products, while also improving the speed and convenience for patients. This includes ongoing investments in digital workflows, treatment planning, and manufacturing capabilities.

Align Technology is also actively pursuing new product lines that complement its core doctor-prescribed offerings, including exploring opportunities in e-commerce and retail channels. Additionally, the company is focused on increasing global orthodontic utilization rates by educating consumers about the benefits of the Invisalign system and driving adoption among teenage and younger patients.

To navigate the ongoing macroeconomic challenges, Align Technology is implementing cost-saving measures, adjusting its business models, and closely monitoring the evolving market conditions. The company remains cautiously optimistic about its ability to maintain its market leadership position and deliver long-term value to its shareholders.

Conclusion

Align Technology’s performance in 2024 demonstrates its resilience and adaptability in the face of significant macroeconomic headwinds. The company’s focus on innovation, diversification, and operational efficiency has allowed it to continue growing its business and maintaining its position as a leader in the orthodontic and dental technology industries.

As the market landscape continues to evolve, Align Technology is well-positioned to capitalize on the growing demand for its products and solutions, driven by its commitment to meeting the ever-changing needs of its customers and patients. With a strong financial position, a robust pipeline of innovative offerings, and a proven track record of navigating challenging environments, the company is poised to navigate the road ahead and deliver long-term value to its stakeholders.