Align Technology Inc ($ALGN) Q1 2026 Earnings Call

Thanks Shirley. Good afternoon and thanks for joining us today. On today's call, I'll start with an overview of our first quarter 2026 results and discuss performance across our two operating segments, Clear Aligners and Systems and Services. John will then walk us through our financial results and outlook for Q2 and 2026. After that, I'll come back to highlight a few key takeaways before we open the call for questions. We're pleased to report another better than expected quarter in Q1. Clear aligner volumes from both a GAAP and non-GAAP operating margins exceeded our outlook. These results reflect continued execution against our strategic priorities and the resilience across our global business. We delivered first quarter revenues of $1.04 billion, up 6.2% year-over-year, driven primarily by higher clear aligner volumes and increased ASPs. Clear aligner shipments reached a record 686,000 cases, increasing 6.7% year-over-year, reflecting double-digit growth across our international businesses and continuing stability in North America. Growth was broad-based across customer channels with shipments to orthodontists up 7.4% and GPs up 5.6% year-over-year, along with solid momentum across adult, teen, and growing kid patient categories. Dental and orthodontic service organizations continue to be force multipliers in every region, driving global double-digit clear aligner volume growth during the quarter. We remain encouraged by how naturally our digital platform fits with DSO operating models and how it continues to benefit customers and patients and support both Invisalign adoption and increased iTero scanner utilization. Q1 highlights the continued strength in Invisalign demand across age groups and geographies even amid varying macro conditions.

For Q1, 449,000 adults were treated with Invisalign aligners, up 7.8% year-over-year, reflecting strong growth across both orthodontist and GP channels in all regions led by EMEA, APAC, and Latin America. Teens and growing kids continue to represent the largest orthodontic patient opportunity globally. In Q1, 237,000 teens and kids started Invisalign treatment, up 4.8% year-over-year, led by China and Latin America. Growth was supported by continued adoption of Invisalign First, the Invisalign palatal expander and mandibular advancement with occlusal blocks, reflecting broader use across growing patient indications. A clinical study by researchers at the University of Siena in Italy found that the Invisalign palatal expander, or what we call IP, was shown to effectively widen the upper jaw by opening a natural growth seam in the palate, achieving bone and bite changes similar to a traditional metal Hyrax expander. IP also delivered more controlled and predictable results than Hyrax. When further considering the greater ability to maintain hygiene and the simplicity many parents desire compared to a Hyrax device, these findings support the use of IP as a reliable option for growing patients and highlights its role as an important step toward fully digital orthodontic care.

For imaging systems and CAD/CAM services, including iTero, exocad, and X-ray insights software, Q1 revenues totaled $184 million, up 1% year-over-year and declined sequentially, reflecting expected first quarter capital equipment seasonality. Q1 Systems and Services year-over-year revenue growth reflects continued adoption of iTero Luminà, full systems, service revenues, and CPO sales, along with a continued mix shift toward lower price scanner offerings, including PC-based configurations, leasing, and rental units. These offerings provide greater affordability and flexibility to doctors in certain markets and practice models. In addition, the number of scanners sold to new doctors increased double digits year-over-year. For Q1, the total installed base of active scanners exceeded 125,000 globally. In addition, during the quarter, over 12 million iTero digital scans were performed, supporting Invisalign, restorative, wellness, and numerous other digital workflows and applications. Exocad delivered double-digit year-over-year revenue growth, reinforcing our strategy to integrate orthodontics and restorative dentistry within a customer and patient-centric digital platform.

Following the success of our inaugural Invisalign Advanced Restorative Treatment, or ART, pilot in EMEA, we recently began an Invisalign ART pilot in the United States with labs and doctors beginning training in several markets. Invisalign ART integrates with Exocad, enabling clinicians and labs to plan tooth alignment ahead of restorative work within the Exocad environment without changing the tools doctors and labs already use. We are very excited about this opportunity to enhance the goal of preserving patients' natural dentition as much as possible. ART allows us to do this by incorporating the prior alignment of teeth into the overall restorative treatment plan, as opposed to the removal or grinding them down before minimally invasive restorative work, and allows us to further expand our reach and offer existing and new products to the large and growing restorative market through lab-based channels.

Clear aligner revenue in Q1 was $856 million, increasing 7.4% year-over-year and 2.1% sequentially. Q1 clear aligner volume reached a record 686,000 cases, up 6.7% year-over-year and 1.3% sequentially. On a year-over-year basis, our clear aligner revenues reflected double-digit volume growth in EMEA, APAC, and Latin America, along with overall stability in North America. Importantly, growth was primarily driven by both submitter expansion and higher utilization across the orthodontist and GP channels and across adult, teen, and growing kid categories. During the quarter, more than 88,000 doctors submitted Invisalign cases globally, a year-over-year increase of 3%, or an additional 3,000 orthodontists and GPs, driven primarily by increases in APAC and the Americas led by Latin America. Doctor utilization also increased year-over-year by 3.4%, led by EMEA, Latin America, and APAC. These metrics illustrate the continued adoption and penetration of the Invisalign system through our strategic geographic growth efforts as well as the meaningful addition opportunities and the large untapped demand for digital orthodontics, both in gaining share in the existing 22 million annual orthodontic case starts and expanding access to care to the more than 600 million potential patients that our digital technology can serve through GP dentists globally.

Our DSO channel continued to be a meaningful growth driver. In Q1, DSO clear aligner volumes grew double digits across all regions and represented approximately a quarter of total global volumes. The retail channel continued to be mixed, particularly in the United States where our doctor customers reported less patient traffic during the quarter. To drive adoption and utilization across channels, we expect to continue expanding targeted initiatives focused on affordability, patient conversion, clinical confidence, and practice efficiency. These initiatives are beginning to show traction with GPs, dentists, orthodontists, and DSOs, helping to drive increased engagement and directional growth in case volumes.

These initiatives include the Doctor Subscription Program, or DSP. We continue to see strong growth from our DSP program, which includes retention and touch-up or relapse cases. DSP touch-up cases continue to grow double digits year-over-year across regions. DSP was originally launched in the United States in 2023, expanded into EMEA in 2025, and is expected to launch in APAC in Q2 of this year. North America DSP is also supporting early momentum with orthodontic groups and DSOs, helping drive re-engagement among competitive and historically lower utilizing doctors as pricing simplicity and bundled value resonate across accounts.

Patient financing in the United States. Healthcare Finance Direct, or HFD, is now live in over 4,000 offices, enabling patients to pre-qualify for financing before their first appointment, allowing doctors to see these patients directly within our Invisalign Doctor Site. We saw particularly strong adoption in Q1 among the American Academy of Clear Aligners, or AACA, member practices where expanded access to patient financing is helping improve affordability, increase patient conversion, and drive meaningful directional growth in case starts. Beyond AACA, adoption continues to expand across independent practices, multi-site groups, and DSOs. Practices report that HFD simplifies the front office workflows, reduces complexity in payment discussions, and increases staff confidence when offering financing during consultations and special patient events. Pre-qualification and flexible monthly payment options are helping practices broaden access to care. In many cases, providing affordable options to patients to increase scope and types of treatment, including Invisalign clear aligners. Feedback we've received from offices highlights that the speed of approvals, clarity of options, and prompt funding are shifting conversations away from price and back toward delivering treatment options that match patient needs while also easing administrative burdens for staff and operating teams. These benefits are proving particularly impactful in multi-practice environments where consistency, simplicity, and scalability are critical.

Invisalign Pay, which is available in Brazil with further expansion planned across Latin America, continues to improve affordability and treatment conversion and serves as a proof point for how patient-centric embedded financing can complement our clinical and digital workflows. In Brazil, Invisalign Pay is now used in a majority of Invisalign cases, reflecting strong doctor endorsement and patient adoption. Providers report that financing helps optimize cash flow, reduce friction for patients, and supports reactivation of lower utilizing providers, reinforcing financing as a meaningful lever for sustained growth across the region.

Peer-to-peer mentoring. The clinician-to-clinician mentoring programs connect doctors over a structured 12-month period to build clinical confidence and drive engagement and treatment conversion. These programs are especially effective for accelerating adoption of new technologies, increasing confidence treating kids, teens, and more complex cases. Peer-to-peer programs are active across all regions, and we expect to expand them over the year. These efforts complement our broader engagement strategy, particularly with GPs and competitive orthodontic accounts that benefit from hands-on clinical support and shared best practices.

Treatment Planning Services, or TPS. TPS addresses one of the largest barriers to adoption: low clinical confidence and uncertainty around treatment planning, particularly among GP dentists. TPS provides case assessment and treatment planning support through a combination of internal TPS and external TPS partners, enabling doctors to submit cases with confidence. TPS has emerged as a direct go-to-market engine with materially higher utilization among TPS users versus non-users and strong adoption across regions. In markets such as Canada, TPS adoption among participating GPs continues to increase, with TPS users consistently outperforming non-users and contributing to low double-digit year-over-year growth in case starts.

From a regional standpoint, Americas Q1 clear aligner volumes increased year-over-year, reflecting very strong double-digit growth in Latin America, partially offset by a modest but stable year-over-year decline in North America. Latin America delivered record first quarter shipments driven by increased submitters, higher utilization across both orthodontist and GP channels, along with strength across adult, teen, and growing kid categories. In EMEA, Q1 clear aligner volumes grew double digits year-over-year, reaching record first quarter levels led by increases in Iberia, Italy, Nordics, UK, and also Turkey. Growth was driven primarily by utilization gains across both GP and orthodontic channels and continued strength from adult and growing kids patients. In APAC, Q1 clear aligner volumes also grew double digits year-over-year with record first quarter shipments for APAC led by China, India, Korea, and Japan. In addition, eight APAC markets had record first quarters including China, Japan, Korea, India, and Taiwan. Growth was broad-based with teen and growing kid patients growing double digits alongside continued growth among adult patients. Overall, while the operating environment remains uneven in some markets, our Q1 results illustrate the resilience of our global business, and we continue to see orthodontics, oral health, and digital dentistry as durable long-term growth categories. With that, I'll turn it over to John.

Thanks John. Stepping back, we're pleased with our Q1 performance and consistency of execution we're seeing across the business. Growth this quarter was broad-based across region, patient segments, and channels, supported by record submitters for our first quarter and a higher utilization within our existing customer base. We also continue to see strong momentum from our doctor subscription program with Invisalign touch-up and retention products growing double digits year-over-year. We continue to observe the dental needs we address, such as orthodontics, restorative, diagnostics, oral health, and digital dentistry, and durable consumer demand, which we expect will continue to drive our long-term growth expectations. Importantly, teens and growing kids remain a central driver of Invisalign demand and long-term opportunity. In Q1, we saw continued strength in teens and kids across key international markets, supported by adoption of Invisalign First, palatal expansion, and mandibular advancement. These products are helping doctors treat a broader range of growing patients with Invisalign aligners and allowing us to compete more effectively against traditional wires and braces at earlier stages of treatment.

We have moved forward in 2026. Our focus is on maintaining discipline as we invest strategically in innovation and growth opportunities. That includes advancing digital dentistry through the Align Digital Platform, scaling our iTero Luminà ecosystem, expanding internationally with localized strategies, and continuing to build a differentiated portfolio for teens and growing kids. While macroeconomic conditions remain dynamic, we continue to benefit from long-term investments in AI-enabled treatment planning and integrated digital workflows that improve predictability, efficiency, and scalability across the business. These capabilities are designed to increase planning consistency and throughput and support more predictable outcomes for doctors, helping us operate more efficiently across volume environments.

A key part of our strategy is expanding the role Align plays in oral health and restorative dentistry. Increasingly, doctors are using our platform not just to align teeth but to identify oral health issues earlier and integrate orthodontics into comprehensive treatment plans. By connecting Exocad and Invisalign through digital workflows, we're helping doctors deliver better long-term oral health care outcomes for patients, especially as they transition from orthodontic to restorative care. Our vision is to make tooth alignment using clear aligner therapy the standard of care by revolutionizing traditional treatment modalities, appliances, tools, practice workflows, and business and go-to-market models across the dental industry. By focusing on oral health and the benefits of tooth alignment as part of orthodontic and restorative treatment, we're developing products and technologies that are helping doctors deliver the best treatment experiences and clinical outcomes for their patients. To date, nearly 23 million patients worldwide have been treated with the Invisalign system, including approximately 7 million teens and kids. Every case adds to our proprietary clinical data set generated within our integrated digital platform. This data set continues to fuel our innovation and ability to scale across orthodontics, oral health, and change lives for our doctors, customers, and their patients.

Innovation remains central to our strategy, but always with a clear purpose: helping doctors deliver better outcomes, improving efficiency, and enhancing the patient experience. Looking forward, that includes continued progress in direct fabrication, which we are advancing deliberately and in phases with quality and reliability as our guiding principles. While still early, direct printing unlocks new design flexibility, strengthens our long-term cost structure, and allows us to operate more cost-effectively. We began initial limited market releases of direct 3D printed attachments and retainer products in Q1 and look forward to updating you further as direct printing programs progress. Our objectives are straightforward: to keep earning trust through clinical leadership, thoughtful innovation, and consistent execution quarter after quarter. With that, I thank you for your time today. And now I'll turn over to the operator.

On the iTero side, you know, Glenn, honestly, we didn't have any disruption from a production or shipment standpoint. That team is very rigorous over there. We understand when to move equipment well and whatever. And so, I'm not saying that's always perfect, but the team has responded well, and we didn't have any really impact on the business in the first quarter. And then on the share repurchase, you're right, we saw the 200 million that we just completed and now an additional 200 million. Remember, it comes down to US cash and you know about 20% of our cash is in the US versus out of the US. So we have that constrained as well. But it's part of our overall plan that we have. We want to grow the business as fast as we can, use our cash to be able to help do that. We have a good business model that generates a lot of cash. You saw that reflection in the first quarter and then we do the buybacks to be able to put cash back to our shareholders. So, that's been the plan that we have and it's a disciplined approach that we've taken and we've seen that investments made back into business that way.

John, hey John, you sound really low. Can you speak up? Okay, that's better.

Hey John. Look, I mean, overall when I look at the quarter, I look at it globally and all, it was pretty consistent across the board when we look month-to-month. Obviously it is kind of backend loaded obviously in the way capital equipment purchases go, but when we looked at Invisalign, we felt good about Invisalign all country and country and the consistency of what we saw. So, and though I would say overall pockets of weakness that was different than what we experienced in the fourth quarter. So overall, I felt good about that, and we felt good is how we entered the second quarter, too. So John, anything to add?

Yeah, that's a good question, Jeff. You know, first of all, I'd say the competition aspect hasn't changed. And just to take off on John's question a second ago, you know that no AA allows us to play offense out there and we're playing more offense in that sense and we feel good about it overall. I'd say, broadly I was actually anticipating this question, Jeff, is it's broadly a macro the way I look at it versus here in the rest of the world. And it's almost like you'd put the macro in Asia being the best. Secondly, and Europe's spotty. Europe's a lot of different countries but you can see that the countries we highlighted like Iberia, UK and different parts of Asia is growing pretty well and then when you look at the Americas which includes Latin America did extremely well, we're seeing some improvement in Canada right now and some improvement in the US so overall I feel good overall but that variable you're looking for Jeff has been US macro as far as I can tell.

You know, Jeff, I think it's just to add something what John said. I think one is over the years the doctors have gotten more and more confidence in our product lines. I talked about TPS and my scripts and different things we do to train doctors and I think it gives a much more confidence to go out there with no AA. Secondly is it aligns doctor's economics along with our economics too and so it helps to bring the two of us together in a much better way.

You know, I just deciphering your question Jason I'd say when you look at like a DSO approach versus a retail approach we obviously get a broader signal on a DSO because we're looking at a lot more patients and doctors and the DSOs traditionally have really good skills to go out and recruit, finance in different areas. On the retail doctor side, when I talked about HFD and those different things those are types of systems that we're bringing together that to address things that we feel hurt our retail doctors at times and inability to be able to finance or to make quick decisions and financing with patients in different areas. How we go about that as a business overall. So, I'd say the macro is there, but I feel good about what we've been offering from a product standpoint. We do from a financing standpoint and delivering it from a, we changed our organization to move to call on both orthodontists and GPs going forward. That's given us more coverage out there to be able to deliver this kind of message and support to our doctors, too.

I think anybody in business has to be careful of using the word normal in China. Okay. It's just I think you take that business almost on a year-to-year sometimes quarter-to-quarter basis. We have a great team there, Jason. They execute well. Junho that ran that business has been moved and he runs all of Asia right now. We have a great team there that helps to drive that. It's a very dynamic marketplace. We're well positioned with our manufacturing, well positioned with what we offer over there. But I would never say it's always business as usual in China. It's the most competitive market in the world.

And back to your question, it's Joe on the US marketplace particularly wires and brackets and ratios with clear liners. I tell you got to be careful with the data that you gather out there today and where it's coming from. We find there's a pretty big delta in that data overall. What I'd say is I feel good about our team play overall because with mandibular advancement, with occlusal blocks, Invisalign First that I referenced in my script and also IP we're doing better and better on that pre-teen area because what we're offering is so much better than what the traditional kind of appliances were to be able to do that and we see good progress in that area. But overall I wouldn't say a whole lot of change over the quarters in the US orthodontic market. Wires and brackets versus the liners except for what we're seeing in the pre-teen side has been pretty substantial.

Hey Kevin, Joe, on the direct fab side, I mean, you called out, I mean, there's an obvious aspect when you direct print, you don't have the 95% kind of scrap base that you use on our current vacuum forming piece. So, that's always there. And, you know, our feed stream is more of a natural feed stream. There's not really a feed stream from a petrochemical standpoint. So, it helps isolate you overall. But remember, I mean that play, it's a great thing about that on direct fab is it will help us significantly in the sense of efficiency in that way. But how you can make an aligner and the flexibility to make it and variable wall thickness and being able to design aligners to each individual cases to an extreme we could never do before. Still a primary driver, but you do have these auxiliary areas that really help in the sense of how the resin's obtained and how it's used.

Yeah, no change to what we've seen, Michael. We're very pleased with the DSO growth and it continues to be in many places double digit growth. And that's a reflection of really those groups taking a lot of the tools that we offer and bring together, whether it's the scale, the technology, and the brand, and they do a great job of bringing all together and really being much more active to try to drive that conversion with their potential patients. So, that plays out, and that's the force multiplier that we talk about. You just don't see that as much, at least on a consistent basis, on the retail side. We're working to try to get those retail doctors to operate more like some of the DSOs, but broadly it plays out as we've seen and it's up to us to try to get after those retail doctors with our sales force, with the technology, with the marketing and so on to try to get them more active.