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Jun 30
Align Q2 2025 Earnings Report
Align Technology reported mixed financial results for the second quarter of 2025, with total revenues slightly down year-over-year but up sequentially, driven by strong performance in Imaging Systems and CAD/CAM Services, offset by a decrease in Clear Aligner revenues.
Key Takeaways
Align Technology's Q2 2025 performance was characterized by a slight year-over-year revenue decline, primarily due to lower-than-expected Clear Aligner volumes in Europe and North America, despite strong consumer interest. However, the Imaging Systems and CAD/CAM Services segment showed robust growth. The company's profitability metrics, including GAAP and non-GAAP EPS and net income, saw significant increases compared to the previous year.
Total revenues for Q2 2025 were $1,012.4 million, a 1.6% decrease year-over-year but a 3.4% increase sequentially.
Clear Aligner revenues decreased by 3.3% year-over-year to $804.6 million, while Imaging Systems and CAD/CAM Services revenues grew by 5.6% year-over-year to $207.8 million.
Diluted net income per share (GAAP) increased to $1.72, up from $1.28 in Q2 2024, and non-GAAP diluted net income per share rose to $2.49 from $2.41.
The company plans to implement cost-reduction measures in the second half of 2025, including workforce realignment and manufacturing optimization, expecting one-time charges of $150 million to $170 million.
Align
Align
Align Revenue by Segment
Revenue by Segment
Clear Aligner Revenue
CapyFin.comImaging Systems and CAD/CAM Services Revenue
CapyFin.com Forward Guidance
Align Technology anticipates continued economic uncertainty and spending hesitancy impacting demand for clear aligners and new iTero scanner systems in the second half of 2025. The company expects to implement cost-reduction actions to improve operating margins.
Positive Outlook
- Expected non-GAAP operating margin to be approximately 22.5% for fiscal 2025.
- Anticipated improvement of GAAP and non-GAAP operating margins by at least 100 basis points year-over-year for FY 2026 due to restructuring.
- Clear Aligner volume growth expected to be low-single digits for fiscal 2025.
- Systems and Services year-over-year revenues expected to grow faster than Clear Aligner revenues in 2025.
- Favorable foreign exchange rates expected to slightly increase Q3'25 Clear Aligner average selling price.
Challenges Ahead
- Q3'25 worldwide revenues expected to be in the range of $965 million to $985 million, down sequentially from Q2'25.
- Q3'25 Clear Aligner volume expected to be down sequentially due to seasonality.
- Q3'25 Systems and Services revenues expected to be down sequentially due to seasonality.
- Q3'25 GAAP gross margin expected to be 64% to 65%, down sequentially due to one-time charges and lower Clear Aligner volume.
- Fiscal 2025 GAAP operating margin expected to be 13% - 14%, down year-over-year due to one-time charges of $150 million to $170 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income