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Sep 30
Align Q3 2025 Earnings Report
Align Technology reported its third quarter 2025 financial results, with revenues and non-GAAP operating margins exceeding expectations.
Key Takeaways
Align Technology delivered a strong third quarter, with total revenues reaching $995.7 million, surpassing guidance. Clear Aligner volume saw a significant increase, particularly in international markets and among teens and kids, while Imaging Systems and CAD/CAM Services revenues experienced an expected seasonal decline. The company's non-GAAP operating margin also exceeded its outlook, demonstrating effective cost management despite restructuring charges.
Total revenues for Q3'25 were $995.7 million, up 1.8% year-over-year and above the company's guidance range.
Clear Aligner volume increased by 4.9% year-over-year, driven by strong performance in EMEA, APAC, and Latin America, and a notable 8.3% increase in the teens and kids segment.
GAAP diluted net income per share was $0.78, while non-GAAP diluted net income per share was $2.61, exceeding expectations.
The company reported $1,004.6 million in cash and cash equivalents, indicating a healthy liquidity position.
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 sequential growth in Q4'25 across all revenue categories, with expected improvements in both GAAP and non-GAAP gross and operating margins. For the full fiscal year 2025, the company projects mid-single-digit Clear Aligner volume growth and flat to slightly up revenue growth, with a focus on improving operating margins through restructuring and other initiatives.
Positive Outlook
- Q4'25 worldwide revenues are expected to be in the range of $1,025M to $1,045M, indicating sequential growth.
- Q4'25 Clear Aligner volume and average selling price are expected to be up sequentially due to favorable geographic mix.
- Q4'25 Systems and Services revenues are projected to increase sequentially, consistent with typical Q4 seasonality.
- Q4'25 GAAP gross margin is expected to improve to 65.5% to 66.0%, and non-GAAP gross margin to approximately 71.0%.
- Fiscal 2025 non-GAAP operating margin is expected to be slightly above 22.5%, driven by restructuring actions and other initiatives.
Challenges Ahead
- Fiscal 2025 GAAP operating margin is expected to be around 13.6% to 13.8%, down year-over-year due to higher restructuring and non-cash charges.
- The company expects approximately $145 million to $155 million in non-cash charges for fiscal 2025, primarily for impairment losses and depreciation.
- The outlook assumes no unforeseen circumstances such as adverse foreign exchange movements, macroeconomic conditions, or changes to duties and tariffs.
- Activity in the orthodontic and dental markets remains mixed, particularly in North America.
- The company is nearing completion of restructuring actions, which involve costs related to involuntary termination benefits.
Revenue & Expenses
Visualization of income flow from segment revenue to net income