Align Technology reported earnings that aligned closely with expectations, highlighting international growth amid currency challenges.
Align Technology (ALGN 0.75%), known for its Invisalign clear aligners and digital dental systems, announced its fourth-quarter 2024 results on Feb. 5, 2025. The earnings release highlighted stable performance amid currency and demand challenges. The company reported Non-GAAP earnings per share (EPS) of $2.44, marginally missing analysts’ estimates of $2.45. Revenue was $995.2 million, slightly below the expected $996 million, though within management’s forecast range. Overall, the quarter showed steady growth in key segments, tempered by external economic factors.
| Metric | Q4 2024 Actual | Q4 2024 Estimate | Q4 2023 | Y/Y Change |
|---|---|---|---|---|
| Non-GAAP EPS | $2.44 | $2.45 | $2.42 | +0.8% |
| Revenue | $995.2M | $996M | $956.7M | +4.0% |
| Operating Margin (Non-GAAP) | 23.2% | N/A | 23.8% | -0.6 pp |
| Clear Aligner Volume | 628,730 | N/A | 592,635 | +6.1% |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in 2024-10-23 earnings report.
Business Overview
Align Technology is at the forefront of digital orthodontics with its flagship Invisalign system. This clear aligner product replaces conventional braces, providing an innovative solution for dental corrections. The company integrates advanced technology through offerings like iTero intraoral scanners and CAD/CAM software, crucial for precise treatment planning and monitoring.
Align has focused on driving international market expansion and innovation in its product line. Key elements of its strategy include leveraging 3D printing for scalable production and expanding its ecosystem through the Align Digital Platform. This approach is designed to support growth across emerging and stabilized markets, positioning it as a technological leader in dental care.
Quarterly Highlights
During the fourth quarter of 2024, Align Technology’s performance was marked by increases in several areas. Clear Aligner volumes rose to 628,730 units, up 6.1% from the previous year, indicating strength in regions such as EMEA, APAC, and LATAM. These geographic areas benefited from increased adoption of Invisalign products, particularly among teens in China.
Revenue from systems and services increased by 14.9% from Q4 2023, highlighting robust consumer interest and expanding market penetration. Despite these successes, the stronger U.S. dollar imposed a significant headwind, impeding net income per share by approximately $0.14. The U.S. market also presented challenges, with decreased demand affecting Clear Aligner sales.
Operational metrics such as gross and operating margins endured pressure from currency fluctuations and restructuring charges. However, these challenges did not overshadow Align’s international growth trajectory. Notably, the company’s cash position remained strong, with approximately $1.044 billion in reserves after stock repurchases of $275 million in 2024.
Looking Ahead
Align Technology’s management anticipates low single-digit revenue growth for fiscal 2025, with specific mid-single-digit growth projected in Clear Aligner volumes.
Moving forward, management has indicated that it will continue investments in technology and operational restructuring.
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