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There have been plenty of smiles for Align Technology (NASDAQ:ALGN) shareholders in 2016. The orthodontic-device maker posted great results in the first two quarters. Shares have soared over 30% year to date. Align announced its third-quarter results after the market closed on Monday. Were investors still smiling? 

Align Technology results: The raw numbers

 Metric

Q3 2016 Actuals

Q3 2015 Actuals

Change (YOY)

Revenue

$278.6 million

$207.6 million

 34.2%

Net income 

$51.4 million

$27.6 million

 86.2%

Net income per diluted share

$0.63

$0.34

 85.3%

Data source: Align Technology. YOY = year over year.

What happened this quarter?

Align Technology appeared to execute well in the third quarter. Revenue and earnings increased even more than investors expected. This was helped by strong growth in Align's clear-aligner shipments. The company reported clear-aligner shipments in the third quarter of 177,755, a 20.5% year-over-year jump.

The most impressive growth came from Align's scanner products and service offerings. Scanner and service revenue during the prior-year period totaled $9.3 million. In the third quarter this year, that figure soared 273.7%, to $34.9 million.

Align's operating expenses jumped 23% from the prior-year period, but well below the company's revenue growth. Higher selling, general, and administrative costs accounted for the majority of this increase. 

The company ended the third quarter with $675.8 million in cash, cash equivalents, and marketable securities. That's down by only $2.9 million from Align's cash position at the end of 2015. The company wrapped up its $50-million accelerated stock-repurchase program in the third quarter, but  $341.8 million remains available under previously approved buyback authorizations.

What management had to say

Joe Hogan, Align's president and CEO, said:

Q3 was a solid quarter with revenue, margins and EPS above the high end of our guidance. Our results were driven by record Invisalign case volume, up 20.5% year over year reflecting growth across all customer channels and geographies, as well as continued demand for iTero scanners.

Looking forward

Align expects fourth-quarter clear-aligner shipments will be in the range of 182,500 to 184,500. That projection reflects an increase of 13.8% to 15% over the prior-year period.

The company also provided fourth-quarter revenue and earnings guidance. Revenue is expected to be between $289.2 million and $293.9 million -- better than what many investors anticipated. Align projects earnings in the fourth quarter of $0.64 to $0.67 per diluted share.

There don't seem to be any big clouds on the horizon for Align Technology. The company appears to be in great financial shape.

Clear aligner shipments continue to grow at a solid pace. Invisalign doctor-utilization rates remain strong. While Align's relatively high valuation could make the stock suffer if the company encounters rough waters, at this point, Align seems to have smooth sailing ahead.

Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Align Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.