Please ensure Javascript is enabled for purposes of website accessibility

Align Technology Again Makes Investors Smile With a Record Second Quarter

By Keith Speights - Updated Jul 28, 2017 at 7:21AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The orthdontic-device maker known for its Invisalign clear aligners shines in the second quarter.

Align Technology's (ALGN -0.15%) first quarter was one for the record books. On Thursday, Align announced its second-quarter results. The orthodontic-device maker reported all-time high revenue, earnings, and shipments of its Invisalign clear aligners. There really weren't any negatives to be found in the company's results. Here are the highlights from the company's second quarter.

Smiling woman holding clear dental aligner

Image source: Getty Images.

Align Technology results: The raw numbers


Q2 2017 

Q2 2016 

Year-Over-Year Change


 $356.5 million  $269.4 million


Net income from continuing operations

 $69.2 million  $50.1 million


Adjusted EPS

 $0.85  $0.62


Data source: Align Technology.

What happened with Align Technology this quarter?

Align Technology again enjoyed tremendous performance from all areas of its business in the second quarter. Revenue for its Invisalign clear aligner segment jumped 31.9% year over year, to $321 million. Revenue for Align's scanner and services segment soared 36.7% above the prior-year period performance, to $35.4 million.

Invisalign shipments were also strong, yet again, with a total of 231,890 case shipments in the second quarter. That reflected at 31% year-over-year increase and an 11.5% sequential increase. Align especially benefited from impressive international growth of 37.4% above the prior-year period.

Second-quarter earnings growth was even higher than sales growth, thanks to the company keeping spending under control. While Align's operating expenses increased by nearly 34%, it was still less than the company's revenue increase.

Other highlights for Align Technology during the second quarter included:

  • Opening a new Invisalign treatment-planning facility in Chengdu, China
  • Launching a major new software update for its iTero Element intraoral scanners
  • Receiving two key U.S. patents for its SmartTrack aligner material
  • Kicked off a multimillion-dollar marketing campaign for Invisalign

What management had to say

Align Technology CEO Joe Hogan liked what he saw in the second quarter. Hogan stated:

Our second quarter results were better than expected across key financial metrics including revenue, volume, margins, and EPS. Q2 revenues increased 32.3% year-over-year driven by strong Invisalign case shipments across all channels and especially in the teen segment. Solid execution of our strategy and key investments continue to deliver strong growth across the board, with record Invisalign volume in almost every geography. The second quarter also had an all-time high of nearly 5,000 newly trained Invisalign doctors in a quarter. Our iTero scanner business also performed well this quarter with revenues up 36.7% year-over-year.

Looking forward

The company projects that Invisalign case shipments in the third quarter will be between 231,000 and 234,000. That's a year-over-year increase of 30% to 32%. Net revenue for the third quarter is expected to come in between $355 million and $360 million, up 27% to 29% compared to the prior-year period. Align thinks that diluted earnings per share for the third quarter will be in the range of $0.78 to $0.81, including $0.01 of excess tax benefit.

There don't appear to be any clouds on the horizon for Align Technology right now. Demand continues to be strong for its Invisalign clear aligners. Align's iTero scanners are also selling briskly.

One key area to watch is Align's international expansion. The company's new Chinese treatment-planning facility should be important for Align's goal of achieving more growth in Asia. 

Align Technology stock continues to perform strongly, tripling in value in the last three years. While it's impossible to accurately predict how well the stock will do in the next few years, the company's business model is solid, and management appears to be making smart decisions. Align's second-quarter performance underscores both points quite well.

Keith Speights has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Align Technology. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Align Technology, Inc. Stock Quote
Align Technology, Inc.
$287.38 (-0.15%) $0.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.