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Align Technology Inc. Sees Clear Q1 Success With Invisalign Growth

By Keith Speights - Apr 29, 2016 at 11:42AM

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Higher shipments of its clear dental aligners powers this orthodontic-device maker to a solid Q1 performance.

Image source: Align Technology.

Shares of Align Technology (ALGN -3.08%) have racked up nice gains of around 20% in the last 10 weeks. Continuation of that run was at stake, though, with the orthodontic-device maker announcing its first-quarter earnings results after the market closed on Thursday.

Did Align measure up? Here are the highlights. 

Align results: The raw numbers


Q1 2016 Actuals

Q1 2015 Actuals

Growth (YOY)


$238.7 million

$198.1 million


Net profit

$40.5 million

$36.2 million


Earnings per share




YOY: Year over year. Data source: Yahoo! Finance.

What happened with Align this quarter?
Align Technology reported solid results on all fronts. And those numbers would have been even better except the company made a significant policy change in July 2015. That change resulted in Align allowing doctors to order additional aligners for mid-course corrections and case refinements at no charge. The company calculated that this policy shift lowered first-quarter revenue and pre-tax income by around $7.5 million.

Highlights for Align's first quarter included:

  • Clear aligner shipments jumped 25.2% year over year, to 163,700 cases.
  • International growth for clear aligners was exceptionally strong, with a 34.1% increase compared to the prior-year period.
  • Scanner-and-services revenue soared 72% year over year, to $19 million.
  • Align's cash position improved slightly, with the company reporting $680.8 million in cash, cash equivalents, and marketable securities as of March 31 compared to $678.7 million on hand at the end of 2015.

What management had to say
Align Technology's President and CEO Joe Hogan liked what he saw in the first quarter. Hogan said:

Q1 was a solid start to 2016 with better than expected revenues and earnings, driven by continued strong year-over-year Invisalign volume growth across our customer base, with North American shipments up 21% and international shipments up 34%. Demand for our new iTero Element scanner remains strong driving a 72% year-over-year growth in scanner and services revenues.

Looking forward
The company anticipates more good news in the second quarter. Align expects clear aligner case shipments between 174,500 and 177,000. That reflects a year-over-year increase of 20.7% to 22.4%.

Align also projects second-quarter revenue between $253.3 million and $258.3 million. The midpoint of that range represents a 22% jump over the same period in 2015. Diluted earnings per share are expected to come in between $0.46 and $0.49 compared to $0.39 posted in the second quarter last year.

It's important to note that Joe Hogan particularly pointed out the strong growth for the company's new iTero Element scanner. Those great results indicate that Align is at least holding its own against rival Dentsply Sirona (XRAY -1.34%). Dentsply and Sirona merged earlier this year, creating a formidable competitor for Align.

But while Align's iTero scanner battles Dentsply Sirona's Cerec intraoral scanner in the marketplace, the two companies are also partners. Align and Sirona announced support for Cerec to submit digital impressions for the Invisalign system in March 2015.

Align also just announced support for another line of competing scanners, 3Shape's TRIOS series. With roughly 92% of Align's revenue coming from Invisalign, integrating with third parties helps increase case submissions. "Coopetition" appears to be a pretty smart strategy for Align over the long run.

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