Align Technology, Inc.

Greetings. Welcome to the Align fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Shirley Stacey, with Align Technology. You may begin.

Good afternoon, and thank you for joining us. I'm Shirley Stacey, Vice President of Corporate Communications and Investor Relations Joining me for today's call is Joe Hogan, President and CEO, and John Marucci, CFO. We issued fourth quarter and full year 2025 financial results today via Business Wire, which is available on our website at investor.aligntech.com. Today's conference call is being audio webcast and will be archived on our website for approximately one month. As a reminder, the information provided and discussed today will include forward-looking statements, including statements about Align's future events and product outlook. These forward-looking statements are only predictions. and involve risks and uncertainties that are described in more detail in our most recent periodic reports filed with the Securities and Exchange Commission, available on our website and at sec.gov. Actual results may vary significantly, and Align expressly assumes no obligation to update any forward-looking statement. We have posted historical financial statements with corresponding reconciliations, including our GAAP to non-GAAP reconciliation, if applicable, and our fourth quarter and full-year 2025 conference call slides on our website under quarterly results. Please refer to these files for more detailed information. With that, I'd like to turn the call over to Align Technologies President and CEO, Joe Hogan. Joe?

Thanks, Shirley. Good afternoon, and thanks for joining us today. On our call today, I'll provide an overview of our fourth quarter and full year 2025 results and discuss performance of our two operating segments, system services and clear aligners. John will provide more detail on our Q4 financial performance and comment on our views for 2026. Following that, I'll come back and summarize a few key points and open the call to questions. I'm pleased to report fourth quarter results with better than expected revenues and clear aligner volumes, as well as non-GAAP gross margin and non-GAAP operating margin, both above our outlook, and the highest non-GAAP operating margin since 2021. Q4 revenues were a record $1,048,000,000, up 5.3% year over year and 5.2% sequentially. For the full year 2025, total revenues were a record $4 billion, up 1% year-over-year. Systems and services revenues were $790 million, up 2.7% year-over-year. Fiscal 2025 clear-liner revenues were $3.2 billion, up 0.5% year-over-year on record clear-liner volumes of 2.6 million cases, which are 4.7% year-over-year. For the year, a record 936,000 teens and kids started treatment with Invisalign clear aligners, up 7.8% year-over-year for fiscal 2025. Total DSP touch-up cases shipped were over 136,000, up 36% compared to 2024. We also delivered fiscal 2025 non-GAAP operating margin of 22.7% above our 2025 outlook. In terms of major milestones, as of December 31st, 2025, Over 296,000 active Invisalign trained doctors have treated over 22 million people worldwide, including over 6.5 million teens and growing kids with Invisalign clear aligners and Invisalign pallet expanders. For clear aligners, Q4 revenues of $838 million were up 5.5% year-over-year and up 4% sequentially. Q4 clear aligner volume was also a record 677,000 cases. up 7.7% year-over-year, and up 4.5% sequentially. On a year-over-year basis, Q4 LIDAR volume growth was driven by strength in EMEA, Latin America, and APAC, with stability in North America. Q4 clear LIDAR volume growth reflects strength from adults and teens and growing kids patients, as well as growth in both the GP and ortho channels. On a sequential basis, Q4 clear LIDAR volumes reflect strong growth from the EMEA region, driven primarily by adult patients as well as continued strength in Latin America from teens, growing kids, and adult patients. For Q4, 88,000 doctors submitted Invisalign cases globally, a record high for fourth quarter, driven primarily by a record number of orthodontist submitters. Dental service and orthodontic service organizations, DSOs or OSOs, remain one of the line's most important and scalable strategic growth channels and a major catalyst to making digital dentistry the global standard of care. As DSOs continue to outpace growth rates of traditional retail practices globally, they are becoming one of the most influential forces shaping digital dentistry. In many respects, their scale, operational discipline, and need for consistent tech-enabled workflows make them ideal partners for accelerating adoption of the Invisalign system, iTero scanners, and fully digital workflows across large networks of general dentists and orthodontists. This practice consolidation trend strengthens brand preference and utilization as DSOs increasingly prioritize efficiency, clinical predictability, improved patient experience, and importantly, scale. Align has proven its leadership as the world's most sophisticated treatment planning and 3D printing manufacturing operation, and our ability to scale and meet the patient needs, speed, and rigor of those rapidly growing DSOs is unmatched globally. Over the past year, we continued to make strong progress with DSOs across all major regions. In the Americas, we deepened partnership with top DSOs, building on our successful Heartland and Smile Doctors relationships. Our top 10 DSOs in the Americas grew double digits year over year, and retention was up double digits in the Americas. These gains helped offset broader orthodontic market softness in North America retail chain, where consumer sentiment and patient inflow remained pressured. North America DSO performance remained very strong, delivering double-digit year-over-year growth, led by strength in the adult category. In EMEA, DSO performance was equally strong, with double-digit growth year-over-year and triple-digit growth among our top 10 DSOs in the region. DSOs continue to drive expansion in both Invisalign case volume and iTero scanner penetration. Across all regions, DSOs remain high-growth, digitally forward partners that amplify, aligns reach and impact. Their continued adoption of Invisalign and iTero reinforces the strength of our digital platform as DSOs help move more of the industry toward a fully digital standard of care. In America, ClearLiner volumes were up year over year, representing one of the best growth rates since 2021. This was led by double-digit growth in Latin America, which delivered record quarter shipments, driven by more submitters and higher utilization across both the orthodontist and GP channels, with strength across adults, teens, and kids. We also reached a major Invisalign milestone in Q4 by surpassing one million patients treated with Invisalign in Latin America. In North America, we focused on driving adoption of Invisalign and saw encouraging results across our portfolio. Our year-over-year performance reflects higher utilization across all channels. We continue to see that practices taking an active approach to conversion, scanning every patient, using chair-side visualization tools and offering patient financing are performing better than those that don't. While DSOs are leading the way in North America, we're helping retail doctors adopt similar business methods through localized marketing, outside patient financing, and tools that help doctors attract and convert patients. Affordability also remains a priority. Our partnership with the healthcare financing platform, HFD, continues to grow, and doctors and DSOs enrolled in HFD are seen as incremental lift to Invisalign treatment with meaningful room for expansion. And by offering more portfolio flexibility, including streamlined configurations with no additional aligners, doctors have more options to meet patients' needs and drive adoption. In May, a clear aligner volumes grew double digits year over year, reaching record Q4 levels. We delivered double digit growth year over year across almost all markets, with Iberia, the Nordics, and the UK all delivering double digit growth. During the quarter, we surpassed key patient milestones reaching over a million patients treated in both the UK and Iberia. In APAC, clear aligner volumes grew double digits year over year, achieving a record number of Q4 shipments by China, India, and Korea, with strength across teens and growing kids. Growth reflected increases in both submitters and utilization in a GP channel, as well as an increase in orthosubmitter utilization. Invisalign First continued to grow. Adoption of Invisalign Pallet Expander System began in the region during the quarter. Retention performance remained strong year over year, supported by increased utilization across both channels. Regarding China's volume-based procurement processor, VPP, there continues to be implementation delays, and early phases are expected to begin within the public hospital system before expanding more broadly. As a reminder, over 85% of our business in China is in the private sector. While timing and scope remain fluid, We believe we are well positioned to navigate eventual pricing changes through our established local footprint, including local manufacturing, regulatory, and commercial infrastructure, and a product portfolio designed specifically for China's clinical and economic environment. In Q4, over 230,000 teens and growing kids started treatment with Invisalign clear aligners, an increase of 7% year-over-year. This growth was driven by strong performance in APAC, led by China, along with EMEA and Latin America, partially offset by continued softness in North America. Sequentially, case starts declined 9.8% as expected following an exceptionally strong Q3 teen season. From a product standpoint, Invisalign First, the Invisalign Pallet Expander, and MAOB, mandibular advancement with occlusal blocks, continue to fuel year-over-year growth across all regions. Invisalign First is used for patients ages 6 to 10. addressing phase one needs such as crowding, spacing, narrow arches, and erupting teeth. Our pallet expander system, the first direct-printed orthodontic appliance, and the only FDA-cleared removable pallet expander, remains a strong driver of early intervention adoption globally. Doctor engagement in the teen and early intervention category remains solid. In Q4, the number of doctors submitting cases for teens and growing kids increased 6% year over year, supported by continued strength in Invisalign First, Pallet Expander, and MAOB. The Invisalign system continues to demonstrate broad clinical applicability across younger patients and adults. Reinforced by our global scale and exceptional product portfolio, with more than 22 million patients treated worldwide, including over 6.5 million teens, our treatment planning platform is powered by a robust evidence-based ClinCheck Live plan, which can generate initial doctor-ready plans in about 15 minutes. leverages AI-driven planning tools and integrated digital workflows to reduce cycle times, enhance chair-side experience, and help doctors convert patients more efficiently. Our portfolio strategy, including products with lower upfront cost options, is expanding access for doctors while maintaining healthy margins. These configurations give providers more choices around refinements and pricing that continue to support adoption. We're also advancing direct fabrication, transitioning from thermal forming to 3D printing of clear align appliances. Direct fabrication will unlock new design flexibility and over time reduce waste and lower cost, although early production has some dilutive margin impact until scale. We remain on track for limited market release of Invisalign First direct 3D printed retainers and Invisalign Specific's 3D printed prefab attachments in 2026. with more complex products expected to follow in 2027. Invisalign's specific attachment system is a direct 3D printed accessory indicated to bond attachments and engagement features. Over the past year, it has advanced through technical design assessment and has been used successfully to treat over 1,000 patients. Feedback from participating doctors has been consistently positive, demonstrating strong clinical adoption and market validation. For imaging systems and CAD-CAM services, which includes iTero solutions and ExoCAD software, Q4 revenues were $209 million, up 4.2% year-over-year and up 10% sequentially, driven by higher volumes across all regions and continued adoption of iTero Luminous Scanner. Lumina represented approximately 86% of full systems units in the quarter, and we continue to drive utilization through full systems installations. During Q4, Exocad delivered sequential year-over-year revenue growth. We continued piloting Exocad ART, stands for Advanced Restorative Treatment, in several European markets, with broader rollout planned for this year. ART extends the digital platform deeper into restorative and lab workflows, increasing software-driven reoccurring revenue and enhancing efficiency for doctors and labs. Exocad's strong footprint in dental labs provides a critical connection point between restorative dentistry and digital orthodontics, helping integrate restorative planning more tightly with iTero scanning and Invisalign treatment. As GPs and labs, we are developing across solutions that streamline restorative workflows, improve communications, and increase predictability, from single tooth restorations to full arch cases. These advancements support broader digital adoption and create more opportunities to incorporate iTero scanning and where clinically appropriate, Invisalign treatment as part of comprehensive care. Our growing suite of digital diagnostic tools, including Align Oral Health Suite and Align X-Ray Insights, or AXI, helps doctors identify conditions earlier and deliver clearer, more informed treatment recommendations. When combined with the restorative capabilities of ExoCat and the visualization strength of iTero, these tools support better long-term oral health outcomes, and naturally connect straightening, function, and restorative care with a unified digital platform. By strengthening our capabilities across diagnostic, restorative, and orthodontic workflows, we're increasing our relevance in everyday oral health care and positioning Align, iTero, and ExoCAD as essential partners across the GP and lab ecosystem. With that, I'll now turn it over to John.