Wednesday, May 4, 2022

Align Technology Announces First Quarter 2022 Financial Results


When I started in dentistry, orthodontics required wires, years of treatment, sometimes extractions, AND a referral to a specialist.  my how times have changed.  Into that orthodontic process stepped Align Technologies and their product Invisalign.  The entire process rocked the tooth moving world and proved an incredible concept of healthcare.  Suddenly computer simulation could create a product that moved teeth and didn't involve wires.  Today the market for orthodontic services is higher than ever and more general dentists, like me, are treating a large percentage of patients.  And yet, orthodontists are busier than ever.  Align was a disrupter, but also an instigator or progress...

Now their numbers continue to prove every year just how successful the are...

Commemorates 25 years of smiles and innovation through doctor-directed care with major milestones including 217K Invisalign trained doctors, 12.8M Invisalign patients, 73K iTero scanners, and 49K exocad software licenses

  • Q1'22 total revenues of $973.2 million, compared to $894.8 million in Q1'21
  • Q1'22 Invisalign volume of 598.8 thousand cases, compared to 595.8 thousand cases in Q1'21
  • Q1'22 Invisalign cases for teenage patients of 175.2 thousand cases, 29.3% of total volumes, compared to 165.3 thousand cases, or 27.7% of total volumes in Q1'21
  • Q1'22 Clear Aligner revenues of $809.7 million, compared to $753.3 million in Q1'21
  • Q1'22 Imaging Systems and CAD/CAM Services revenues of $163.5 million, compared to $141.5 million in Q1'21
  • Q1'22 diluted net income per share of $1.70; Q1 non-GAAP diluted net income per share of $2.13
 Align Technology, Inc. (Nasdaq: ALGN), a leading global medical device company that designs, manufactures, and sells the Invisalign system of clear aligners, iTero intraoral scanners, and exocad CAD/CAM software for digital orthodontics and restorative dentistry, today reported financial results for the first quarter of fiscal 2022 ("Q1'22"). Q1'22 total revenues were $973.2 million, down 5.6% sequentially and up 8.8% year-over-year. Q1'22 Clear Aligner revenues were $809.7 million, down 0.7% sequentially and up 7.5% year-over-year. Q1'22 Imaging Systems and CAD/CAM Services revenues were $163.5 million, down 24.2% sequentially and up 15.6% year-over-year. Q1'22 Clear Aligner volume was down 5.1% sequentially and up 0.5% year-over-year. For the Americas, Q1'22 Clear Aligner case volume was down 4.3% sequentially and down 1.5% year-over-year. For our International region, Q1'22 Clear Aligner case volume was down 6.1% sequentially and up 3.0% year-over-year. Q1'22 Clear Aligner case volume for teens was down 3.6% sequentially and up 6.0% year-over-year. Q1'22 operating income was $198.1 million resulting in an operating margin of 20.4%. Q1'22 net income was $134.3 million, or $1.70 per diluted share. On a non-GAAP basis, Q1'22 net income was $168.7 million or $2.13 per diluted share.

Commenting on Align's first quarter results, Align Technology President and CEO Joe Hogan said, “Overall, the first quarter proved to be a tougher than expected operating environment globally and we believe our results primarily reflect three factors: the continued impact of COVID-19 waves in every region and especially in China with its restrictions and lockdowns under their zero-COVID policy; a weaker economic environment and waning consumer confidence driven by increasing inflationary pressures and supply chain disruptions; and the military conflict in Ukraine and fallout across Europe. In addition, with approximately half our business occurring outside of the U.S., unfavorable foreign exchange rates negatively impacted our revenues, margins, and EPS. Notwithstanding these headwinds, Q1’22 total revenues of $973.2 million were up 8.8% year-over-year. This is compared to Q1’21 revenues of $894.8 million which had year-over-year revenue growth rate of 62.4% from Q1'20 to Q1'21. Our Q1’22 operating income was $198.1 million and operating margin was 20.4%.”

Continued Hogan, “We know that COVID lockdowns, weaker consumer confidence, inflationary pressures, and the Russia/Ukraine conflict have created headwinds, but we remain excited and are committed to realizing the enormous opportunity in front of us to lead the evolution of digital orthodontics and comprehensive dentistry. With less than 10% share of the 21 million orthodontic case starts each year, and with over 500 million people globally who can benefit from a healthy beautiful smile, our market is as large as ever. No other company is as well positioned as us to take advantage of that potential as the environment improves and growth trends return. We will continue focusing on the relentless execution of our strategic growth drivers while managing investments in the near term to account for the headwinds and uncertainty and we remain confident in our long term revenue growth target of 20-30%.”

Financial Summary - First Quarter Fiscal 2022

  Q1'22 Q4'21 Q1'21 Q/Q Change Y/Y Change
Invisalign Case Shipments 598,835 631,145 595,820 (5.1)% +0.5%
Net Revenues $973.2M $1,031.1M $894.8M (5.6)% +8.8%
Clear Aligner $809.7M $815.3M $753.3M (0.7)% +7.5%
Imaging Systems and CAD/CAM Services $163.5M $215.8M $141.5M (24.2)% +15.6%
Net Income $134.3M $191.0M $200.4M (29.7)% (33.0)%
Diluted EPS $1.70 $2.40 $2.51 ($0.70) ($0.81)
Net Income $168.7M $224.5M $198.4M (24.9)% (15.0)%
Diluted EPS $2.13 $2.83 $2.49 ($0.70) ($0.36)
As of March 31, 2022, we had $1.1 billion in cash, cash equivalents and short-term and long-term marketable securities, compared to $1.3 billion as of December 31, 2021. We also have $300.0 million available under a revolving line of credit. In February 2022, we purchased approximately 143.6 thousand shares of our common stock at an average price of $522.61 per share through open market repurchases, for a purchase price of $75.0 million. We have approximately $650.0 million remaining available for repurchase under our May 13, 2021, $1.0 Billion Repurchase Program.

Q1'22 Announcement Highlights

April 3, 2022 marked the 25th anniversary of the founding of Align Technology and 25 years of smiles and innovation in digital orthodontics and restorative dentistry. Align is commemorating this significant milestone of doctor-directed care with over 217 thousand Invisalign trained doctors, 12.8 million Invisalign patients, 73 thousand iTero scanners, and 49 thousand exocad software licenses.
On March 18, 2022, we announced the new Cone Beam Computed Tomography ("CBCT") integration feature for ClinCheck digital treatment planning software, a user-friendly tool that combines roots, bone, and crowns into a single three-dimensional model that enables doctors to visualize patients' roots as part of the digital treatment planning process. The CBCT integration feature helps doctors confidently expand diagnosis and treat a broader range of cases with Invisalign clear aligners by increasing visibility and control of a patient’s underlying anatomical structures during the digital treatment planning process.
On February 2, 2022, we announced Invisalign system innovations for the Align Digital Platform, a proprietary combination of software, systems, and services designed to provide a seamless experience and workflow that integrates and connects all users – doctors, labs, patients, and consumers. These Invisalign system innovations include ClinCheck Live Update for 3D controls, the Invisalign Practice App, Invisalign Personalized Plan ("IPP"), and Invisalign Smile Architect, and will revolutionize digital treatment planning for orthodontics and restorative dentistry by providing doctors with greater flexibility, consistency of treatment preferences, and real-time treatment plan access and modification capabilities. Each of these innovations is designed to enhance Invisalign treatment planning quality, efficiency, and scale, and contribute to a better doctor-patient engagement and treatment outcomes.
Q2'22 Stock Repurchase

During Q2'22, we expect to repurchase up to $200.0 million of our common stock through either, or a combination of, open market repurchases or an accelerated stock repurchase agreement.

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