Align Technology Announces Second Quarter 2026 Financial Results

Record Q2'26 revenues of $1.06 billion increased 4.3% year-over-year, reflecting 8.2% growth from Clear Aligner revenues and a 10.8% decrease in Systems and Services revenues

Record Clear Aligner shipments of 691.8 thousand increased 7.4% year-over-year, led by double-digit international growth and stable North America performance

Year-over-year growth continued across key customer channels and patient segments, including orthodontists and GP dentists, as well as adult, teen, and kid patients

• Q2'26 total revenues were $1,056.2 million, up 1.5% sequentially and up 4.3% year-over-year
• Q2'26 total revenues were unfavorably impacted by foreign exchange by approximately $6.1 million sequentially, and favorably impacted by approximately $12.5 million year-over-year⁽¹⁾
• Q2'26 Clear Aligner revenues of $870.9 million increased 8.2% year-over-year, and Clear Aligner volume increased 7.4% year-over-year to 691.8 thousand cases
• Q2'26 Imaging Systems and CAD/CAM Services revenues of $185.3 million, increased 0.7% sequentially and decreased 10.8% year-over-year, reflecting softness in the capital equipment market and a mix shift toward lower-priced scanners and flexible acquisition models, including leasing and rental programs
• Q2'26 gross margin of 71.7% was unfavorably impacted by foreign exchange by approximately 0.2 points sequentially and by approximately 0.8 points year-over-year.⁽¹⁾ On a non-GAAP basis, Q2'26 gross margin was 72.3%⁽¹⁾_, up 1.8 points year-over-year or up approximately 2.6 points at constant currency
• Q2'26 operating margin of 14.6% was unfavorably impacted by foreign exchange by approximately 0.6 points sequentially and by approximately 1.4 points year-over-year.⁽¹⁾ On a non-GAAP basis, Q2'26 operating margin was 22.9%⁽¹⁾, up 1.6 points year-over-year or up approximately 3.1 points at constant currency.
• Q2'26 diluted net income per share was $1.51, non-GAAP diluted net income per share was $2.64.⁽¹⁾ Both Q2'26 GAAP and non-GAAP EPS were unfavorably impacted by approximately $0.23 on a year-over-year basis due to foreign exchange
• Q2'26 cash and cash equivalents were $1,102.6 million compared to approximately $1,059.8 million as of March 31, 2026
• Repurchased approximately 0.4 million shares, returning approximately $67.0 million to shareholders

TEMPE, Ariz.--(BUSINESS WIRE)--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 second quarter ("Q2'26"). Q2'26 total revenues were $1,056.2 million, up 1.5% sequentially and up 4.3% year-over-year. Q2'26 total revenues were unfavorably impacted by foreign exchange by approximately $6.1 million, or 0.6% sequentially, and favorably impacted by approximately $12.5 million, or 1.2% year-over-year.⁽¹⁾ Q2'26 Clear Aligner revenues were $870.9 million, up 1.7% sequentially and up 8.2% year-over-year. Q2'26 Clear Aligner revenues were unfavorably impacted by foreign exchange by approximately $5.1 million, or 0.6% sequentially, and favorably impacted by approximately $10.6 million, or 1.2% year-over-year.⁽¹⁾ Q2'26 Clear Aligner volume of 691.8 thousand cases was up 0.9% sequentially and up 7.4% year-over-year. Q2'26 Imaging Systems and CAD/CAM Services revenues were $185.3 million, up 0.7% sequentially and down 10.8% year-over-year. Q2'26 Imaging Systems and CAD/CAM Services revenues were unfavorably impacted by foreign exchange by approximately $1.0 million, or 0.5% sequentially, and favorably impacted by approximately $1.9 million, or 1.0% year-over-year.⁽¹⁾

Q2'26 gross profit was $757.4 million, resulting in a gross margin of 71.7%. Q2'26 gross margin was unfavorably impacted by foreign exchange by approximately 0.2 points sequentially.⁽¹⁾ On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 gross margin would have been approximately 72.0%. On a year-over-year basis, Q2'26 gross profit was unfavorably impacted by foreign exchange by approximately 0.8 points.⁽¹⁾ On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 gross margin would have been approximately 72.5%. On a non-GAAP basis, Q2'26 gross profit was $763.1 million, resulting in a gross margin of 72.3%.⁽¹⁾

Q2'26 operating income was $154.0 million, resulting in an operating margin of 14.6%. Q2'26 operating income was unfavorably impacted by an estimated $37.5 million liability, inclusive of interest, related to UK VAT. Q2'26 operating margin was unfavorably impacted by foreign exchange by approximately 0.6 points sequentially.⁽¹⁾ On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 operating margin would have been approximately 15.2%. On a year-over-year basis, Q2'26 operating margin was unfavorably impacted by foreign exchange by approximately 1.4 points.⁽¹⁾ On a constant currency basis, excluding the unfavorable foreign exchange impact, Q2'26 operating margin would have been approximately 16.0%.⁽¹⁾ Q2'26 net income was $108.3 million, or $1.51 per diluted share. Foreign exchange unfavorably impacted Q2'26 diluted net income per share by approximately $0.17 sequentially and by approximately $0.23 year-over-year. On a non-GAAP basis, Q2'26 net income was $189.1 million, or $2.64 per diluted share.⁽¹⁾

Commenting on Align's Q2'26 results, Align Technology President and CEO Joe Hogan said, “We delivered a solid second quarter with record revenues of $1.06 billion, up 4.3% year-over-year, driven by record Clear Aligner volumes of 691.8 thousand cases and 8.2% Clear Aligner revenue growth. Q2'26 revenues and Clear Aligner volumes were in line with our outlook, while Clear Aligner ASPs and non-GAAP operating margin of 22.9% exceeded our expectations. Q2’26 year-over-year Clear Aligner volume growth of 7.4% was driven by continued double-digit expansion across APAC, EMEA, and Latin America, together with stable performance in North America. Growth reflected continuing adoption across orthodontist and GP dentist channels and across adult, teen, and growing patient segments, as well as continued double-digit growth from DSOs. Investments in patient financing, clinical support programs, doctor subscription offerings, and practice productivity solutions supported adoption and utilization across our global Invisalign business. In Systems and Services, Q2’26 revenue performance reflected persistent softness in the capital equipment market as well as a shift toward lower-priced scanners and flexible acquisition models, including leasing and rental programs, which generate lower upfront revenue than traditional scanner purchases. By lowering the upfront cost of adoption, we can expand patient access to care, grow recurring revenue, and strengthen the Align™ Digital Platform."

Financial Summary - Second Quarter Fiscal 2026

As of June 30, 2026, we had approximately $1,102.6 million in cash and cash equivalents, compared to approximately $1,059.8 million as of March 31, 2026. As of June 30, 2026, we had $300.0 million available under our revolving line of credit and a $50.0 million letter of credit sub-limit.

Commenting on Align's Q2'26 results, Align Technology CFO and EVP Global Finance, John Morici said, "Our second quarter results reflect continued execution across the business. Solid Clear Aligner performance, disciplined expense management, and operational improvements supported revenue growth in-line with our outlook and non-GAAP operating margin above our expectations. Our growth initiatives continue to drive doctor adoption, utilization, and patient conversion. While Q2’26 Systems and Services revenue was below our original expectations, underlying scanner adoption remained healthy, and the reported lower revenues reflects lower price scanners and the transition toward lease and rental models that increase access to care by offering a broader range of purchasing options and increasing adoption of our digital scanning technology. This is a deliberate trade-off on our part. While this model may impact upfront economics and timing of revenue recognition, it enables us to serve more customers and to drive for higher-margin treatment revenue and drives durable long-term growth. Stronger Clear Aligner revenue growth and ASP performance helped offset the near-term impact. As more than 23 million patients have now been treated with the Invisalign^® System, we believe our integrated digital platform and disciplined execution position us to support customer growth, expand adoption, and drive long-term profitable growth. Our strong balance sheet and healthy free cash flow generation continue to provide flexibility to invest in innovation, support our customers, and return capital to shareholders. During the quarter we repurchased approximately 0.4 million shares, at an average price of $169.45 per share, returning approximately $67 million to shareholders, and ended the quarter with more than $1.1 billion in cash and cash equivalents. We remain committed to disciplined capital allocation, maintaining financial flexibility, and creating long-term value for shareholders."

Commenting on Align’s fiscal 2026 outlook, Hogan continued, “As we enter the second half of 2026, we believe we are well positioned to build on the momentum we saw in the first half of the year. We are entering the important teen treatment season with one of the industry's most comprehensive digital treatment portfolios for growing patients and teens. At the same time, we continue to expand opportunities in adult treatment through innovations that connect oral health, restorative workflows, and digital orthodontics, helping doctors incorporate Invisalign® treatment into broader patient care discussion. Our innovation engine remains a key differentiator and central to our growth strategy. Business model innovation, patient financing, subscription programs such as DSP, no-AA offerings, and digital workflow innovation are helping doctors improve patient conversion, increase utilization, and grow their practices. Every digital workflow begins with a scan, making scanner adoption important driver to increasing patient access to orthodontic care and long-term platform growth. As we continue to advance our innovation roadmap and direct fabrication technologies, we are creating more effective and personalized treatment solutions that improve clinical outcomes, enhance operating efficiency, and strengthen the customer experience across orthodontics and restorative dentistry.”

Align Announcement Highlights

Q2'26 Stock Repurchase

• During Q2'26, we repurchased approximately 393.4 thousand shares of our common stock at an average price of $169.45 per share. These purchases were made pursuant to the $200.0 million open market repurchase plan announced on April 29, 2026, which we expect will be completed in October 2026.
• As of June 30, 2026, $733.3 million remains available for repurchases of our common stock under our $1.0 billion stock repurchase program announced in April 2025.

Tariff Update as of June 30, 2026

• As a result of the Supreme Court's ruling on February 20, 2026, that certain of the tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were unlawful, we are no longer subject to IEEPA tariffs, but are subject to new, temporary tariffs on imports under Section 122 of the Trade Act of 1974, effective February 24, 2026, which was subsequently held unlawful by the U.S. Court of International Trade in a decision that remains subject to appeal. We do not expect this change to have a material impact on our results.

UK VAT update as of July 7, 2026

• Following the First-tier Tribunal's 2025 decision that clear aligners qualify as VAT-exempt dental prostheses, we stopped charging VAT to UK customers effective August 1, 2025. On July 7, 2026, the UK Upper Tribunal overturned that decision, determining that clear aligners do not qualify as VAT-exempt dental prostheses. We acknowledge the ruling and will comply with applicable law. Effective September 7, 2026, invoices will include UK VAT at 20% on applicable Invisalign® aligners and Vivera™ retainers — our list prices remain unchanged. As a result of the ruling, we have recorded an estimated liability of approximately $37.5 million, inclusive of interest. We intend to appeal, though the ultimate resolution remains subject to uncertainty.

Fiscal 2026 Business Outlook

Assuming no circumstances occur beyond our control, such as foreign exchange, macroeconomic conditions, an extended war, and changes to currently applicable duties, including tariffs or other fees that could impact our business:

Q3'26:

• We expect Q3’26 worldwide revenues to be in the range of $1,000M to $1,020M, down sequentially from Q2’26.
• We expect Q3’26 Clear Aligner volume to be up mid-single digits year-over-year and Q3’26 Clear Aligner ASP to be down sequentially from geographic mix and foreign exchange.
• We expect Q3'26 Systems & Services revenue to be down sequentially and year-over-year as a result of Q3 seasonality alongside a continued mix shift towards lower-priced scanners and flexible acquisition models, including leasing and rental units, and certified pre-owned offerings.
• We expect Q3’26 worldwide GAAP Gross Margin to be 67.5% to 68.5%, down sequentially approximately by 3 to 4 points, due to the incurrence of one-time charges expected to be approximately $20 to $30 million primarily for accelerated depreciation and restructuring and other charges in Q3'26.
• We expect Q3'26 non-GAAP Gross Margin to be approximately 71.0%, down sequentially from lower ASPs, consistent with typical Q3 quarter-over-quarter trends.
• We expect our Q3’26 GAAP Operating Margin to be between 13.5% and 15.0%, due to the incurrence of one-time charges expected to be approximately $35 to $50 million primarily for restructuring and other charges, and accelerated depreciation in Q3'26.
• We expect Q3'26 non-GAAP Operating Margin to be approximately 24.0%.

For Fiscal 2026:

• We continue to expect 2026 worldwide revenue growth to be up 3% to 4% year-over-year.
• Our full year 2026 revenue guidance continues to assume a benefit from foreign exchange that is consistent with the assumptions underlying our initial full year outlook. We expect the impact of foreign exchange to moderate in the remaining quarters, trending toward the full-year assumption of approximately 100 basis points.
• We now expect 2026 Clear Aligner volume growth to be up approximately 6% year-over-year and 2026 Clear Aligner ASP to be flat to slightly down from 2025.
• We now expect 2026 Systems & Services revenue growth to be down 6% to 8% year-over-year as we anticipate a continued mix shift towards lower-priced scanners and more flexible acquisition models in 2H’26. We expect our 2026 iTero scanner shipment growth to be up double-digits year-over-year, reflecting continued customer adoption and scanner placements - and helping to underpin our second half outlook for Invisalign volumes.
• We expect 2026 GAAP Gross Margin to be approximately 70.2% to 70.5%, up year-over-year by approximately 3 points, due to the incurrence of one-time charges expected to be approximately $30 to $40 million primarily for accelerated depreciation and restructuring and other charges, partially offset by gain on assets held for sale.
• We expect 2026 non-GAAP Gross Margin to be up approximately 100 basis points over 2025 non-GAAP Gross Margin.
• We expect 2026 GAAP Operating Margin to be approximately 15.1% to 15.6%, up year-over-year by approximately 2 points, due to the incurrence of one-time charges expected to be approximately $90 to $110 million, primarily related to restructuring and other charges, accelerated depreciation, and legal settlements, partially offset by gain on assets held for sale. In Q2'26 we recorded $38 million for clear aligner UK VAT liability.
• We expect 2026 non-GAAP Operating Margin to be approximately 23.7%, a 100-basis point improvement year-over-year consistent with our previous guidance.
• We expect our investments in capital expenditures for fiscal 2026 to be $125 million to $150 million. Capital expenditures primarily relate to technology upgrades, additional manufacturing capacity as well as maintenance.
• We now expect to repurchase $400 million to $500 million of our common stock in 2026, reflecting the conviction of the Board and Management in Align's long-term value. This includes approximately $133 million of our common stock we expect to repurchase through October 2026.

Commenting on the Company’s outlook, Morici continued, “I want to take a moment to offer some preliminary, high-level framing for 2027, especially given the work we are doing to drive growth, cost discipline and margin expansion. To be clear—we are not issuing formal guidance for next year—it’s too early and our strategic and operating model review is still underway. However, we remain laser focused on executing our strategic plan for profitable revenue growth across our two operating segments. Based on our continued progress and the initiatives we outlined in the Strategic Initiatives press release today, we are comfortable targeting at least that same level of improvement in operating margin again in fiscal 2027, on top of the approximately 100 basis points of operating margin improvement we reiterated today for fiscal 2026. For fiscal 2027, we currently expect GAAP and non-GAAP operating margins to increase at least approximately 100 basis points year-over-year. We’ll share more details after our strategic and operating model review is complete and in conjunction with formal 2027 guidance.”

Align Webcast and Conference Call

We will host a conference call today, July 29, 2026, at 4:30 p.m. EDT, 1:30 p.m. PDT, to review our Q2'26 financial results, discuss future operating trends, and our business outlook. The conference call will also be webcast live via the Internet. To access the webcast, go to the "Events & Presentations" section under "Company Information" on Align's Investor Relations website at http://investor.aligntech.com. To access the conference call, participants may register for the call at https://edge.media-server.com/mmc/p/voy55bot. An archived audio webcast will be available 2 hours after the call's conclusion and will remain available for one month.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles ("GAAP") in the United States ("U.S. GAAP"), we use the following non-GAAP financial measures: constant currency net revenues, constant currency gross profit, constant currency gross margin, constant currency income from operations, constant currency operating margin, constant currency diluted net income per share, non-GAAP constant currency gross margin, non-GAAP constant currency operating margin, non-GAAP gross profit, non-GAAP gross margin, non-GAAP total operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted net income per share. These non-GAAP financial measures exclude certain items that may not be indicative of our fundamental operating performance, including foreign currency exchange rate impacts, the effects of stock-based compensation, amortization of intangible assets related to certain acquisitions, restructuring and other charges, legal settlements and contingencies, acquisition-related costs, discrete cash and non-cash charges or gains and associated tax impacts that are included in the most directly comparable GAAP financial measure.

Our management believes that the use of certain non-GAAP financial measures provides meaningful supplemental information regarding our recurring core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and (2) they are used by our institutional investors and the analyst community to help them analyze the performance of our business.

There are material limitations to using non-GAAP financial measures as they are not prepared in accordance with U.S. GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. Non-GAAP financial measures exclude certain items that may have a material impact upon our reported results of operations, which can limit their usefulness for comparison purposes. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which charges and gains are excluded or included from the non-GAAP financial measures. We compensate for these limitations by analyzing current and future results on both a GAAP and non-GAAP basis and by providing specific information regarding the GAAP amounts excluded or included from these non-GAAP financial measures in our public disclosures. The presentation of non-GAAP financial information is meant to be considered in addition to, not as a substitute for, superior to, or in isolation from, the directly comparable financial measures prepared in accordance with U.S. GAAP. We urge investors to review the reconciliation of our GAAP financial measures to the comparable non-GAAP financial measures included herein and not to rely on any single financial measure to evaluate our business. For more information on these non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please see the tables captioned "Unaudited GAAP to Non-GAAP Reconciliation."

About Align Technology, Inc.

Align Technology designs and manufactures the Invisalign^® System, the most advanced clear aligner system in the world, iTero™ intraoral scanners and services, and exocad™ CAD/CAM software. These technology building blocks enable enhanced digital orthodontic and restorative workflows to improve patient outcomes and practice efficiencies for over 302.0 thousand doctor customers and are key to accessing Align’s 600 million consumer market opportunity worldwide.

Align Technology
Madelyn Valente
(909) 833-5839
mvalente@aligntech.com

Zeno Group
Sarah Karlson
(828) 551-4201
sarah.karlson@zenogroup.com