ALIGN TECHNOLOGY INC (ALGN): Results of Operations and Financial Condition
ALIGN TECHNOLOGY INC (ALGN) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Align Technology Announces Second Quarter 2026 Financial Results Align Technology Zeno Group Madelyn Valente Sarah Karlson (909) 833-5839 (828) 551-4201 mvalente@aligntech.com sarah.karlson@zenogroup.com ALIGN TECHNOLOGY ANNOUNCES SECOND QUARTER 2026 FINANCIAL RESULT
How this was made
The 30-second read
Why it matters
Clear Aligner revenues and shipments grew year over year, while Imaging Systems and CAD/CAM Services declined, and GAAP profitability was pressured by FX and a UK VAT-related liability. The company also reported cash balance and share repurchases.
Market read
This is a primary earnings disclosure with segment-level growth/decline and margin bridge details that can drive same-day positioning and near-term estimate revisions.
What to watch
Non-GAAP margins and EPS look stronger than GAAP; traders should separate underlying operating performance from FX and one-time tax-related impacts when updating forward estimates.
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 revenue and Clear Aligner shipments, Clear Aligner revenue growth, and higher non-GAAP profitability were offset by declining Systems and Services revenue, lower GAAP net income, foreign exchange pressure, and a UK VAT-related liability.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Clear Aligner Shipmentsother | 691,785 | +0.9% | +7.4% |
| Net RevenuesGAAP | $1,056.2M | +1.5% | +4.3% |
| Gross ProfitGAAP | $757.4 million | – | – |
| Gross MarginGAAP | 71.7% | – | – |
| Gross Profitnon-GAAP | $763.1 million | – | – |
| Gross Marginnon-GAAP | 72.3% | – | up 1.8 points year-over-year |
| Operating IncomeGAAP | $154.0 million | – | – |
| Operating MarginGAAP | 14.6% | – | – |
| Operating Marginnon-GAAP | 22.9% | – | up 1.6 points year-over-year |
| Net IncomeGAAP | $108.3M | (4.0)% | (13.1)% |
| Diluted EPSGAAP | $1.51 | ($0.06) | ($0.20) |
| Net Incomenon-GAAP | $189.1M | +2.5% | +4.4% |
| Diluted EPSnon-GAAP | $2.64 | +$0.07 | +$0.15 |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Clear AlignerRecord Clear Aligner volumes of 691.8 thousand cases, continued double-digit expansion across APAC, EMEA, and Latin America, stable North America performance, and adoption across orthodontist and GP dentist channels and adult, teen, and growing patient segments. | $870.9M | +1.7% | +8.2% |
| Imaging Systems and CAD/CAM ServicesPersistent softness in the capital equipment market and a mix shift toward lower-priced scanners and flexible acquisition models, including leasing and rental programs. | $185.3M | +0.7% | (10.8)% |
Capital returns
- Repurchased approximately 0.4 million shares, at an average price of $169.45 per share, returning approximately $67 million to shareholders.
What drove it
- 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.
- 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.
- Investments in patient financing, clinical support programs, doctor subscription offerings, and practice productivity solutions supported adoption and utilization across the global Invisalign business.
- More than 23 million patients have now been treated with the Invisalign System.
Concerns
- Imaging Systems and CAD/CAM Services revenue decreased 10.8% year-over-year.
- GAAP net income decreased 13.1% year-over-year and 4.0% sequentially.
- Q2'26 operating income was unfavorably impacted by an estimated $37.5 million liability, inclusive of interest, related to UK VAT.
- Foreign exchange unfavorably impacted Q2'26 diluted net income per share by approximately $0.17 sequentially and by approximately $0.23 year-over-year.
- Leasing and rental models generate lower upfront revenue than traditional scanner purchases and may impact upfront economics and timing of revenue recognition.
What to watch
- Clear Aligner shipment growth and Clear Aligner revenue growth during the important teen treatment season.
- Whether double-digit expansion across APAC, EMEA, and Latin America continues alongside stable North America performance.
- Systems and Services capital-equipment demand, scanner pricing mix, and the transition toward leasing and rental programs.
- The impact of patient financing, subscription programs such as DSP, no-AA offerings, and digital workflow innovation on doctor conversion and utilization.
- Foreign exchange effects and the UK VAT-related liability on reported profitability.
Balance sheet and cash flow
- As of June 30, 2026, cash and cash equivalents were approximately $1,102.6 million, compared to approximately $1,059.8 million as of March 31, 2026.
- As of June 30, 2026, the company had $300.0 million available under its revolving line of credit and a $50.0 million letter of credit sub-limit.
- The company described free cash flow generation as healthy; no free cash flow amount was reported.
Analysis
Align reported record Q2'26 GAAP net revenues of $1,056.2M, up 1.5% sequentially and 4.3% year-over-year. The principal contributor was Clear Aligner, where revenue rose 8.2% year-over-year to $870.9M and shipments increased 7.4% to 691,785. Management attributed volume growth to double-digit expansion across APAC, EMEA, and Latin America, stable North America performance, and continued adoption among orthodontists, GP dentists, and adult, teen, and growing patient segments.
The growth mix remained uneven. Imaging Systems and CAD/CAM Services revenue was $185.3M, up 0.7% sequentially but down 10.8% year-over-year. Management cited persistent capital-equipment softness, lower-priced scanner mix, and increased leasing and rental adoption. The company characterized the migration toward flexible acquisition models as deliberate, noting lower upfront revenue and potential effects on timing of revenue recognition while seeking broader scanner adoption, recurring revenue, and treatment-revenue growth.
Reported profitability diverged from adjusted profitability. GAAP gross margin was 71.7%, while non-GAAP gross margin was 72.3%, up 1.8 points year-over-year. GAAP operating income was $154.0 million and GAAP operating margin was 14.6%; operating income included an estimated $37.5 million UK VAT-related liability, inclusive of interest. Non-GAAP operating margin was 22.9%, up 1.6 points year-over-year. GAAP net income fell to $108.3M from $124.6M in Q2'25, and GAAP diluted EPS declined to $1.51 from $1.72. In contrast, non-GAAP net income increased to $189.1M and non-GAAP diluted EPS increased to $2.64. Foreign exchange was a reported headwind to revenue, margins, and EPS sequentially, and reduced diluted EPS by approximately $0.23 year-over-year.
Capital allocation remained active. Align ended June 30, 2026 with approximately $1,102.6 million of cash and cash equivalents, compared with approximately $1,059.8 million at March 31, 2026, and had $300.0 million available under its revolving line of credit. During the quarter, it repurchased approximately 0.4 million shares at an average price of $169.45 per share, returning approximately $67 million to shareholders. No numerical fiscal 2026 outlook was included in the supplied filing text, so the next measurable catalysts remain Clear Aligner demand through the teen treatment season, scanner economics, and margin effects from foreign exchange and the UK VAT matter.
Management, verbatim
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.
Joe Hogan, President and CEO
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.
John Morici, CFO and EVP Global Finance
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 durable long-term growth.
John Morici, CFO and EVP Global Finance
Not in the filing
stated, not guessed- Numerical fiscal 2026 forward guidance for revenue, gross margin, operating expenses, tax rate, EPS, shipments, or other metrics was not included in the supplied filing text.
- Previous-period outlook was not provided, so reported results cannot be compared with prior numerical guidance.
- GAAP gross profit prior-quarter and prior-year figures and changes were not reported.
- GAAP and non-GAAP gross-margin prior-quarter figures were not reported.
- GAAP operating income, GAAP operating margin, and non-GAAP operating margin prior-quarter and prior-year dollar figures were not reported.
- Operating cash flow amount was not reported.
- Free cash flow amount was not reported.
- Debt balance was not reported.
- Dividend information was not reported.
- Clear Aligner ASP figures were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The filing is an SEC Form 8-K with Exhibit 99.1 reporting Align Technology’s second quarter fiscal 2026 financial results.
Ticker impact
Align Technology reported Q2 2026 results, including record $1.06B revenues, Clear Aligner volume of 691.8k cases, and margin/EPS figures.
Near-term bias likely positive if investors focus on record revenues and Clear Aligner volume growth, but GAAP margin pressure and the UK VAT liability may cap upside.
The filing provides multiple concrete datapoints (revenue, volume, segment trends, gross/operating margin, GAAP vs non-GAAP EPS) that can drive earnings-model updates and positioning.
Market effects
Signals continued Invisalign/Clear Aligner adoption strength while capital equipment-linked scanner demand remains soft, relevant for digital orthodontics peers.
International growth is highlighted (double-digit APAC, EMEA, Latin America), which may influence regional demand expectations.
FX is explicitly cited as a swing factor for revenues and margins, reinforcing currency sensitivity for global medtech earnings.
Counterpoint
Investors may discount the record revenue headline because Systems and Services revenue fell 10.8% YoY and GAAP operating margin was pressured by a UK VAT liability plus FX.
Key entities
- companyAlign Technology, Inc.
Reported Q2 2026 financial results, including record revenues and Clear Aligner volume growth, plus margin/EPS impacts from FX and a UK VAT liability.
