Align TechnologyALGN

The company reached a new high for quarterly revenue, growing about 4 percent from last year. This growth was led by the clear aligner business, which saw shipments rise over 7 percent to nearly 692,000 cases. While sales of the expensive iTero scanners fell about 11 percent as dental offices grew cautious about big purchases, the core Invisalign business remains healthy.

The results show that the company is successfully finding growth outside the United States, where high interest rates have made consumers more hesitant to start elective dental work. International markets saw double-digit growth, and the company continues to win over younger patients. This suggests the business can still expand even when its largest market is cooling off.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• International aligner growth: Clear aligner shipments grew 7.4% year-over-year to 691.8 thousand cases, a record high led by double-digit expansion across international markets. This volume growth shows the company is successfully finding new patients outside of North America even as spending on expensive dental procedures remains under pressure.
• Scanner revenue decline: Revenue from imaging systems and services dropped 10.8% to $185.3 million compared to last year. This dip happened because the company is shifting toward lower-priced scanners and leasing models that bring in less money upfront but help get more digital tools into dentist offices for the long run.
• Operating margins improving: The adjusted operating margin, which tracks the profit left after business costs, rose to 22.9% from 21.3% a year ago. Management hit this higher level of profitability through disciplined spending and better efficiency despite facing $12.5 million in currency hurdles.
• Unexpected tax charge: The company recorded a $37.5 million liability for unpaid taxes in the United Kingdom after a court ruled that clear aligners are not exempt from value-added tax. While the company plans to appeal, it will start adding 20% tax to its invoices there in September, which could make its products more expensive for British patients.
• Full year outlook: Management expects total revenue for 2026 to grow between 3% and 4% compared to last year. They also raised their target for clear aligner volume growth to 6%, up from previous expectations, as they enter the busy season for teen dental treatments.

Our take: A solid quarter that proves the core aligner business can still grow even when the economy makes people hesitant to buy expensive scanners. While the capital equipment side is soft, the move toward leasing and cheaper hardware should help secure more long-term treatment revenue. This strategy strengthens the case for owning the stock through current market volatility.