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What changed in Align Technology's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Align Technology's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+541 added−506 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in Align Technology's 2025 10-K

541 paragraphs added · 506 removed · 404 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

151 edited+40 added−22 removed82 unchanged
Biggest changeMalocclusion Very Mild Moderate Severe Product Invisalign® Express Package Invisalign® Lite Package Invisalign Go™ (GP) Invisalign® Moderate Packages (& Invisalign Go™ Plus) Invisalign® Comprehensive Packages Treatment Stages* 7 14 20 20-26 As many as required Clinical Scope Relapse and minor movement, anterior esthetic alignment Up to 2mm AP correction, crowding/spacing, lower incisor extraction, pre-restorative No AP correction, mild to moderate crowding, spacing, lower incisor extraction, pre-restorative tooth movement from 2nd premolar to 2nd premolar (5x5) Class I, mild AP correction, moderate crowding/spacing, mild anterior / posterior and vertical discrepancies, pre-restorative, (Go Plus tooth movement from 1st molar to 1st molar (6X6)) Class I, II, III, moderate to severe crowding/spacing, anterior / posterior and vertical discrepancies, extractions, complex pre-restorative * The number of stages can vary by product and region.
Biggest changeThe table below provides a general description of the categories of products in our Invisalign System offered in various regions as they typically correspond to the severity of malocclusion and length of anticipated treatment. 7 Malocclusion Very Mild to Mild Mild to Moderate Moderate to Severe Product Invisalign ® Express Package Invisalign ® Lite Package Invisalign Go Package Limited Movement (GP) Invisalign ® Moderate Package Invisalign ® Comprehensive Packages Treatment Stages* 7 14 20 20-26 As many as required Clinical Scope Relapse and minor movement, anterior esthetic alignment Class I, mild crowding/spacing, non-extraction, pre-restorative Class I, no AP correction, mild to moderate crowding/spacing, non-extraction, pre-restorative.
Some of the tools that support this stage are Invisalign.com, the Invisalign SmileView TM tool, My Invisalign app, Doctor Locator, Invisalign ® Practice App, and Invisalign ® Virtual Appointment. • Scan: During this stage, patient data is captured through intraoral scanning.
Some of the tools that support this stage are Invisalign.com, Invisalign ® Doctor Locator, Invisalign SmileView TM tool, Invisalign ® Practice App, Invisalign ® Virtual Appointment and My Invisalign TM app. • Scan: During this stage, patient data is captured through intraoral scanning.
Our business strategy remains focused on increasing our share of the existing market of orthodontic case starts compared to brackets and wires, especially among teens, and expand the market for digital orthodontics, especially among adults.
Our business strategy remains focused on increasing our share of the existing market of orthodontic case starts compared to wires and brackets, especially among teens, and expand the market for digital orthodontics, especially among adults.
In various markets we also offer Invisalign Go TM , Invisalign Go TM Express and Invisalign Go Plus, which are streamlined non-comprehensive packages designed for GPs to more easily identify and treat patients with mild-to-moderate malocclusion cases, expand arch width, align anterior teeth prior to restorative treatment, and move teeth from second pre-molar to second pre-molar.
In various markets we also offer Invisalign Go TM , Invisalign Go TM Express and Invisalign Go TM Plus, which are streamlined non-comprehensive packages designed for GPs to more easily identify and treat patients with mild-to-moderate malocclusion cases, expand arch width, align anterior teeth prior to restorative treatment, and move teeth from second pre-molar to second pre-molar.
We continuously upgrade our proprietary, three-dimensional treatment planning software to enhance computer analysis of treatment data and to reduce time spent on manual and judgmental tasks for each case, thereby increasing the efficiency of our technicians.
We continuously upgrade our proprietary, three-dimensional treatment planning software to enhance computer analysis of treatment data and reduce time spent on manual and judgmental tasks for each case, thereby increasing the efficiency of our technicians.
In part to help mitigate risks to our manufacturing operations, we have strategically located our clear aligner production facilities in three facilities on different continents. This allows us to both respond more quickly to customer demand while also offering redundancy in the event natural disasters or climate-related events affect operations at one or more facilities.
In part to help mitigate risks to our manufacturing operations, we have strategically located our clear aligner production facilities on three different continents. This allows us to both respond more quickly to customer demand while also offering redundancy in the event natural disasters or climate-related events affect operations at one or more facilities.
We also seek to protect our software, documentation and other written materials under trade secret and copyright laws. We furthermore have a broad and diverse trademark portfolio that we use to highlight and protect our universally recognized brands.
We also seek to protect our software, documentation and other written materials under trade secret and copyright laws. We furthermore have a broad and diverse trademark portfolio that we use to highlight and protect universally recognized brands.
A discussion of the risks of our supply and manufacturing operations, including foreign operations, may be found in Item 1A of this Annual Report on Form 10-K under the heading “ Risk Factors .” Sales and Marketing Our sales and marketing efforts are focused on increasing adoption and utilization of the Invisalign System and Vivera retainers by orthodontists and GPs worldwide and integrating the iTero scanner and services and exocad CAD/CAM products into dental labs and practices.
A discussion of the risks of our supply and manufacturing operations, including foreign operations, may be found in Item 1A of this Annual Report on Form 10-K under the heading “ Risk Factors .” Sales and Marketing Our sales and marketing efforts are focused on increasing adoption and utilization of the Invisalign System and Vivera retainers by orthodontists and GPs and integrating the iTero scanner and services and exocad CAD/CAM products into dental labs and practices.
Information regarding risks associated with our proprietary technology and our intellectual property rights may be found in Part I, Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.” Seasonal Fluctuations General economic conditions impact our business and financial results, and we have historically experienced seasonal trends within our two operating segments, customer channels and the geographic locations that we serve.
Information regarding risks associated with our proprietary technology and our intellectual property rights may be found in Part I, Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.” Seasonal Fluctuations General economic conditions impact our business and financial results, and we have historically experienced seasonal trends within our two operating segments, customer channels and geographic locations we serve.
The laws govern different interactions and may include: prohibiting improper influence of or payments to healthcare professionals, other decision makers or purchasers of medical devices and government officials; setting out rules for when and how to engage healthcare professionals; marketing our products within the regulatory approval (e.g., on label) promotion, sale and marketing of our products and services; the importing and exporting of our products; the operation of our facilities and distribution of our products; and disclosure of payments to healthcare professionals and institutions.
The laws govern different interactions and may include: prohibiting improper influence of or payments to healthcare professionals, other decision makers or purchasers of medical devices and government officials; 16 setting out rules for when and how to engage healthcare professionals; marketing our products within the regulatory approval (e.g., on label) promotion, sale and marketing of our products and services; the importing and exporting of our products; the operation of our facilities and distribution of our products; and disclosure of payments to healthcare professionals and institutions.
We view climate-related risks to be one of many operational challenges we face and factor them into our business continuity planning and strategic risk mitigation efforts. 12 For instance, our manufacturing plants and operations may be impacted by extreme temperatures and weather, subjecting us to potential brownouts and blackouts, increased energy costs and capital investments needed to maintain ideal operating temperatures.
We view climate-related risks to be one of many operational challenges we face and factor them into our business continuity planning and strategic risk mitigation efforts. For instance, our manufacturing plants and operations may be impacted by extreme temperatures and weather, subjecting us to potential brownouts and blackouts, increased energy costs and capital investments needed to maintain ideal operating temperatures.
Moreover, the digital model file can be used for various procedures and services including fabrication of physical dental models for use by labs to create restorative units such as veneers, inlays, onlays, crowns, bridges and implant abutments; digital records storage; aid to caries detection; orthodontic diagnosis; orthodontic retainers and appliances; and Invisalign digital impression submission. iTero Scanner .
Moreover, the digital model file can be used for various procedures and services including fabrication of physical dental models for use by labs to create restorative units such as veneers, inlays, onlays, crowns, bridges and implant abutments; digital records storage; aid to caries detection; orthodontic diagnosis; orthodontic retainers and appliances; and Invisalign ® digital impression submission. iTero Element™ Scanner.
Research and Development We are committed to investing in world-class digital technology development, which we believe is critical to achieving our goal of establishing the Invisalign System as the standard method for treating malocclusion, our iTero intraoral scanners as the preferred scanning technology for digital dental scans, and our exocad CAD/CAM software as the solution of choice for dental labs.
Research and Development We are committed to investing in world-class digital and clinical technology development, which we believe is critical to achieving our goal of establishing the Invisalign System as the standard method for treating malocclusion, our iTero intraoral scanners as the preferred scanning technology for digital dental scans, and our exocad CAD/CAM software as the solution of choice for dental labs.
The Invisalign System The Invisalign System is a proprietary method for treating malocclusion based on a proprietary computer-simulated virtual treatment plan and a series of doctor-prescribed, custom manufactured, clear polymer removable aligners. We received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market the Invisalign System in 1998.
The Invisalign System 6 The Invisalign System is a proprietary method for treating malocclusion based on a proprietary computer-simulated virtual treatment plan and a series of doctor-prescribed, custom manufactured, clear polymer removable aligners. We received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market the Invisalign System in 1998.
Clear Aligner Segment Malocclusion and Traditional Orthodontic Treatment 5 Malocclusion is one of the most prevalent clinical dental conditions in the world, affecting approximately 60% to 75% of the global population. We estimate that there are approximately 600 million people globally with malocclusion who could benefit from straightening their teeth.
Clear Aligner Segment Malocclusion and Traditional Orthodontic Treatment Malocclusion is one of the most prevalent clinical dental conditions in the world, affecting approximately 60% to 75% of the global population. We estimate that there are approximately 600 million people globally with malocclusion who could benefit from straightening their teeth.
Manufacturing and Suppliers We have regional fabrication facilities in our main markets for clear aligners, which are located in Juarez, Mexico; Ziyang, China; and Wroclaw, Poland. We believe this allows us to better serve our global customer base by being closer to our doctor customers and driving efficiencies in the business.
Manufacturing and Suppliers We have regional fabrication facilities in our main markets for clear aligners, which are located in Juarez, Mexico; Ziyang, China; and Wroclaw, Poland. We believe this allows us to better serve our global customer base by being closer to our customers and driving efficiencies in the business.
As part of our manufacturing resiliency design efforts, we have also considered climate change and climate-related risks such as higher average global temperatures, rising sea levels and more frequent and severe wildfires, hurricanes, floods, winter storms, heat waves and other events and natural disasters (collectively, “climate-related risks”).
As part of our manufacturing resiliency design efforts, we have also considered climate change related risks such as higher average global temperatures, rising sea levels and more frequent and severe wildfires, hurricanes, floods, storms, heat waves and other events and natural disasters (collectively, “climate-related risks”).
Failure to obtain appropriate marketing authorization and to meet all local requirements, including specific quality and safety standards and new software and AI standards in any country in which we currently market our products, could cause commercial disruption and/or subject us to sanctions and fines.
Failure to obtain appropriate marketing authorization and meet all local requirements, including specific quality and safety standards and new software and AI standards in any country in which we market our products, could cause commercial disruption and/or subject us to sanctions and fines.
Moreover, to improve efficiency and increase the scale of our operations, we continue to invest in the development of automated systems for the fabrication and packaging of clear aligners. In addition, predictable and consistent production is essential to our commitment to timely deliver products to our customers efficiently and profitably.
Moreover, to improve efficiency and increase the scale of our operations, we continue to invest in the development of automated systems for the fabrication and packaging of clear aligners. In addition, predictable and consistent production is essential to timely deliver products to our customers efficiently and profitably.
However, most people afflicted by malocclusion do not seek orthodontic treatment for various reasons, including negative perceptions of traditional metal wires and brackets, affordability of treatment, and accessibility to doctors. Annually, only approximately 22 million people globally elect treatment by orthodontists.
However, most people afflicted by malocclusion do not seek orthodontic treatment for various reasons, including negative perceptions of traditional wires and brackets, affordability of treatment, and accessibility to doctors. Annually, only approximately 22 million people globally elect treatment by orthodontists.
Major worksites, such as our clear aligner fabrication sites, and large offices have dedicated Environmental Health and Safety (“EHS”) departments which are dedicated to ensuring our health and safety programs are maintained while contributing Best Management Practices and general input to corporate-wide programs.
Major worksites, such as our clear aligner fabrication sites, and large offices have dedicated Environmental Health and Safety (“EHS”) departments dedicated to ensuring our health and safety programs are maintained while contributing Best Management Practices and general input to corporate-wide programs.
Fostering a culture of dignity, integrity, open dialogue, open-mindedness, compassion, fairness, recognition, and shared goals allows us to attract and retain the best talent, and provide a safe and supportive environment that allows our employees to excel.
Fostering a culture of dignity, integrity, open dialogue, open-mindedness, compassion, 17 fairness, recognition, and shared goals allows us to attract and retain the best talent, and provide a safe and supportive environment that allows our employees to excel.
We have and may continue to financially invest in or explore collaborations with key ecosystem partners, including DSOs, whose missions and visions align with our own vision, strategy, business model and goals. • Patient Demand.
We have and may continue to financially invest in or explore collaborations with key ecosystem partners, including DSOs, whose missions and visions align with our vision, strategy, business model and goals. • Patient Demand.
Moreover, each of our three key clear aligner manufacturing facilities are located at elevations less likely to be impacted by rising sea levels and at least two hundred miles inland.
Moreover, each of our key clear aligner manufacturing facilities are located at elevations less likely to be impacted by rising sea levels and at least two hundred miles inland.
In addition, through our Align Foundation, we support organizations whose visions closely align with our mission to improve smiles, supporting and educating teens, and empowering our customers through partnerships with learning institutions and foundations.
In addition, through our Align Foundation, we support organizations whose visions closely align with our 20 mission to improve smiles, supporting and educating teens, and empowering our customers through partnerships with learning institutions and foundations.
The iTero Element™ portfolio of intraoral scanners includes the iTero Element™ 2, the iTero Element™ Flex, iTero Element™ 5D Imaging System, iTero Element™ Plus Series and the iTero Lumina™ intraoral scanner which are each available in select regions and countries.
The iTero Element™ portfolio of intraoral scanners includes the iTero Element™ 2, the iTero Element™ Flex, iTero Element™ 5D imaging system, iTero Element™ Plus Series and the iTero Lumina™ which are each available in select regions and countries.
Align provided scholarships to two leaders from the program who focused on oral health education and expansion of dental health for low-income populations. • For 17 years we have supported America’s ToothFairy, an organization with a mission to ensure underserved children in the United States have access to dental care and learn about oral health by supporting nonprofit clinics and community partners.
Align provided scholarships to two leaders from the program who focused on oral health education and expansion of dental health for low-income populations. • For 18 years we have supported America’s ToothFairy, an organization with a mission to ensure underserved children in the United States have access to dental care and learn about oral health by supporting nonprofit clinics and community partners.
The iTero Element Plus Series of intraoral scanners and imaging systems offers restorative and orthodontic digital workflows that include enhanced visualization for optimized patient 9 experience, including a fully integrated 3D intraoral camera in certain models, seamless scanning with reduced processing time, artificial intelligence (“AI”)-based features, and, in certain models, NIRI technology.
The iTero Element Plus Series of intraoral scanners and imaging systems offers restorative and orthodontic digital workflows that include enhanced visualization for optimized patient experience, including a fully integrated 3D intraoral camera in certain 10 models, seamless scanning with reduced processing time, artificial intelligence (“AI”)-based features, and, in certain models, NIRI technology.
We have e nvironmental, health, safety and sustainability personnel who are 18 responsible for ensuring health and safety programs and processes are maintained and effective at each of our locations.
We have e nvironmental, health, safety and sustainability personnel who are responsible for ensuring health and safety programs and processes are maintained and effective at each of our locations.
In North America, summer is typically the busiest season for orthodontists with practices that have a high percentage of adolescent and teenage patients as many parents start their children in treatment before the school year begins. Conversely, many GPs are on vacation during this time and therefore tend to start fewer cases.
In North America, summer is typically the busiest season for orthodontists that have a high percentage of adolescent and teenage patients as many parents start their children in treatment before the school year begins. Conversely, many GPs are on vacation during this time and therefore tend to start fewer cases.
In October 2021, the findings of a clinical study we sponsored were published in the peer-reviewed Journal of Dentistry which demonstrated that the NIRI technology of the iTero Element 5D imaging system was 66% more sensitive than bitewing x-ray radiography for detection of interproximal lesions, without the use of harmful radiation.
The findings of a clinical study we sponsored were published in the peer-reviewed Journal of Dentistry which demonstrated that the NIRI technology of the iTero Element 5D imaging system was 66% more sensitive than bitewing x-ray radiography for detection of interproximal lesions, without the use of harmful radiation.
By reviewing, modifying as needed and approving an acceptable treatment plan, the dental professional retains control of the patient’s treatment. Manufacture of custom clear aligners. Following the dental professional’s approval of a ClinCheck treatment plan, we use the data underlying the simulation as input for stereolithography technology (a form of 3D printing technology) to construct a series of molds.
By reviewing, modifying as needed and approving the treatment plan, the dental professional retains control of the patient’s treatment. Manufacture of custom clear aligners. Following the dental professional’s approval of a ClinCheck treatment plan, we use the data underlying the simulation as input for stereolithography technology (a form of 3D printing technology) to construct a series of molds.
Below are some of our key community initiatives in 2024 : • Since 2013 we have been a proud supporter of Operation Smile, a global medical nonprofit that has provided hundreds of thousands of free surgeries for people born with cleft lips and cleft palates in low and middle-income countries.
Below are some of our key community initiatives in 2025 : • Since 2013, we have been a proud supporter of Operation Smile, a global medical nonprofit that has provided hundreds of thousands of free surgeries for people born with cleft lips and cleft palates in low and middle-income countries.
Our sales and marketing personnel are organized primarily to support orthodontists and GPs separately, allowing highly trained and specialized personnel to serve each customer channel, thereby increasing our focus and effectiveness on both. We continue to expand in existing markets through targeted investments in sales resources, professional marketing and education programs.
Our sales and marketing personnel are organized primarily to support orthodontists and GPs, allowing highly trained and specialized personnel to serve each customer channel, thereby increasing our focus and 14 effectiveness on both. We continue to expand in existing markets through targeted investments in sales resources, professional marketing and education programs.
We believe our success continues to be driven by our focus on integrating and welcoming employees across the globe and of all different backgrounds, orientations, beliefs, perspectives and capabilities into our workforce. Our employees bring a positive mix of ethnic and culturally diverse backgrounds to the 47 different countries in which we operate.
We believe our success continues to be driven by our focus on integrating and welcoming employees across the globe and of all different backgrounds, orientations, beliefs, perspectives and capabilities into our workforce. Our employees bring a positive mix of ethnic and culturally diverse backgrounds to the 48 different countries in which we operate.
The number of employees for each of the last five years and our employees’ roles as of December 31, 2024 are as follows: We are fundamentally a global organization with approximately 91% of our employees located internationally, primarily in direct-labor roles in our manufacturing and clinical treatment planning facilities.
The number of employees for each of the last five years and our employees’ roles as of December 31, 2025 are as follows: We are fundamentally a global organization with approximately 91% of our employees located internationally, primarily in direct-labor roles in our manufacturing and clinical treatment planning facilities.
Our production can be disrupted by such things as supply chain and shipping issues, production manufacturing software system issues, quality and safety issues, and production equipment downtime. Accordingly, as we have grown our operations, we have included flexibility and resiliency in our overall manufacturing design to mitigate the risks of production downtime.
Our production can be disrupted by such things as supply chain and shipping issues, production manufacturing software system issues, quality and safety issues, and production equipment downtime. Accordingly, as we have grown our operations, we have included flexibility and resiliency in our overall manufacturing design to mitigate against risks of production downtime.
Some of the tools that support this stage are Invisalign.com, the Invisalign SmileViewTM tool, My Invisalign app, Doctor Locator, Invisalign® Practice App, and Invisalign® Virtual Appointment. The Align TM Digital Platform also facilitates the doctor-patient conversation, through education regarding clinical needs and setting expectations.
Some of the tools that support this stage are Invisalign.com, Doctor Locator, Invisalign SmileView TM tool, Invisalign ® Practice App, Invisalign ® Virtual Appointment and My Invisalign TM app. The Align TM Digital Platform also facilitates the doctor-patient conversation, through education regarding clinical needs and setting expectations.
Our Invisalign System is intended mainly for the treatment of malocclusions and is designed to help dental professionals achieve the clinical outcomes they expect and the results patients desire. To date, over 19 million people worldwide have been treated with the Invisalign System.
Our Invisalign System is intended mainly for the treatment of malocclusions and is designed to help dental professionals achieve the clinical outcomes they expect and the results patients desire. To date, over 22 million people worldwide have been treated with the Invisalign System.
As part of our Board’s commitment to our employees and communities, our Board has delegated oversight responsibility of our policies and practices that foster Align’s sustainability and cultural initiatives, policies, practices, and programs to our 16 Nominating and Governance Committee. Additionally, our Compensation and Human Capital Committee has oversight responsibilities of all human capital management strategies, programs and policies.
As part of our commitment to our employees and communities, our Board has delegated oversight responsibility of our policies and practices that foster Align’s sustainability and cultural initiatives, policies, practices, and programs to our Nominating and Governance Committee. Additionally, our Compensation and Human Capital Committee has oversight responsibilities of all human capital management strategies, programs and policies.
Doctors and their staffs use intraoral scanning tools designed to support diagnosis of a patient’s oral conditions and health and support doctors to develop appropriate treatment pathways. Visualization of their potential smiles helps patients understand the benefits of treatment and increase patient conversion.
Doctors and their staffs use intraoral scanning tools designed to support diagnosis of a patient’s oral conditions and health and support doctors to develop appropriate treatment pathways. Visualization of their potential smiles helps patients understand the benefits of treatment and increases patient conversion.
We expect to continue expanding our business in 2025 by investing in resources, infrastructure and initiatives that help drive Invisalign treatment growth, position our iTero intraoral scanners as the preferred scanning technology for digital dental scans, and establish our exocad CAD/CAM software as the solution of choice for dental labs in existing and new international markets. • GP Dentist Treatment .
We expect to continue expanding our business by investing in resources, infrastructure and initiatives that help drive Invisalign treatment growth, position our iTero intraoral scanners as the preferred scanning technology for digital dental scans, and establish our exocad CAD/CAM software as the solution of choice for dental labs in existing and new markets. 12 • GP Dentist Treatment .
Our customers are healthcare providers that may be reimbursed by state or federal funded programs such as Medicaid, a foreign national healthcare program, or private pay insurance, each of which may offer some degree of oversight.
Our customers are healthcare providers who may be reimbursed by state or federal funded programs such as Medicaid, a foreign national healthcare program, or private pay insurance, each of which may offer some degree of oversight.
Morici 58 Chief Financial Officer and Executive Vice President, Global Finance of Align • Chief Financial Officer and Senior Vice President, Global Finance of Align • Chief Financial Officer of Align • EVP and Managing Director of NBC Universal North America Home Entertainment • CFO/Chief Operating Officer of NBC Universal North America Home Entertainment • Senior Vice President and Chief Financial Officer of NBC Universal North America Home Entertainment 2022-Present 2018-2022 2016-2018 2014-2016 2011-2014 2007-2011 Julie Coletti 57 Executive Vice President, Chief Legal and Regulatory Officer of Align • Senior Vice President, Chief Legal and Regulatory Officer of Align • Vice President, Associate General Counsel, Strategic Commercial Affairs of Align • Vice President, Global General Counsel and Chief Compliance Officer of Danaher • Vice President, Chief Legal Officer and Corporate Secretary of Bayer HealthCare's MEDRAD/Radiology and Interventional Division 2022-Present 2019-2022 2018-2019 2013-2017 2007-2013 Stuart Hockridge 53 Executive Vice President, Global Human Resources of Align • Senior Vice Present, Global Human Resources of Align • Vice President, Global Human Resources of Align • Vice President of Talent of Visa 2022-Present 2018-2022 2016-2018 2013-2016
Morici 59 Chief Financial Officer and Executive Vice President, Global Finance of Align • Chief Financial Officer and Senior Vice President, Global Finance of Align • Chief Financial Officer of Align • EVP and Managing Director of NBC Universal North America Home Entertainment • CFO/Chief Operating Officer of NBC Universal North America Home Entertainment • Senior Vice President and Chief Financial Officer of NBC Universal North America Home Entertainment 2022-Present 2018-2022 2016-2018 2014-2016 2011-2014 2007-2011 Julie Coletti 58 Executive Vice President, Chief Legal and Regulatory Officer of Align • Senior Vice President, Chief Legal and Regulatory Officer of Align • Vice President, Associate General Counsel, Strategic Commercial Affairs of Align • Vice President, Global General Counsel and Chief Compliance Officer of Danaher • Vice President, Chief Legal Officer and Corporate Secretary of Bayer HealthCare's MEDRAD/Radiology and Interventional Division 2022-Present 2019-2022 2018-2019 2013-2017 2007-2013 Stuart Hockridge 54 Executive Vice President, Global Human Resources of Align • Senior Vice Present, Global Human Resources of Align • Vice President, Global Human Resources of Align • Vice President of Talent of Visa 2022-Present 2018-2022 2016-2018 2013-2016
As we expand our operations footprint, countries to which we sell and invest in new business models, compliance with applicable laws becomes more complex and the general trend is toward increasingly stringent oversight and enforcement.
As we expand our operations, compliance with applicable laws in countries in which we sell and invest in new business models becomes more complex and the general trend is toward increasingly stringent oversight and enforcement.
We monitor the effectiveness of the quality system based on internal data and direct customer feedback and strive to continually improve our systems and processes, taking corrective action, as needed. Since the mass-customized treatment planning and manufacturing processes of our products requires substantial and varied technical expertise, we believe our manufacturing capacity and capabilities are important to our success.
We monitor the effectiveness of the quality system based on internal data 13 and direct customer feedback and strive to continually improve our systems and processes, taking corrective action, as needed. Since the mass-customized treatment planning and manufacturing processes of our products require substantial and varied technical expertise, we believe our manufacturing capacity and capabilities are important to our success.
Initiatives sponsored by government agencies, legislative bodies, and the private sector to limit the growth of healthcare expenses generally are ongoing in markets where we do business. It is not possible to predict at this time whether these trends will impact our business or the potential cost containment measures on our future business.
Initiatives sponsored by government agencies, legislative bodies, and the private sector to limit the growth of healthcare expenses generally are ongoing in markets where we do business. It is not possible to predict whether these trends will impact our business or the potential cost containment measures on our future business.
As we further evolve the treatment planning experience for doctors through new technological research and development innovations, we expect to introduce new technologies, features and functionality that improve personalization of treatment planning, predictability, clinical preferences, and 2D/3D imaging, including digital tools for faster and more accurate final tooth positions.
New Products/Feature Enhancement As we further evolve the treatment planning experience for doctors through new technological research and development innovations, we expect to introduce new technologies, features and functionality that improve personalization of treatment planning, predictability, clinical preferences, and 2D/3D imaging, including digital tools for faster and more accurate final tooth positions.
Our research and development activities are directed toward developing digital technology innovations that we believe will deliver our next generation of products and solutions as part of the Align TM Digital Platform. These activities range from accelerating product and clinical innovation, to developing manufacturing process improvements, to researching future technologies, products and software.
Our research and development activities are directed toward developing digital technology innovations we believe will deliver our next generation of products and solutions as part of the Align TM Digital Platform. These activities range from accelerating product and clinical innovation, to developing treatment planning and manufacturing process improvements, to researching future technologies, products and software.
A patient’s ClinCheck treatment plan simulates desired tooth movement in stages and details the timing and placement of any features or attachments to be used during treatment. Attachments are tooth-colored shapes that can be affixed to a patient’s teeth to increase the biomechanical force on a specific tooth or teeth in order to affect the desired movement(s).
A patient’s ClinCheck treatment plan simulates desired tooth movement in stages and details the timing and placement of any features or attachments to be used during treatment. Attachments are tooth-colored shapes that are sometimes used to increase the biomechanical force on a specific tooth or teeth in order to affect the desired movement(s).
We furthermore market and sell doctor and consumer accessory products complementary to our doctor-prescribed principal products under the Invisalign® and other brands, including retainers, dental supplies, clear aligner cases (clamshells), ultrasonic and UV electronic cleaning devices, teeth whitening products and cleaning solutions (collectively, “Invisalign Accessory Products”).
We furthermore market and sell doctor and consumer accessory products complementary to our doctor-prescribed principal products under the Invisalign ® and other brand names, including retainers, dental supplies, clear aligner cases (clamshells), ultrasonic and UV electronic cleaning devices, teeth whitening products and cleaning solutions (collectively, “Invisalign Accessory Products”).
The iTero Lumina intraoral scanner is designed with iTero Multi-Direct Capture TM technology that we believe quickly, easily and accurately captures more data while delivering exceptional scan quality and photorealistic images that remove the need for intraoral photos. iTero Multi-Direct Capture replaces the confocal imaging technology in earlier intraoral scanner models.
The iTero Lumina intraoral scanner is designed with iTero Multi-Direct Capture TM technology that captures more data quickly and accurately while delivering exceptional scan quality and photorealistic images that remove the need for intraoral photos. iTero Multi-Direct Capture replaces the confocal imaging technology in earlier intraoral scanner models.
Our restorative software is designed for GPs, prosthodontists, periodontists and oral surgeons and includes restorative workflows providing the ability to send digital impressions to the lab of their choice and communicate seamlessly with external treatment planning, custom implant abutment, chairside milling and laboratory CAD/CAM systems such as through our iTero-exocad Connector TM .
Our restorative software is designed for GPs, prosthodontists, periodontists and oral surgeons and includes restorative workflows providing the ability to send digital impressions to the lab of their choice and communicate seamlessly with external treatment planning, custom implant abutment, chairside milling and laboratory CAD/CAM systems such as through our iTero-exocad Connector TM . Invisalign® Progress Assessment Tool.
We continue expansion of our sales and marketing by reaching into new countries and regions, including new areas in Africa and Latin America. As of the end of 2024, we are selling directly or through authorized distributors in more than 100 countries.
We continue expansion of our sales and marketing by reaching into new countries and regions, including new areas in Africa, Asia and Latin America. As of the end of 2025, we are selling directly or through authorized distributors in more than 100 countries.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our proxy statement on Schedule 14A for our annual stockholders’ meeting and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are available, free of charge, on our investor relations website as soon as reasonably practicable after we electronically file or furnish such material with the Securities and Exchange Commission (“SEC”).
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our proxy statements on Schedule 14A for our annual stockholders’ meetings and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are available, free of charge, on our investor relations website as soon as reasonably practicable after we electronically file with or furnish such material to the Securities and Exchange Commission (“SEC”).
Additionally, our consumer marketing programs are designed to create awareness and educate consumers on the benefits of Invisalign treatment and Vivera retainers, including where they can find trained doctors to provide treatment. We provide training, marketing and clinical support to orthodontists and GPs. As of December 31, 2024, we had approximately 130,370 active Invisalign-trained doctors.
Additionally, our consumer marketing programs are designed to create awareness and educate consumers on the benefits of Invisalign treatment and Vivera retainers, including where they can find trained doctors to provide treatment. We provide training, marketing and clinical support to orthodontists and GPs. As of December 31, 2025, we had approximately 130,015 active Invisalign-trained doctors.
We have thousands of dedicated, highly skilled sales force employees who are focused on key demographics in our target markets that allow us to uniquely address customer needs and thereby enhance the customer experience.
We have thousands of dedicated, highly skilled sales force employees who are focused on key portions of our target markets that allow us to uniquely address customer needs and thereby enhance the customer experience.
We achieve this by focusing on and executing our strategic growth drivers: • International Expansion. We continue increasing our presence globally by increasing awareness of our products and by making them available in more countries to more customers and consumers.
We achieve this by focusing on and executing our strategic growth drivers: • International Expansion. We continue growing our global presence by increasing awareness of our products and making them available in more countries to more customers and consumers.
We strive to enable GPs, who have the potential to treat the general patient population, to more easily identify potential cases they can treat with the Invisalign System, monitor patient progress or, if needed, help refer cases to an orthodontist while providing high-quality restorative, orthodontic and dental hygiene care.
We strive to enable GPs, who treat the general patient population, to more easily identify potential cases they can treat with the Invisalign System, monitor patient progress or, if needed, help refer cases to orthodontists while providing high-quality restorative, orthodontic and dental hygiene care.
In 2024 , our employees continued to make us proud through their generosity and dedication, especially during our annual Month of Smiles initiative in October where we encourage them to make a difference individually and as teams through volunteer activities, charitable donations, fundraising, and intentional acts of goodness.
In 2025 , our employees continued to make us proud through their generosity and dedication, especially during our annual Month of Smiles initiative in October where we encouraged them to make a difference individually and as teams through volunteer activities, charitable donations, fundraising, and intentional acts of goodness.
We received 510(k) clearance in the United States for the caries detection feature of the iTero Element 5D in 2020.
We received 510(k) clearance in the United States for the caries detection feature of the iTero Element 5D imaging system in 2020.
Although the number of competitors varies by segment, product, geography and customer, they include new and well-established regional competitors in certain foreign markets, as well as larger companies, divisions of larger companies or well-capitalized new entrants with substantial sales, marketing, research and financial capabilities.
Although the number of competitors varies by segment, product, geography and customer, they include new and well-established regional competitors in certain foreign markets, as well as larger companies, divisions of larger companies or well-capitalized new entrants with substantial sales, marketing, research and financial capabilities at cost-effective rates.
Hogan 67 President and Chief Executive Officer of Align • Chief Executive Officer of ABB • Chief Executive Officer of GE Healthcare 2015-Present 2008-2013 2000-2008 John F.
Hogan 68 President and Chief Executive Officer of Align • Chief Executive Officer of ABB • Chief Executive Officer of GE Healthcare 2015-Present 2008-2013 2000-2008 John F.
As of December 31, 2024, we have provided almost $2 million for the foundation’s operational expenses and children’s oral health programs. As Title Sponsor of the HERO Program since 2019, we have helped the program reach an estimated 2.7 million children, caregivers, and parents.
As of December 31, 2025, we have provided almost $2 million for the foundation’s operational expenses and children’s oral health programs. As Title Sponsor of the HERO Program since 2019, we have helped the program reach an estimated 2.87 million children, caregivers, and parents.
For our Systems and Services segment, capital equipment sales are often stronger in the fourth calendar quarter. However, many of these typical seasonal patterns have been impacted by changes in foreign exchange rates, military conflicts, inflation and other macroeconomic challenges. It remains unclear when or if these seasonal fluctuations will return to historical norms.
For our Systems and Services segment, capital equipment sales are often stronger in the fourth calendar quarter. However, many of these typical seasonal patterns have been impacted by changes in foreign exchange rates, military conflicts, inflation, trade policies and other macroeconomic challenges. It remains 15 unclear when or the extent to which these seasonal fluctuations will return to historical norms.
We furthermore fund research in the field of orthodontics and dentistry through initiatives such as our 13 Annual Research Award Program, which was in its 15th year in 2024 and donations to the American Association of Orthodontists Foundation. Intellectual Property We believe our intellectual property portfolio represents a substantial business advantage.
We furthermore fund research in the field of orthodontics and dentistry through initiatives such as our Annual Research Award Program, which was in its 16th year in 2025 and donations to the American Association of Orthodontists Foundation. Intellectual Property We believe our intellectual property portfolio represents a substantial business advantage.
Enforcement actions and associated efforts to respond or defend against enforcement actions can be expensive, and any resulting findings carry the risk of significant civil and criminal penalties. In addition, we must comply with numerous laws and regulations addressing privacy, data protection, data governance and cyber security.
Enforcement actions and associated efforts to respond or defend against enforcement actions can be expensive, and any resulting findings carry the risk of significant civil and criminal penalties. In addition, we must comply with numerous laws and regulations addressing privacy, data protection, artificial intelligence, data governance and cybersecurity.
We expect the acquisition of Cubicure will ultimately extend and scale our printing, materials and manufacturing capabilities for our 3D printed products while concurrently materially reducing the amount of resin used in our manufacturing process. Direct fabrication offers the transformative potential of design flexibility that goes beyond what the current thermoforming technology allows.
We expect this technology will ultimately extend and scale our printing, materials and manufacturing capabilities for our 3D printed product portfolio while concurrently materially reducing the amount of resin used in our manufacturing process. Direct fabrication offers the transformative potential of design flexibility that goes beyond what the current thermoforming technology allows.
Our iTero Element 5D Imaging System is the first integrated dental imaging system that simultaneously records 3D, intraoral color camera images, near infrared imaging (“NIRI”) technology and enables comparison over time using the iTero™ TimeLapse technology.
Our iTero Element 5D imaging system is the first integrated dental imaging system that simultaneously records 3D, intraoral color camera images, NIRI technology and enables comparison over time using the iTero™ TimeLapse technology.
Every year, we sponsor the Month of Wellness, a month dedicated to well-being and a worldwide movement fostering employee health across our organization.
Every year, we promote a Month of Wellness, a month dedicated to well-being and a worldwide movement fostering employee health across our organization.
Some of the tools that support this stage include Invisalign ® Virtual Care AI, My Invisalign TM app, Invisalign Doctor Site, Invisalign ® Practice App, Invisalign ® Progress Assessment and iTero TM scanners. • Retain: Following completion of their orthodontic treatment, patients can retain the final position of their teeth using Vivera TM retainers.
Some of the tools that support this stage include Invisalign ® Progress Assessment, Invisalign ® Virtual Care AI and My Invisalign TM app. • Retain: Following completion of their orthodontic treatment, patients can retain the final position of their teeth using Vivera TM retainers.
Further, the SEC maintains an internet site ( http://www.sec.gov) that contains reports, proxy and information statements and other information regarding our filings with the SEC. 19 Information about our Executive Officers The following table sets forth certain information regarding our executive officers as of February 28, 2025: Name Age Position Period Joseph M.
Further, the SEC maintains an internet site ( http://www.sec.gov) that contains reports, proxy and information statements and other information regarding our filings with the SEC. 21 Information about our Executive Officers The following table sets forth certain information regarding our executive officers as of February 27, 2026: Name Age Position Period Joseph M.
The 3in3 configuration offers doctors Invisalign Comprehensive treatment with a three-year treatment expiration date and three sets of additional clear aligners included prior to the treatment expiration date, rather than the five-year treatment expiration date with unlimited additional clear aligner sets prior to the treatment end date offered under the Invisalign Comprehensive Package. 7 Non-Comprehensive Products - Invisalign Treatment Options: Invisalign Non-comprehensive Packages.
The 3in3 configuration offers doctors Invisalign Comprehensive treatment with a three-year treatment expiration date and three sets of additional clear aligners included prior to the treatment expiration date, rather than the five-year treatment expiration date with unlimited additional clear aligner sets prior to the treatment end date offered under the Invisalign Comprehensive Package.
The CAHI Jeffe Fellowship brought together 23 leaders from six Latin American countries and focused on enhancing the quality, accessibility, and affordability of health services through a variety of programs.
The CAHI Jeffe Fellowship brought together 19 leaders from nine Latin American countries and focused on enhancing the quality, accessibility, and affordability of health services through a variety of programs.
In addition, we sell directly to Dental Support Organizations (“DSOs”) who contract with dental practices to provide critical business management and support including non-clinical operations. We also sell our products to dental laboratories who use our products to manufacture or customize their own products for licensed dentists.
We also sell through sales agents and distributors in certain countries. In addition, we sell directly to dental support organizations (“DSOs”) who contract with dental practices to provide critical business management and support, including non-clinical operations. We also sell our products to dental laboratories who use our products to manufacture or customize their own products for licensed dentists.
Globally, approximately 94% of prescription orders for our Invisalign System are now submitted via digital scan, increasing the accuracy of treatment plans, reducing the time from when a doctor submits a prescription to the time a patient receives the clear aligners, and helping to decrease the carbon footprint resulting from elimination of the initial or upfront shipment of a patient’s PVS impressions to the doctors and shipping those PVS impressions back to us.
Globally, more than 95% of Invisalign System prescription orders are now submitted via digital scan, increasing the accuracy of treatment plans, reducing the time from when the doctor submits the prescription to the time the patient receives the clear aligners, and helping to decrease the carbon footprint resulting from elimination of the initial or upfront shipment of the patient’s PVS impressions to the doctors and shipping those PVS impressions back to us.
We also sell non-case products. Clear aligner non-case products include retention products, Invisalign training, adjusting tools used by dental professionals during the course of treatment, ancillary Invisalign Accessory Products and other oral health products available in certain e-commerce and retail channels in the United States. Retention .
Clear aligner non-case products include retention products, Invisalign training, adjusting tools used by dental professionals during the course of treatment, ancillary Invisalign Accessory Products and other oral health products available in certain e-commerce and retail channels in the United States. Vivera™ Retainers for Retention .
As of December 31, 2024, we had donated approximately $3.0 million to Operation Smile. • As part of Align’s commitment to improving oral health, we partnered with the INCAE Business School as they relaunched the CAHI Jeffe Fellowship in Health and Innovation to improve health services in Latin America.
As of December 31, 2025, we had donated approximately $3.4 million to Operation Smile. • As part of Align’s commitment to improving oral health, we partnered with the INCAE Business School as part of the CAHI Jeffe Fellowship in Health and Innovation to improve health services in Latin America.
Computer-simulated treatment plan . Our ClinCheck ® Pro cloud-based treatment planning software is the cornerstone of the Align TM Digital Platform. ClinCheck Pro leverages proprietary algorithms based on the insights from data from over 19 million patients treated worldwide.
Computer-simulated treatment plan . Our ClinCheck ® treatment planning software is the cornerstone of the Align TM Digital Platform. ClinCheck Pro treatment planning software uses proprietary algorithms based on the insights from data from our over 22 million patients treated worldwide.
We also offer discounts to our employees and their dependents who undergo Invisalign treatment. We are furthermore committed to pay equity practices. We exceed minimum pay requirements for our manufacturing employees and regularly review our pay equity practices globally and locally to address discrepancies. Health, Wellness and Safety .
We also offer discounts to our employees and their dependents who undergo Invisalign treatment. We are furthermore committed to pay equity practices. We exceed minimum pay requirements for our manufacturing employees and regularly review our pay equity practices globally and locally for compliance with applicable laws and work to address discrepancies identified. Health, Wellness and Safety .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese laws and regulations are constantly evolving and may be created, interpreted, applied or amended in ways that could restrict our activities in certain jurisdictions, limit our ability to provide our products and services in those jurisdictions, require us to modify our policies and practices and to engage in additional contractual negotiations, or increase our costs and obligations and impose limitations upon our ability to efficiently transfer personal data across borders.
Biggest changeThese laws, regulations and other obligations relating to privacy, data protection, data governance and cybersecurity are constantly evolving and may be created, interpreted or enforced in ways that could impose new, substantially uncertain, and relatively burdensome obligations on our global operations, restrict our activities and our ability to provide our products and services in certain jurisdictions, require us to cease operations or modify our policies and business practices in a materially limiting manner, prevent us from resolving issues quickly or force us to resolve them in unanticipated ways, require us to engage in additional contractual negotiations, increase our costs and obligations and limit our ability to efficiently transfer personal data across borders, cause us to incur significant costs, expenses and damages, and present challenges in adapting our policies and practices to address their requirements.
We may not timely and adequately remediate or implement corrective measures for such failures, including due to reliance on third-party providers or suppliers. Consequently, any remediation may be time-consuming and difficult to achieve, which may materially impact our customers and business partners, damage our reputation, and result in lost business and revenue opportunities, and could be materially costly.
We may not timely and adequately remediate or implement corrective measures for such failures, including due to reliance on third-party providers or suppliers. Consequently, any remediation may be time-consuming or difficult to achieve, which may materially impact our customers and business partners, damage our reputation, and result in lost business and revenue opportunities, and could be materially costly.
Furthermore, before we can sell a new medical device or market a new use of, or claim for, an existing product, we frequently must obtain regulatory clearance or approval. For instance, in the United States, FDA regulations are wide-ranging and govern, among other things, product design, product materials, development, manufacturing and testing, product labeling and product storage.
Furthermore, we frequently must obtain regulatory clearance or approval before we can sell a new medical device or market a new use of, or claim for, an existing product. For instance, in the United States, FDA regulations are wide-ranging and govern, among other things, product design, product materials, development, manufacturing and testing, product labeling and product storage.
Significant service disruptions, breaches, incidents, interruptions or other disruptive events impacting our infrastructure and IT systems, or other cybersecurity incidents, or any belief or reporting that any of the foregoing has occurred, could expose us to regulatory investigations, or other proceedings, private claims, demands, and litigation, impair our reputation and competitive position, distract management and require significant time and resources to address.
Significant service disruptions, breaches, incidents, interruptions or other disruptive events impacting our infrastructure and IT systems, or other cybersecurity incidents, or any belief or reporting that any of the foregoing has occurred, could expose us to regulatory investigations, private claims, demands, litigation or other proceedings, impair our reputation and competitive position, distract management and require significant time and resources to address.
We rely on our portfolio of issued and pending patent applications in the United States and other countries to protect a large part of our IP and our competitive position; however, these patents may not prevent third parties from producing competing products similar in design to ours if they are invalidated, held unenforceable, circumvented or otherwise limited in scope.
We rely on our portfolio of issued and pending patent applications in the United States and other countries to protect a large part of our IP and competitive position; however, these patents may not prevent third parties from producing competing products similar in design to ours if they are invalidated, held unenforceable, circumvented or otherwise limited in scope.
We may not be afforded the protection of a patent if our currently pending or future patent filings do not result in the issuance of patents or we fail to timely apply for patent protection. We may not apply for a patent if our personnel fail to disclose or recognize new patentable ideas or innovations.
We may not be afforded the protection of a patent if our currently pending or future patent filings do not result in the issuance of patents or if we fail to timely apply for patent protection. We may not apply for a patent if our personnel fail to timely disclose or recognize new patentable ideas or innovations.
There is no assurance that we will continue repurchasing our common stock in the future at historical levels or at all, or that our stock repurchase programs will beneficially impact our stock price.
There is no assurance we will continue repurchasing our common stock in the future at historical levels or at all, or that our stock repurchase programs will beneficially impact our stock price.
Our ASPs for the Invisalign System and iTero intraoral scanners have been and could in the future be adversely affected if: • we offer promotions or general or volume-based discount programs, product or services bundles, large account sales or consumer rebate programs; • participation in promotions or programs unexpectedly increases, decreases or changes demand in material ways; • our geographic, channel or product mix shifts to lower-priced products or to products with a higher percentage of deferred revenue; • we decrease prices or are unable to increase prices on one or more products or services in response to increasing competitive pricing pressures; • we introduce new or change existing products or services, or modify how we market or sell any of our new or existing products or services; • we modify our pricing strategies for certain products or adjust pricing for certain items based on cancellation fees, shipping and handling charges or processing fees; • we participate in government tenders, such as volume-based procurement in China; or • our critical accounting estimates materially differ from actual results.
Our ASPs for the Invisalign System and iTero intraoral scanners have been and could in the future be adversely affected if: • we offer promotions or general or volume-based discount programs, product or services bundles, large account sales or consumer rebate programs; • participation in promotions or programs unexpectedly increases, decreases or changes demand in material ways; • our geographic, channel or product mix shifts to lower-priced products or to products with a higher percentage of deferred revenue; • we decrease prices or are unable to increase prices on one or more products or services in response to increasing competitive pricing pressures; • we introduce new or change existing products or services, or modify how we market, lease or sell any of our new or existing products or services; • we modify our pricing strategies for certain products or adjust pricing for certain items based on cancellation fees, shipping and handling charges or processing fees; • we participate in government tenders, such as volume-based procurement in China; or • our critical accounting estimates materially differ from actual results.
It may be difficult, expensive, and time-consuming for us to re-establish market access or regulatory compliance. 26 A disruption in the operations of a primary freight carrier, higher shipping costs or shipping delays could disrupt our supply chain and impact our operating and financial results. We depend on commercial freight carriers, primarily United Parcel Service, Inc., to deliver our products.
It may be difficult, expensive, and time-consuming for us to re-establish market access or regulatory compliance. A disruption in the operations of a primary freight carrier, higher shipping costs or shipping delays could disrupt our supply chain and impact our operating and financial results. We depend on commercial freight carriers, primarily United Parcel Service, Inc., to deliver our products.
Although we do not engage in developing or providing AI systems for which their placement on the market, putting into service, or use would qualify as “prohibited AI practices,” restrictions and obligations under this regulation, to the extent applicable to us, could have a negative impact on our business, financial condition and results of operations.
Although we do not engage in developing or providing AI systems for which their placement on the market, putting into service, or use would qualify as “prohibited AI practices,” restrictions and obligations under this regulation, to the extent applicable to us, could have a negative impact on our business, global systems, financial condition and results of operations.
We continue to monitor the enactment of legislation to evaluate the impact of changing global tax laws, which could adversely affect our provision for income taxes or operations. Moreover, the application of indirect taxes (such as sales and use tax (“SUT”), value-added tax (“VAT”), goods and services tax (“GST”), and other indirect taxes) to our operations is complex and evolving.
We continue to monitor the enactment of legislation to evaluate the impact of changing global tax laws, which could adversely affect our provision for income taxes or operations. The application of indirect taxes (such as sales and use tax (“SUT”), value-added tax (“VAT”), goods and services tax (“GST”), and other indirect taxes) to our operations is complex and evolving.
These laws are proliferating and new substances subject to restrictions are added regularly and may require additional reporting or phasing out of certain chemicals and compounds such as per- and polyfluoroalkyl substances (PFAS). We may be required to re-design our products or identify new suppliers to maintain our compliance with these laws.
These laws are proliferating and new substances subject to restrictions are added regularly and may require additional reporting or phasing out of certain chemicals and compounds such as per- and polyfluoroalkyl substances (PFAS) and microplastics. We may be required to re-design our products or identify new suppliers to maintain compliance with these laws.
It takes significant time, effort, and expense to obtain and maintain clearances and approvals of products and services, and there is no guarantee we will timely succeed, if at all, in the countries in which we do business. In other countries, the requirements, time, effort and expense to obtain and maintain clearances may differ materially.
It takes significant time, effort, and expense to obtain and maintain clearances and approvals of products and 30 services, and there is no guarantee we will timely succeed, if at all, in the countries in which we do business. In other countries, the requirements, time, effort and expense to obtain and maintain clearances may differ materially.
We have cybersecurity and other forms of insurance coverage related to cyberattacks, breaches, and other incidents 29 or security problems, but we cannot guarantee applicable insurance will be available to us in the future on economically reasonable terms or at all.
We have cybersecurity and other forms of insurance coverage related to cyberattacks, breaches, and other incidents or security problems, but we cannot guarantee applicable insurance will be available to us in the future on economically reasonable terms or at all.
Moreover, consumer products and services are routinely subject to claims of false, deceptive or misleading advertising, consumer fraud and unfair business practices. Additionally, we may be held liable if our products or services cause injury or are otherwise found unhealthy.
Moreover, consumer products and services are routinely subject to claims of false, deceptive or misleading advertising, labeling, consumer fraud and unfair business practices. Additionally, we may be held liable if our products or services cause injury or are otherwise found unhealthy.
Meeting our obligations under existing Sustainability laws and regulations is costly for us and our suppliers, and we expect these regulations and costs to increase, in particular as the regulatory frameworks in each jurisdiction in which we operate become more complex and distinct.
Meeting our obligations under existing Sustainability laws and regulations is costly for us and our suppliers, and we expect these regulations and costs to increase as the regulatory frameworks in each jurisdiction in which we operate become more complex and distinct.
Furthermore, our foreign patent protections may be more limited in geographic scope than those under U.S. patent and IP laws. Additionally, any of our patent applications may not result in an issued patent or the scope of the patent ultimately issued may be narrower than initially sought.
Furthermore, our foreign patent protections may be more limited in scope than those under U.S. patent and IP laws. Additionally, any of our patent applications may not result in an issued patent or the scope of the patent ultimately issued may be narrower than initially sought.
GAAP, we review our goodwill annually and more frequently if we identify events or circumstances that indicate it is more likely than not the fair value of a reporting unit has been reduced below its carrying value.
GAAP, we review our goodwill annually or more frequently if we identify events or circumstances that indicate it is more likely than not the fair value of a reporting unit has been reduced below its carrying value.
This entails certain risks, including operational disruptions, such as our ability to continue developing and updating products while addressing safety and security, track orders and timely ship products, manage our supply chain, and aggregate financial and operational data.
This entails certain risks, including operational disruptions, such as our ability to continue developing and updating 27 products while addressing safety and security, track orders and timely ship products, manage our supply chain, and aggregate financial and operational data.
Financial, Tax and Accounting Risks If our goodwill, intangible or long-lived assets become impaired, we may be required to record material charges to income. Under U.S.
Financial, Tax and Accounting Risks If our goodwill, finite-lived intangible or long-lived assets become impaired, we may be required to record material charges to income. Under U.S.
These may include delays or loss of revenues, significant remediation costs, market acceptance delays, data damage, loss, or unavailability, unintended disclosure or other processing of financial, health or other information relating to individuals, product recalls, loss of market share or increased service costs, any of which could have a material effect on our reputation, business, financial condition or results of our operations and the operations of our customers or our business partners.
These may include delays, loss of revenues, significant remediation costs, market acceptance delays, data damage, loss, or unavailability, unintended disclosure or other processing of financial, health or other information relating to individuals, product recalls, loss of market share or increased service costs, any of which could have a material effect on our reputation, business, financial condition or results of our operations and those of our customers or our business partners.
Item 1A. Risk Factors. Our business, reputation, results of operations, financial condition, cash flows and stock price can be affected by a number of factors, whether currently known or unknown, or that we currently believe to be immaterial. including those described below.
Item 1A. Risk Factors. Our business, reputation, results of operations, financial condition, cash flows and stock price can be affected by a number of factors, whether currently known or unknown, or that we currently believe to be material. including those described below.
The qualitative analysis performed by management to identify indicators of impairment or the quantitative analysis used to determine fair value requires management to exercise significant judgement in determining appropriate assumptions and estimates, including revenue growth rates, gross and operating margins, and discount rates.
The qualitative analysis performed by management to identify indicators of impairment or the quantitative analysis used to determine fair value requires management to exercise significant judgment in determining appropriate assumptions and estimates, including revenue growth rates, gross and operating margins, and discount rates.
Failures of all or any portion of our or third-party software or other components or systems to interoperate with iTero or third-party intraoral scanners, termination of interoperability with third-party intraoral scanners, malware or ransomware attacks, product or system vulnerabilities or defects, interference or disruptions for us, our customers, labs or other business partners in the use of our products or the transmission or processing of data needed for the use or ordering of our products, or system outages, regardless of cause, have harmed our operations previously and in the future could materially and adversely affect our ability to accept scans, manufacture clear aligners or restorative procedures or treatments and services, or otherwise service our customers.
Failures of all or any portion of our or third-party software or other components or systems to interoperate with iTero or third-party scanners, termination of interoperability with third-party scanners, product or system vulnerabilities or defects, interference or disruptions for us, our customers, labs or other business partners in the use of our products or the transmission or processing of data needed for the use or ordering of our products, or system outages, regardless of cause, have harmed our operations previously and in the future could materially and adversely affect our ability to accept scans, manufacture clear aligners or restorative procedures or treatments and services, or otherwise service our customers.
Our inability to maintain the proprietary nature of our technology through patents, copyrights, or trade secrets would impair our competitive advantages and could have a material effect on our operating results, financial condition, and future growth prospects.
Our inability to maintain the proprietary nature of our technology through patents, copyrights, or trade secrets could impair our competitive advantages and could have a material effect on our operating results, financial condition, and future growth 33 prospects.
Failure to obtain or maintain approvals or comply with regulations regarding our products or services or those of our suppliers could materially harm our sales, result in substantial penalties and fines, interrupt our supply chain and cause harm to our reputation.
Failure to obtain or maintain approvals or comply with regulations and government actions regarding our products or services or those of our suppliers could materially harm our sales, result in substantial penalties and fines, interrupt our supply chain and cause harm to our reputation.
Additionally, our cybersecurity controls depend on our customers, many of whom are individual or small healthcare providers with limited IT experience and inadequate or untested security protocols, to successfully manage data privacy and security requirements.
Our cybersecurity controls also depend on our customers, many of whom are individual or small healthcare providers with limited IT experience and inadequate or untested security protocols, to successfully manage data privacy and security requirements.
Our marketing efforts and costs are significant and include national and regional campaigns in multiple countries involving television, print, social media and alliances with professional sports teams, social media influencers and other strategic partners.
Our marketing efforts and costs are significant and include national and regional campaigns in multiple countries involving television, film, print, social media and alliances with professional sports teams, athletes, social media influencers and other strategic partners.
Failure to adequately protect and maintain the integrity of our products and IT systems and those of our suppliers and customers may materially impact our business, financial condition, and results of operations. Additionally, we continuously upgrade and issue new software releases upon which customer facing manufacturing and treatment planning operations depend.
Failure to adequately protect and maintain the integrity of our products, IT systems and data in those systems, and those of our suppliers and customers may materially impact our reputation, business, financial condition, and results of operations. Additionally, we continuously upgrade and issue new software releases upon which customer facing manufacturing and treatment planning operations depend.
The discovery of a defect, error, or security vulnerability in our products, software applications or IT systems, incompatibility with customers’ computer operating systems and hardware configurations with a new release or upgraded version or the failure of our products or primary IT systems, which we are unable to cure in a timely fashion, may cause adverse consequences.
The discovery of a defect, error, or security vulnerability in our products, software applications or IT systems, incompatibility with customers’ computer operating systems and hardware configurations with a new release or upgraded version or the failure of our products or primary IT systems, that we are unable to timely cure, may cause adverse consequences.
Additionally, the third-party software integrated into or interoperable with our iTero intraoral scanners will routinely reach end of life, and as a consequence, certain applications and models may be exposed to additional vulnerabilities, including security risks, errors, and malfunctions that may be irreparable or difficult to repair.
Additionally, the third-party software integrated into or interoperable with our scanners routinely reach end of life, and as a consequence, certain applications and models may be exposed to additional vulnerabilities, including security risks, errors, and malfunctions that may be irreparable or difficult to repair.
The loss of any key personnel, particularly executive management, research and development, or sales personnel, could harm our business and prospects and impede the achievement of our research and development, operational or strategic objectives.
The loss of the services and knowledge of any key personnel, particularly executive management, research and development, or sales personnel, could harm our business and prospects and impede the achievement of our research and development, operational or strategic objectives.
Consequently, we may be required to record material charges to earnings on our financial statements during the period in which any impairment of goodwill, intangible assets or long-lived assets is determined. Changes in, or interpretations of, accounting rules and regulations, could result in unfavorable accounting charges. We prepare our consolidated financial statements in conformity with U.S. GAAP.
Consequently, we may be required to record material charges to income during the period in which any impairment of goodwill, finite-lived intangible assets or long-lived assets is determined. Changes in, or interpretations of, accounting rules and regulations, could result in unfavorable accounting charges. We prepare our consolidated financial statements in conformity with U.S. GAAP.
Future sales of significant amounts of our common stock may depress our stock price. A significant percentage of our outstanding common stock is currently owned by a small number of stockholders. These stockholders have sold in the past, and may sell in the future, large amounts of our stock over relatively short periods of time.
A significant percentage of our outstanding common stock is currently owned by a small number of stockholders. These stockholders have sold in the past, and may sell in the future, large amounts of our stock over relatively short periods of time.
A distributor may also affect our ability to effectively market our products in certain foreign countries or regulatory jurisdictions if it holds the regulatory authorization in such countries or within such regions and causes, by action or inaction, the suspension of such marketing authorization or sanctions for non-compliance or prevents us from taking control of any such authorization.
An intermediary may also affect our ability to effectively market our products in certain foreign countries or regulatory jurisdictions if it holds the regulatory authorization in such countries or within such regions and causes, by action or inaction, the suspension of such marketing authorization or sanctions for non-compliance or prevents us from taking control of any such authorization.
It could also affect the availability or cost of materials, goods, and services on which we and our suppliers, contract manufacturers, distributors and other business partners rely, which could materially adversely impact our business, financial condition and results of operations.
It could also affect the availability or cost of materials, goods, and services on which we and our suppliers, contract manufacturers, commercial intermediaries and other business partners rely, which could materially adversely impact our business, financial condition and results of operations.
In Europe, the EU AI Act entered into force on August 1, 2024 which will become fully effective on August 2, 2026, with some provisions effective in February 2025. Other jurisdictions are considering similarly focused legislation.
In Europe, the EU AI Act entered into force on August 1, 2024 which will become fully effective on August 2, 2026, with some provisions effective in February 2025. Other jurisdictions are considering similar legislation.
The extent and rate at which our new, improved or refurbished products or services achieve market acceptance and penetration depends on many factors, including our ability to: • successfully predict, timely innovate, develop, and launch new or improved technologies, applications, features, products and services to meet market demand and keep pace with changes in technology, customers ’ demands and industry standards; • successfully and timely obtain regulatory approval or clearance of new or improved products or services from government agencies such as the FDA and analogous agencies in other countries ; • cost-effectively and efficiently develop, manufacture, quality test, market, dispose of and sell new or improved products and services, including localized versions for international markets; • properly forecast the amount and timing of new or improved product and services demand; • allocate our research and development funding to products and services with higher growth prospects; • ensure the compatibility of our technology, services and systems with those of our customers; • anticipate and rapidly innovate in response to new competitive offerings and technologies; • differentiate our products and services from those of our competitors as well as other products and services in our own portfolio and successfully articulate the benefits to potential customers; • design and manufacture products that achieve the clinical and practice outcomes we believe necessary for market acceptance; • manage the impact of nationalism or initiatives encouraging consumer purchases from domestic vendors; • qualify for third-party reimbursement for procedures involving our products or services; • offer attractive and competitive products, services and subscription plans; • encourage customers to adopt new or improved technologies and provide the needed technical, sales and marketing support to make new or improved product and services launches successful; • manage government procurement program restrictions; and • source and receive quality raw materials or parts from our suppliers.
The extent and rate at which our products or services achieve market acceptance and penetration depends on many factors, including our ability to: • cost-effectively and efficiently predict, timely innovate, develop, manufacture, quality test, market, launch, dispose of and sell new or improved technologies, applications, features, products and services to meet market demand and keep pace with changes in technology, customers’ demands and industry standards; • successfully and timely obtain and maintain regulatory approvals or clearances of new or improved products or services from government agencies such as the FDA and analogous agencies in other countries; • properly forecast the amount and timing of new or improved product and services demand; • allocate our research and development funding to products and services with higher growth prospects; • ensure the compatibility of our technology, services and systems with those of our customers; • anticipate and rapidly innovate in response to new competitive offerings and technologies; • differentiate our products and services from those of our competitors as well as other products and services in our own portfolio and successfully articulate the benefits to potential customers; • design and manufacture products that achieve the clinical and practice outcomes necessary for market acceptance; • manage the impact of nationalism or initiatives encouraging consumer purchases from domestic vendors; • qualify for third-party reimbursement for procedures involving our products or services; • offer attractive and competitive products, services and subscription plans; • encourage customers to adopt new or improved technologies and provide the needed technical, sales and marketing support to make new or improved product and services launches successful; • manage government procurement program restrictions; and • source and receive quality raw materials or parts from our suppliers.
We may not be able to fully mitigate the impact of the increased costs or pass price increases on to our customers, resulting in downward pressure on our operating results. Attempts to offset cost increases with price increases may reduce sales, increase customer dissatisfaction or otherwise harm our reputation.
We may not be able to fully mitigate the impact of the increased costs or pass price increases on to our customers, which could result in downward pressure on our operating results. Attempts to offset cost increases with price increases may reduce sales, increase customer dissatisfaction or otherwise harm our reputation.
Even if we successfully comply with these laws and regulations, our suppliers may not. We may also suffer financial and reputational harm if customers require, and we are unable to deliver, certification that our products are compliant.
Even if we successfully comply with these laws and regulations, our suppliers may not. We may also suffer financial and reputational harm if customers require, and we cannot deliver, certification that our products are compliant.
Such events have and could result in, among other things, supply chain and trade disruptions, changes in diplomatic and trade relationships, new tariffs and retaliatory tariffs, trade protection measures, trade sanctions, customs inquiries or restrictions, boycotts, reduced consumer spending, government shut downs, cyberattacks, energy shortages or power outages, energy rationing that adversely impacts our manufacturing facilities, rising fuel or rising costs of producing, procuring, and shipping our products, constraints, volatility or disruption in the financial markets, deaths or injuries to our employees, restrictions and shortages of food, water, shelter and medical supplies, data or information exchange, disruptions, interruptions or limitations in telecommunication services, critical systems or applications reliant on a stable and uninterrupted communications infrastructure, and protests that may impact delivery of our products to customers or destruction of property.
Such events have and could result in, among other things, supply chain and trade disruptions, changes in diplomatic and trade relationships, new and retaliatory tariffs, trade protection measures, quotas, embargoes, trade sanctions and countersanctions, customs investigations or restrictions, boycotts, reduced consumer spending, government shutdowns, cyberattacks, energy shortages or power outages, energy rationing that adversely impacts our manufacturing facilities, rising fuel or rising costs of producing, procuring, and shipping our products, constraints, volatility or disruption in the financial markets, employee deaths or injuries, restrictions and shortages of food, water, shelter and medical supplies, data or information exchange, disruptions, interruptions or limitations in telecommunication services, critical systems or applications reliant on a stable and uninterrupted communications infrastructure, and protests that may impact delivery of our products to customers or destruction of property.
Many U.S. and foreign regulators have or are considering enacting new or additional disclosure requirements or limits on the emissions of greenhouse gases from power generated using fossil fuels.
U.S. and foreign regulators have or are considering enacting new or additional disclosure requirements or limits on the emissions of greenhouse gases from power generated by fossil fuels.
The evolving AI regulatory environment may, among other impacts, result in: • inconsistencies among AI regulations and frameworks across jurisdictions; • onerous compliance, governance, research and development obligations that may require us to rework or reevaluate improvements to be compliant or result in the development of products that are unacceptable under new or revised regulatory frameworks; • increased risk of regulatory enforcement and litigation related to our AI models; • increased liability related to the use of AI by our customers, consumers or suppliers that are beyond our control; • delays in the deployment of new products and services; • competitive and reputational harm; and • increased cybersecurity risks.
The evolving AI regulatory environment may, among other impacts, result in inconsistencies among AI regulations and frameworks across jurisdictions; onerous compliance, governance, and research and development obligations that may require us to rework or reevaluate products or services to be compliant or result in the development of products that are unacceptable under new or revised regulatory frameworks; increased risk of exposure to investigations, proceedings and claims related to our AI models; increased liability related to the use of AI by our customers, consumers or suppliers beyond our control; delays in the deployment of new products and services; competitive and reputational harm; and increased cybersecurity risks.
The factors include: • quarterly variations in our results of operations and liquidity, our ability to meet or exceed our forecasts and guidance or changes to or withdrawal of our previous forecasts and guidance; • our ability to regain or sustain our historical growth rates; • changes in recommendations or valuation models for our stock by the investment community, or speculation in the press or investment community regarding estimates of our net revenues, results of operations, or other key performance indicators; • announcements by us, our competitors, or new market entrants, including strategic actions, management changes, and material transactions or acquisitions; • technical factors in the public trading markets for our stock that may produce price movements inconsistent with macroeconomic, industry, or company-specific fundamentals, including the sentiment of retail investors (as it may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock, fractional share trading, and other technical trading factors or strategies; • stockholder activism or securities class action litigation; • announcements regarding stock repurchases, sales or purchases of our common stock by us, our officers or directors, credit agreements, and debt issuances; • announcements of technological innovations or new, additional or revised programs, business models, products, or product offerings by us, our customers, or competitors; • key decisions in pending litigation, new litigation, settlements, judgments, or decrees; • short selling or other hedging activity in our stock; and • general economic market conditions, including rising interest rates, tariffs, inflationary pressures, recessions, consumer sentiment and demand, global geopolitical conflict, and industry factors unrelated to our actual performance.
The factors include: • quarterly variations in our results of operations and liquidity, our ability to meet or exceed our forecasts and guidance or changes to or withdrawal of our previous forecasts and guidance; • our ability to regain or sustain our historical growth rates; • changes in recommendations or valuation models for our stock by the investment community, or speculation in the press or investment community regarding estimates of our net revenues, results of operations, or other key performance indicators; • negative publicity or unfavorable consumer perceptions, whether accurate or inaccurate, concerning our products or the company; • announcements by us, our competitors, or new market entrants, including strategic actions, management changes, and material transactions, investments or acquisitions; • technical factors in the public trading markets for our stock that may produce price movements inconsistent with macroeconomic, industry, or company-specific fundamentals, including the sentiment of retail investors (as it may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock, fractional share trading, and other technical trading factors or strategies; • stockholder activism or securities class action litigation; • announcements regarding stock repurchases, sales or purchases of our common stock by us, our officers or directors, credit agreements, and debt issuances; • announcements of technological innovations or new, additional or revised programs, business models, products, or product offerings by us, our customers, or competitors; • key decisions in pending litigation, new litigation, settlements, judgments, or decrees; • short selling or other hedging activity in our stock; and • general economic market conditions, including elevated interest rates, new, proposed or retaliatory tariffs, uncertainty regarding changes in trade policies, including trade wars, inflationary pressures, recessions, consumer sentiment and demand, global geopolitical conflict, and industry factors unrelated to our actual performance.
If freight costs materially increase and we are unable to successfully pass all or significant portions of the increases along to our customers, or we cannot otherwise offset such increases, our gross margin and financial results could be materially affected. Our success depends on our personnel.
If freight costs materially increase and we are unable to successfully pass all or significant portions of the increases along to our customers, or we cannot otherwise offset such increases, our gross margin and financial results could be materially affected.
Our net revenues depend primarily on sales of the Invisalign System and iTero intraoral scanners and declines in sales or the average selling price (“ASP”) of these products may adversely affect net revenues, gross profit, and net income. Our net revenues are primarily dependent on sales of the Invisalign System an d iTero intraoral scanners.
Our net revenues depend primarily on sales of the Invisalign System and iTero intraoral scanners and declines in volume or the average selling price (“ASP”) may adversely affect net revenues, gross profit, operating profit and net income. Our net revenues are primarily dependent on sales of the Invisalign System an d iTero intraoral scanners.
Establishing, testing and maintaining an effective system of internal control over financial reporting requires significant resources and time commitments on the part of our management and our finance staff, and may require additional staffing and infrastructure investments and increases our costs of doing business.
Establishing, testing and maintaining an effective system of internal control over financial reporting requires significant resources and time commitments by management and our finance staff, and may require additional staffing and infrastructure investments and increases our costs of doing business.
In addition, we may be held responsible for the actions of these distributors, their employees and agents for compliance with laws and regulations, including fair competition, bribery and corruption, import and export compliance, safety, data privacy, false advertising or unfair and deceptive trade practices, and marketing and sales activities.
In addition, we may be held responsible for the actions of these commercial intermediaries, their employees and commercial intermediaries for non-compliance with laws and regulations, including fair competition, bribery and corruption, import and export compliance, safety, data privacy, false advertising or unfair and deceptive trade practices, and marketing and sales activities.
If one of these facilities is temporarily, partially or fully shut down, we may be unable to timely fulfill orders, which may negatively impact our reputation, business, financial condition and results of operations. Our IT systems are critical to our business.
If one of these facilities is temporarily, partially or fully shut down, we may be unable to timely fulfill orders, which may negatively impact our reputation, business, financial condition and results of operations.
Despite the implementation of security features in our products and services and security measures in our IT systems, we and our service providers, third-party vendors and other third parties could be targeted by or subject to physical break-ins, computer viruses and other malicious code, unauthorized or fraudulent access, programming errors or other technical malfunctions, hacking attacks, phishing and other social engineering attacks, malware, ransomware, employee error or malfeasance, cybersecurity attacks, malicious code, and other breaches of, or incidents impacting, IT systems or similar malicious or otherwise disruptive actions, including by organized groups and nation-state actors, which may disrupt or limit the availability of, or result in damage to, our IT systems and result in loss or unavailability of, damage to, or the unauthorized acquisition, use, disclosure, or other processing of confidential information.
We and our service providers, third-party vendors and other third parties could be targeted by or subject to physical break-ins, computer viruses and other malicious code, unauthorized or fraudulent access, programming errors or other technical malfunctions, hacking attacks, phishing, vishing, deepfakes, and other social engineering attacks, malware, ransomware, employee noncompliance, error or malfeasance, cybersecurity attacks, malicious code, and other breaches of, or incidents impacting, IT systems or similar malicious or otherwise disruptive actions, including by organized groups and nation-state actors, which may disrupt or limit the availability of, or result in damage to, our IT systems and result in loss or unavailability of, damage to, or the unauthorized acquisition, use, disclosure, or other processing of confidential information.
We and many of our healthcare provider customers, suppliers and distributors are subject to extensive and frequently changing regulations under numerous federal, state, local, and foreign laws, including those regulating: • the storage, transmission, disclosure, and other processing of, and security measures with respect to, personal, financial and medical information as well as healthcare records; • processing and use of children’s personal and health data; • websites and application advertising, including that involving the use of cookies or involving the collection, use, disclosure, or other processing of data relating to individuals for marketing purposes; • prohibitions against the offer, payment or receipt of remuneration to induce referrals to entities providing healthcare services or goods or to induce the order, purchase or recommendation of our products and services; and • the design, manufacture, marketing and advertising of our products and services.
We and many of our healthcare provider customers, suppliers and commercial intermediaries are subject to extensive and evolving regulations and government actions under numerous federal, state, local, and foreign laws, including those regulating: • the access, storage, transmission, disclosure, and other processing of, and security measures with respect to, personal, financial and medical information as well as healthcare records, including children’s personal and health data; • websites and application advertising, including those involving the use of cookies or involving the collection, use, disclosure, or other processing of data relating to individuals for marketing purposes and other business purposes; • prohibitions against the offer, payment or receipt of remuneration to induce referrals to entities providing healthcare services or goods or to induce the order, purchase or recommendation of our products and services; and • the design, manufacture, marketing and advertising of our products and services.
If our personnel or the personnel of our agents or suppliers fail to comply with any laws, regulations, policies or procedures, or we fail to audit and enforce compliance, our reputation may be harmed, we may lose customers or revenues or we may face regulatory investigations, actions and fines. In June 2024, the U.S.
If our personnel or the personnel of our agents or suppliers fail to comply with any laws, regulations, policies or procedures, or we fail to audit and enforce compliance, our reputation may be harmed, we may lose customers or revenues or we may face regulatory investigations, actions and fines.
Additionally, you should consider these risk factors in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K. Macroeconomic and External Risks Our business, financial condition and results of operations depend on global and regional economic conditions.
Additionally, you should consider these risk factors in connection with evaluating the forward-looking statements contained in this Annual Report on Form 10-K. Macroeconomic and External Risks Global and regional economic conditions have and could in the future materially affect our business, financial condition and results of operations.
Some of the factors that have and could in the future cause our operating results to fluctuate include: • changes in consumer and doctor demand; • changes in manufacturing, packaging, delivery and inventory costs; • the creditworthiness, liquidity and solvency of our customers and their ability to timely make payments when due; • our ability to collect payments; • our acceptance of longer customer payment cycles; • changes in the timing of revenue recognition and our ASPs; • seasonal fluctuations; • geographic, channel or product mix shifts to lower priced products or to products with a higher percentage of deferred revenue; • improvements to or changes in our products, capabilities or technologies that replace or shorten the life cycles of legacy products or cause customers to defer or stop purchasing legacy products until new products become available; • changes in costs and expenditures, including in connection with new treatment planning and fabrication facilities and the hiring and deployment of personnel; • the timing of clear aligner treatment order submissions, acceptance, processing and fulfillment, which can cause fluctuations in our backlog; and • timing and fluctuation of spending around marketing and brand awareness campaigns and industry trade shows.
Some of the factors that have and could in the future cause our operating results to fluctuate include: • changes in consumer, customer and industry demand; • changes in manufacturing, packaging, delivery and inventory costs; • the creditworthiness, liquidity and solvency of our customers and their ability to timely make payments when due; • our ability to collect payments; • our acceptance of longer customer payment cycles; • changes in the timing of revenue recognition and our ASPs as a result of changes to the amount allocated to the standalone selling price of the distinct performance obligations under sales contracts; • seasonal fluctuations; • geographic, channel or product mix shifts to lower priced products or to products with a higher percentage of deferred revenue; • improvements to or changes in our products, capabilities or technologies that replace or shorten the life cycles of legacy products or cause customers to defer or stop purchasing legacy products until new products become available; • changes in costs and expenditures, including in connection with new treatment planning and fabrication facilities and the hiring and deployment of personnel; • the timing of clear aligner treatment order submissions, acceptance, processing and fulfillment, which can cause fluctuations in our backlog; • new, proposed or retaliatory tariffs; and • timing and fluctuation of spending around marketing and brand awareness campaigns and industry trade shows.
Foreign countries may also adopt or rescind other measures, such as controls on the import or export of goods, technology or data, including personal data, that could adversely impact our operations and supply chains or limit our ability to offer certain products and services.
Foreign countries have and may continue to adopt other measures such as controls on the import or export of goods, technology or data, including personal data, which could adversely impact our operations and supply chains or limit our ability to offer certain products or services.
Our products and services require our customers and consumers to forego traditional treatment methods. For example, Invisalign treatment is a significant departure from traditional orthodontic wires and brackets, and our customers and consumers may not find it cost-effective or preferable. A number of dental professionals believe Invisalign treatment is only appropriate for a limited percentage of patients.
For example, Invisalign treatment is a significant departure from traditional orthodontic wires and brackets, and our customers and consumers may not find it cost-effective or preferable. A number of dental professionals believe Invisalign treatment is only appropriate for a limited percentage of patients.
We are subject to various risks when making a strategic investment or acquisition and integrating the operations and cultures of acquired businesses within our own, which could materially impact our business, financial condition or results of operations, including that we may: • fail to perform proper due diligence and inherit unexpected material issues or assets, including intellectual property (“IP”) or other litigation or ongoing investigations, accounting irregularities or compliance liabilities; • fail to comply with regulations, governmental orders or decrees; • experience information technology (“IT”) security and privacy compliance issues; • invest in companies that generate net losses or are slow or fail to develop; • not realize a positive return on our investment or determine that investments have declined in value, which could potentially require recording impairments; • need to pay cash, incur debt or issue equity securities to pay for an acquisition, adversely affecting our liquidity, financial condition or the trading price of our common stock; • find it difficult to implement and harmonize company-wide financial reporting, forecasting and budgeting, accounting, billing, IT and other systems due to inconsistencies in standards, internal controls, procedures and policies; • require significant time and resources to effectuate the integration; • fail to retain key personnel or harm our existing culture or the culture of an acquired entity; • not realize material portions of the expected synergies and benefits of the investment or acquisition; or • unsuccessfully evaluate or utilize the acquired technology or acquired company’s know-how or fail to successfully integrate the technologies acquired.
We are subject to various risks when making a strategic investment or acquisition and integrating the operations and cultures of acquired businesses within our own, including that we may: 25 • ultimately own less than a majority of the outstanding shares of the company and be unable to control or have significant influence over critical issues that could harm the value of our investment; • fail to perform proper due diligence and inherit unexpected material issues or assets, including intellectual property (“IP”) or other litigation or ongoing investigations, accounting irregularities or compliance liabilities; • experience information technology (“IT”) security and privacy compliance issues; • invest in companies that generate net losses or are slow or fail to develop; • not realize a positive return on our investment or determine that investments have declined in value, which could require recording impairments; • need to pay cash, incur debt or issue equity securities to pay for an acquisition, adversely affecting our liquidity, financial condition or the trading price of our common stock; • find it difficult to implement and harmonize company-wide financial reporting, forecasting and budgeting, accounting, billing, IT and other systems due to inconsistencies in standards, internal controls, procedures and policies; • require significant time and resources to effectuate the integration; • fail to retain key personnel or harm our existing culture or the culture of an acquired entity; • not realize material portions of the expected synergies and benefits of the investment or acquisition; or • unsuccessfully evaluate or utilize the acquired technology or acquired company’s know-how or fail to successfully integrate the technologies acquired.
Increased acceptance of our products and services depends in part on the recommendations of dental professionals, professional associations, societies and organizations, as well as other factors, including efficacy, safety, ease of use, reliability, aesthetics, third-party reimbursement and price compared to competing products and traditional treatment methods.
Increased acceptance of our products and services depends in part on the recommendations of dental professionals, professional associations, societies and organizations, as well as other factors, including efficacy, safety, ease of use, reliability, aesthetics, third-party reimbursement, price compared to traditional treatment methods and competing products, and perceptions regarding single-use or non-recyclable plastics.
We face software and hardware risks related to the manufacturing, design, quality and safety of our complex, global installed base of iTero intraoral scanners, which are continually updated to add, expand, or improve features with new hardware we manufacture or components that we source, to integrate new or existing software or other components manufactured by third parties, or to provide repair or replacement parts, any of which may contain errors or exhibit failures, especially when products are first introduced.
Our Systems and Services segment is subject to software and hardware risks related to the manufacturing, design, quality and safety of our complex, global installed base of iTero intraoral scanners, which are continually updated to add, expand or improve features with new hardware or software, to integrate new or existing software or other components manufactured by third parties, or to provide repair or replacement parts, any of which may contain errors or exhibit failures, especially when products are first introduced.
Products in our Systems and Services segment, such as our iTero intraoral scanners, are subject to software and hardware risks that, if improperly managed, could have a material adverse impact on our business and financial results. 25 The success of our Systems and Services segment depends on the quality and reliability of our products.
Products in our Systems and Services segment, such as our iTero intraoral scanners, are subject to software and hardware risks that, if improperly managed, could have a material adverse impact on our business and financial results.
Such restrictions may be announced with little or no advance notice and we may be unable to effectively mitigate any adverse impacts in a timely manner or at all. Military conflicts have and may in the future materially adversely impact the economies in which we operate.
Trade restrictions may be announced with little or no advance notice and we may be unable to effectively mitigate any adverse impacts in a timely manner or at all. Military conflicts, wars, and escalation of terrorist or gang activities have and may in the future materially adversely impact the economies in which we operate.
We retain confidential employee, applicant and customer personal, health and financial, and our own proprietary information and data essential to our operations. We rely on the effectiveness of our IT systems, policies and contracts and the policies of our third-party vendors, and their IT systems to safeguard information and data.
Our IT systems, policies and contracts and the policies of our third-party vendors, and their IT systems safeguard employee, applicant and customer personal, health and financial, and our own proprietary information and data essential to our operations.
If we cannot attract, motivate, train or retain personnel, it will be difficult to achieve our strategic priorities, which could materially adversely affect our business, financial condition and results of operations. We are highly dependent on the talent and efforts of our personnel.
If we cannot attract, motivate, train or retain personnel, it will be difficult to achieve our strategic priorities, which could materially adversely affect our business, financial condition and results of operations.
We generally enter into confidentiality agreements with our employees, consultants and collaborative partners upon commencement of a relationship with us. However, despite the existence of these protections, we have experienced incidents in which our proprietary information has been misappropriated and believe it could be misappropriated in the future.
We generally enter into confidentiality agreements with our employees, consultants and collaborative partners upon commencement of a relationship with us. However, despite the existence of these protections, our proprietary information has been misappropriated in the past and could be misappropriated again in the future.
Moreover, should any entity or individual endorsing us, our products or services take actions, make or publish statements in support of, or lend support to events or causes which are perceived by a portion of society negatively, our sponsorships or support of these entities or individuals may be questioned, our products and services boycotted and our reputation harmed, any of which could materially affect our business, financial condition and results of operations. 27 In addition, many countries prohibit certain types of marketing activities.
Moreover, should any entity or individual endorsing us, our products or services take actions, make or publish statements in support of, or lend support to events or causes which are perceived by a portion of society negatively, our sponsorships or support of these entities or individuals may be questioned, our products and services boycotted and our brand image and 29 reputation harmed, any of which could materially affect our business, financial condition and results of operations.
These include changes in the global economic environment, our legal entity structure or activities performed within our entities, our business operations, tax laws, regulations and/or rates, changes to existing accounting pronouncements, changes in interpretations of existing tax laws or regulations, the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates, overall levels of pretax earnings, settlements of income tax audits, non-deductible goodwill impairments, and changes in the valuation allowance offsetting deferred tax assets.
Our future effective tax rate may be impacted by various internal and external factors, such as changes in the global economic environment, our legal entity structure or activities performed within our entities, our business operations, tax laws, regulations and/or rates, changes to existing accounting pronouncements, changes in interpretations of existing tax laws or regulations, the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates, overall levels of pretax earnings, settlements of income tax audits, non-deductible goodwill impairments, and changes in the valuation allowance offsetting deferred tax assets.
To effectively manage and improve our operations, our IT systems and applications require an ongoing commitment of significant expenditures and resources to maintain, protect, upgrade, enhance, and restore existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, including privacy, security and data protection laws and regulations, increasingly sophisticated cybersecurity threats, and changing customer preferences.
To effectively manage and improve our operations, our IT systems and applications require an ongoing commitment of significant expenditures and resources to maintain, protect, upgrade, enhance, and restore existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving industry and regulatory standards, and changing customer preferences.
The healthcare and technology markets are also highly regulated and subject to evolving political, economic and regulatory influences. Global regulators are expanding and changing regulations and guidance for products and services, which can limit their potential benefits and cause protracted review timelines for new products and services. Our critical third-party vendors and service providers are subject to similar regulations.
The healthcare and technology markets are also highly regulated and subject to evolving political, economic and regulatory influences and government actions. Global regulators are expanding and changing regulations and guidance for products and services, which can limit their potential benefits and cause protracted review timelines for new products and services.
Macroeconomic conditions can, among other things, reduce or shift spending away from elective procedures, drive patients to pursue less costly orthodontic treatments, decrease the number of orthodontic case starts, reduce patient traffic in dentists’ offices, or reduce demand for dental services generally.
Macroeconomic conditions impact consumer confidence and discretionary spending, which can reduce or shift spending away from elective procedures, drive patients to pursue less costly orthodontic treatments, decrease the number of orthodontic case starts, reduce patient traffic in dental offices, or reduce demand for dental services generally.
Of the two, we expect the Invisalign System to continue to represent the majority of our net revenues, making sales of it critical to our success.
Of the two, we expect the Invisalign System to continue to represent the majority of our net revenues and remain critical to our success.
Our competitors also include DTC companies that provide clear aligners using a business model requiring little or no in-office care from trained and licensed doctors, and doctors and DSOs who manufacture custom aligners in their offices using 3D printing technology. Large consumer product companies may also start supplying orthodontic products.
Our competitors also include DTC companies that provide clear aligners using a business model requiring little to no in-office care from trained and licensed doctors, and doctors and DSOs who manufacture custom aligners or procure products from third-party white-label providers. Large consumer product companies may also start supplying orthodontic products.
Additionally, as Sustainability laws are increasing, customers and consumers may demand our products, packaging and operations be more sustainable, affect how we manufacture and package our products, increase our costs and those of our suppliers, and may result in manufacturing, transportation and supply chain disruptions if sustainable clean energy is not readily available in adequate amounts when required.
Additionally, customers and consumers may demand our products, packaging and operations be more sustainable, which could affect how we manufacture and package our products, increase our costs and those of our suppliers, and result in manufacturing, transportation and supply chain disruptions if clean energy sources are unavailable in adequate amounts when required.
The potential effects on our business operations resulting from litigation, whether or not ultimately determined in our favor or settled by us, are costly and could materially affect our reputation, business, financial condition and results of operations.
Investigations and additional litigation based on the same or similar claims may be brought in the future. The potential effects on our business operations resulting from litigation, whether or not ultimately determined in our favor or settled by us, are costly and could materially affect our reputation, business, financial condition and results of operations.
While we forecast our balance sheet exposures to foreign currency fluctuations and utilize foreign currency forward contracts to moderate the impact of exchange rate fluctuations on certain assets and liabilities, these contracts may not eliminate our exposure to fluctuations in foreign currency.
While we forecast our balance sheet exposures to foreign currency fluctuations and utilize foreign currency forward contracts to moderate the impact of currency fluctuations on certain assets and liabilities, these contracts may not eliminate our exposure. Currency exchange rate fluctuations have and may continue to materially adversely affect our results of operations and cash flows.
We may be unable to ensure that third party components or changes to them will be completely compatible with our iTero intraoral scanners, which could result in failures of our iTero intraoral scanners to perform as anticipated.
We may be unable to ensure that third-party components or changes to them will be completely compatible with our scanners, which could cause our scanners to fail to perform as anticipated.
Consumer spending habits are affected by, among other things, inflation, fluctuations in foreign currency exchange rates, consumer confidence, general economic weakness, actual or potential slowdowns or recessions, pandemics, wars and military actions, employment levels, wages, debt obligations, discretionary income, interest rates, volatility in capital and perceptions of current and future economic conditions.
Consumer spending habits are affected by, among other things, fluctuations in foreign currency exchange rates, changes in consumer confidence and demand, inflation, general economic weakness, actual or potential slowdowns or recessions, employment levels, health insurance coverage, wages, debt obligations, discretionary income, interest rates, cultural and social influences, market volatility and perceptions of current and future economic conditions.
We are highly dependent on our supply chain, particularly manufacturers of specialized and customized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our iTero intraoral scanners. We maintain single and sole supply relationships for many of these machines and materials.
We are highly dependent on our supply chain, particularly manufacturers of specialized and customized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our iTero scanners. We maintain single and sole supply relationships in limited locations for materials and manufacturing, which exposes us to multiple supply chain vulnerabilities.
If we fail to adopt Sustainability standards or practices as quickly as stakeholders desire, comply with or timely report on our Sustainability efforts or practices accurately, or satisfy the disclosure and other expectations of stakeholders, our brand, reputation, employee retention, business, financial performance, growth, and stock price may be adversely impacted. 31 We have been incorporating and continue to work to further incorporate AI technologies into our products, services and IT systems.
If we fail to adopt Sustainability standards or practices as quickly as stakeholders desire, comply with or timely report on our Sustainability efforts or practices accurately, or satisfy the disclosure and other expectations of stakeholders, our brand, reputation, employee retention, business, financial performance, growth, and stock price may be adversely impacted.
The market price of our common stock is subject to rapid and large price fluctuations attributable to various factors, many of which are beyond our control.
Risks Related to Ownership of our Common Stock Historically, the market price for our common stock has been volatile. The market price of our common stock is subject to rapid and large price fluctuations attributable to various factors, many of which are beyond our control.
The ASPs of our products, particularly the Invisalign System, are influenced by numerous factors, including the mix of product treatment packages, geographical mix, channel mix and timing of products sold (particularly the timing and quantity of orders for additional clear aligners for certain Invisalign products) and foreign currency exchange rates.
The ASPs of our products, particularly the Invisalign System, are influenced by numerous factors, including the mix of product treatment packages, geographical mix, channel mix and timing of products sold, promotions and discounts, inflation and foreign currency exchange rates.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information security team engages third-party services to conduct evaluations of our security controls, including penetration testing and independent audits. Annually, an external auditor conducts a System and Organization Controls (“SOC”) type 2 audit covering the security principle for systems supporting our products.
Biggest changeAnnually, an external auditor conducts a System and Organization Controls (“SOC”) type 2 audit covering the security principle for systems supporting our products. Our assessment of risks associated with the use of third-party vendors is part of our overall cybersecurity risk management framework.
In the event of an identified cybersecurity incident, we have developed a detailed cybersecurity incident response process, which outlines the steps to be followed from incident detection, analysis, containment, eradication, recovery and notification, including notifying functional areas (e.g. information technology, legal, finance, operations, privacy), as well as senior leadership and the Audit Committee, as appropriate.
In the event of an identified cybersecurity incident, we have developed a cybersecurity incident response process, which outlines steps to be followed from incident detection, analysis, containment, eradication, recovery and notification, including notifying functional areas (e.g. information technology, legal, finance, operations, privacy), as well as senior leadership and the Audit Committee, as appropriate.
In certain instances, incidents are escalated to certain members of our legal team who are responsible for, among other things, the accurate and timely disclosure of material cybersecurity incidents required under federal securities laws, including making the materiality determination and approving related securities disclosures.
In certain instances, incidents are escalated to certain members of our legal team who are responsible for, among other things, the accurate and timely disclosure of material cybersecurity incidents as required under federal securities laws, including making the materiality determination and approving related securities disclosures.
Our information security program includes, among other things: • cybersecurity incident response; • vulnerability management; 35 • antivirus and malware protection; • technology compliance and risk management; • encryption; • identity and access management; • application security; and • security monitoring.
Our information security program includes, among other things: • cybersecurity incident response; • vulnerability management; • antivirus and malware protection; • technology compliance and risk management; • encryption; • identity and access management; • application security; and • security monitoring.
The Audit Committee periodically reports on its review of cybersecurity risks and our cybersecurity program to our Board of Directors. In 2024, our CISO or his team met with the Audit Committee four times to discuss cybersecurity risks and threats. 36
The Audit Committee periodically reports on its review of cybersecurity risks and our cybersecurity program to our Board of Directors. In 2025, our CISO or his team met with the Audit Committee two times to discuss cybersecurity risks and threats. 37
Our assessment of risks associated with the use of third-party vendors is part of our overall cybersecurity risk management framework. If a third-party vendor is unable to provide a SOC 1 or SOC 2 report, our information security team takes additional steps to assess its cybersecurity preparedness and our initiation or continued engagement with it.
If a third-party vendor is unable to provide a SOC 1 or SOC 2 report, our information security team takes additional steps to assess its cybersecurity preparedness and our initiation or continued engagement with it.
Our information security program also includes an information security awareness program, which includes annual training regarding our acceptable use and information classification and handling policies, regular phishing campaigns complemented by additional employee training as appropriate, and communications and companion trainings to keep users informed on current events.
Our information security program also includes an information security awareness program, which includes annual training regarding our acceptable use and information classification and handling policies, regular phishing campaigns complemented by additional employee training as appropriate, and communications and companion trainings to keep users informed on current events. 36 Our information security team engages third-party services to conduct evaluations of our security controls, including penetration testing and independent audits.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOwn Office for Americas regional headquarters Belen, Heredia, Costa Rica Own Office for administrative personnel, treatment personnel, and customer care La Lima, Cartago, Costa Rica Own Office for administrative personnel, treatment personnel, and customer care Wroclaw, Poland Lease and Own Manufacturing and office for treatment and administrative personnel Petah Tikva, Israel Lease and Own Manufacturing and office for research & development and administrative personnel Rotkreuz, Switzerland Lease Office for EMEA regional headquarters Juarez, Mexico Own Manufacturing and office for administrative personnel Ziyang, China Own Manufacturing and office for administrative personnel We believe our existing facilities are in good operating condition and are suitable for the conduct of our business.
Biggest changeOwn Office for Americas regional headquarters Belen, Heredia, Costa Rica Own Office for administrative personnel, treatment personnel, and customer care La Lima, Cartago, Costa Rica Own Office for administrative personnel, treatment personnel, and customer care Wroclaw, Poland Lease and Own Manufacturing and office for treatment and administrative personnel Petah Tikva, Israel Lease and Own Manufacturing and office for research & development and administrative personnel Rotkreuz, Switzerland Lease Office for EMEA regional headquarters Juarez, Mexico Own Manufacturing and office for administrative personnel Guoco Midtown, Singapore Lease Office for APAC regional headquarters Ziyang, China Own Manufacturing and office for administrative personnel We believe our existing facilities are in good operating condition and are suitable for the conduct of our business.
Item 2. Properties. We occupy several leased and owned facilities. As of December 31, 2024, the significant facilities occupied were as follows: Location Lease/Own Primary Use Tempe, Arizona, U.S.A. Lease Office for corporate headquarters San Jose, California, U.S.A. Own Office for research & development and administrative personnel Raleigh, North Carolina, U.S.A.
Item 2. Properties. We occupy several leased and owned facilities. As of December 31, 2025, the significant facilities occupied were as follows: Location Lease/Own Primary Use Tempe, Arizona, U.S.A. Lease Office for corporate headquarters San Jose, California, U.S.A. Own Office for research & development and administrative personnel Raleigh, North Carolina, U.S.A.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. For a discussion of legal proceedings, refer to Note 8 "Legal Proceedings" of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Item 4. Mine Safety Disclosures. Not applicable. 37 PART II
Biggest changeItem 3. Legal Proceedings. The information set forth in Note 8 “ Legal Proceedings” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. 38 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “soliciting material” under the Exchange Act or subject to Regulation 14A or 14C, or to liabilities of Section 18 of the Exchange Act except to the extent we specifically request that such information be treated as soliciting material or to the extent we specifically incorporate this information by reference.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Please see Part III, Item 12 of this Annual Report on Form 10-K under the heading “ Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .” Performance Graph Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the SEC or “soliciting material” under the Exchange Act or subject to Regulation 14A or 14C, or to liabilities of Section 18 of the Exchange Act except to the extent we specifically request that such information be treated as soliciting material or to the extent we specifically incorporate this information by reference.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ALGN.” As of February 20, 2025, there were approximately 52 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ALGN.” As of February 20, 2026, there were approximately 50 holders of record of our common stock.
The graph tracks the performance of a $100 investment in Align common stock and each index (assuming reinvestment of all dividends) from December 31, 2019 to December 31, 2024. Past stock price performance is not necessarily indicative of future stock price performance. 38 Recent Sales of Unregistered Securities None.
The graph tracks the performance of a $100 investment in Align common stock and each index (assuming reinvestment of all dividends) from December 31, 2020 to December 31, 2025. Past stock price performance is not necessarily indicative of future stock price performance. 39 Recent Sales of Unregistered Securities None.
Because the majority of our shares of outstanding common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Because the majority of our shares of outstanding common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders. Dividends We have never declared or paid any cash dividends on our common stock.
In January 2023, we announced that our Board of Directors had authorized a plan to repurchase up to $1,000,000,000 of our common stock (“January 2023 Repurchase Program”). See Note 11 “ Common Stock Repurchase Programs” of the Notes to Consolidated Financial Statements for details on the January 2023 Repurchase Program. 39 Item 6. [Reserved]
In April 2025, our Board of Directors authorized a plan to repurchase up to $1,000,000,000 of our common stock (“April 2025 Repurchase Program”). See Note 11 “ Common Stock Repurchase Programs” of the Notes to Consolidated Financial Statements for details on the April 2025 Repurchase Program. 40 Item 6. [Reserved] Item 7.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes the stock repurchase activity for the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2024 through October 31, 2024 83,029 $ 217.18 83,029 $ 482,000,000 November 1, 2024 through November 30, 2024 407,090 $ 221.48 407,090 $ 392,000,000 December 1, 2024 through December 31, 2024 419,848 $ 225.49 419,848 $ 297,100,000 Total 909,967 909,967 1 January 2023 Repurchase Program.
Issuer Purchases of Equity Securities The following table summarizes the stock repurchase activity for the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1, 2025 through October 31, 2025 319,732 $ 131.99 319,732 $ 886,241,000 November 1, 2025 through November 30, 2025 105,371 $ 139.31 105,371 $ 871,563,000 December 1, 2025 through December 31, 2025 255,577 $ 157.95 255,577 $ 831,195,000 Total 680,680 680,680 1 April 2025 Repurchase Program.
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We currently intend to retain earnings for use in the operations and expansion of our business. In additional, we may use a portion of our retained earnings to repurchase shares of our common stock, if appropriate.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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A discussion regarding our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 is presented under Results of Operations of this Annual Report on Form 10-K.
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Discussions regarding our financial condition and results of operations for fiscal 2024 compared to 2023 have been omitted from this Annual Report on Form 10-K, but can be found in “

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe low-stage aligners, the Touch up product, are included as a Non-Comprehensive Product. • Non-Case revenues include, but are not limited to, retention products including retention aligners ordered through the Doctor Subscription Program, Invisalign training, adjusting tools used by dental professionals during the course of treatment and Invisalign Accessory Products that are complementary to our doctor-prescribed principal products such as aligner cases (clamshells), teeth whitening products, cleaning solutions (crystals, foam and other material) and other oral health products available in certain commerce channels in select markets. • Our Systems and Services segment consists of sales related to our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, upgrades and leases of scanner systems, sales of pre-owned scanner systems, subscription software, disposables, pay per scan services, as well as exocad’s CAD/CAM software solutions that integrate workflows to dental labs and dental practices.
Biggest changeThe low-stage aligners, the Touch up product, are included as a Non-Comprehensive Product. • Non-Case revenues include, but are not limited to, retention products including retention aligners ordered through the Doctor Subscription Program, Invisalign training, adjusting tools used by dental professionals during the course of treatment and Invisalign Accessory Products that are complementary to our doctor-prescribed principal products such as aligner cases (clamshells), teeth whitening products, cleaning solutions (crystals, foam and other material) and other oral health products available in certain commerce channels in select markets. • Our Systems and Services segment consists of sales related to our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, scanner wand upgrades and non-system revenues from leases of scanner systems, sales of pre-owned scanner systems, subscription software, disposables, pay per scan services, as well as exocad’s CAD/CAM software solutions that integrate workflows to dental labs and dental practices. 45 Net revenues for our Clear Aligner and Systems and Services segments for the years ended December 31, 2025, 2024 and 2023 are as follows (in millions) 1 : Year Ended December 31, Year Ended December 31, Net Revenues 2025 2024 Change 2024 2023 Change Clear Aligner net revenues $ 3,245.4 $ 3,230.1 $ 15.3 0.5 % $ 3,230.1 $ 3,199.3 $ 30.8 1.0 % Systems and Services net revenues 789.6 768.9 20.7 2.7 % 768.9 662.9 106.0 16.0 % Total net revenues $ 4,035.0 $ 3,999.0 $ 36.0 0.9 % $ 3,999.0 $ 3,862.3 $ 136.8 3.5 % Changes and percentages are based on actual values.
Changing Product Preferences As the markets for clear aligners and digital processes and workflows used to transform the practice of dentistry continue to mature, we continue to anticipate customer and patient expectations and demands will continue to evolve.
Changing Product Preferences As the markets for clear aligners and digital processes and workflows used to transform the practice of dentistry continue to mature, we anticipate customer and patient expectations and demands will continue to evolve.
Certain tables may not sum or recalculate due to rounding.
Certain tables may not sum or recalculate due to rounding.
Investing Activities Net cash used in investing activities was $255 million for the year ended December 31, 2024 which primarily consisted of $116 million for purchases of property, plant and equipment, $77 million for the Cubicure acquisition and $106 million for investments in privately held companies, partially offset by sales and maturities of marketable securities of $44 million.
Net cash used in investing activities was $255 million for the year ended December 31, 2024 which primarily consisted of $116 million for purchases of property, plant and equipment, $77 million for the Cubicure acquisition and $106 million for investments in privately held companies, partially offset by sales and maturities of marketable securities of $44 million.
Financing Activities Net cash used in financing activities was $356 million for the year ended December 31, 2024 which consisted of payments to repurchase shares of our common stock of $353 million and payroll taxes paid for equity awards through share withholdings of $28 million, which were partially offset by proceeds from the issuance of common stock for $25 million.
Net cash used in financing activities was $356 million for the year ended December 31, 2024 which consisted of payments to repurchase shares of our common stock of $353 million and payroll taxes paid for equity awards through share withholdings of $28 million, which were partially offset by proceeds from the issuance of common stock for $25 million.
Results of Operations Net Revenues by Reportable Segment We group our operations into two reportable segments: Clear Aligner segment and Systems and Services segment. • Our Clear Aligner segment consists of Comprehensive Products, Non-Comprehensive Products and Non-Case revenues as defined below: • Comprehensive Products include, but are not limited to, Invisalign Comprehensive, Invisalign First and Invisalign Comprehensive 3in3. • Non-Comprehensive Products include, but are not limited to, Invisalign Moderate, Lite and Express packages, Invisalign Go and Invisalign Go Plus and Invisalign Palatal Expander. 43 • In the United States, Canada, and EMEA, we also offer a Doctor Subscription Program which is our monthly subscription-based clear aligner program.
Results of Operations Net Revenues by Reportable Segment We group our operations into two reportable segments: Clear Aligner segment and Systems and Services segment. • Our Clear Aligner segment consists of Comprehensive Products, Non-Comprehensive Products and Non-Case revenues as defined below: • Comprehensive Products include, but are not limited to, Invisalign Comprehensive, Invisalign First and Invisalign Comprehensive 3in3. • Non-Comprehensive Products include, but are not limited to, Invisalign Moderate, Lite and Express packages, Invisalign Go and Invisalign Go Plus and Invisalign Palatal Expander. • In the United States, Canada, and EMEA, we also offer a Doctor Subscription Program which is our monthly subscription-based clear aligner program.
Over the longer-term, we expect international revenues to grow faster than Americas' revenues as a result of growing international demand, our continued investment in international market expansion, the size of the market opportunities and our relatively low market penetration in these regions. • Building confidence within the GP and orthodontic communities through training and education efforts to increase their adoption and utilization of digital dental practice transformation and clear aligner treatment.
Over the longer-term, we expect international revenues to grow faster than Americas’ revenues as a result of growing international demand, our continued investment in international market expansion, the size of the market opportunities and our relatively low market penetration in these regions. 41 • Building confidence within the GP and orthodontic communities through training and education efforts to increase their adoption and utilization of digital dental practice transformation and clear aligner treatment.
We have well established relationships with many DSOs globally that recognize the benefits of digital workflows enabled by our portfolio of products and services that make up the Align TM Digital Platform, including increased practice efficiency and profitability, as well as delivering a better patient experience from shorter cycle times and customer proximity.
We have well established relationships with many DSOs globally that recognize the benefits of digital workflows enabled by our portfolio of products and services that make up the Align TM Digital Platform, including increased practice efficiency and profitability, as well as delivering a better patient experience from shorter cycle times to customer proximity.
Further discussion of the impact of these challenges on our business may be found in Part I, Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.” Key Financial and Operating Metrics We measure our performance against these strategic priorities by the achievement of key financial and operating metrics.
Further discussion of the impact of these challenges on our business may be found in Part I, Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.” Key Financial and Operating Metrics We measure our performance against the foregoing strategic priorities by the achievement of key financial and operating metrics.
We furthermore demonstrate to GPs and orthodontists how the iTero portfolio of intraoral scanners, products like Invisalign Go™ treatment, and CAD/CAM restorative services and workflows can increase revenues and profitability for their dental practices by enhancing patient experiences and creating operational practice efficiencies.
We furthermore demonstrate to GPs and orthodontists how the iTero portfolio of intraoral scanners, products like Invisalign Go™ treatment, and exocad™ CAD/CAM restorative services and workflows can increase revenues and profitability for their dental practices by enhancing patient experiences and creating operational practice efficiencies.
Similarly, in 2024, we continued our focus on our doctor subscription plan and grew our underpenetrated share of the retainer business through strategic marketing campaigns focused on driving adoption and increasing market share. • Increasing global orthodontic utilization rates as doctors’ clinical confidence in the efficacy and predictability of the Invisalign System increases with advancements in products and technology and as patients and doctors demand treatments that emphasize convenience and safety through fewer visits and less invasive and quicker treatments.
Similarly, in 2025, we continued our focus on our doctor subscription plan and grew our underpenetrated share of the retainer business through strategic marketing campaigns focused on driving adoption and increasing market share. • Increasing global orthodontic utilization rates as doctors’ clinical confidence in the efficacy and predictability of the Invisalign System increases with advancements in products and technology and as patients and doctors demand treatments that emphasize convenience and safety through fewer visits and less invasive and quicker treatments.
The process of identifying impairment indicators, preparing an undiscounted cash flow and determining the fair value of the asset (asset group) require management to exercise significant judgement related to various assumptions and estimates. If we were to have impairments to goodwill or finite-lived intangible assets, it could adversely affect our operating results.
The process of identifying impairment indicators, preparing an undiscounted cash flow and determining the fair value of the asset (asset group) require management to exercise significant judgment related to various assumptions and estimates. If we were to have impairments to goodwill or finite-lived intangible assets, it could adversely affect our operating results.
For further information on all of our significant accounting policies, see Note 1 “ Summary of Significant Accounting Policies ” of the Notes to Consolidated Financial Statements . 50 Revenue Recognition Our revenues are derived primarily from the sale of aligners, scanners, and services from our Clear Aligner and Systems and Services segments.
For further information on all of our significant accounting policies, see Note 1 “ Summary of Significant Accounting Policies ” of the Notes to Consolidated Financial Statements . 52 Revenue Recognition Our revenues are derived primarily from the sale of aligners, scanners, and services from our Clear Aligner and Systems and Services segments.
The use of a DCF model requires management to exercise significant judgement related to operating assumptions and estimates including, revenue growth rates, terminal growth rates, operating margins and discount rates, among others. Additionally, management exercises judgement when determining the methodology used to allocate net assets to each reporting unit.
The use of a DCF model requires management to exercise significant judgment related to operating assumptions and estimates including, revenue growth rates, terminal growth rates, operating margins and discount rates, among others. Additionally, management exercises judgment when determining the methodology used to allocate net assets to each reporting unit.
When an impairment indicator is identified, we perform a recoverability test, in 51 which the estimated, undiscounted future cash flows expected to result from the use and eventual disposition of the asset (asset group) are compared to the carrying value of the asset (asset group).
When an impairment indicator is identified, we perform a recoverability test, in 53 which the estimated, undiscounted future cash flows expected to result from the use and eventual disposition of the asset (asset group) are compared to the carrying value of the asset (asset group).
To increase awareness and educate young adults, parents and teens about the benefits of Invisalign treatment, in 2024, we continued to invest in and create campaigns across markets in media platforms such as TikTok, Instagram, YouTube, SnapChat, WeChat, and Douyin.
To increase awareness and educate young adults, parents and teens about the benefits of Invisalign treatment, in 2025, we continued to invest in and create campaigns across markets in media platforms such as TikTok, Instagram, YouTube, SnapChat, WeChat, and Douyin.
We strive to manage the challenges from the trends and uncertainties, including the macroeconomic conditions, tariffs and retaliatory measures, military conflicts and the evolution of our target markets, by focusing on improving our operations, further increasing flexibility and efficiencies in our processes, adjusting our business models to changing circumstances and offering products that meet market demand.
We strive to manage the challenges presented by the foregoing trends and uncertainties, including the macroeconomic conditions, tariffs and retaliatory measures, military conflicts and the evolution of our target markets, by focusing on improving our operations, further increasing flexibility and efficiencies in our processes, adjusting our business models to changing circumstances and offering products that meet market demand.
We strive to deliver on each of our strategic growth drivers through a variety of interrelated enterprise-wide efforts including: • Continuing penetration and adoption of Invisalign clear aligners, intraoral scanners and CAD/CAM solutions in international markets by investing in manufacturing operations, research and development, clinical treatment planning, sales and marketing and building our quality and regulatory capabilities in existing and emerging markets globally.
We strive to deliver on each of our strategic growth drivers through a variety of interrelated enterprise-wide efforts including: • Continuing penetration and adoption of Invisalign ® clear aligners, iTero Element™ and Lumina™ intraoral scanners and exocad™ CAD/CAM solutions in international markets by investing in manufacturing operations, research and development, clinical treatment planning, sales and marketing and building our quality and regulatory capabilities in existing and emerging markets globally.
We expect to meet customer demands with innovative treatment options that include more choices to address a wider scope of treatment goals and budgets based on our existing and new products. This may result in larger and unpredictable variations in geographic and product mix and selling prices with uncertain implications on our financial statements and business operations.
We expect to meet customer demands with innovative treatment options that include more choices to address a wider scope of treatment goals and budgets based on our existing and new products. This may result in larger and unpredictable variations in geographic and product mix and selling prices, which could result in uncertain impacts on our financial statements and business operations.
During the year ended 2024 and 2023, we did not have any impairment charges related to our goodwill or finite-lived intangible assets. Accounting for Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions. The evaluation of our uncertain tax positions involves significant judgment in the interpretation and application of U.S.
During the years ended 2025 and 2024, we did not have any impairment charges related to our goodwill or finite-lived intangible assets. Accounting for Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions. The evaluation of our uncertain tax positions involves significant judgment in the interpretation and application of U.S.
We expect to make further investments to create additional demand for Invisalign System treatment driving more consumers to dental professionals for those treatments. • Pursuing new product lines that complement our doctor-prescribed principal products currently available in certain e-commerce and retail channels in the United States.
We expect to make further investments to stimulate additional demand for Invisalign System treatment and drive more consumers to dental professionals for those treatments. • Pursuing new product lines that complement our doctor-prescribed principal products currently available in certain e-commerce and retail channels in the United States.
Our growth strategy depends on our ability to facilitate the digital transformation of dentistry happening around the world, our continuous focus on innovation, and expansion to meet and exceed evolving customer expectations as the array of products and services available to them increases.
Our growth strategy depends on our ability to facilitate the digital transformation of dentistry, our continuous focus on innovation, and expansion to meet and exceed evolving customer expectations as the array of products and services available to them increases.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024, which is available without charge on the SEC’s website at www.sec.gov and on our investor relations website at investor.aligntech.com .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025, which is available without charge on the SEC’s website at www.sec.gov and on our investor relations website at investor.aligntech.com .
Certain tables may not sum or recalculate due to rounding. Restructuring and other charges increased in 2024 compared to 2023 due to higher severance and other one-time post-employment benefits, driven by a more significant restructuring plan initiated in 2024.
Certain tables may not sum or recalculate due to rounding. Restructuring and other charges increased in 2025 compared to the same period in 2024 due to higher severance and other one-time post-employment benefits, driven by a more significant restructuring plan initiated in 2025.
The increase in our effective tax rate for the year ended December 31, 2024 compared to the same period in 2023 is primarily attributable to an increase in U.S. taxes on foreign earnings, partially offset by a change in our jurisdictional mix of income and release of unrecognized tax benefits due to a lapse of the statute of limitation.
The decrease in our effective tax rate for the year ended December 31, 2025 compared to the same period in 2024 is primarily attributable to a decrease in U.S. taxes on foreign earnings, release of unrecognized tax benefits due to statute of limitation lapse, partially offset by the remeasurement of the deferred tax asset due to tax rate change and change in our jurisdictional mix of income.
Clear Aligner Case Volume Case volume data which represents Clear Aligner case shipments for the year ended December 31, 2024, 2023 and 2022 is as follows (in thousands): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Total case volume 2,493.7 2,408.5 85.2 3.5 % 2,408.5 2,398.4 10.2 0.4 % Changes and percentages are based on actual values.
Clear Aligner Case Volume Case volume data which represents Clear Aligner case shipments for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Total case volume 2,611.3 2,493.7 117.5 4.7 % 2,493.7 2,408.5 85.2 3.5 % Changes and percentages are based on actual values.
Interest income (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Interest income $ 20.2 $ 17.3 $ 3.0 $ 17.3 $ 5.4 $ 11.9 % of net revenues 0.5 % 0.4 % 0.4 % 0.1 % Changes and percentages are based on actual values.
Interest income (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Interest income $ 16.0 $ 20.2 $ (4.2) $ 20.2 $ 17.3 $ 3.0 % of net revenues 0.4 % 0.5 % 0.5 % 0.4 % Changes and percentages are based on actual values.
Restructuring and other charges (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Restructuring and other charges $ 33.2 $ 13.3 $ 19.9 $ 13.3 $ 11.5 $ 1.9 % of net revenues 0.8 % 0.3 % 0.3 % 0.3 % Changes and percentages are based on actual values.
Restructuring and other charges (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Restructuring and other charges $ 35.4 $ 33.2 $ 2.2 $ 33.2 $ 13.3 $ 19.9 % of net revenues 0.9 % 0.8 % 0.8 % 0.3 % Changes and percentages are based on actual values.
Refer to Note 8 “ Legal Proceedings ” of the Notes to Consolidated Financial Statements for more information. • As of December 31, 2024, we had no material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material impact on our liquidity or capital resources.
Refer to Note 13 “Income Taxes” of the Notes to Consolidated Financial Statements for more information. • As of December 31, 2025, we had no material off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material impact on our liquidity or capital resources.
Selling, general and administrative (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Selling, general and administrative $ 1,763.2 $ 1,703.4 $ 59.8 $ 1,703.4 $ 1,674.5 $ 28.9 % of net revenues 44.1 % 44.1 % 44.1 % 44.8 % Changes and percentages are based on actual values.
Selling, general and administrative (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Selling, general and administrative $ 1,755.8 $ 1,763.2 $ (7.4) $ 1,763.2 $ 1,703.4 $ 59.8 % of net revenues 43.5 % 44.1 % 44.1 % 44.1 % Changes and percentages are based on actual values.
Net cash used in financing activities was $598 million for the year ended December 31, 2023 which consisted of payments to repurchase shares of our common stock of $602 million and payroll taxes paid for equity awards through share withholdings of $23 million, which were partially offset by proceeds from the issuance of common stock for $27 million of proceeds from the issuance of common stock.
Financing Activities Net cash used in financing activities was $465 million for the year ended December 31, 2025 which consisted of payments to repurchase shares of our common stock of $466 million and payroll taxes paid for equity awards through share withholdings of $20 million, which were partially offset by proceeds from the issuance of common stock for $22 million.
Unfulfilled Performance Obligations for Clear Aligners and Scanners Our unfulfilled performance obligations, including deferred revenues and backlog, and the estimated revenues expected to be recognized in the future related to these performance obligations are $1,444.9 million and $1,578.3 million as of December 31, 2024 and 2023, respectively.
Unfulfilled Performance Obligations for Clear Aligners and Scanners Our unfulfilled performance obligations, including deferred revenues and backlog, and the estimated revenues expected to be recognized in the future related to these performance obligations are $1,353 million and $1,445 million as of December 31, 2025 and 2024, respectively.
The degree of our exposure is dependent on, among other things, the type of goods subject to any tariffs enacted, the tariff rates imposed, the timing of the tariffs and any retaliatory measures enacted. The impact of declining demand may vary by time and region, making operational results uncertain and difficult to predict.
The degree of our exposure depends on, among other things, the type of goods subject to any tariffs or trade restrictions enacted, the tariff rates or limits imposed, the timing of the tariffs or restrictions and any other retaliatory measures enacted. The impact may vary by time and region, making operational results uncertain and difficult to predict.
Research and development (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Research and development $ 364.2 $ 346.8 $ 17.4 $ 346.8 $ 305.3 $ 41.6 % of net revenues 9.1 % 9.0 % 9.0 % 8.2 % Changes and percentages are based on actual values.
Research and development (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Research and development $ 369.9 $ 364.2 $ 5.7 $ 364.2 $ 346.8 $ 17.4 % of net revenues 9.2 % 9.1 % 9.1 % 9.0 % Changes and percentages are based on actual values.
Our material cash requirements as of December 31, 2024 are as follows: • Our purchase commitments consist primarily of open purchase orders for goods and services, including manufacturing inventory, supplies and services, sales and marketing, research and development services and technological services, issued in the normal course of business. Our purchase commitments totaled $1,193 million.
Our material cash requirements as of December 31, 2025 and material trends and uncertainties for the fiscal year 2026 are as follows: • Our purchase commitments consist primarily of open purchase orders for goods and services, including manufacturing inventory, supplies and services, sales and marketing, research and development services and technological services, issued in the normal course of business.
We continue to evaluate opportunities to repatriate our foreign earnings if or when needed. We do not expect to incur significant additional costs upon repatriation of these foreign earnings. We generate sufficient domestic operating cash flow and have access to $300 million under our revolving line of credit.
We do not expect to incur significant additional costs upon repatriation of these foreign earnings. We generate sufficient operating cash flow from our domestic operations and have access to $300 million under our revolving line of credit.
Research and development expense increased in 2024 compared to 2023 primarily due to higher employee costs, including salaries, fringe benefits, stock-based compensation, net of capitalized labor costs related to internal use software, and bonus, partially offset by lower outside services expense.
Research and development expense increased in 2025 compared to the same period in 2024 primarily due to higher employee costs, including salaries, fringe benefits, stock-based compensation, offset by lower capitalized labor costs related to internal use software and lower bonus cost.
We have and may continue to financially invest in or explore collaborations with key ecosystem partners, including DSOs, whose missions and visions align with our own vision, strategy, business model and goals. 40 • Investing in research and development that allows us to innovate, develop and bring to market products and solutions that deliver the ever-increasing clinical precision and predictability that doctors expect with the speed and convenience their patients require. • Creating demand and enabling patient conversion with targeted investments in advertising and public relations through social media, influencers and other forms of digital communications to encourage treatment by Invisalign trained doctors.
We have and may continue to financially invest in or explore collaborations with key ecosystem partners, including DSOs, whose missions and visions align with our vision, strategy, business model and goals. • Investing in research and development that allows us to innovate, develop and bring to market products and solutions that deliver the ever-increasing clinical precision and predictability that doctors expect with the speed and convenience their patients require.
Selling, general and administrative expense generally includes personnel-related costs, including payroll, stock-based compensation and commissions for our sales force, marketing and advertising expenses including media, market research, marketing materials, clinical education, trade shows and industry events, legal and outside service costs, equipment, software and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and Information Technology (“IT”).
Selling, general and administrative expense generally includes personnel-related costs, including payroll, stock-based compensation and commissions for our sales force, marketing and advertising expenses including media, market research, marketing materials, clinical education, trade shows and industry events, legal and outside service costs, equipment, software and maintenance costs, depreciation and amortization expense and allocations of corporate overhead expenses including facilities and IT. 47 Selling, general and administrative expense decreased in 2025 compared to the same period in 2024 primarily due to lower employee costs, including salaries, fringe benefits, and bonus, and lower marketing and outside services expense.
The accuracy of these estimates could be affected by unforeseen events or actual results, and the sustainability of our future tax benefits is dependent upon the acceptance of these valuation estimates and assumptions by the taxing authorities.
The accuracy of these estimates could be affected by unforeseen events or actual results, and the sustainability of our future tax benefits is dependent upon the acceptance of these valuation estimates and assumptions by the taxing authorities, particularly with respect to our Switzerland operation, where our deferred tax assets have a finite utilization period.
We anticipate a majority, an estimated $1,003 million, will be payable within the next 12 months. These purchase commitments exclude capital expenditures. • We expect our investments in capital expenditures to be between $100 million and $150 million for the next 12 months. Capital expenditures primarily relate to building construction and improvements as well as additional manufacturing capacity.
Our purchase commitments totaled $1,020 million. We anticipate a majority, an estimated $935 million, will be payable within the next 12 months. These purchase commitments exclude capital expenditures. • We expect our investments in capital expenditures to be between $125 million and $150 million for the next 12 months.
Our stock repurchase program is subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, taking into account prevailing market conditions.
Our stock repurchase program is subject to periodic evaluations to determine when and if repurchases are in the best interests of our stockholders, taking into account 50 prevailing market conditions. In April 2025, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock, (the “April 2025 Repurchase Program”).
Certain tables may not sum or recalculate due to rounding. Interest income generally includes interest earned on cash, cash equivalents and investment balances.
Certain tables may not sum or recalculate due to rounding. Interest income generally includes interest earned on cash, cash equivalents and investment balances. Interest income decreased in 2025 compared to the same period in 2024 primarily due to lower interest rates earned on cash and cash equivalent balances.
Sources and Uses of Cash The following table summarizes our Consolidated Statements of Cash Flows for the year ended December 31, 2024, 2023 and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in): Operating activities $ 738,231 $ 785,776 $ 568,732 Investing activities (254,912) (195,943) (213,316) Financing activities (355,722) (598,340) (501,686) Effects of foreign exchange rate changes on cash, cash equivalents, and restricted cash (21,153) 4,671 (11,514) Net (decrease) increase in cash, cash equivalents, and restricted cash $ 106,444 $ (3,836) $ (157,784) Operating Activities For the year ended December 31, 2024, cash flows from operations of $738 million resulted primarily from our net income of approximately $421 million as well as the following: Significant adjustments to net income • Stock-based compensation of $174 million related to equity awards granted to employees and directors; and • Depreciation and amortization of $145 million related to our investments in property, plant and equipment and intangible assets.
Sources and Uses of Cash The following table summarizes our Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Net cash provided by (used in): Operating activities $ 593,223 $ 738,231 $ 785,776 Investing activities (112,445) (254,912) (195,943) Financing activities (464,580) (355,722) (598,340) Effects of foreign exchange rate changes on cash, cash equivalents, and restricted cash 35,025 (21,153) 4,671 Net (decrease) increase in cash, cash equivalents, and restricted cash $ 51,223 $ 106,444 $ (3,836) Operating Activities For the year ended December 31, 2025, cash flows from operations of $593 million resulted primarily from our net income of approximately $410 million as well as the following: Significant adjustments to net income • Stock-based compensation of $186 million related to equity awards granted to employees and directors; and • Depreciation and amortization of $237 million related to our investments in property, plant and equipment and intangible assets. 51 Significant changes in working capital • Net outflow of $96 million from accrued and other long-term liabilities primarily due to timing of payments related to the payment of fiscal year 2024 bonuses in the first quarter of 2025; • Net outflow of $112 million from deferred revenues; and • Net outflow of $140 million from accounts receivable due to timing of collections and increased revenues.
We may, in the future, be required to increase the valuation allowance to take into account additional deferred tax assets that we may be unable to realize. Accounting for Legal Proceedings Estimates of probable losses resulting from litigation are inherently difficult to make, particularly when the matters are in early procedural stages with incomplete facts and information.
Accounting for Legal Proceedings Estimates of probable losses resulting from litigation are inherently difficult to make, particularly when the matters are in early procedural stages with incomplete facts and information.
For instance, we have fabrication facilities in three key regions as a part of our strategy to bring operational facilities closer to customers to serve them more quickly and respond to their needs more effectively as well as new treatment planning operations in targeted regional geographies.
Our fabrication facilities in our three key regions and treatment planning operations in targeted regional geographies brings our operations closer to our customers and enables us to serve them more quickly and respond to their needs more effectively.
Income from operations (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Clear Aligner Income from operations $ 1,142.2 $ 1,182.3 $ (40.1) $ 1,182.3 $ 1,134.4 $ 47.8 Operating margin % 35.4 % 37.0 % 37.0 % 36.9 % Systems and Services Income from operations $ 269.2 $ 191.4 $ 77.9 $ 191.4 $ 179.8 $ 11.6 Operating margin % 35.0 % 28.9 % 28.9 % 27.2 % Total Income from operations 1 $ 607.6 $ 643.3 $ (35.7) $ 643.3 $ 642.6 $ 0.7 Operating margin % 15.2 % 16.7 % 16.7 % 17.2 % Changes and percentages are based on actual values.
Refer to Note 8 “Legal Proceedings” of the Notes to Consolidated Financial Statements for more information. 48 Income from operations (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Clear Aligner Income from operations $ 1,034.8 $ 1,142.2 $ (107.4) $ 1,142.2 $ 1,182.3 $ (40.1) Operating margin % 31.9 % 35.4 % 35.4 % 37.0 % Systems and Services Income from operations $ 306.1 $ 269.2 $ 36.9 $ 269.2 $ 191.4 $ 77.9 Operating margin % 38.8 % 35.0 % 35.0 % 28.9 % Total Income from operations 1 $ 545.8 $ 607.6 $ (61.9) $ 607.6 $ 643.3 $ (35.7) Operating margin % 13.5 % 15.2 % 15.2 % 16.7 % Changes and percentages are based on actual values.
Interest income increased in 2024 compared to 2023 primarily due to primarily due to higher cash and cash equivalents. 47 Other income (expense), net (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Other income (expense), net $ (18.9) $ (19.4) $ 0.5 $ (19.4) $ (48.9) $ 29.5 % of net revenues (0.5) % (0.5) % (0.5) % (1.3) % Changes and percentages are based on actual values.
Other income (expense), net (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Other income (expense), net $ 23.5 $ (18.9) $ 42.4 $ (18.9) $ (19.4) $ 0.5 % of net revenues 0.6 % (0.5) % (0.5) % (0.5) % Changes and percentages are based on actual values.
Cost of net revenues and gross profit (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Clear Aligner Cost of net revenues $ 952.1 $ 911.3 $ 40.8 $ 911.3 $ 844.4 $ 66.9 % of net segment revenues 29.5 % 28.5 % 28.5 % 27.5 % Gross profit $ 2,278.0 $ 2,288.0 $ (10.1) $ 2,288.0 $ 2,228.2 $ 59.9 Gross margin % 70.5 % 71.5 % 71.5 % 72.5 % Systems and Services Cost of net revenues $ 247.7 $ 244.1 $ 3.6 $ 244.1 $ 256.4 $ (12.3) % of net segment revenues 32.2 % 36.8 % 36.8 % 38.7 % Gross profit $ 521.2 $ 418.8 $ 102.3 $ 418.8 $ 405.6 $ 13.2 Gross margin % 67.8 % 63.2 % 63.2 % 61.3 % Total cost of net revenues $ 1,199.9 $ 1,155.4 $ 44.5 $ 1,155.4 $ 1,100.9 $ 54.5 % of net revenues 30.0 % 29.9 % 29.9 % 29.5 % Gross profit $ 2,799.2 $ 2,706.9 $ 92.3 $ 2,706.9 $ 2,633.8 $ 73.1 Gross margin % 70.0 % 70.1 % 70.1 % 70.5 % Changes and percentages are based on actual values.
These increases were partially offset by lower scanner system sales of $25 million, driven by lower system volume and ASP. 46 Cost of net revenues and gross profit (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Clear Aligner Cost of net revenues $ 1,058.9 $ 952.1 $ 106.8 $ 952.1 $ 911.3 $ 40.8 % of net segment revenues 32.6 % 29.5 % 29.5 % 28.5 % Gross profit $ 2,186.5 $ 2,278.0 $ (91.5) $ 2,278.0 $ 2,288.0 $ (10.1) Gross margin % 67.4 % 70.5 % 70.5 % 71.5 % Systems and Services Cost of net revenues $ 265.1 $ 247.7 $ 17.3 $ 247.7 $ 244.1 $ 3.6 % of net segment revenues 33.6 % 32.2 % 32.2 % 36.8 % Gross profit $ 524.5 $ 521.2 $ 3.3 $ 521.2 $ 418.8 $ 102.3 Gross margin % 66.4 % 67.8 % 67.8 % 63.2 % Total cost of net revenues $ 1,324.0 $ 1,199.9 $ 124.1 $ 1,199.9 $ 1,155.4 $ 44.5 % of net revenues 32.8 % 30.0 % 30.0 % 29.9 % Gross profit $ 2,711.0 $ 2,799.2 $ (88.1) $ 2,799.2 $ 2,706.9 $ 92.3 Gross margin % 67.2 % 70.0 % 70.0 % 70.1 % Changes and percentages are based on actual values.
GP and orthodontist doctor submitters increased by approximately 3% and 4%, respectively, in 2024 compared to 2023. • Our total utilization rate in 2024 of 19.1 cases per doctor was flat compared to 2023 and slightly down from 19.3 cases per doctor in 2022.
GP and orthodontist doctor submitters decreased by approximately 2% and increased by approximately 2%, respectively, in 2025 compared to 2024. • The total utilization rate in 2025 was 20.1 cases per doctor compared to 19.1 in both 2024 and 2023.
We continue to monitor the potential for violence and military actions that may directly or indirectly impact our personnel, manufacturing, supply chain, and sales.
Foreign exchange volatility and the subsequent strengthening or weakening of the U.S. dollar against other currencies remains uncertain and unpredictable. We continue to monitor the potential for violence and military actions that may directly or indirectly impact our personnel, manufacturing, supply chain, and sales.
Certain tables may not sum or recalculate due to rounding. Total net revenues increased by $137 million in 2024 as compared to 2023, primarily due to an increase in Systems and Services net revenues from higher scanner ASP, increase in non-system sales and services revenue.
Certain tables may not sum or recalculate due to rounding. Total net revenues increased by $36 million in 2025 as compared to the same period in 2024, primarily due to an increase in Clear Aligner volume, partially offset by a decrease in ASP and an increase in Systems and Services net revenues driven by strong scanner wand sales.
Refer to Note 8 “Legal Proceeding s ” of the Notes to Consolidated Financial Statements . • Net outflow of $80 million from deferred revenues; and • Net outflow of $153 million from accounts receivable due to timing of collections and increased revenues. 49 For the year ended December 31, 2023, cash flows from operations of $786 million resulted primarily from our net income of approximately $445 million as well as the following: Significant adjustments to net income • Stock-based compensation of $154 million related to equity awards granted to employees and directors; and • Depreciation and amortization of $142 million related to our investments in property, plant and equipment and intangible assets.
For the year ended December 31, 2024, cash flows from operations of $738 million resulted primarily from our net income of approximately $421 million as well as the following: Significant adjustments to net income • Stock-based compensation of $174 million related to equity awards granted to employees and directors; and • Depreciation and amortization of $145 million related to our investments in property, plant and equipment and intangible assets.
While there have been export and import restrictions imposed against products originating from and businesses operating in Israel, they have not materially impacted our sales or operations to date although we continue to monitor the risk.
While there have been export and import restrictions imposed against products originating from and businesses operating in Israel, they have not materially impacted our sales or operations to date although we continue to monitor the risk. 2025 Restructuring 43 Beginning in the third quarter of 2025 and continuing into the fourth quarter, we initiated a series of restructuring actions to streamline our operations, realign parts of our organization, and optimize our global manufacturing footprint in response to the current macro environment.
Total operating margin percentage decreased in 2024 compared to 2023 primarily due to increased legal settlement losses, restructuring and other charges and employee costs. Refer to Note 8 “ Legal Proceedings ” of the Notes to Consolidated Financial Statements .
Total operating margin percentage decreased in 2025 compared to the same period in 2024 primarily due to lower gross margin and higher restructuring and other charges, offset by lower legal settlement loss. Refer to Note 8 “Legal Proceedings” of the Notes to Consolidated Financial Statements for more information.
For the year ended December 31, 2024, our business operations reflect the following: ◦ Revenues of $3,999.0 million, an increase of 3.5% year-over-year; ◦ Clear Aligner revenues of $3,230.1 million, an increase of 1.0% year-over-year; ▪ Americas Clear Aligner case revenues of $1,426.3 million, a decrease of 2.5% year-over-year; ▪ International Clear Aligner case revenues of $1,500.5 million, an increase of 3.5% year-over-year; ▪ Clear Aligner volume increase of 3.5% year-over-year and Clear Aligner volume increase for kids and teens of 7.7% year-over-year; ◦ Imaging Systems and computer-aided design and computer-aided manufacturing (“CAD/CAM”) Services revenues of $768.9 million, an increase of 16.0% year-over-year; ◦ Income from operations of $607.6 million and operating margin of 15.2%; ◦ Effective tax rate of 30.8%; ◦ Net income of $421.4 million with diluted net income per share of $5.62; ◦ Cash and cash equivalents of $1,043.9 million as of December 31, 2024; ◦ Cash provided by operating activities of $738.2 million; ◦ Capital expenditures of $115.6 million, primarily related to investments in our manufacturing capacity and facilities; and ◦ Number of employees of 20,945 as of December 31, 2024, a decrease of 3.1% year-over-year.
For the year ended December 31, 2025, our business operations reflect the following: ◦ Revenues of $4,035.0 million, an increase of 0.9% year-over-year; ◦ Clear Aligner revenues of $3,245.4 million, an increase of 0.5% year-over-year; ◦ Clear Aligner case volume increase of 4.7% year-over-year and Clear Aligner volume increase for teens and growing patients from 868.1 thousand shipments to 935.8 thousand or 7.8% year-over-year; ◦ Imaging Systems and computer-aided design and computer-aided manufacturing (“CAD/CAM”) services revenues of $789.6 million, an increase of 2.7% year-over-year; ◦ Income from operations of $545.8 million and operating margin of 13.5%; ◦ Effective tax rate of 29.9%; ◦ Net income of $410.4 million with diluted net income per share of $5.65; ◦ Cash and cash equivalents of $1,094.9 million as of December 31, 2025; ◦ Cash provided by operating activities of $593.2 million; ◦ Capital expenditures of $102.4 million, primarily related to investments in our manufacturing capacity and facilities; and ◦ Number of employees was 20,290 as of December 31, 2025, a decrease of 3.1% year-over-year. 44 Other Statistical Data and Trends • As of December 31, 2025, over 22 million people worldwide have been treated with our Invisalign system. • For the year ended 2025, the total number of Invisalign-trained doctors cases were shipped to (doctor submitters) was 130.0 thousand compared to 130.4 thousand in 2024, a 0.3% decrease.
Refer to Note 17 “ Restructuring and Other Charges” of the Notes to Consolidated Financial Statements for more information. 46 Legal settlement loss (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Legal settlement loss $ 31.0 $ — $ 31.0 $ — $ — $ — % of net revenues 0.8 % — % — % — % Changes and percentages are based on actual values.
Legal settlement loss (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Legal settlement loss $ 4.2 $ 31.0 $ (26.8) $ 31.0 $ — $ 31.0 % of net revenues 0.1 % 0.8 % 0.8 % — % Changes and percentages are based on actual values.
Provision for income taxes (in millions): Year Ended December 31, Year Ended December 31, 2024 2023 Change 2023 2022 Change Provision for (benefit from) income taxes $ 187.6 $ 196.2 $ (8.6) $ 196.2 $ 237.5 $ (41.3) Effective tax rates 30.8 % 30.6 % 30.6 % 39.6 % Changes and percentages are based on actual values.
Other income (expense), net increased in 2025 compared to the same period in 2024 primarily due to gains recorded on our equity investments and changes in foreign exchange rates. 49 Provision for income taxes (in millions): Year Ended December 31, Year Ended December 31, 2025 2024 Change 2024 2023 Change Provision for (benefit from) income taxes $ 174.9 $ 187.6 $ (12.7) $ 187.6 $ 196.2 $ (8.6) Effective tax rates 29.9 % 30.8 % 30.8 % 30.6 % Changes and percentages are based on actual values.
For instance, ongoing conflicts in the Middle East may further exacerbate general and regional macroeconomic instability, particularly if fighting intensifies, spreads to other locations, creates shipping and logistical challenges or cost increases, leads to sanctions or boycotts, or otherwise may materially impact our operations.
This is particularly true if fighting erupts, intensifies, spreads to other locations, creates shipping and logistical challenges or cost increases, leads to sanctions or boycotts, or otherwise materially impacts our operations or consumer spending.
Clear Aligner Operating margin percentage decreased in 2024 compared to 2023 primarily due to a decrease in gross margin and an increase in employee costs. Systems and Services Operating margin percentage increased in 2024 compared to 2023 primarily due to higher gross margin, partially offset by an increase in employee costs .
Systems and Services Operating margin percentage increased in 2025 compared to the same period in 2024 primarily due to higher operating income driven by higher revenue and lower operating expenses related to a decrease in employee costs .
Specifically, we are managing financial impacts through strategic product innovations, introductions and pricing actions, implementing cost saving measures and evaluating hiring needs. As an example, there was significant adoption of the Invisalign Comprehensive 3in3 product after it was introduced in 2023 that continued in 2024.
Specifically, we are managing financial impacts by implementing strategic product innovations, introductions and pricing actions, implementing cost saving measures and evaluating hiring needs.
We expect utilization rates to continue to rise. However, our utilization rates will fluctuate from period to period due to a variety of factors, which may include seasonal trends in our business, consumer demand due to macroeconomic factors, and adoption rates for new products and features.
However, our utilization rates will fluctuate from period to period due to a variety of factors, which may include seasonal trends in our business, consumer demand due to macroeconomic factors, and adoption rates for new products and features. 42 Trends and Uncertainties Below is a discussion of the significant trends and uncertainties that could impact our operations: Macroeconomic Challenges, Trade Impediments and Geopolitical Tensions Our revenues may fluctuate as a result of events and circumstances impacting customer confidence, consumer sentiment, discretionary spending and ultimately demand for dental services and our products.
For instance, our iTero business is headquartered in Israel and, although the sales, delivery times and cost of shipping our 41 products have not been materially impacted and we have put measures in place to help reduce the future risks, it remains uncertain if there will be impacts on our sales, delivery times or cost of shipping our products.
Our iTero business is headquartered in Israel and, although the sales, delivery times and cost of shipping have not been materially impacted to date, the situation remains fluid. We have implemented contingency planning and business continuity measures to mitigate these risks, but it is uncertain whether further escalation could disrupt our operations.
We continue to closely monitor the foregoing issues, assess their potential impact on our operations and financial results, and implement plans to mitigate the impact of any adverse events. Additionally, a material amount of our revenues are derived internationally and many of our international operations are denominated in currencies other than the U.S. dollar.
Additionally, a material amount of our revenues are derived internationally and many of our international operations are denominated in currencies other than the U.S. dollar. In 2025, the U.S. dollar remained weakened against major currencies, which positively impacted our financial condition and results of operations for the year.
Certain tables may not sum or recalculate due to rounding. Legal settlement loss incurred during 2024 was due to litigation and other settlements. Refer to Note 8 “Legal Proceedings” of the Notes to Consolidated Financial Statements for more information.
Certain tables may not sum or recalculate due to rounding. Legal settlement losses were incurred in 2025 and 2024 due to litigation and other settlements. For the year ended 2025, we recorded losses of $4 million due to such legal settlements.
Net cash used in investing activities was $196 million for the year ended December 31, 2023 which primarily consisted of purchases of property, plant and equipment of $178 million which included a building acquisition for $25 million, an investment in equity of a privately held company of $77 million and purchases of marketable securities of $3 million, partially offset by sales and maturities of marketable securities of $61 million.
Investing Activities Net cash used in investing activities was $112 million for the year ended December 31, 2025 which was primarily related to an outflow of $102 million for purchases of property, plant and equipment and a $10 million additional investment in SD Holding Company.
Clear Aligner The gross margin percentage decreased in 2024 as compared to 2023 primarily due to lower ASPs and higher restructuring expense. 45 Systems and Services The gross margin percentage increased in 2024 as compared to 2023 primarily due to higher ASPs and lower cost of net revenues leverage, partially offset by lower service revenue mix.
Systems and Services The gross margin percentage decreased in 2025 as compared to the same period in 2024 primarily due to lower ASPs and an impairment loss on inventory of $15 million. These decreases were partially offset by lower Cost of net revenues, excluding the impairment loss, from operational efficiencies.
We also expect the military conflict between Russia and Ukraine to continue to create market uncertainties and dampen consumer sentiment and demand, particularly in Europe. Additionally, government actions in various countries relating to implemented or proposed tariffs, particularly the United States, China, Mexico, and Europe are expected to adversely impact our revenue and cost of goods sold if implemented.
More directly, we believe government actions relating to actual or proposed tariffs and retaliatory actions in key strategic countries or regions, particularly in the United States, China, Europe, Brazil, Canada, Israel and Mexico may adversely impact our revenue and cost of goods sold.
Liquidity and Capital Resources Liquidity and Trends As of December 31, 2024 and 2023, we had the following cash and cash equivalents and short-term and long-term marketable securities (in thousands): December 31, 2024 2023 Cash and cash equivalents $ 1,043,887 $ 937,438 Marketable securities, short-term — 35,304 Marketable securities, long-term — 8,022 Total $ 1,043,887 $ 980,764 As of December 31, 2024 and 2023, approximately $855 million and $785 million, respectively, of cash, cash equivalents and marketable securities were held by our foreign subsidiaries.
Liquidity and Capital Resources Liquidity and Trends As of December 31, 2025 and 2024, we had the following cash and cash equivalents (in thousands): December 31, 2025 2024 Cash and cash equivalents $ 1,094,908 $ 1,043,887 Our principal source of liquidity is cash provided by our operations.
Refer to Note 11 “ Common Stock Repurchase Programs ” of the Notes to Consolidated Financial Statements for details on our stock repurchase activity. • In 2024, we agreed, in principle, to settle certain legal matters. As of December 31, 2024, a total of $27.5 million remained unpaid.
Refer to Note 11 “Common Stock Repurchase Program” of the Notes to Consolidated Financial Statements for details on our stock repurchase programs. • In 2025, we settled certain legal matters and issued a payment for the full settlement amount of $32 million, Settlement payments were made in accordance with the terms and conditions as set forth in the settlement agreement.
Systems and Services Systems and Services net revenues increased by $106 million in 2024 as compared to 2023 primarily due to higher scanner ASP which increased net revenues by $45 million, an increase in sales of upgrade scanner systems which increased net revenues by $38 million, higher services revenue which increased net revenues by $19 million and higher volume which increased net revenues by $4 million.
Systems and Services Systems and Services net revenues increased by $21 million in 2025 as compared to the same period in 2024 primarily due to an increase of $26 million in sales of scanner wands, driven by strong volume partially offset by lower scanner wand ASP, a $19 million increase from non-system sales and a $1 million positive impact from favorable foreign exchange rates.
In addition, the teenage and younger market makes up about 70% of the approximately 22 million total annual global orthodontic case starts. We continue to emphasize the benefits of the Invisalign System for teenage and younger patient treatments through education, training and sales and marketing programs. In 2024, we had record shipments to teenage and younger patients.
In addition, the teenage and younger market makes up approximately 70% of the estimated 22 million total annual global orthodontic case starts. We offer early interceptive treatment to this patient population with products designed to acclimate them to wearing removable devices.
Below is a discussion of the significant trends and uncertainties that could impact our operations: Macroeconomic Challenges and Military Conflicts in Ukraine and the Middle East Our revenues are susceptible to fluctuations resulting from events and circumstances, including macroeconomic conditions, fluctuations in foreign currency exchange rates, inflation, higher interest rates, actual and threatened wars and military actions, threats or actual imposition of tariffs, customs duties and fees by nations and retaliatory actions, threats of or actual slowdowns or recessions, supply chain challenges, market volatility, employment levels, wages, debt obligations, discretionary income and other factors, each of which impacts customer confidence, consumer sentiment and demand.
These events and circumstances include, but are not limited to, macroeconomic conditions, fluctuations in foreign currency exchange rates, tariffs or proposed tariffs, customs duties or fees, and any retaliatory tariffs or protectionist trade measures taken in response to such tariffs or as a result of trade and international disputes, inflation, elevated interest rates, actual or potential slowdowns or recessions, wages, employment levels and health insurance coverage, debt obligations, discretionary income, supply chain challenges, market volatility, and other factors.
Clear Aligner net revenues increased primarily from an increase in volume, partially offset by lower Clear Aligner ASP. Clear Aligner - Americas Americas net revenues decreased by $37 million in 2024 as compared to 2023, primarily due to a 3.0% decrease in ASP, resulting in a decrease of net revenues of $44 million.
Clear Aligner Clear Aligner net revenues increased by $15 million in 2025 as compared to the same period in 2024, primarily due to higher Clear Aligner volume, resulting in an increase of net revenues of $138 million. Clear Aligner net revenues were further positively impacted by $4 million due to favorable foreign exchange rates.
Refer to Note 4 “ Leases ” of the Notes to Consolidated Financial Statements for details on the lease payments. • We have approximately $297 million, inclusive of approximately $72 million repurchased in January 2025, available for repurchases of our common stock under the stock repurchase program authorized by our Board of Directors in January 2023 (“January 2023 Repurchase Program”).
Refer to Note 4 “ Leases ” of the Notes to Consolidated Financial Statements for details on the lease payments. • We continually evaluate opportunities to repurchase shares of our common stock depending on various factors including our share price and current liquidity requirements.
The decrease in ASP was primarily driven by a mix shift to lower priced products and countries which reduced net revenues by $88 million and higher promotional discounts which decreased net 44 revenues by $66 million and unfavorable foreign exchange rates that decreased net revenues by $9 million.
These increases were partially offset by a decrease in ASP, driven by product mix shift to lower priced products and higher discounts, resulting in a decrease of net revenue of $127 million.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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Executive Overview of Results Our Strategic Growth Drivers We strive to help our doctor customers move their practices forward by connecting them with new patients, providing digital solutions to help increase practice efficiency and helping them deliver the best possible treatment outcomes and experiences to millions of people around the world.
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A discussion regarding our financial condition and results of operations for fiscal 2024 compared to fiscal 2023 is presented under Results of Operations of this Form 10-K. Discussions regarding our financial condition and results of operations for fiscal 2023 compared to 2022 have been omitted from this Annual Report on Form 10-K, but can be found in "Item 7.
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We strive to achieve this through our continued focus on, and execution of, our strategic growth drivers: International Expansion : Continually increasing the presence of our operations and commercial organization globally, expanding our products and service offerings and training and educating more doctors in more markets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Exchange Rate Risk As a result of our international business activities, our financial results have been affected by changes in foreign currency exchange rates as well as economic conditions in foreign markets. There is no assurance that exchange rate fluctuations will not adversely impact our results of operations or financial condition in the future.
Biggest changeForeign Currency Exchange Rate Risk 54 As a result of our international business activities, our financial results have been affected by changes in foreign currency exchange rates as well as economic conditions in foreign markets. There is no assurance that exchange rate fluctuations will not adversely impact our results of operations or financial condition in the future.
We generally sell our products in the local 52 currency of the respective countries. This provides some natural hedging because most of the subsidiaries’ operating expenses are also generally denominated in their local currencies.
We generally sell our products in the local currency of the respective countries. This provides some natural hedging because most of the subsidiaries’ operating expenses are also generally denominated in their local currencies.
As of December 31, 2024, we are not exposed to interest rate risk on our unsecured revolving line of credit. An immediate 10% change in interest rates would not have a material adverse impact on our future operating results and cash flows. We have not historically used derivative financial instruments to manage our exposure to changes in interest rates.
As of December 31, 2025, we are not exposed to interest rate risk on our unsecured revolving line of credit. An immediate 10% change in interest rates would not have a material adverse impact on our future operating results and cash flows. We have not historically used derivative financial instruments to manage our exposure to changes in interest rates.
There is no assurance that our results of operations and financial condition will not be adversely impacted by inflation in the future. 53
There is no assurance that our results of operations and financial condition will not be adversely impacted by inflation in the future. 55

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