Align Technology Reports Modest Revenue Growth, Decline in Profitability in Q3 2024

Align Technology, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a modest increase in net revenues and a slight decline in profitability compared to the previous fiscal period.

For Q3 2024, Align's net revenues reached $977.9 million, a 1.8% increase from $960.2 million in Q3 2023. The gross profit for the quarter was $681.8 million, up from $663.1 million year-over-year. However, income from operations decreased to $162.3 million from $166.3 million in the prior year, reflecting increased selling, general, and administrative (SG&A) expenses, which rose to $434.1 million from $408.0 million. Net income for Q3 2024 was $116.0 million, down from $121.4 million in Q3 2023, resulting in diluted earnings per share of $1.55 compared to $1.58 a year earlier.

For the nine months ended September 30, 2024, Align reported net revenues of $3.0 billion, an increase from $2.9 billion in the same period of 2023. Gross profit for this period was $2.1 billion, compared to $2.0 billion in the previous year. However, net income decreased slightly to $317.6 million from $321.0 million, with diluted earnings per share increasing marginally from $4.18 to $4.23.

The Clear Aligner segment generated $786.8 million in Q3 2024, a decrease of 1.0% year-over-year, while the Imaging Systems and CAD/CAM Services segment saw a 15.6% increase in revenues to $191.0 million. The decline in Clear Aligner revenues was attributed to a decrease in average selling prices (ASPs) and macroeconomic conditions affecting consumer demand.

Align's cash and cash equivalents increased to $1.04 billion as of September 30, 2024, up from $937.4 million at the end of 2023. The company also reported a significant investment in Cubicure GmbH, acquiring the company specializing in 3D printing solutions, which added $47.6 million to goodwill.

In terms of strategic developments, Align announced a restructuring plan on October 23, 2024, aimed at reducing headcount by approximately 700 employees, with expected costs between $25 million and $30 million. The company also initiated a new common stock repurchase program of $275 million, following the completion of a previous $150 million repurchase plan in June 2024.

Align's performance continues to be influenced by macroeconomic factors, including inflation and foreign currency fluctuations, which have impacted both revenues and costs. The company is closely monitoring geopolitical events and their potential effects on operations, particularly in regions affected by military conflicts.