Align Technology Inc (ALGN) Reports Q3 2023 Earnings
Align Technology Inc (NASDAQ:ALGN) reported Q3'23 total revenues of $960.2 million, a 7.8% increase year-over-year.
Clear Aligner revenues for Q3'23 were $794.9 million, up 8.5% year-over-year.
The company expects to repurchase up to $250.0 million of its common stock in Q423.
Align Technology Inc (NASDAQ:ALGN) faced challenges due to a difficult macro environment and lower than expected demand.
Align Technology Inc (NASDAQ:ALGN) released its Q3 2023 earnings report on October 25, 2023. The company reported total revenues of $960.2 million, a 7.8% increase year-over-year. Clear Aligner revenues for the quarter were $794.9 million, up 8.5% year-over-year. However, the company faced challenges due to a difficult macro environment and lower than expected demand.
Financial Performance
Align Technology Inc (NASDAQ:ALGN) reported Q3'23 operating income of $166.3 million and an operating margin of 17.3%. The company's GAAP operating margin was unfavorably impacted by foreign exchange of approximately 0.3 points sequentially and by approximately 0.1 point year-over-year. Clear Aligner volume for teens increased 9.9% sequentially and increased 8.4% year-over-year to a record 221.8 thousand cases. Imaging Systems and CAD/CAM Services revenues of $165.3 million, increased 4.9% year-over-year.
Company Commentary
Align Technology President and CEO Joe Hogan commented on the results, stating,
Our third quarter results reflect lower than expected demand and a more difficult macro environment than we experienced in the first half of 2023. Despite these headwinds, total Q323 worldwide revenues were up 7.8% year-over-year with growth across all regions."
Future Outlook
For Q4'23, the company anticipates worldwide revenue to be in the range of $920M to $940M, down sequentially from Q3'23. Clear Aligner and Systems and Services Revenues are expected to be down sequentially due to a more challenging macro-economic environment and potential supply issues related to the war in the Middle East. The company expects to repurchase up to $250.0 million of its common stock in Q423.
Key Financial Tables
The company reported Clear Aligner Shipments of 602,335 in Q3'23, a decrease of 3.3% from Q2'23 but an increase of 2.3% from Q3'22. GAAP Net Revenues were $960.2M in Q3'23, a decrease of 4.2% from Q2'23 but an increase of 7.8% from Q3'22. GAAP Net Income was $121.4M in Q3'23, an increase of 8.6% from Q2'23 and a significant increase of 67.0% from Q3'22.
Conclusion
Despite facing a challenging macro environment and lower than expected demand, Align Technology Inc (NASDAQ:ALGN) managed to increase its revenues and Clear Aligner shipments in Q3'23. The company plans to continue driving the adoption of digital orthodontics and restorative dentistry and optimize its investments for the current environment.
Explore the complete 8-K earnings release (here) from Align Technology Inc for further details.
This article first appeared on GuruFocus.
