On February 5, 2025, Align Technology Inc (ALGN, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. The company reported Q4 total revenues of $995.2 million, slightly above the analyst estimate of $993.51 million. However, the diluted net income per share for Q4 was $1.39, falling short of the estimated $1.69. For the full fiscal year 2024, Align Technology achieved total revenues of $4.0 billion, aligning with the annual estimate of $4.001 billion. However, the diluted net income per share was $5.62, below the expected $5.74.

Company Overview

Align Technology is renowned for its Invisalign system, a leading product in the clear aligner market, approved by the FDA in 1998. The company dominates the market with over 90% share and has treated over 14 million patients globally. Align also offers iTero intraoral scanners, which are integral to digital orthodontics, with over half of Invisalign cases submitted via iTero scans.

Performance Highlights and Challenges

Align Technology's Q4 revenue increased by 4.0% year-over-year, driven by a 6.1% rise in Clear Aligner volumes and a 14.9% increase in Systems and Services revenues. However, the company's performance was adversely affected by foreign exchange impacts, which reduced the diluted net income per share by approximately $0.14. The operating margin for Q4 was 14.5%, impacted by restructuring charges of $37.0 million related to post-employment benefits.

Financial Achievements and Industry Context

For fiscal 2024, Align Technology reported total revenues of $4.0 billion, with Clear Aligner revenues at $3.2 billion. The company's non-GAAP operating margin stood at 21.8%, reflecting its strategic focus on operational efficiency. Align's ability to maintain a strong market position in the medical devices and instruments industry is crucial, given the competitive landscape and technological advancements.

Key Financial Metrics

Analysis and Commentary

Align Technology's financial performance in Q4 and fiscal 2024 reflects both growth and challenges. The increase in Clear Aligner volumes and Systems and Services revenues indicates strong demand and market penetration. However, the impact of foreign exchange and restructuring costs highlights the need for strategic adjustments to mitigate external financial pressures.

Commenting on the results, Align Technology President and CEO Joe Hogan stated, “I am pleased to report that Q4 total revenues, Clear Aligner volumes, and Systems and Services revenues were in line with our Q4 outlook and both GAAP and non-GAAP operating margins were better than our Q4 outlook.”

Conclusion

Align Technology's fiscal 2024 results underscore its resilience and strategic positioning in the medical devices sector. While the company faces challenges from foreign exchange fluctuations and restructuring costs, its continued focus on innovation and market expansion positions it well for future growth. Investors and stakeholders will be keen to see how Align navigates these challenges and leverages its strengths in the coming fiscal year.

Explore the complete 8-K earnings release (here) from Align Technology Inc for further details.