NASDAQ$ALGN

Align Technology Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Align's Q4 2022 financial results reflected a more stable environment with sequential growth in systems and services, as well as a slight increase in clear aligner shipments. However, revenues and margins were significantly impacted by unfavorable foreign exchange.

Align Technology's Q4 2022 total revenues reached $901.5 million, a 1.3% sequential increase but a 12.6% year-over-year decrease. Diluted net income per share was $0.54, while non-GAAP diluted net income per share was $1.73. The Board of Directors authorized a new $1 billion stock repurchase program.

  • Q4 total revenues were $901.5 million, down 12.6% year-over-year.
  • Q4 Clear Aligner revenues were $731.7 million, down 10.3% year-over-year.
  • Q4 Imaging Systems and CAD/CAM Services revenues were $169.9 million, down 21.3% year-over-year.
  • The Board of Directors authorized a new $1 billion stock repurchase program.

Headline financials

Total Revenue

$902M

Previous: $1.03B-12.6%
EPS (adj)

$1.73

Previous: $2.83-38.9%
Clear Aligner Shipments

583.7K

Previous: 631.1K-7.5%
Capital Expenditures

$53.2M

Previous: $109M-51.2%
Free Cash Flow

$91.5M

Previous: $164M-44.1%
Net Income

$41.8M

Previous: $191M-78.1%
Operating Income

$113M

Previous: $221M-49.0%
Gross Profit

$618M

Previous: $745M-17.0%
Cash & Equivalents

$942M

Previous: $1.3B-27.5%
Total Assets

$5.95B

Previous: $5.94B+0.1%
Stock-Based Comp

$34.7M

Previous: $29.8M+16.3%

Revenue & EPS history

Align · Revenue · Quarterly

$902M

Q4 2022-12.6%vs Q4 2021
Beat estimate in 7 of 15 quarters(47%)
ActualEstimate

Revenue by segment

Align · $170M total across 1 segment · Q4 2022

  • Imaging Systems and CAD/CAM Services
    $170M-21.3%

Forward guidance

Align anticipates clear aligner volumes to be down sequentially in Q1 2023 primarily due to weakness in China from COVID, partially offset by some stability from our Americas and EMEA regions. They expect Q1'23 revenues to be about flat to Q4'22.

Tailwinds

  • Cautiously optimistic for continued stability and improving trends as we move through the year.
  • Confident in our large, untapped market opportunity for digital orthodontics and restorative dentistry.
  • Focus on strategic investments in sales, marketing, technology and innovation.
  • Anticipate clear aligner ASPs to be up from Q4’22 primarily due to higher pricing and favorable foreign exchange rates.
  • Expect our Q1’23 GAAP operating margin to be up approximately 1% point from Q4’22 GAAP operating margin

Headwinds

  • The macroeconomic environment remains fragile.
  • Continued global challenges and uncertainty, we are not providing full year revenue guidance.
  • Would like to see improvements in the operating environment and consumer demand signals, including stability in China before revisiting our approach.
  • Anticipate clear aligner volumes to be down sequentially primarily due to weakness in China from COVID.
  • Anticipate iTero scanner and services revenue to be down sequentially as the business follows a more typical capital equipment cycle.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

+2.5%

Avg return

Earnings day

+2.0%

Avg return

5 days after

+2.3%

Avg return

30 days after

66%

45 / 68 earnings

Positive

+35.5%

Q3 2020

Best reaction

-28.2%

Q3 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.5%-5.4%-2.0%
Q4 2025+8.9%+21.7%+7.9%
Q3 2025+5.0%+2.9%+11.6%
Q1 2025+2.0%-0.1%+4.4%
Q4 2024+0.9%-2.7%-19.7%
Q3 2024+2.7%+2.4%+7.2%
Q2 2024-9.8%-10.6%-6.7%
Q1 2024-0.4%-2.3%-18.0%
Q4 2023+3.3%+4.1%+13.3%
Q3 2023-28.2%-29.7%-17.3%
Q2 2023+16.0%+13.8%+7.3%
Q1 2023-9.6%-9.7%-18.8%
Q4 2022+33.4%+27.0%+24.0%
Q3 2022-16.7%-10.9%-10.7%
Q2 2022+12.1%+12.3%+0.2%
Q1 2022-15.7%-14.5%-21.2%
Q4 2021-1.0%-1.6%-8.7%
Q3 2021+6.5%+11.5%+6.9%
Q2 2021+8.2%+11.9%+12.2%
Q1 2021-2.8%-3.5%-5.1%
Q4 2020+10.3%+8.0%-3.8%
Q3 2020+35.5%+35.8%+33.4%
Q2 2020-5.2%-2.1%-6.7%
Q1 2020+5.6%+3.3%+20.7%
Q4 2019-1.8%-5.5%-18.5%
Q3 2019+16.8%+17.2%+28.5%
Q2 2019-26.4%-28.2%-35.9%
Q1 2019+0.2%+7.2%+5.2%
Q4 2018+5.1%+10.2%+16.9%
Q3 2018-25.5%-30.1%-29.8%
Q2 2018-2.6%-6.4%-1.3%
Q1 2018+8.4%+4.3%+32.9%
Q4 2017-5.3%-7.0%-11.3%
Q3 2017+16.9%+18.5%+26.3%
Q2 2017+9.1%+6.8%+8.7%
Q1 2017+12.4%+12.0%+18.7%
Q4 2016+8.1%+6.5%+15.7%
Q3 2016+3.6%+6.8%+14.5%
Q2 2016+4.7%+6.1%+8.8%
Q1 2016-3.5%
Q4 2015+7.7%
Q3 2015+10.4%
Q2 2015-7.4%
Q1 2015+5.8%
Q4 2014-9.4%
Q3 2014+7.3%
Q2 2014+6.1%
Q1 2014-2.4%
Q4 2013+2.9%
Q3 2013+32.6%
Q2 2013+10.4%
Q1 2013+2.3%
Q4 2012+9.0%
Q3 2012-26.4%
Q2 2012+10.8%
Q1 2012+13.7%
Q4 2011-2.1%
Q3 2011+2.9%
Q2 2011-4.3%
Q1 2010-2.0%
Q1 2011+1.6%
Q4 2010+5.1%
Q4 2008+5.1%
Q3 2009+6.3%
Q3 2010+6.3%
Q4 2009+0.4%
Q2 2010+0.4%
Q2 2009+0.4%

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