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Item 1. Business

2022-02-25 compared with 2021-02-26 · 231 added, 183 removed, 204 unchanged (67% of the section changed)

Align Technology, Inc.

(“We”, “Our”, “Align”) is a global medical device company engaged in the design, manufacture and marketing of Invisalign® clear aligners and iTero® intraoral scanners and services for dentistry, and exocad® computer-aided design and computer-aided manufacturing (“CAD/CAM”) software for dental laboratories and dental practitioners.

Our products are intended primarily for the treatment of malocclusion or the misalignment of teeth and are designed to help dental professionals achieve the clinical outcomes that they expect and the results patients desire.

Our goal is to establish clear aligners as the principal solution for the treatment of malocclusions and our Invisalign System as the treatment solution of choice by orthodontists, general dental practitioners and patients globally.

To date, over 9.6 million people worldwide have been treated with our Invisalign System.

Effective January 1, 2021, Align’s corporate headquarters is located at 410 North Scottsdale Road, Suite 1300, Tempe, Arizona 85281, and our telephone number is 408-470-1000.

(“We”, “Our”, “Align”) is a global medical device company primarily engaged in the design, manufacture and marketing of Invisalign® clear aligners, iTero® intraoral scanners and services for dentistry, and exocad® computer-aided design and computer-aided manufacturing (“CAD/CAM”) software for dental laboratories and dental practitioners.

We also market and sell consumer products that are complementary to our doctor-prescribed principal products under the Invisalign and other brands, including retainers, aligner cases (clamshells), teeth whitening products and cleaning solutions (crystals, foam and other material) (collectively “Consumer Products”).

Our primary goals are to establish clear aligners as the principal solution for the treatment of malocclusions, or the misalignment of teeth, and our Invisalign system as the treatment solution of choice by orthodontists, general dental practitioners and patients globally, our 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.

Align’s corporate headquarters are located at 410 North Scottsdale Road, Suite 1300, Tempe, Arizona 85281.

Our telephone number is 602-742-2000.

Our internet address is www.aligntech.com .

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(1) Clear Aligner and (2) Imaging Systems and CAD/CAM Services (“Systems and Services”).

For the year ended December 31, 2020, Clear Aligner net revenues represented approximately 85% of worldwide net revenues, while Systems and Services net revenues represented the remaining 15% of worldwide net revenues.

For the year ended December 31, 2021, Clear Aligner net revenues represented approximately 82% of worldwide net revenues, while Systems and Services net revenues represented the remaining 18%.

We sell the majority of our products directly through a dedicated and specialized sales force to our customers:

orthodontists, general practitioner dentists (“GPs”), restorative and aesthetic dentists, including prosthodontists, periodontists, and oral surgeons, and dental laboratories.

We also sell through non-inventory carrying sales agents and distributors in certain countries.

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, and we sell products used by dental laboratories who manufacture or customize a variety of products used by licensed dentists to provide oral health care.

We received 510(k) clearance from the United States Food and Drug Administration (“FDA”) to market the Invisalign System in 1998.

The Invisalign System is regulated by the FDA as a Class II medical device.

We sell our Consumer Products online through our corporate website and large e-commerce websites.

Our clear aligners are sold under the Invisalign ® brand name.

Our Invisalign system is intended mainly for the treatment of malocclusions and is designed to help dental professionals achieve the clinical outcomes that they expect and the results patients desire.

To date, over 12 million people worldwide have been treated with our Invisalign system.

We received 510(k) clearance from the United States (“U.S.”) Food and Drug Administration (“FDA”) to market the Invisalign system in 1998.

In order to provide Invisalign treatment to their patients, orthodontists and GPs must initially complete an Invisalign training course.

Our iTero intraoral scanner is used by dental professionals and/or labs and service providers for restorative and orthodontic digital procedures as well as Invisalign case submissions.

We received 510(k) clearance from the FDA to market iTero software for expanded indications in 2013.

Our Systems and Services products are primarily sold through our direct sales force and through non-inventory carrying sales agents and distributors in certain countries and directly to DSOs.

In April 2020, we completed the acquisition of privately-held exocad Global Holdings GmbH (“exocad”), a German dental CAD/CAM software company that offers fully integrated workflows to dental labs and dental practices.

We acquired exocad for its expertise in restorative dentistry, implantology, guided surgery, and smile design to extend the Invisalign System and iTero digital solutions and pave the way for new, cross-disciplinary dentistry in labs and at chairside.

exocad now has over 200 partners and more than 40,000 software licenses installed worldwide.

To date, over 68,000 iTero scanners have been sold.

We received 510(k) clearance in the U.S.

for the caries detection feature of the iTero Element 5D in 2020.

Our Systems and Services products, which includes our iTero intraoral scanners, are primarily sold through our direct sales force and through sales agents and distributors in certain countries and directly to DSOs.

Our exocad CAD/CAM software products provide restorative dentistry, implantology, guided surgery, and smile design to dental labs and dental practices through fully integrated workflows, paving the way for new, cross-disciplinary dentistry in labs and at chairside.

There are over 200 exocad strategic distribution partners and over 47,000 software licenses installed worldwide.

Clear Aligner Segment

Malocclusion and Traditional Orthodontic Treatment

Malocclusion, or the misalignment of teeth, is one of the most prevalent clinical dental conditions, affecting billions of people, or approximately 60% to 75% of the global population.

Annually, approximately 15 million people in major developed countries elect treatment by orthodontists worldwide.

Most orthodontic patients are treated with the use of traditional methods such as metal arch wires and brackets, referred to as braces, and may be augmented with elastics, metal expanders, headgear or functional appliances, and other ancillary devices as needed.

Upon completion of the treatment, the dental professional may, at his or her discretion, have the patient use a retainer appliance.

Of the 15 million annual global orthodontic cases started, we estimate that approximately 90% or 13.5 million could be treated using our Invisalign clear aligners.

Malocclusion is one of the most prevalent clinical dental conditions, affecting approximately 60% to 75% of the global population.

Annually, approximately 21 million people globally elect treatment by orthodontists.

Today, most orthodontic patients continue to have their malocclusions treated with the use of traditional methods such as metal arch wires and brackets, referred to as braces, augmented with elastics, metal expanders, headgear or functional appliances, and other ancillary devices as needed.

Upon completion of the treatment, the dental professional may recommend the patient use a retainer appliance.

Of the 21 million cases started, we estimate that approximately 90% or 19 million could be treated using our Invisalign system.

In addition, globally approximately 500 million people with malocclusion could benefit from straightening their teeth.

This represents a significant opportunity for us as we expand the market for orthodontics by training more doctors, including GP dentists as well as orthodontists, and educating more consumers about the benefits of straighter teeth using the Invisalign System and connecting them with an Invisalign doctor of their choice.

This represents a significant opportunity for us as we expand the market for orthodontics by training more doctors, including GPs as well as orthodontists, educating more consumers about the benefits of straighter teeth using the Invisalign system and connecting consumers with an Invisalign-trained doctor of their choice.

The Invisalign system

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Diagnosis and transmission of treatment data .

An Invisalign System trained dental professional prepares an online prescription form on our Invisalign Doctor Site and submits the patient's records, which include a digital intraoral scan or a polyvinyl-siloxane (“PVS”) impression of the relevant dental arches, photographs of the patient and, at the dental professional’s election, x-rays of the patient’s dentition.

An Invisalign trained dental professional prepares an online prescription form on our Invisalign Doctor Site and submits the patient's records, which include a digital intraoral scan or a polyvinyl-siloxane (“PVS”) impression of the relevant dental arches, photographs of the patient and, at the dental professional’s election, x-rays of the patient’s dentition.

Intraoral digital scans may be submitted through Align’s iTero scanner or certain third-party scanners capable of accurately interfacing with our systems and processes.

See “Third Party Scanners and Digital scans.” More than 79% of Invisalign System case submissions are now submitted via digital scan, increasing the accuracy of

treatments, reducing the time from prescription submission to patient receipt, and decreasing the carbon footprint resulting from the shipment of the materials used to form PVS impressions to the doctors and shipping those PVS impressions back to us.

Globally, more than 85% of Invisalign system case submissions are now submitted via digital scan, increasing the accuracy of treatments, reducing the time from prescription submission to patient receipt, and decreasing the carbon footprint resulting from the shipment of the materials used to form PVS impressions to the doctors and shipping those PVS impressions back to us.

Additionally, it is during this stage that exocad’s CAD/CAM software platform can be used to identify, assess and assist doctors and dental labs to collaborate on any needed ortho-restorative treatment options through comprehensive interdisciplinary workflows.

Computer-simulated treatment plan .

Using the information, certain doctor preferences and digital data provided, we generate a proposed custom, three-dimensional treatment plan, called a ClinCheck ® treatment plan using proprietary software we have developed through significant, ongoing investments over more than 20 years.

Using the digital scans or PVS impressions, certain doctor preferences and digital data provided, we generate a proposed custom, three-dimensional treatment plan, called a ClinCheck ® treatment plan using proprietary software we have developed through significant, ongoing investments over more than 20 years.

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.

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Review and approval of the treatment plan by an Invisalign trained doctor.

The patient’s ClinCheck treatment plan is then made available to the prescribing dental professional via Align’s Invisalign Doctor Site which enables the dental professional to evaluate projected tooth movement from initial position to final position and compare multiple treatment plan options.

The patient’s ClinCheck treatment plan is then made available to the prescribing dental professional via Align’s Invisalign Doctor Site, enabling the dental professional to evaluate projected tooth movement from initial position to final position and compare multiple treatment plan options.

By reviewing, modifying as needed and approving the treatment plan, the dental professional retains control of the patient’s treatment.

Manufacture of custom aligners.

Following the dental professional’s approval of the ClinCheck treatment plan, we use the data underlying the simulation as input for the next stage in which we use stereolithography technology (a form of 3D printing technology) to construct a series of molds depicting the future position of the patient’s teeth.

Following the dental professional’s approval of a ClinCheck treatment plan, we use the data underlying the simulation as input for the next stage in which we use stereolithography technology (a form of 3D printing technology) to construct a series of molds depicting the future position of the patient’s teeth.

Each mold is a replica of the patient’s teeth at each stage of the simulated course of treatment.

From these molds, aligners are fabricated by pressure-forming polymeric sheets over each mold.

Aligners are thin, clear polymer, removable dental appliances that are custom manufactured in a series to correspond to each stage of the patient's ClinCheck treatment plan.

Aligners are thin, clear polymer, removable dental appliances that are custom manufactured in a series designed to correspond to each stage of the patient's ClinCheck treatment plan.

Shipment to the dental professional and patient aligner wear.

Once manufactured, in most countries all the aligners for a patient's treatment plan are shipped directly to the dental professional, who then dispenses them to the patient at regular check-up intervals.

Aligners are generally worn for a short period of time corresponding to the stages of the patient’s approved ClinCheck treatment plan.

Once manufactured, all the aligners for a patient's doctor-approved treatment plan are typically shipped directly to the dental professional, who then dispenses them to the patient at regular check-up intervals.

Aligners are generally worn for a short period of time corresponding to the stages of the patient’s approved ClinCheck treatment plan and their doctor’s discretion.

The patient replaces the aligners with the next pair in the series when prescribed, advancing tooth movement through each stage.

At various points in each patient’s treatment, their doctor may place attachments or use other auxiliaries to achieve desired tooth movements, per the doctor’s original prescription and the approved ClinCheck treatment plan.

At the treating doctor’s discretion, weekly aligner changes are recommended for all Invisalign treatments except for Express packages and may provide shorter treatment time compared with two-week aligner wear.

Feature Enhancements

We continually introduce enhanced features across our digital platform that includes our Invisalign System, iTero intraoral scanners, exocad CAD/CAM solutions and digital workflows to improve treatment outcomes, address broader clinical indications or respond to customer demand.

2020 saw a number of new innovations intended to enhance the ease by which doctors can diagnose, plan and treat patients more efficiently and effectively, many of which became critically important to patient care in the wake of limited in-person visits as a result of the COVID-19 pandemic.

In addition to other examples referenced throughout this Annual Report on Form 10-K, in 2020 Align launched the following products:

• Invisalign Virtual Appointment and Invisalign Virtual Care - Two continuity of care virtual solutions generally released in May 2020 that offer practice and care transformation to doctors by enabling a range of remote practice services for their patients such as video appointments and care and treatment progress reviews and communications.

• ClinCheck 6.0 Pro Software - Released in the third quarter of 2020, ClinCheck Pro 6.0 software is the latest release of Align ’s proprietary 3D treatment planning software showing the planned tooth movements throughout a patient’s Invisalign treatment, now more broadly available to doctors on multiple devices at any time via the cloud.

ClinCheck Pro 6.0 software also included the ClinCheck “In-Face” Visualization tool, enhancing the digital treatment planning experience for doctors and their patients by incorporating a front-facing image of a patient’s face into their 3D ClinCheck treatment plan to create a personalized view of how their new smile could look with Invisalign System treatment.

• Invisalign Stickables - Released in the third quarter of 2020, Invisalign Stickables are sticker accessories designed exclusively for use with our patented SmartTrack® material in Invisalign clear aligners to personalize Invisalign clear aligners.

Invisalign Stickables are available in an array of designs, colors, shapes, and themes and allow patients to show their personal flair during Invisalign System treatment in fun and engaging ways.

Additionally, for patients treated using many of our Invisalign system treatments, doctors have the option to adjust treatment plans to achieve desired results by ordering additional clear aligners in accordance with pre-defined terms.

Clear Aligner Products

We offer our Invisalign clear aligner products in a variety of treatment packages designed to correspond with the case-by-case treatment needs of our doctors and their patients.

The table below provides a general description of the types of treatment products we offer in various regions as they typically correspond to the severity of malocclusion and length of anticipated treatment.

We offer our Invisalign system in a variety of treatment packages designed to correspond with the case-by-case treatment needs of our doctors and their patients.

The table below provides a general description of the categories of treatment products we offer in various regions as they typically correspond to the severity of malocclusion and length of anticipated treatment.

Malocclusion Very Mild

Product Invisalign Express Package Invisalign Lite Package Invisalign Go Limited Movement (GP) Invisalign Moderate Packages Invisalign Comprehensive Packages

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 anterior / posterior correction, mild to moderate crowding, spacing, non-extraction, pre-restorative Tooth movement from 2nd premolar to 2nd premolar (5x5) Class I, mild Class II, mild to moderate crowding/spacing, mild anterior / posterior and vertical discrepancies, pre-restorative Class I, II, III, moderate to severe crowding/spacing, anterior / posterior and vertical discrepancies, extractions, complex pre-restorative

Product Invisalign Express Package Invisalign Lite Package Invisalign Go Limited Movement (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 Class I, mild crowding/spacing, non-extraction, pre-restorative Class I, no anterior / posterior correction, mild to moderate crowding, spacing, non-extraction, pre-restorative Tooth movement from 2nd premolar to 2nd premolar (5x5) Class I, mild Class II, mild to moderate crowding/spacing, mild anterior / posterior and vertical discrepancies, pre-restorative, (Go Plus tooth movement from 1 st molar to 1 st 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.

Most of our Invisalign system treatment plans described above provide dental professionals with the option to order additional aligners if the patient's treatment deviates from the original treatment plan.

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Invisalign Comprehensive Packages .

The Invisalign Comprehensive Package is used to treat adults and teens for a full spectrum of mild to severe malocclusion and contains a wide variety of Invisalign features to address the doctor's treatment goals.

The Invisalign Comprehensive Package is used to treat adults and teens over a wide spectrum of mild to severe malocclusion and contains a broad variety of Invisalign features to address the desired treatment goals.

It also addresses the frequently complex orthodontic needs of teenage or younger patients with advanced features such as mandibular advancement, compliance indicators and compensation for tooth eruption.

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Invisalign First Phase 1 Package is designed specifically for younger patients generally between the ages of seven and ten years, who frequently have a mixture of primary/baby and permanent teeth.

Invisalign First Phase 1 treatment provides early interceptive orthodontic treatment, traditionally done through arch expanders, or partial metal braces, before all permanent teeth have erupted.

Invisalign First Phase 1 clear aligners are designed specifically to address a broad range of younger patients' malocclusions, including shorter clinical crowns, management of erupting dentition and predictable dental arch expansion.

Our Invisalign First Comprehensive Phase 2 Package is a continuation of Invisalign First Phase 1 and is generally consistent with our Invisalign Comprehensive Package.

After a patient completes Invisalign First Phase 1, doctors have the option to purchase a discounted Comprehensive Phase 2 Package for that same patient.

Invisalign First Phase 1 treatment provides early interceptive orthodontic treatment, traditionally done through arch expansion, or partial metal braces, before all permanent teeth have erupted.

Invisalign First Phase 1 clear aligners are designed specifically to address a wide range of younger patients' malocclusions, including shorter clinical crowns, management of erupting dentition and predictable dental arch expansion.

Our Invisalign First Comprehensive Phase 2 Package is complementary to Invisalign First Phase 1 and is generally consistent with our Invisalign Comprehensive Package.

After a patient completes Invisalign First Phase 1, doctors have the option to purchase a Comprehensive Phase 2 Package for that same patient.

Non-Comprehensive Products - Invisalign Treatment Options:

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The Invisalign Go and Invisalign Go Plus packages include case assessment support, simplified ClinCheck treatment plans and a progress assessment feature for case monitoring.

Feature Enhancement / New Products

Invisalign G8 with SmartForce® Activation.

Broadly released in early 2021, Invisalign G8 with SmartForce Aligner Activation is a clear aligner biomechanical innovation designed to optimize tooth movements and further improve predictability for frequently treated crowding, crossbite, and deep bite cases through the targeted application of force to teeth through surface contours on the aligners that help control the location, direction and intensity of tooth movement.

New Invisalign Innovations in Treatment Planning for Align Digital Platform.

Released in early 2022, the new Invisalign system innovations as a part of the Align digital platform is a combination of software, systems and services designed to provide a seamless experience and workflow that integrates and connects all users – doctors, labs, patients and consumers.

These new innovations include ClinCheck Live Update for 3D controls, the Invisalign Practice App, Invisalign Personalized Plan and Invisalign Smile Architect.

Non-Case Products:

Clear Aligner non-case products include retention products, Invisalign training fees and sales of ancillary products, such as cleaning material and adjusting tools used by dental professionals during the course of treatment.

We offer up to four sets of custom clear aligners called Vivera Retainers made with proprietary material strong enough to maintain tooth position and correct minor relapse, if necessary.

Clear Aligner non-case products include retention products, Invisalign training, adjusting tools used by dental professionals during the course of treatment and ancillary Consumer Products and other oral health products available in certain e-commerce channels in the U.S.

We offer up to four sets of custom clear aligners called Vivera retainers made with proprietary material strong enough to maintain tooth position and correct minor relapse, if necessary, as well as Invisalign retainers.

Retainers are generally available for doctors to offer to any of their patients, whether they use the Invisalign system or other products, including wires and brackets.

In select markets, we also offer single set retainers.

Further, in the third quarter of 2021, we announced a multi-year supply and distribution agreement with Ultradent Products to allow Invisalign trained doctors to exclusively offer a professional whitening system using Ultradent’s Opalescence PF whitening system with Vivera retainers.

We also offer in the U.S., a Doctor Subscription Program which is a monthly subscription program based on the doctor’s monthly need for retention or limited treatment.

The program allows doctors the flexibility to order both “touch-up” or retention aligners within their subscribed tier and is designed for a segment of experienced Invisalign doctors who are currently not regularly using our retainers or low-stage aligners.

SmartTrack Aligner Material:

SmartTrack clear aligner material is a patented, custom-engineered Invisalign clear aligner material that delivers gentle, more constant force considered ideal for orthodontic tooth movements.

Conventional aligner materials relax and lose a substantial percent of their energy in the initial days of wear, but SmartTrack material maintains more constant force over time.

Conventional aligner materials relax and lose a substantial percent of the force applied in the initial days of wear.

SmartTrack material maintains more constant force over time.

The flexible SmartTrack material also more precisely conforms to tooth morphology, attachments and interproximal spaces to improve control of tooth movement throughout treatment.

In October 2020, we introduced Invisalign G8 with SmartForce Aligner Activation;

a clear aligner biomechanical innovation that allows doctors to more predictably treat crowding, crossbite and deep bite cases through the targeted application of force to teeth through surface contours on the aligners that help control the location, direction and intensity of tooth movement.

Systems and Services Segment

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By enabling the dental practitioner to create a 3D image of a patient's teeth (digital scan) using a handheld intraoral scanner, digital scanning is faster, more efficient, precise and comfortable for patients.

Beginning patient care with the early usage of our iTero intraoral scanners and combining the results with digital workflows designed to assist doctors and patients visualize and evaluate various treatment options with detailed imagery and CAD/CAM solutions is helping improve treatments, outcomes and satisfaction.

The accuracy of digitally scanned models substantially reduces the rate of restoration "remakes," meaning patients are recalled less often and the appointment time for the restoration is shorter because of fewer adjustments, increasing overall patient satisfaction.

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iTero Scanner .

The iTero Element scanner is available as a single hardware platform with software options for restorative or orthodontic procedures.

The expanded portfolio includes the iTero Element 2, the iTero Element Flex, iTero Element 5D Imaging System and iTero Element Plus Series of intraoral scanners which are each available in select regions and countries.

These products build on the existing high precision, full-color imaging and fast scan times of the iTero Element portfolio while streamlining orthodontic and restorative workflows.

The iTero Element portfolio of intraoral scanners includes the iTero Element 2, the iTero Element Flex, iTero Element 5D Imaging System and iTero Element Plus Series which are each available in select regions and countries.

These products build on the existing high precision, full-color imaging and fast scan times of the iTero Element portfolio and are available with software options for orthodontic and restorative procedures.

The iTero scanner is interoperable with our Invisalign treatment such that a full arch or full mouth digital scan can be submitted as part of the Invisalign system case submission process.

In February 2019, we launched the iTero Element 5D Imaging system which provides a new comprehensive approach to clinical applications, workflows and user experience that expands the suite of existing high-precision, full-color imagining and fast scan times of the iTero Element scanner portfolio and in March 2020, we received U.S.

FDA 501(K) clearance for the system.

In addition to offering all of the features and functionality of the iTero Element 2 scanner, the iTero Element 5D scanner is the first integrated dental imaging system that simultaneously records 3D, intra-oral color and near-infrared (“NIRI”) imaging and enables comparison over time using the iTero TimeLapse technology.

NIRI technology included in our intraoral scanners like the iTero Element 5D Imaging System, aids in detection and monitoring of interproximal caries lesions above the gingiva without using harmful radiation.

The iTero Element 5D Imaging System is available in the majority of North America, EMEA and select APAC and LATAM countries and is pending regulatory approval in others.

We also recently announced the launch of the iTero Element Plus Series next generation of scanners and imaging systems featuring advanced technology and capabilities designed to improve the scanning experience and increase practice productivity.

The iTero Element Plus Series offers faster processing times and advanced visualization capabilities in an ergonomically designed package available in both cart and mobile configurations for greater practice flexibility.

Restorative software for iTero.

Our Restorative software is designed for GPs, prosthodontists, periodontists, and oral surgeons which includes restorative workflows providing them with the ability to send digital impressions to the lab of choice and communicate seamlessly with external treatment planning, custom implant abutment, chairside milling, and laboratory CAD/CAM systems.

Orthodontic software for iTero.

Our iTero s oftware is designed for orthodontists for digital records storage, orthodontic diagnosis, and for the fabrication of printed models and retainers.

CAD/CAM Services and Ancillary Products

Our iTero Element 5D imaging system is the first integrated dental imaging system that simultaneously records 3D, intraoral color camera images and near imaging (“NIRI”) technology and enables comparison over time using the iTero TimeLapse technology.

NIRI technology, included in our iTero Element 5D and 5D Plus Imaging Systems, aids in detection and monitoring of interproximal caries lesions above the gingiva without using harmful radiation.

The iTero Element 5D Imaging System is available in the U.S., Canada, China, and the majority of EMEA and select APAC and LATAM countries

and is pending regulatory approval in others.

The iTero Element Plus Series of intraoral scanners and imaging systems was introduced in the first quarter of 2021 and offers restorative and orthodontic digital workflows that include enhanced visualization for optimized patient experience, including a fully integrated 3D intraoral camera in certain models,;

seamless scanning with reduced processing time, artificial intelligence-based features, and, in certain models, NIRI technology.

Services and Ancillary Products.

Our services include subscription software, disposables, rentals, and pay per scan as well as exocad’s CAD/CAM software solutions that integrate workflows to dental labs and dental practices.

Restorative software for iTero scanners and imaging systems.

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 exocad Connector.

iTero intraoral scans can enhance the accuracy and precision of a doctor’s downstream restorative process.

Orthodontic software for iTero scanners and imaging systems.

Our iTero software is designed for orthodontists for digital records storage, orthodontic diagnosis, and for the fabrication of printed models and retainers.

CAD/CAM Services.

The acquisition of exocad’s CAD/CAM software in April 2020 broadens Align’s digital platform reach by adding technology that addresses restorative needs in an end-to-end digital platform workflow to facilitate ortho-restorative and comprehensive dentistry.

exocad software is licensed and sold separately.

Our exocad CAD/CAM software platform addresses restorative needs in an end-to-end digital platform workflow to facilitate ortho-restorative and comprehensive dentistry.

The platform provides doctors and dental labs with digital clinical solutions that aid general dentists and dental labs in planning and delivering restorative dental treatments, adding restorative functionality to our comprehensive digital platform to deliver digital ortho-restorative workflows and interdisciplinary dentistry.

Our exocad software is licensed and sold separately.

Ancillary Products .

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We accept case submissions for our clear aligner products in two ways:

(1) physical impressions of the patient’s teeth or (2) intraoral scans of their teeth.

With respect to intraoral scans, we accept scans from iTero scanners and certain third-party scanners that have interoperability relationship with our systems and processes.

(1) PVS impressions of patients’ teeth or (2) intraoral scans of their teeth.

With respect to intraoral scans, we accept scans from iTero scanners and certain third-party scanners that have an interoperability relationship with our systems and processes.

iTero Applications and Tools

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The Invisalign Outcome Simulator is an exclusive chair-side and cloud-based application for the iTero scanner that allows doctors to help patients visualize how their teeth may look at the end of Invisalign treatment.

This is achieved through a dual view layout that shows a prospective patient an image of his/her own current dentition next to his/her simulated final position after Invisalign treatment.

This is achieved through a dual view layout that shows a prospective patient an image of their own current dentition next to a simulated final position after Invisalign treatment.

Invisalign Progress Assessment Tool.

The Invisalign Progress Assessment tool provides the ability to compare a patient’s new scan with a specific stage of their ClinCheck treatment plan;

allowing doctors to visually assess and communicate Invisalign treatment progress with an easy to read, color-coded tooth movement report.

The Invisalign Progress Assessment tool provides the ability to compare a patient’s new scan with a specific stage of their ClinCheck treatment plan, allowing doctors to visually assess and communicate Invisalign treatment progress with an easy to read, color-coded tooth movement report.

TimeLapse Technology.

The TimeLapse technology allows doctors or practitioners to compare a patient’s historic 3D scans to the present-day scan, enabling clinicians to identify and measure orthodontic movement, tooth wear, and gingival recession.

Our TimeLapse technology allows doctors or practitioners to compare a patient’s historic 3D scans to a present-day scan, enabling clinicians to identify and measure orthodontic movement, tooth wear, and gingival recession.

This highlights areas of diagnostic interest to dental professionals and helps foster a proactive conversation with the patient regarding potential restorative or orthodontic solutions.

Our iTero Element scanners are offered in a number of software configurations such as Ortho Comprehensive, Restorative Comprehensive and Restorative Foundation.

These software packages are included in the price of the system.

These software packages are included in the price of the scanner and have a service period of 1 to 5 years.

They enable various orthodontic and restorative workflows as well as provide other applications, including Invisalign Outcome Simulator, Invisalign Case Assessment tool, Invisalign Progress Assessment tool, and iTero TimeLapse technology.

Other proprietary software mentioned in this Annual Report on Form 10-K, such as ClinCheck and ClinCheck Pro software, the Invisalign Doctor Site, and feature enhancements are included as part of the Invisalign System and are not sold separately nor do they contribute as individual items to revenues.

We also recently introduced our 5D Photo uploader enhanced workflow that simplifies the process for submitting images needed for treatment planning.

Other proprietary software mentioned in this Annual Report on Form 10-K, such as software embedded in our iTero

scanners, ClinCheck and ClinCheck Pro software, the Invisalign Doctor Site, and feature enhancements included as part of the Invisalign system are not sold separately, nor do they contribute as individual items to revenues.

Business Strategy

Our goal remains to establish the Invisalign System as the standard method for treating malocclusion and our intraoral scanning platform as the preferred scanning protocol for digital dental scans.

Our technology and innovations are designed to meet the demands of today’s patients with treatment options that are convenient, comfortable, affordable, while helping to improve overall oral health.

We strive to help our doctors 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.

Our technology and innovations are designed to meet the demands of today’s patients with treatment options that are convenient, comfortable, and affordable, while helping to improve overall oral health.

We strive to help doctors and lab technicians move their businesses forward by connecting them with new patients, providing digital solutions that increase operational speed and efficiency and provide solutions that allow them to deliver the best possible treatment outcomes and experiences to millions of people around the world.

We achieve this by focusing on and executing to our strategic growth drivers:

• International Expansion.

We continue increasing our presence globally by making our products available in more countries to more consumers.

During 2020, we shipped our Invisalign System to our 2 millionth patient in EMEA and 1 millionth patient in APAC.

We expect to continue expanding our business by investing in resources, infrastructure, and initiatives that will drive Invisalign treatment growth in our current and new international markets.

international countries continue to grow in both number of new Invisalign trained doctors and customer utilization, we strive to make sure we can support that growth through investments such as headcount, clinical support, product improvements, technological innovations, education and advertising.

In addition, we are scaling and expanding our operations and facilities to better support our customers across the globe.

For instance, primarily for the China and APAC markets we now fabricate our clear aligners in Ziyang, China and perform digital treatment planning and interpretation for restorative cases worldwide, including in Costa Rica, China, Germany, Spain, Poland, and Japan among others.

By establishing and expanding our key operational activities in locations closer to our customers, we have created an infrastructure that allows us to be responsive and flexible to more than 195,000 customers in approximately 100 countries, while providing operational flexibility and scale needed for variations in demand.

We want to enable GPs, who have access to a large patient base, to more easily identify Invisalign cases they can treat, monitor patient progress or, if needed, help refer cases to an orthodontist while providing high-quality restorative, orthodontic, and dental hygiene care.

We believe success with GPs can be achieved through doctor training and by offering tools such as the iTero scanner and product offerings like Invisalign Go treatment that address the distinctive needs of GP patients;

all delivered by sales and marketing personnel specifically focused on this unique customer category.

We encourage GPs to scan every patient as a means to diagnose and treat patients over time and as an opportunity to drive future demand for their services and the Invisalign system.

We continue increasing our presence globally by making our products available in more countries to more customers.

In 2021, the number of international doctors trained to prescribe treatment using the Invisalign system grew by approximately 21% compared to 2020.

We continue expansion of our sales and marketing by reaching into new countries and regions, including new areas within Africa.

By the end of 2021, we were selling directly or through authorized distributors in more than 100 countries.

As our business continues to grow in both number of new Invisalign trained doctors and customer utilization, we support that growth through targeted investments such as increasing headcount, clinical support, product improvements, technological innovations, clinical education and advertising.

In addition, we are scaling and expanding our operations and facilities to better support the growing numbers of global customers.

For instance, for China and other APAC markets, we now primarily fabricate our clear aligners in Ziyang, China, and we perform digital treatment planning and interpretation for restorative cases worldwide, including in Costa Rica, China, Germany, Spain, Poland, and Japan, among others.

In 2021, we announced similar plans to open a clear aligner manufacturing facility in Wroclaw, Poland.

Expected to begin serving doctors during the first half of 2022, the new manufacturing facility will be our third aligner fabrication facility and allow us to more quickly and effectively serve tens of thousands of customers throughout EMEA.

By establishing and expanding our key operational activities in locations closer to our customers, we are creating an infrastructure that allows us to be responsive to local and regional needs, while providing global operational flexibility and scale needed for variations in global and regional demand.

We expect to continue expanding our business in 2022 by investing in resources, infrastructure and initiatives that help drive Invisalign treatment growth, our 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 in existing and new international markets.

• GP Adoption.

We want to enable GPs, who have access to a large patient base, 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 believe success with GPs can be achieved through doctor training and clinical education, by offering digital tools such as the iTero scanner and products like Invisalign Go treatment that address the distinctive needs of GP patients, all delivered by sales and marketing personnel specifically focused on the unique needs of this customer category.

We encourage GPs to scan every patient with intraoral scanners that are without harmful radiation as a means to diagnose and treat patients over time and as an opportunity to drive future demand for their services and the Invisalign system.

To support our belief in the benefits of using our iTero scanners, in October 2021 we announced the findings of a clinical study that validates and demonstrates 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.

• Patient Demand & Conversion.

Our goal is to make the Invisalign brand a highly recognized name brand worldwide by creating awareness for Invisalign treatment among consumers and motivating the potential 500 million patients who can benefit from treatment of malocclusion to seek that treatment using the Invisalign System.

We accomplish this through an integrated consumer marketing strategy that includes television, media, social networking and event marketing and strategic alliances with professional sports teams as well as educating patients on treatment options and directing them to high volume Invisalign doctors.

We furthermore support our doctor customers as they adopt digital dentistry through programs such as ADAPT (Align Digital and Practice Transformation).

ADAPT is an expert and independent fee-based business consulting service that we announced in 2020 designed to optimize dental operational workflow and processes to enhance patients' experiences and customer and staff satisfaction with the goal of increasing practice growth and efficiencies.

We accomplish this through an integrated consumer marketing strategy that includes television, media, social networking and event marketing and strategic alliances with professional sports teams, as well as educating patients on treatment options and directing them to high volume Invisalign trained doctors.

We further support our doctor customers as they adopt digital dentistry through programs such as the Align Digital and Practice Transformation (“ADAPT”).

ADAPT is an expert and independent fee-based business consulting service designed to optimize dental operational workflow and processes to enhance patients' experiences and customer and staff satisfaction with the goal of increasing practice growth and efficiencies.

To further drive consumer awareness, in 2021 we began offering additional dental-related Consumer Products under the Invisalign brand name available in certain e-commerce channels in the U.S.

• Orthodontist Utilization.

We continue to train doctors, innovate and increase product applicability and predictability to address a wide range of cases, from simple to complex, thereby enabling doctors to confidently diagnose and treat children and adults with the Invisalign System.

We continue to innovate and increase product applicability and predictability to address a wide range of cases, from simple to complex, thereby enabling doctors to confidently diagnose and treat children and

adults with the Invisalign system.

This is especially important to treating teenage patients who make up the largest portion of the 21 million annual orthodontic case starts each year.

We also continue to make improvements to our Invisalign treatment software, ClinCheck Pro software, designed to deliver an exceptional user experience and increase treatment control to help our doctors achieve their treatment goals.

In combination with the new Invisalign system innovations that are part of the Align digital platform, we are enhancing the digital treatment planning experience for orthodontics and restorative dentistry by providing doctors with greater flexibility, consistency of treatment preferences and real-time treatment plan access and modification capabilities.

Manufacturing and Suppliers

We have manufacturing facilities located in Juarez, Mexico, where we conduct our aligner fabrication, distribution, repair of our iTero scanners and perform certain CAD/CAM services and in Ziyang, China, where we fabricate aligners primarily for the China and APAC markets.

In addition, we produce our handheld intraoral scanner wand, perform final scanner assembly and repair our scanners at our facilities in Or Yehuda, Israel and Ziyang, China.

We have manufacturing facilities located in Juarez, Mexico, where we conduct our aligner fabrication, distribution, and certain services and in Ziyang, China, where we fabricate aligners primarily for China and other APAC markets.

In addition, we produce our handheld intraoral scanner wand, perform final scanner assembly and repair our scanners at our facilities in Ziyang, China and Or Yehuda, Israel and service and repair certain scanners in Juarez, Mexico.

In the second quarter of 2021, we announced the start of a multi-million dollar project to bring operational facilities closer to our customers through the expansion of our manufacturing operations in Wroclaw, Poland.

Expected to begin serving doctors during the first half of 2022, the new aligner fabrication facility will be our third and allow us to more quickly and effectively serve tens of thousands of customers throughout EMEA.

Additionally, in the third quarter of 2021, we opened our multi-story iTero scanner and services facilities in Petach Tikva, Israel to further the design and development of our portfolio of iTero intraoral scanners, imaging systems and services.

We also perform digital treatment planning and interpretation for restorative cases based on digital scans generated by our iTero intraoral scanners.

Our digital treatment planning facilities are located worldwide, including in Costa Rica, China and other international locations.

Information regarding risks associated with our manufacturing process and foreign operations may be found in Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.”

Our digital treatment planning facilities are located worldwide, including in Costa Rica, China, Germany, Spain, Poland and Japan, among other international locations.

Our quality system is required to be in compliance with the Quality System regulations enforced by the FDA, and similar regulations enforced by other worldwide regulatory authorities.

We are certified to EN ISO 13485:2003, an internationally recognized standard for medical device manufacturing.

We are certified to ISO 13485:2016, an internationally recognized standard for medical device quality.

We are routinely audited by third party certification bodies as well as global health authorities for our compliance to this quality standard as well as international regulations.

We have a formal, documented quality system by which quality objectives are defined, understood and achieved.

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To increase the efficiency of our manufacturing processes, we continue to focus our efforts on software development and the improvement of rate-limiting processes or bottlenecks.

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 to reduce time spent on manual and judgmental tasks for each case, thereby increasing the efficiency of our technicians.

In addition, 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 aligners.

We are highly dependent on manufacturers of specialized scanning equipment, rapid prototyping machines, resin and other advanced materials for our aligners, as well as the optics, electronic and other mechanical components of our intraoral scanners.

We maintain single supply relationships for many of these machines and materials technologies.

We maintain single supplier relationships for many of these machines and materials technologies.

In particular, our CT scanning and stereolithography equipment used in our aligner manufacturing and many of the critical components for the optics of our intraoral scanners are provided by single or sole source suppliers.

We also currently purchase our resin and polymer, the primary raw materials used in our manufacturing process for clear aligners, from a single source.

A discussion of the risks of our supply and manufacturing operations may be found in Item 1A of this Annual Report on Form 10-K under the heading " Risk Factors."

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 efforts are focused on increasing adoption and utilization of the Invisalign System by orthodontists and GPs worldwide and integrating the iTero scanner and exocad CAD/CAM products into dental labs and practices.

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 exocad CAD/CAM products into dental labs and practices.

The scanner is an important component to the customer experience and is central to a digital approach as well as overall customer utilization of Invisalign treatments.

In each region, we have direct sales and support organizations, which include quota carrying sales representatives, sales management and sales administration.

In each region, we have direct sales, marketing and support

organizations, which include quota carrying sales representatives, sales management and sales administration.

We also have distribution partners in certain markets.

Our sales and marketing personnel are organized to support orthodontists and GP dentists separately, allowing highly trained and specialized personnel to serve each customer category, 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, along with consumer marketing in select countries.

Our sales and marketing personnel are organized to support orthodontists and GPs separately, allowing highly trained and specialized personnel to serve each customer category, 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.

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 a trained doctor to provide treatment.

We provide training, marketing and clinical support to orthodontists and GPs.

As of December 31, 2020, we had approximately 102,000 active Invisalign trained doctors, which we define as having submitted at least one case in the prior 12-month period.

As of December 31, 2021, we had approximately 122,500 active Invisalign trained doctors.

We define doctors as active if they have submitted at least one case in the prior 12-month period.

Research and Development

We are committed to investing in world-class technology development, which we believe is critical to achieving our goal of establishing the Invisalign System as the standard method for treating malocclusion and our intraoral scanning platform as the preferred scanning protocol for digital dental scans.

Our research and development activities are directed toward developing the technology innovations that we believe will deliver our next generation of products and platforms.

These activities range from accelerating product and clinical innovation to developing manufacturing process improvements to researching future technologies and products.

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 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.

Our research and development activities are directed toward developing digital technology innovations that we believe will deliver our next generation of products and solutions to enable the Align digital platform.

These activities range from accelerating product and clinical innovation to developing manufacturing process improvements to researching future technologies, products and software.

In an effort to demonstrate the broad treatment capabilities of the Invisalign system, various clinical case studies and articles have been published that highlight the clinical applicability of Invisalign treatment to malocclusion cases, including those of severe complexity.

We undertake pre-commercialization trials and testing of our technological improvements to the product and manufacturing process.

We furthermore fund research in the field of orthodontics and dentistry through initiatives such as our Annual Research Award Program, which was in its 11th year in 2020 and our partnership with MedTech Innovator Asia Pacific, a nonprofit startup accelerator for the medical technology industry that connects healthcare industry leaders with innovative medical technology startups for mentorship and support.

Similarly, various studies have also been published demonstrating the capabilities of our scanners, including advanced features such as our NIRI technology.

We undertake pre-commercialization trials and testing of our technological improvements to our products and manufacturing process.

We furthermore fund research in the field of orthodontics and dentistry through initiatives such as our Annual Research Award Program, which was in its 12th year in 2021, our donations to the American Association of Orthodontists Foundation and our partnership with MedTech Innovator Asia Pacific, a nonprofit startup accelerator for the medical technology industry that connects healthcare industry leaders with innovative medical technology startups for mentorship and support.

Intellectual Property

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When patents expire, we lose the protection and competitive advantages they provided, which could negatively impact our operating results;

however, we continue to pursue further intellectual property protection through U.S.

however, as we continue to pursue new innovations, we seek intellectual property protection for new inventions and know-how through U.S.

and foreign patent applications and non-disclosure agreements.

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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.

Sales of Invisalign treatments are often weaker in Europe during the summer months due to our customers and their patients being on holiday and seasonally higher in China during the third quarter, particularly related to increased teen cases.

Similarly, other international holidays like Lunar New Year can also negatively impact our sales in APAC.

Sales of the Invisalign system are often weaker in Europe, especially southern European countries during the summer months due to our customers and their patients being on holiday and seasonally higher in China during the third quarter.

Similarly, other international holidays like Lunar New Year can impact our sales in APAC.

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 want to get their teenagers started in treatment before the start of the school year;

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Consequently, these seasonal trends have caused and may continue to cause fluctuations in our quarterly results, including fluctuations in sequential revenue growth rates.

Moreover, the COVID-19 pandemic has disrupted many seasonal patterns and it remains unclear when or if they will return to historical norms.

Our clear aligner products compete directly against traditional treatments using metal brackets and wires and increasingly against clear aligner products manufactured and distributed by various companies, both within and outside the U.S.

We also face competition in the emerging and rapidly evolving markets for intraoral scanners and CAD/CAM software.

Moreover, the COVID-19 pandemic with its consequent office closures or capacity constraints imposed to curtail the spread of the virus and its variants, and the easing and

reimplementation of those restrictions, has exacerbated the timing and extent of seasonal patterns and it remains unclear when or if they will return to historical norms.

Our clear aligner products compete directly against traditional orthodontic treatments that use metal brackets and wires and increasingly against clear aligner products manufactured and distributed by various companies, both within and outside the U.S.

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 or divisions of larger companies with substantial sales, marketing, research and financial capabilities.

Due in part to the expiration of certain of our clear aligner key patents beginning in 2017, we are facing increased competition in the clear aligner market.

In addition, corresponding foreign patents began expiring in 2018 which has increased competition in the clear aligner markets outside the U.S.

These competitors include existing larger companies in certain markets who have the ability to leverage their existing channels in the dental market to compete directly with us, direct-to-consumer (“DTC”) companies that provide clear aligners using a remote teledentistry model requiring little or no in-office care from trained and licensed doctors, and doctors themselves who can manufacture custom aligners in their offices using modern 3D printing technology.

Due in part to the expiration of certain of our clear aligner key patents beginning in 2017 and the significant benefits of clear aligner treatment over traditional brackets and wires, competition in the clear aligner market is increasing.

In addition, corresponding foreign patents began expiring in 2018 which has increased competition outside the U.S.

These competitors include existing larger companies in certain markets who have the ability to leverage their existing channels in the dental market to compete directly with us, direct-to-consumer (“DTC”) companies that provide clear aligners requiring little or no in-office care from trained and licensed doctors, and doctors themselves who can manufacture custom aligners in their offices using modern 3D printing technology.

Unlike our DTC competitors, we are committed to doctors being at the core of our business strategy, and Invisalign treatment requires a doctor's prescription and an in-person physical examination of the patient’s dentition before treatment can begin.

Additionally, we face competition in the emerging and rapidly evolving markets for intraoral scanners and software solutions, including CAD/CAM.

The global intraoral scanner market is very dynamic with participants spanning from traditional dental conglomerates to companies dedicated primarily to scanner development and sales with new entrants from South Korea and China playing larger roles.

Information regarding risks associated with increased competition may be found in Item 1A of this Annual Report on Form 10-K under the heading “ Risk Factors .”

We believe we are well positioned to compete in the markets we target.

Our significant historical and ongoing investments in research and design in around the movement of teeth, SmartTrack aligner materials and design, intraoral scanning, 3D manufacturing, and an in depth understanding of the drivers and motivations within the orthodontic and GP dental markets are among a few of our key competitive factors that compare favorably with our competitors’ products and services.

We have a dedicated sales force of over 4,000 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.

Our significant historical and ongoing investments in research and design around the movement of teeth, SmartTrack aligner materials and design, intraoral scanning, 3D manufacturing, global scale of manufacturing and treatment planning, strong brand name recognition, and an in depth understanding of the drivers and motivations within the orthodontic and GP dental markets are among a few of our key competitive factors that compare favorably with our competitors’ products and services.

Government Regulation

Many countries throughout the world have established regulatory frameworks for commercialization of medical devices.

As a designer, manufacturer, and marketer of medical devices, we are obligated to comply with the respective framework of these countries to obtain and maintain access to these global markets.

The framework often defines requirements for marketing authorizations which vary by country.

As a designer, manufacturer, and marketer of medical devices, we are obligated to comply with the respective frameworks of these countries to obtain and maintain access to these global markets.

The frameworks often define requirements for marketing authorizations which vary by country.

Failure to obtain appropriate marketing authorization and to meet all local requirements, including specific quality and safety standards in any country in which we currently market our products, could cause commercial disruption and/or subject us to sanctions and fines.

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We believe we are in compliance with all state, federal, and international regulatory requirements applicable to our products.

We are also subject to various laws inside and outside the U.S.

concerning our relationships with healthcare professionals and government officials, price reporting and regulation, the promotion, sale and marketing of our products and services, the importation and exportation of our products, the operation of our facilities and distribution of our products.

As a global company, we are subject to varying degrees of government regulation in the various countries in which we do business, and the general trend is toward increasingly stringent oversight and enforcement.

We are also subject to various laws around the world that govern interactions with our customers as healthcare professionals or government officials.

The laws govern different interactions and may include prohibiting improper influence of or payments to healthcare professionals and government officials, setting out rules for when and how to engage healthcare professionals as our vendors, requiring price reporting regulations, requiring proper and on label promotion, sale and marketing

of our products and services, importation and exportation of our products, the operation of our facilities and distribution of our products, and disclosure of payments to healthcare professionals and entities.

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.

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.

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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.

As we expand our customer base and product offering, it is increasingly possible that there will be new opportunities to seek reimbursement from public and private payors for services that include our products, and additional laws or regulatory enforcement requirements may apply now or in the future.

Also, as a medical device manufacturer and seller, we are subject to transparency reporting laws (also known as sunshine laws) that in certain countries require us to report transfers of value to healthcare professionals that perform services or receive other items from us (e.g., meals, travel, branded promotional or educational items, or other benefits of value).

Many government agencies, both domestic and foreign, have increased their enforcement activities with respect to healthcare providers and companies in recent years.

Enforcement actions and associated defense can be expensive, and any resulting findings carry the risk of significant civil and criminal penalties.

In addition, we must comply with numerous data protection requirements that span from individual state and national laws in the U.S.

and China, to multinational requirements in the EU.

In the U.S., final regulations implementing amendments to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) became effective in the latter part of 2013 with the HIPAA Omnibus Rule.

We are also required to be in compliance with the California Consumer Privacy Act (“CCPA”).

In the EU, we must comply with the General Data Protection Regulation (“GDPR”), which serves as a harmonization of European data-privacy laws.

With relocation of our EMEA headquarters to Switzerland, the Swiss Federal Act on Data Protection (“FADP”), passed September 25, 2020, becomes increasingly important.

Expansion into LATAM markets requires us to comply with Brazil's Lei Geral de Proteção de Dados (“LGPD”).

Meanwhile, the APAC and EMEA regions have also seen rapid development of privacy laws including India, Russia, China, South Korea, Singapore, Hong Kong, and Australia.

Enforcement actions and associated efforts to respond or defend against such actions can be expensive, and any resulting findings carry the risk of significant civil and criminal penalties.

In addition, we must comply with numerous data protection and storage requirements that span from individual state and national laws in the U.S., China and other countries, to multinational requirements in the EU, including laws that regulate or restrict cross border data transfers.

In the U.S., we must comply with final regulations implementing amendments to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the associated HIPAA Security Rule.

We are also required to comply with the California Consumer Privacy Act and are preparing for a number of state-level laws and bills in the U.S., including the California Privacy Rights Act of 2020.

In the EU, we must comply with the General Data Protection Regulation, which serves as a harmonization of European data-privacy law and the Swiss Federal Act on Data Protection, where Align has its EMEA headquarters.

In LATAM markets, we must comply with Brazil's Lei Geral de Proteção de Dados.

Meanwhile, the APAC and EMEA regions have also seen rapid development of privacy laws including Turkey, Morocco, Ghana, India, Russia, China, South Korea, Singapore, Hong Kong, Israel, and Australia.

Information regarding risks associated with data security and privacy may be found in Item 1A of this Annual Report on Form 10-K under the heading “ Risk Factors .”

Human Capital

We believe our culture and commitment to our employees provides unique value to our Company and its shareholders.

We believe our culture and commitment to employees provide unique value that benefits Align, its stockholders and the communities and other stakeholders we serve.

Every employee, and every job, is important to our success and helps us achieve our purpose of transforming smiles and changing lives.

Our core values of Agility, Customer and Accountability inform our culture.

Our Global Code of Conduct (“Code”) and Quality Policy are designed to enable us to operate with integrity and deliver superior treatment outcomes and experiences to patients.

We seek to create an environment that values the health, safety and wellness of our teams, and we work to equip them with the knowledge and skills to serve our business and develop in their careers.

As of December 31, 2020, we had approximately 18,070 employees, including 11,900 in manufacturing and operations, 3,505 in sales and marketing which includes customer care, 1,020 in research and development and 1,645 in general and administrative functions.

Fostering open dialogue, open-mindedness, compassion, fairness, recognition, and shared goals allows us to attract and retain the best talent, which has ultimately led to the growth and success of our company.

As of December 31, 2021, we had approximately 22,540 employees, an increase of approximately 25% and 55% over December 31, 2020, and December 31, 2019, respectively.

Included among our employees as of December 31, 2021, were approximately 14,200 in manufacturing and operations, 4,600 in sales and marketing (which includes customer care), 1,375 in research and development, and 2,365 in general and administrative functions.

We are a global organization with the majority of our employees in direct-labor roles in our manufacturing and clinical treatment planning facilities.

Set forth in the following paragraphs are some of the most important elements of our culture and commitment to our employees.

Our commitment to improving the lives of our employees and the communities in which we live and work, including conducting our business ethically, responsibly and transparently through open and clear disclosures that allow us and others to hold us accountable, begins with our Board of Directors (“Board”) and management team.

They set the tone for our organization by establishing and clearly communicating our core values of Agility, Customer and Accountability that inform our culture.

Our Global Code of Conduct (“Code”) and quality policies are designed to enable us to operate with integrity and deliver superior treatment outcomes and experiences to patients.

We seek to create an environment that values the health, safety and well-being of our teams, and we work to equip them with the knowledge and skills to serve our business and develop in their careers.

We believe that by effectively managing our business with these values as the foundation, we will drive long-term value for our stockholders and all stakeholders.

To demonstrate our commitment to our environmental, social and governance (“ESG”) efforts, our Board has delegated ESG oversight responsibility to our Nominating and Governance Committee.

In 2021, our Board took further steps to support ESG by amending the charter of our Compensation Committee to specifically empower the committee to oversee our diversity, equity and inclusion initiatives.

Fostering diversity and encouraging inclusion in the workplace makes Align a more welcoming and enjoyable place to work.

Our management team is comprised of a diverse group from around the globe who are committed to promoting and encouraging the health and well-being of our employees at work and in society overall.

Our work culture is designed to create innumerable benefits for our employees, customers, consumers and organization.

We believe we are at our best, and our success has been driven by, different backgrounds, orientations, beliefs, perspectives and capabilities in our workforce.

Our products and services are used broadly across age groups, gender identities, races, ethnicities, and cultures, so we aim to build a workforce that optimally reflects this diversity.

We believe our success continues to be driven by our focus on integrating employees of all different backgrounds, orientations, beliefs, perspectives and capabilities into our workforce.

Our approximately 22,540 employees bring a positive mix of ethnic and culturally diverse backgrounds to the more than 40 different countries in which we operate.

Our management team is comprised of diverse individuals from varying countries and nationalities and who are committed to promoting and encouraging the health and well-being of our employees at work, at home and in society in general.

Our work culture is designed to create financial, health, career and personal benefits for our employees and organization.

We sponsor diverse and cultural recognition events to increase awareness of inclusion and diversity, including its importance in creating an environment where every employee can thrive.

We also sponsor employee resource groups based on shared characteristics or life experiences which are open to all employees, including those who do not directly identify with other members but are passionate in supporting the group's members in creating an educated, supportive and inclusive culture.

We provide opportunities for and actively encourage employees to support local charitable organizations through volunteerism, team building, and donation and matching programs and are extremely proud of the generosity and dedication of our employees especially during our annual Month of Smiles initiative in October.

In addition, through our Align Foundation, we support organizations whose visions closely align with our own, including Operation Smile and America’s ToothFairy.

We also provide product donations to the dental community to help patients in need of a healthy, beautiful smile.

For more information on our charitable and community efforts, please refer to the Corporate Social Responsibility portion of our corporate website located at https://www.aligntech.com/about/corporate_social_responsibility .

Talent Recruitment and Engagement.

W e employ a variety of career development, employee benefits, compensation and other policies and programs designed to attract, develop, and retain employees.

We focus on building a talent pipeline that nurtures those early in their careers, encourages continuous learning and growth, and incentivizes our employees to stay and contribute to our success over the long term.

Our programs include early recruitment at high schools and universities, initiatives such as internships, co-ops, apprenticeships, and training programs, quarterly performance management check-ins focused on individual goals and commitment to values and conducting regular employee surveys to build trust and strengthen relationships.

Our efforts have proven successful, resulting in numerous awards for our positive work environment and culture.

In 2021 alone, we were recognized by:

• Forbes as one of their World’s Best Employers in 2021

• Great Places to Work and Best Places to Work based on our employee-validated great workplaces in the following countries - Brazil, Canada, China, Costa Rica, Germany, India, Poland, Singapore, U.S., and Vietnam

• Computerworld as Best Place to Work in IT, based in its survey of organizations across the U.S.

to identify those that provide the best benefits and amenities for IT professionals

Training and Professional Development .

Training is an integral part of developing and retaining our employees and creating a culture of leadership within the Company.

This begins with our Code, which was significantly revised in 2020 to emphasize our strong commitment to ethical business practices in all aspects of our operations.

Every employee and contractor is required to review the Code and confirm they understand it and we routinely reference the Code in presentations and as part of everyday operations.

In 2021, 54% of our employees engaged in some form of professional development activities.

Department of Labor uses the benchmark of 23% as a best practice standard for companies.

Training at Align begins with our Code and our strong commitment to ethical business practices in all aspects of our operations.

Every employee and contractor is required to review the Code and confirm they understand it.

We routinely reference the Code in presentations and as part of everyday operations.

As a further part of our standard onboarding program, we train employees on important environmental health and safety topics to protect them and our environment as we operate our business.

As a general practice, employees are trained to perform their jobs in accordance with any and all applicable statutory/regulatory requirements and that training is routinely re-administered, updated and refreshed.

Employees are encouraged to participate in a variety of Company provided

learning resources through our corporate Align University platform, including:

professional development events;

external training programs based on individual needs;

business-led enterprise leader learning events;

diversity and inclusion;

online business skills courses and onsite classroom events.

This is in addition to opportunities offered for job development such as management skills training and trainings that improve their opportunities for advancement.

As a general practice, employees are trained to perform their jobs in accordance with any and all applicable statutory and regulatory requirements and that training is routinely re-administered, updated and refreshed.

Employees are encouraged to participate in a variety of Company-provided learning resources through our corporate platform Align University.

The platform offers a broad range of development tools with more than 1,000 courses available in multiple languages to serve our many employees globally, including professional development events, external training

programs based on individual needs, business-led enterprise leader learning events, diversity and inclusion, online business skills courses and onsite classroom events.

This is in addition to opportunities offered for job development such as our Early Leader program as well as the Align Leadership Journey, for which our program on creativity and curiosity was recognized with a Brandon Hall Innovation Award, and other management skills training and trainings that create opportunities for advancement.

Compensation and Benefits .

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Besides these, we also offer discounts to our employees and their dependents when they undergo Invisalign treatment.

Importantly, during the initial onset of the pandemic in early 2020, we committed to protect our employees financially by declaring that we did not intend to furlough, lay off or cut employee pay.

We believe our strong operational performance in the second half of 2020 is directly attributable to that decision along with the exceptional efforts of our employees throughout the pandemic.

We are furthermore committed to pay equity practices.

We regularly review our pay equity practices, none of which have shown any systemic differences in pay or pay practices.

Recognizing that financial security is as important to the emotional health and well-being of our employees as physical precautions against the COVID-19 virus and its many variants, we committed at the outset of the pandemic to protect our employees and their families financially by declaring we would not furlough, lay off or cut employee pay.

We have honored this commitment throughout the pandemic.

Health and Safety .

Our employees are essential to us as a business and their health and well-being is critical to our success and their continuing achievements.

Our objective is to prevent injuries and occupational diseases by focusing first and foremost on creating and maintaining environments that are safe.

We therefore offer a wide variety of robust programs and initiatives designed to promote the overall health and welfare of all our employees and their families.

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Examples include hazardous material training, emergency response and evacuation training, ergonomics training, biohazard and personal protective equipment training, and, more recently, COVID-19 related safety training.

We also invest to ensure our facilities and equipment are safe by complying with OSHA or other statutory standards.

Charitable and Community Services.

We provide opportunities for and actively encourage employees to support local charities through volunteerism, team building, and donation and matching programs and are extremely proud of the generosity and dedication of our employees especially during our annual Month of Smiles initiative in October.

In addition, through our Align Foundation, we support businesses with complementary missions including Operation Smile and America’s ToothFairy as well as provide product donations to the dental community to help patients in need of a healthy, beautiful smile.

For example, in 2020 we pledged a $1 million donation to support COVID-19 global relief efforts.

This was in addition to a 1 million renminbi donation to the Chinese Red Cross to support its COVID-19 prevention and control efforts and donations of personal protective equipment to hospitals and healthcare providers treating patients with COVID-19.

For more information on our charitable and community efforts, please refer to the Corporate Social Responsibility portion of our website located at https://www.aligntech.com/about/corporate_social_responsibility.

Information Systems.

We understand the critical nature of measurable data and insights from a human capital perspective.

We made the decision to leverage a cloud-based human capital management software solution that unifies our wide range of human relations functionality onto one single platform.

This allows support for the entire enterprise with qualitative and quantitative analytics specific to employee transactions, processes and programs, thereby creating a culture where data and analytics are the norm and to drive key decisions.

We have an Environmental Health, Safety and Sustainability Director who is responsible for ensuring health and safety programs are maintained and effective at each of our locations.

Major worksites, such as our aligner fabrication sites, and large offices have dedicated Environmental Health and Safety (“EHS”) departments that ensure health and safety programs are maintained while contributing Best Management Practices (“BMP”) and general input to corporate-wide programs.

Each EHS department is responsible for ensuring all employees at their location are properly trained on various EHS topics and at the appropriate frequencies.

A training suite is determined for each employee depending on their responsibilities and function modeled off of ISO 45001.

Available Information

Our website is www.aligntech.com , and our investor relations website is http://investor.aligntech.com .

Our corporate website is www.aligntech.com , and our investor relations website is http://investor.aligntech.com .

The information on or accessible through our websites is not part of this Annual Report on Form 10-K.

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Hogan 64 President and Chief Executive Officer

Morici 54 Chief Financial Officer and Senior Vice President, Global Finance

Julie Coletti 53 Senior Vice President, Chief Legal and Regulatory Officer

Stuart Hockridge 49 Senior Vice President, Global Human Resources

Wright 51 Senior Vice President, Global Operations

Morici 55 Chief Financial Officer and Executive Vice President, Global Finance

Julie Coletti 54 Executive Vice President, Chief Legal and Regulatory Officer

Stuart Hockridge 50 Executive Vice President, Global Human Resources

Wright 52 Executive Vice President, Global Operations

Hogan has served as our President and Chief Executive Officer and as a member of our Board of Directors since June 2015.

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Morici served as our Chief Financial Officer beginning in November 2016.

His title was changed to Chief Financial Officer and Senior Vice President, Global Finance in February 2018.

His title was changed to Chief Financial Officer and Senior Vice President, Global Finance in February 2018 and was changed again in February 2022 to Chief Financial Officer and Executive Vice President.

Prior to joining us, Mr.

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Morici was in various senior financial management positions at GE Healthcare from 1999 to 2007, including Chief Financial Officer for its Diagnostic Imaging and Global Products units from 2002 to 2003.

Julie Coletti has served as our Senior Vice President, Chief Legal and Regulatory Officer since May 2019.

Julie Coletti served as our Senior Vice President, Chief Legal and Regulatory Officer from May 2019 until February 2022 when her title was changed to Executive Vice President, Chief Legal and Regulatory Officer.

Coletti joined Align in May 2018, serving as Vice President and Associate General Counsel, Strategic Commercial Affairs until her promotion in 2019.

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Coletti was Vice President, Global General Counsel and Chief Compliance Officer for Danaher Corporation, a healthcare, environmental and industrial equipment manufacturer, in its dental platform business.

Before Danaher, Ms.

Coletti served in various senior legal management positions, including as Vice President, Chief Legal Officer and Corporate Secretary at Bayer HealthCare's MEDRAD/Radiology and Interventional Division, a leading manufacturer of pharmaceuticals and medical devices for imaging and interventional cardiology.

Stuart Hockridge served as our Vice President, Global Human Resources beginning in May 2016.

His title was changed to Senior Vice President, Global Human Resources in February 2018.

His title was changed to Senior Vice President, Global Human Resources in February 2018 and was changed again in February 2022 to Executive Vice President, Global Human Resources.

Prior to joining us, Mr.

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Wright served as our Vice President, Operations beginning in December 2007.

His title changed to Senior Vice President, Global Operations in February 2018.

His title changed to Senior Vice President, Global Operations in February 2018 and was changed again in February 2022 to Executive Vice President, Global Operations.

He has been with us since March 2000 predominantly in manufacturing and operations roles including Vice President, Manufacturing and was General Manager of New Product Development.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business