What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-08 · 168 added, 110 removed, 621 unchanged (31% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net revenues $ 1,012,449 $ 1,028,490 $ 1,991,711 $ 2,025,921

25 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income $ 124,608 $ 96,564 $ 217,838 $ 201,592

49 unchanged sentences

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Shares Amount

Balance as of March 31, 2025

73,057 $ 7 $ 1,386,807 $ 18,177 $ 2,389,252 $ 3,794,243

Net income — — — — 124,608 124,608

Net change in foreign currency translation adjustment — — — 43,010 — 43,010

Issuance of common stock relating to employee equity compensation plans 15 — — — — —

Tax withholdings related to net share settlements of equity awards ( 1 ) — ( 253 ) — — ( 253 )

Common stock repurchased and retired ( 585 ) — ( 8,221 ) — ( 88,816 ) ( 97,037 )

Stock-based compensation — — 48,208 — — 48,208

Balance as of June 30, 2025

72,486 $ 7 $ 1,426,541 $ 61,187 $ 2,425,044 $ 3,912,779

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total

Six Months Ended June 30, 2025

Shares Amount

Balance as of December 31, 2024

6 unchanged sentences

Stock-based compensation — — 93,205 — — 93,205

Balance as of June 30, 2025

72,486 $ 7 $ 1,426,541 $ 61,187 $ 2,425,044 $ 3,912,779

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total

Three Months Ended June 30, 2024

Shares Amount

Balance as of March 31, 2024

75,281 $ 7 $ 1,238,739 $ 18,439 $ 2,502,675 $ 3,759,860

Net income — — — — 96,564 96,564

Net change in unrealized gains (losses) from investments — — — 243 — 243

Net change in foreign currency translation adjustment — — — 6,359 — 6,359

Issuance of common stock relating to employee equity compensation plans 17 — — — — —

Tax withholdings related to net share settlements of equity awards ( 4 ) — ( 1,547 ) — — ( 1,547 )

Common stock repurchased and retired ( 598 ) — ( 7,922 ) — ( 142,677 ) ( 150,599 )

Stock-based compensation — — 47,028 — — 47,028

Balance as of June 30, 2024

74,696 $ 7 $ 1,276,298 $ 25,041 $ 2,456,562 $ 3,757,908

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Shares Amount

9 unchanged sentences

Stock-based compensation — — 85,816 — — 85,816

Balance as of March 31, 2024

Balance as of June 30, 2024

74,696 $ 7 $ 1,276,298 $ 25,041 $ 2,456,562 $ 3,757,908

3 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

21 unchanged sentences

Proceeds from sales of marketable securities — 7,518

Purchase of equity investments ( 10,000 ) ( 75,390 )

Other investing activities — 129

20 unchanged sentences

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 28, 2025.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and we make no representations related thereto.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and we make no representations related thereto.

Use of Estimates

9 unchanged sentences

The Company maintains its cash and cash equivalents in bank accounts that exceed federally insured FDIC limits.

Through March 31, 2025, the Company has not experienced any material credit losses on such deposits.

Through June 30, 2025, the Company has not experienced any material credit losses on such deposits.

We purchase certain inventory from sole suppliers.

5 unchanged sentences

” The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and other segment expenses.

For public business entities, the provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

For public business entities, the provisions of ASU 2023-07 were effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

We adopted this standard in the fiscal year ended December 31, 2024 .

15 unchanged sentences

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities balances in our Condensed Consolidated Balance Sheets as of March 31, 2025 and Consolidated Balance Sheets as of December 31, 2024 (in thousands):

March 31, 2025 Amortized

The following tables summarize our cash, cash equivalents and marketable securities balances in our Condensed Consolidated Balance Sheets as of June 30, 2025 and Consolidated Balance Sheets as of December 31, 2024 (in thousands):

June 30, 2025 Amortized

Losses Fair Value Cash and Cash Equivalents Marketable securities, short-term Marketable securities, long-term

10 unchanged sentences

Total $ 1,043,887 $ — $ — $ 1,043,887 $ 1,043,887 $ — $ —

We had no short-term or long-term marketable securities as of March 31, 2025 or December 31, 2024.

We had no short-term or long-term marketable securities as of June 30, 2025 or December 31, 2024.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received from selling an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

We use the U.S.

GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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Level 3 — Inputs to the valuation techniques that are unobservable for the assets or liabilities.

The following tables summarize our financial assets measured at fair value as of March 31, 2025 and December 31, 2024 (in thousands):

The following tables summarize our financial assets measured at fair value as of June 30, 2025 and December 31, 2024 (in thousands):

Description Balance as of

March 31, 2025

June 30, 2025

Cash equivalents:

3 unchanged sentences

$ 77,372 $ 77,372

Description Balance as of December 31, 2024

Level 1 Level 2

Description Balance as of

December 31, 2024

Cash equivalents:

5 unchanged sentences

We account for these transactions as sales of financial assets and include the cash proceeds as a part of our cash flows from operations in the Condensed Consolidated Statements of Cash Flows.

Total accounts receivable sold under factoring arrangements was $ 6.4 million and $ 14.6 million during the three months ended March 31, 2025 and 2024, respectively.

Total accounts receivable sold under factoring arrangements was $ 18.3 million and $ 11.3 million during the three months ended June 30, 2025 and 2024, respectively, and $ 24.7 million and $ 25.9 million during the six months ended June 30, 2025 and 2024, respectively.

Factoring fees on the sales of receivables were recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations and were not material.

7 unchanged sentences

In the fourth quarter of 2024, we recorded a $ 6 million increase to the carrying value of our investment, which increased the total carrying value of our investment in Heartland to $ 156 million.

On December 19, 2024, we entered into a Subscription Agreement (the “Smile Doctors Subscription Agreement”) with New SD Holding Company, L.P.

On December 19, 2024 and June 5, 2025, we entered into Subscription Agreements (the “Smile Doctors Subscription Agreements”) with New SD Holding Company, L.P.

(“SD Holding Company”).

Pursuant to the Smile Doctors Subscription Agreement we acquired less than a 3 % equity interest in SD Holding Company through the purchase of Class A Common Units for $ 30 million.

Pursuant to the Smile Doctors Subscription Agreements we acquired less than a 3 % equity interest in SD Holding Company through the purchase of Class A Common Units for $ 40 million in total.

SD Holding Company owns a controlling interest, through intermediary entities, in Smile Doctors, LLC.

We account for our investments in Heartland and SD Holding Company as investments in equity securities, utilizing the measurement alternative.

Based on a review of the relevant facts and circumstances, primarily observable transactions for identical investments, we determined that no adjustments to the carrying values of our investments were necessary for the three months ended March 31, 2025.

Our investments in privately held companies in which we can exercise significant influence are accounted for as equity method investments.

4 unchanged sentences

These forward contracts are classified within Level 2 of the fair value hierarchy.

As a result of the settlement of foreign currency forward contracts, we recognized a net loss of $ 11.5 million and a net gain of $ 19.7 million, during the three months ended March 31, 2025 and 2024, respectively.

Recognized gains and losses from the settlement of foreign currency forward contracts are recorded to Other income (expense), net in our Condensed Consolidated Statements of Operations.

As of March 31, 2025 and December 31, 2024, the fair value of outstanding foreign exchange forward contracts was no t material.

The following tables present the gross notional value of all our foreign exchange forward contracts outstanding as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025

As a result of the settlement of foreign currency forward contracts, we recognized a net loss of $ 27.1 million and a net gain of $ 7.5 million, during the three months ended June 30, 2025 and 2024, respectively, and a net loss of $ 38.6 million and a net gain $ 27.2 million, respectively, during the six months ended June 30, 2025 and 2024.

Recognized gains and losses from the settlement of foreign currency forward contracts are recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations.

As of June 30, 2025 and December 31, 2024, the fair value of outstanding foreign exchange forward contracts was no t material.

The following tables present the gross notional value of all our foreign exchange forward contracts outstanding as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025

Local Currency Amount Notional Contract Amount (USD)

4 unchanged sentences

Chinese Yuan ¥ 251,400 35,183

Japanese Yen ¥ 3,300,000 22,105

Israeli Shekel ILS 92,300 27,396

Japanese Yen ¥ 3,700,000 25,707

Brazilian Real R$ 119,600 21,711

Swiss Franc CHF 7,500 9,436

Australian Dollar A$ 5,400 3,369

Czech Koruna Kč 76,800 3,321

New Taiwan Dollar NT$ 113,000 3,914

New Zealand Dollar NZ$ 5,900 3,579

Australian Dollar A$ 5,250 3,432

Czech Koruna Kč 70,000 3,329

Korean Won ₩ 4,500,000 3,327

Total notional contract amount $ 512,740

December 31, 2024

14 unchanged sentences

Korean Won ₩ 2,000,000 1,361

Total notional contract amount $ 458,347

Balance Sheet Components

22 unchanged sentences

Accrued warranty, which is included in the “Other accrued liabilities” category of the Total accrued liabilities table above, consists of the following activity (in thousands):

Three Months Ended

Six Months Ended

Balance at beginning of period $ 31,211 $ 22,426

8 unchanged sentences

1 Included in Other long-term liabilities within our Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2025 and 2024, we recognized $ 979.3 million and $ 997.4 million of net revenues, respectively, of which $ 246.0 million and $ 236.8 million was included in the deferred revenues balance at December 31, 2024 and 2023, respectively.

Our unfulfilled performance obligations, including deferred revenues and backlog, as of March 31, 2025 were $ 1,418.6 million.

These performance obligations are expected to be fulfilled over a period up to five years .

During the three months ended June 30, 2025 and 2024, we recognized $ 1,012.4 million and $ 1,028.5 million of net revenues, respectively, of which $ 229.4 million and $ 222.4 million was included in the deferred revenues balance at December 31, 2024 and 2023, respectively.

During the six months ended June 30, 2025 and 2024, we recognized $ 1,991.7 million and $ 2,025.9 million of net revenues, respectively, of which $ 475.4 million and $ 459.2 million was included in the deferred revenues balance at December 31, 2024 and 2023, respectively.

Our unfulfilled performance obligations, including deferred revenues and backlog, as of June 30, 2025 were $ 1,411.5 million.

These performance obligations are expected to be fulfilled over a period of up to five years .

Business Combination

31 unchanged sentences

The acquired developed technology had an estimated fair value of $ 47.0 million as of the Cubicure Acquisition Date and will be amortized over a useful life of thirteen years .

The fair value of developed technology was estimated under the Multi-Period Excess Earnings Method and the fair value estimates for developed technology include significant assumptions in the prospective financial information which include, but are not limited to, the projected future cash flows associated with the technology, the asset's life cycle and a present value factor.

are not limited to, the projected future cash flows associated with the technology, the asset's life cycle and a present value factor.

Acquisition related costs are recognized separately from the business combination and are expensed as incurred.

Acquisition related costs were not material.

Our consolidated financial statements include the operating results of Cubicure from the Cubicure Acquisition Date.

Our condensed consolidated financial statements include the operating results of Cubicure from the Cubicure Acquisition Date.

Separate post-acquisition operating results and pro forma results of operations for this acquisition have not been presented as the effect is not material to our consolidated financial results.

Goodwill and Intangible Assets

The change in the carrying value of goodwill for the three months ended March 31, 2025, categorized by reportable segment, is as follows (in thousands):

The change in the carrying value of goodwill for the six months ended June 30, 2025, categorized by reportable segment, is as follows (in thousands):

Clear Aligner Systems and Services Total

3 unchanged sentences

11,401 37,041 48,442

Balance as of March 31, 2025

Balance as of June 30, 2025

$ 164,046 $ 327,026 $ 491,072

3 unchanged sentences

(in years) Gross Carrying Amount as of

March 31, 2025

June 30, 2025

Amortization Accumulated

Impairment Loss Net Carrying

March 31, 2025

June 30, 2025

Existing technology 11 $ 146,651 $ ( 59,715 ) $ — $ 86,936

6 unchanged sentences

Total intangible assets, net $ 103,485

1 The Weighted Average Amortization Period decreased from 10 years to 7 years due an intangible asset with a useful life of 15 years becoming fully amortized during the current quarter.

1 The Weighted Average Amortization Period decreased from 10 years to 7 years due to an intangible asset with a useful life of 15 years becoming fully amortized during the first quarter of 2025.

Weighted Average Amortization Period

10 unchanged sentences

Total intangible assets, net $ 103,488

The total estimated future amortization expense for these acquired finite-lived intangible assets as of March 31, 2025, is as follows (in thousands):

The total estimated future amortization expense for these acquired finite-lived intangible assets as of June 30, 2025, is as follows (in thousands):

Fiscal Year Ending December 31, Amortization

2 unchanged sentences

Total $ 99,779

Amortization expense for the three months ended March 31, 2025 and 2024 was $ 4.6 million and $ 5.0 million, respectively.

Amortization expense for the three months ended June 30, 2025 and 2024 was $ 4.7 million, and amortization expense for the six months ended June 30, 2025 and 2024 was $ 9.3 million and $ 9.6 million, respectively.

Credit Facility

We have a credit facility, as amended in December 2022, that provides for a $ 300.0 million unsecured revolving line of credit, along with a $ 50.0 million letter of credit.

Our credit facility has a maturity date of December 23, 2027 and bears interest, at our option, at either a rate based on the SOFR for the applicable interest period or a base rate, in each case plus a margin.

The credit facility requires us to comply with specific financial conditions and performance requirements.

As of March 31, 2025, we had no outstanding borrowings under the credit facility and were in compliance with the conditions and performance requirements in all material respects.

We maintain a credit facility, as amended in December 2022, that includes a $ 300.0 million unsecured revolving line of credit and a $ 50.0 million letter of credit sub-limit.

The facility matures on December 23, 2027 and accrues interest, at our election, based on either the Secured Overnight Financing Rate (“SOFR”) for the applicable period or a base rate, in each case plus an applicable margin.

The facility includes financial covenants and performance requirements.

As of June 30, 2025, we had no outstanding borrowings under the facility and were in compliance with the terms and conditions of the facility in all material respects.

Legal Proceedings

3 unchanged sentences

Plaintiff filed an amended complaint and added VIP Dental Spas as a plaintiff on August 14, 2020.

On December 18, 2023, the court certified a class of persons or entities that purchased Invisalign directly from Align between January 1, 2019 and March 31, 2022.

On December 18, 2023, the court certified a class of persons or entities that purchased Invisalign directly from us between January 1, 2019 and March 31, 2022.

The court denied Plaintiffs’ motion to certify a class of purchasers of scanners.

On February 21, 2024, the court granted Align’s motion for summary judgment on all claims brought by the plaintiffs.

On February 21, 2024, the court granted our motion for summary judgment on all claims brought by the plaintiffs.

Plaintiffs have appealed the district court’s summary judgment ruling to the United States Court of Appeals for the Ninth Circuit.

2 unchanged sentences

District Court for the Northern District of California on behalf of herself and a putative class of similarly situated individuals seeking treble monetary damages, interest, costs, attorneys’ fees and injunctive relief relating to our alleged market activities in alleged clear aligner and intraoral scanner markets based on Section 2 of the Sherman Act.

Plaintiffs have filed several amended complaints adding new plaintiffs, various state law claims and allegations based on Section 1 of the Sherman Act.

Plaintiffs have since filed several amended complaints adding new plaintiffs, various state law claims and allegations based on Section 1 of the Sherman Act.

On November 29, 2023, the court certified a class of indirect purchasers of Invisalign between July 1, 2018 and December 31, 2023 and a class of indirect purchasers of Invisalign seeking injunctive relief.

On February 21, 2024, the court granted Align’s motion for summary judgment on the claims related to Section 2 allegations.

On February 21, 2024, the court granted our motion for summary judgment on the claims related to Section 2 allegations.

The court entered judgment for the Section 2 and related state law claims on March 22, 2024.

2 unchanged sentences

We are currently unable to predict the outcome of these lawsuits and therefore we cannot determine the likelihood of loss, if any, nor estimate a range of possible loss.

In June 2024, Align and the Section 1 plaintiffs reached a settlement in principle to resolve all remaining claims in the Section 1 lawsuit.

In March, 2025, Align and plaintiffs agreed to a revised settlement to resolve all Section 1 claims for a $ 31.75 million cash payment.

On April 24, 2025 Plaintiffs filed a motion requesting the court approve the revised settlement.

hearing on the motion is scheduled for May 22, 2025.

We are unable to predict the timeline or outcome of the motion to approve the settlement.

In June 2024, we reached a settlement in principle with the Section 1 plaintiffs to resolve all remaining claims in the Section 1 lawsuit.

In March, 2025, Align and plaintiffs agreed to a revised settlement to resolve all Section 1 claims for a

$ 31.75 million cash payment.

On May 28, 2025, the court granted preliminary approval of the proposed settlement.

The Final Approval/Fairness hearing has been set for November 20, 2025.

We are unable to predict the timeline or outcome of the court’s final approval decision.

We continue to believe that plaintiffs’ Section 1 claims are without merit and remain ready to vigorously defend ourselves against those claims.

For the quarter ended March 31, 2025, Align accrued a total loss of $ 31.75 million, $ 27.5 million as of December 31, 2024 and an additional loss accrual of $ 4.25 million in the first quarter of 2025, for the settlement of the Section 1 claims described above.

For the quarter ended June 30, 2025, Align accrued a total loss of $ 31.75 million, consisting of $ 27.5 million as of December 31, 2024 and an additional loss accrual of $ 4.25 million in the first quarter of 2025, for the settlement of the Section 1 claims described above.

Subsequent to June 30, 2025, we issued a payment for the full settlement amount to an escrow agency in accordance with the court's preliminary approval.

Straumann Litigation

1 unchanged sentence

District Court for the Western District of Texas against ClearCorrect Operating, LLC, ClearCorrect Holdings., Inc.

and Institut Straumann AG (“Defendants”).

The complaint asserts claims of false advertising, unfair competition, civil conspiracy and infringement of Align patents related to aligner material, treatment planning, and intraoral scanner technologies.

Among other things, the complaint seeks relief enjoining Defendants’ infringement of multiple Align multilayer material patents through Defendants’ manufacture, sale and offer for sale of aligners made with Zendura FLX/ClearQuartz materials.

and Institut Straumann AG (collectively the “Defendants”).

The complaint asserts claims of false advertising, unfair competition, civil conspiracy and infringement of our patents related to aligner material, treatment planning, and intraoral scanner technologies.

Among other things, the complaint seeks relief enjoining Defendants’ infringement of multiple of our multilayer material patents through Defendants’ manufacture, sale and offer for sale of aligners made with Zendura FLX/ClearQuartz materials.

Defendants filed motions to dismiss the complaint, which are pending.

Defendants are also seeking to invalidate all of Align’s asserted patents at the district court and United States Patent and Trial Appeal Board.

On July 9, 2024, Defendants filed counterclaims against Align for alleged antitrust violations, false advertising, unfair competition and breach of contract.

Among other things, the counterclaims seek to stop Align’s accused business practices and money damages.

Defendants are also seeking to invalidate all of our asserted patents at the district court and United States Patent and Trial Appeal Board.

On July 9, 2024, Defendants filed counterclaims against us alleging antitrust violations, false advertising, unfair competition and breach of contract.

Among other things, the counterclaims seek to stop our alleged business practices and money damages.

On September 13, 2024, we filed a motion to dismiss Defendants’ counterclaims.

1 unchanged sentence

On February 21, 2025, we filed objections to the recommendation, which are pending before the district court judge.

A trial is scheduled for February 16, 2026.

A trial is scheduled for May 11, 2026.

We believe Defendants’ counterclaims are without merit and intend to vigorously defend ourselves.

5 unchanged sentences

Commitments and Contingencies

Beginning in the third quarter of 2023 and continuing through the first quarter of 2024, the Company received cumulative assessments of approximately $ 100 million from His Majesty’s Revenue and Customs (“HMRC”) for unpaid value added tax (“VAT”) related to certain clear aligner sales made during the period of October 2019 through May 2023.

Beginning in the third quarter of 2023 and continuing through the first quarter of 2024, we received cumulative assessments of approximately $ 100 million from His Majesty’s Revenue and Customs (“HMRC”) for unpaid value added tax (“VAT”) related to certain clear aligner sales made during the period of October 2019 through May 2023.

We were required to pay these assessments prior to contesting or litigating the matter in statutory appeal.

The Company has historically asserted and continues to assert that doctor prescribed clear aligners sold by dentists for the orthodontic treatment of patient malocclusions are exempt from VAT, that the Company has reasonably relied upon statements and guidance by HMRC and that the Company’s interpretation of United Kingdom legislation is appropriate.

We have historically asserted and continue to assert that doctor prescribed clear aligners sold by dentists for the orthodontic treatment of patient malocclusions are exempt from VAT, that we have reasonably relied upon statements and guidance by HMRC and that our interpretation of United Kingdom legislation is appropriate.

In October 2024, the Company and HMRC reached a settlement agreement regarding the unpaid VAT related to certain aligner sales made during the period of October 2019 through mid-October 2023.

As part of the settlement, HMRC agreed to vacate the judicial review (before the Administrative Court) originally scheduled for October 9th and October 10th, 2024, refund to the Company all assessments paid for the period of October 2019 through May 2023 and withdraw any potential assessments for the period from June 2023 through mid-October 2023.

HMRC has refunded to the Company all assessed amounts, approximately $ 100 million.

The Company has remaining exposure in the amount of approximately $ 6.0 million for periods up to December 2023.

HMRC has refunded to the Company the assessed amounts, approximately $ 100 million.

A statutory appeal (before the First-tier Tribunal - “Tax Tribunal”) was held on January 27th through January 30th, 2025.

On April 24, 2025, the Tax Tribunal issued a ruling in Align’s favor indicating that clear aligners are “dental prostheses for the

On April 24, 2025, the Tax Tribunal issued a ruling in our favor indicating that clear aligners are “dental prostheses for the

purposes of VAT”, which is a key condition for the VAT exemption.

HMRC has until June 19, 2025 to appeal the Tax Tribunal decision.

HMRC may also attempt to challenge the applicability of VAT on a different basis.

It is not possible at this stage to accurately evaluate the likelihood of an unfavorable outcome from the Tax Tribunal statutory appeal.

The Company has determined that a potential loss related to VAT accounted for in the periods up to December 2023 is not probable.

On June 13, 2025, HMRC applied for permission to appeal the Tax Tribunal decision, which was granted on July 15, 2025.

On August 1, 2025, we were notified that HMRC had lodged their grounds for appeal to the Upper Tribunal.

In August 2025 we stopped charging VAT to our United Kingdom customers.

It is not possible at this stage to accurately evaluate the likelihood of an unfavorable outcome from the Upper Tribunal statutory appeal, nor estimate a range of possible loss.

Indemnification Provisions

6 unchanged sentences

However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period.

As of March 31, 2025, we did not have any material indemnification claims that were probable or reasonably possible.

As of June 30, 2025, we did not have any material indemnification claims that were probable or reasonably possible.

Stockholders’ Equity

As of March 31, 2025, the Align Technology, Inc.

As of June 30, 2025, the Align Technology, Inc.

2005 Incentive Plan, as amended, has a total reserve of 32,168,895 shares, of which 1,893,259 shares are available for issuance.

Summary of Stock-Based Compensation Expense

The stock-based compensation related to our stock-based awards and employee stock purchase plan for the three months ended March 31, 2025 and 2024 is as follows (in thousands):

Stock-based compensation related to our stock-based awards and employee stock purchase plan for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Cost of net revenues $ 1,636 $ 2,582 $ 3,174 $ 4,646

3 unchanged sentences

Restricted Stock Units (“RSUs”)

The fair value of RSUs is based on our closing stock price on the date of grant.

RSUs granted generally vest over a period of four years .

A summary for the three months ended March 31, 2025 is as follows:

The fair value of RSUs is based on the closing price of our stock on the date of grant.

Generally, RSUs vest over a period of four years .

A summary for the six months ended June 30, 2025 is as follows:

Number of Shares

9 unchanged sentences

Forfeited ( 60 ) 292.10

Unvested as of March 31, 2025

Unvested as of June 30, 2025

1,328 $ 259.13 1.7 $ 251,343

As of March 31, 2025, we expect to recognize $ 293.0 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 3.1 years.

As of June 30, 2025, we expect to recognize $ 261.8 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 2.8 years.

Market-Performance Based Restricted Stock Units (“MSUs”)

1 unchanged sentence

Each MSU represents the right to one share of our common stock.

The actual number of MSUs which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of a stock market index over the vesting period.

MSUs vest over a period of three years and the maximum number of shares eligible to vest in the future is 250 % of the MSUs initially granted.

The following table summarizes the MSU performance activity for the three months ended March 31, 2025:

The actual number of MSUs which will be eligible to vest will be based on the performance of our stock price relative to the performance of a stock market index over the vesting period.

MSUs vest over a period of three years and the maximum number of shares eligible to vest is 250 % of the MSUs initially granted.

The following table summarizes the MSU performance activity for the six months ended June 30, 2025:

Number of Shares

10 unchanged sentences

Forfeited ( 10 ) 915.22

Unvested as of March 31, 2025

Unvested as of June 30, 2025

284 $ 506.66 1.8 $ 53,699

1 Includes MSUs vested during the period below 100 % of the original grant as actual shares released is based on Align ’ s stock performance relative to a market index over the vesting period.

As of March 31, 2025, we expect to recognize $ 78.6 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 2.1 years.

1 Includes MSUs vested during the period below 100 % of the original grant as actual shares released is based on our stock performance relative to a market index over the vesting period.

As of June 30, 2025, we expect to recognize $ 67.3 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 1.8 years.

Restricted Stock Units with Performance Conditions (“PSUs”)

1 unchanged sentence

We recognize share-based compensation expense for PSUs if it is probable that the performance condition will be achieved.

The following table summarizes the PSU performance activity for the three months ended March 31, 2025:

The following table summarizes the PSU performance activity for the six months ended June 30, 2025:

Number of Shares

7 unchanged sentences

Forfeited — —

Unvested as of March 31, 2025

Unvested as of June 30, 2025

6 $ 206.36 1.5 $ 1,193

As of March 31, 2025, we expect to recognize $ 0.9 million of total unamortized compensation costs, net of estimated forfeitures, related to PSUs over a weighted average period of 1.8 years.

As of June 30, 2025, we expect to recognize $ 0.8 million of total unamortized compensation costs, net of estimated forfeitures, related to PSUs over a weighted average period of 1.5 years.

Employee Stock Purchase Plan

As of March 31, 2025, we have 1,800,725 shares available for future issuance under the Align Technology, Inc.

As of June 30, 2025, we have 1,800,725 shares available for future issuance under the Align Technology, Inc.

2010 Employee Stock Purchase Plan (as amended and restated, the “2010 Purchase Plan”).

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

Three Months Ended

Six Months Ended

Expected term (in years) 1.1 0.9

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Weighted average fair value at grant date $ 70.62 $ 100.10

As of March 31, 2025, we expect to recognize $ 13.4 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.9 years.

As of June 30, 2025, we expect to recognize $ 9.7 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.7 years.

Common Stock Repurchase Programs

In January 2023, our Board of Directors authorized a plan to repurchase up to $ 1.0 billion of our common stock (“January 2023 Repurchase Program”).

The January 2023 Repurchase Program does not have an expiration date.

The following tables summarize the total repurchases of our common stock pursuant to Accelerated Share Repurchase (“ASR”) agreements and open market common stock repurchases under the January 2023 Repurchase Program:

Accelerated Share Repurchase Agreements

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Q4 2024 January 2023 $ 275.0 Q1 2025 1,241,509 $ 221.50

Q1 2025 January 2023 $ 129.0 N/A 1

753,993 $ 171.03

1 In May 2025, we completed the open market repurchase program initiated in Q1 2025.

In total we repurchased approximately 1.3 million shares of our common stock at an average price of $ 168 per share for an aggregate purchase price of approximately $ 225.0 million.

As of March 31, 2025 we had $ 96.0 million available for repurchase under the January 2023 Repurchase Program, which was used to repurchase shares through May 2, 2025.

These subsequent repurchases completed the January 2023 Repurchase Program.

In April 2025, our Board of Directors authorized a plan to repurchase up to $ 1.0 billion of our common stock (“April 2025 Repurchase Program”), none of which has been utilized.

Q1 2025 January 2023 $ 225.0 Q2 2025 1,339,124 $ 168.02

As of June 30, 2025 the January 2023 Repurchase Program was complete.

In April 2025, our Board of Directors authorized a plan to repurchase up to $ 1.0 billion of our common stock (the “April 2025 Repurchase Program”).

The April 2025 Repurchase Program is expected to be completed over a period of up to three years .

On August 5, 2025 we announced a plan to repurchase $ 200 million of our common stock through open market repurchases beginning in the third quarter of 2025 and continuing into the first quarter of 2026.

The number of shares to be repurchased and the average price per share are not determinable as of the filing of this Quarterly Report on Form 10-Q.

Upon completion of these open market repurchases the Company will have $ 800.0 million remaining available for repurchases under the April 2025 Repurchase Program.

Accounting for Income Taxes

Our provision for income taxes was $ 47.2 million and $ 53.4 million for the three months ended March 31, 2025 and 2024, respectively, representing effective tax rates of 33.6 % and 33.7 %, respectively.

Our effective tax rate differs from the statutory federal income tax rate of 21% for the three months ended March 31, 2025 and 2024 primarily due to the recognition of additional tax expense resulting from U.S.

Our provision for income taxes was $ 48.9 million and $ 47.3 million for the three months ended June 30, 2025 and 2024, respectively, representing effective tax rates of 28.2 % and 32.9 %, respectively.

Our provision for income taxes was $ 96.1 million and $ 100.7 million for the six months ended June 30, 2025 and 2024, respectively, representing effective tax rates of 30.6 % and 33.3 %.

Our effective tax rate differs from the statutory federal income tax rate of 21% for the three and six months

ended June 30, 2025 and 2024 primarily due to the recognition of additional tax expense resulting from U.S.

taxes on foreign earnings, foreign income taxed at different rates, state income taxes and non-deductible expenses in the U.S.

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Changes to the valuation allowance could have a material adverse effect on our results of operations.

Our total gross unrecognized tax benefits, excluding interest and penalties, were $ 147.4 million and $ 145.5 million as of March 31, 2025 and December 31, 2024, respectively, a material amount of which would impact our effective tax rate if recognized.

The increase in our unrecognized tax benefits relates primarily to positions taken on income tax return calculations finalized during the three months ended March 31, 2025.

Our total gross unrecognized tax benefits, excluding interest and penalties, were $ 149.6 million and $ 145.5 million as of June 30, 2025 and December 31, 2024, respectively, a material amount of which would impact our effective tax rate if recognized.

The increase in our unrecognized tax benefits relates primarily to positions taken on income tax return calculations finalized during the three and six months ended June 30, 2025.

On July 4, 2025, the United States enacted tax reform legislation commonly referred to as the One Big Beautiful Bill Act.

Included in this legislation are provisions that allow for the immediate expensing of certain domestic research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign operations.

We are currently evaluating the impact this legislation will have on our future results of operations, financial position and cash flows, if any.

Net Income per Share

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income $ 124,608 $ 96,564 $ 217,838 $ 201,592

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Anti-dilutive potential common shares 1

1 Represents approximately 964 thousand RSU weighted average outstanding common stock equivalent shares for the three months ended March 31, 2025 and approximately 569 thousand RSU and 2 thousand ESPP weighted average outstanding common stock equivalent shares for the three months ended March 31, 2024 that are excluded from the calculation of diluted net income per share as the effect would have been anti-dilutive.

1,505 1,149 1,377 648

1 Represents approximately 1,501.7 thousand RSU and 3.3 thousand ESPP weighted average outstanding common stock equivalent shares for the three months ended June 30, 2025 and approximately 1,374.6 thousand RSU and 2.2 thousand ESPP weighted-average outstanding common stock equivalent shares for the six months ended June 30, 2025.

Approximately 1,148.7 thousand RSU and 0.3 thousand ESPP weighted average outstanding common stock equivalent shares for the three months ended June 30, 2024 and approximately 647.8 thousand RSU and 0.1 thousand ESPP weighted-average outstanding common stock equivalent shares for the six months ended June 30, 2024 that are excluded from the calculation of diluted net income per share as the effect would have been anti-dilutive.

Supplemental Cash Flow Information

The supplemental cash flow information consists of the following (in thousands):

Three Months Ended

Six Months Ended

Non-cash investing and financing activities:

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Clear Aligner $ 804,617 $ 831,738 $ 1,601,460 $ 1,648,989

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Total segment income from operations $ 352,748 $ 370,416 $ 671,435 $ 706,347

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Stock-based compensation

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Systems and Services

9,302 8,070 17,771 14,908

Unallocated corporate expenses

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net revenues 1 :

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During the fourth quarter of 2023, we incurred approximately $ 14.0 million in restructuring expenses, of which $ 5.3 million remained unpaid and were included in Accrued liabilities as of December 31, 2023.

During the first quarter of 2024 , we reduced our December 31, 2023 restructuring liability by approximately $ 3.9 million, primarily due to cash payments.

During the first half of 2024 , we reduced our December 31, 2023 restructuring liability by approximately $ 5.1 million, primarily due to cash payments.

2024 Restructuring

During the fourth quarter of 2024, we initiated a restructuring plan to increase efficiencies across the organization which is expected to be completed in the second half of 2025.

We incurred approximately $ 37.0 million in restructuring expenses, of which $ 13.0 million remained unpaid and were included in Accrued liabilities as of December 31, 2024.

During the first quarter of 2025, we reduced our December 31, 2024 restructuring liability by approximately $ 11.0 million primarily due to cash payments, offset by approximately $ 2.1 million of additional restructuring expense recorded in Cost of net revenues.

We incurred approximately $ 37.0 million in restructuring expenses, of

which $ 13.0 million remained unpaid and were included in Accrued liabilities as of December 31, 2024.

During the first half of 2025, we reduced our December 31, 2024 restructuring liability by approximately $ 12.9 million primarily due to cash payments, offset by approximately $ 2.0 million of additional restructuring expense recorded in Cost of net revenues.

The 2023 and 2024 restructuring activities were primarily related to employee severance and other one-time post-employment benefits.

Activity related to the restructuring liabilities associated with our restructuring initiatives consist of the following (in thousands):

Three Months Ended

Six Months Ended

Balance at beginning of period 1

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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-Q

Item 1. Financial Statements