What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-06 · 228 added, 122 removed, 667 unchanged (34% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

Research and development 93,276 85,272 286,875 269,324

Restructuring and other charges 31,827 — 31,827 —

Legal settlement loss — 66 4,178 31,193

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net income $ 56,753 $ 115,963 $ 274,591 $ 317,555

Other comprehensive income (loss):

Other comprehensive income:

Change in foreign currency translation adjustment, net of tax 4,185 10,713 59,394 14,140

Change in unrealized gains (losses) on investments, net of tax — 159 — 605

Other comprehensive income (loss) 43,010 6,602 55,209 3,873

Other comprehensive income

4,185 10,872 59,394 14,745

Comprehensive income $ 60,938 $ 126,835 $ 333,985 $ 332,300

3 unchanged sentences

(in thousands, except per share data)

September 30,

2025 December 31,

5 unchanged sentences

Prepaid expenses and other current assets 174,114 198,582

Assets held for sale

Total current assets 2,534,094 2,492,441

32 unchanged sentences

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

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Shares Amount

Balance as of March 31, 2025

Balance as of June 30, 2025

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

5 unchanged sentences

Stock-based compensation — — 48,377 — — 48,377

Balance as of June 30, 2025

Balance as of September 30, 2025

72,040 $ 7 $ 1,475,146 $ 65,372 $ 2,416,933 $ 3,957,458

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

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Shares Amount

7 unchanged sentences

Stock-based compensation — — 141,582 — — 141,582

Balance as of June 30, 2025

Balance as of September 30, 2025

72,040 $ 7 $ 1,475,146 $ 65,372 $ 2,416,933 $ 3,957,458

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Shares Amount

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

4 unchanged sentences

Tax withholdings related to net share settlements of equity awards ( 2 ) — ( 370 ) — — ( 370 )

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

Stock-based compensation — — 49,039 — — 49,039

Balance as of June 30, 2024

Balance as of September 30, 2024

74,757 $ 7 $ 1,335,909 $ 35,913 $ 2,572,525 $ 3,944,354

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Shares Amount

9 unchanged sentences

Stock-based compensation — — 134,855 — — 134,855

Balance as of June 30, 2024

Balance as of September 30, 2024

74,757 $ 7 $ 1,335,909 $ 35,913 $ 2,572,525 $ 3,944,354

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Non-cash operating lease cost 29,504 28,603

Impairment loss on Assets held for sale

Impairment of equity investment 85 115

Other non-cash operating activities 29,349 6,931

24 unchanged sentences

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 34,502 6,008

Net decrease in cash, cash equivalents, and restricted cash

Net (decrease) increase in cash, cash equivalents, and restricted cash

( 39,155 ) 104,462

10 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 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.

The results of operations for the three and nine months ended September 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

4 unchanged sentences

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

In the third quarter of 2025, we committed to a plan to dispose of, other than by sale, specifically identified manufacturing assets prior to the end of their estimated useful lives.

We anticipate completing the disposition of these assets by December 31, 2025.

Accordingly, we have revised the estimated useful lives of these assets to reflect our use through the disposal date.

In the three and nine months ended September 30, 2025, we recorded $ 13.7 million of depreciation expense related to these assets.

The increase in depreciation expense negatively impacted Net income, net of tax, by $ 8.2 million or $ 0.11 per basic and diluted share and $ 9.2 million or $ 0.13 per basic and diluted share for the three and nine months ended September 30, 2025, respectively.

Certain Risks and Uncertainties

3 unchanged sentences

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

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

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

We purchase certain inventory from sole suppliers.

4 unchanged sentences

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 (“ASU 2023-07”), “Improvements to Reportable Segment Disclosures.

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

” 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 were effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

2 unchanged sentences

(ii) Recent Accounting Pronouncements Not Yet Effective

On September 18, 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software.” The amendments in this ASU simplify the accounting for internal-use software by eliminating the existing project development stages and introducing new guidance for evaluating the probable-to-complete threshold for capitalization.

The amendments in this ASU also require the application of ASC 360-10 disclosure requirements for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements.

The provisions of ASU 2025-06 are effective for all entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.

Early adoption is permitted.

The Company is evaluating the effect of this pronouncement on its annual consolidated financial statements.

On December 14, 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.

” The amendments in this ASU require a public entity to disclose in tabular format, using both percentages and reporting currency amounts, specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative

The amendments in this ASU also require taxes paid (net of refunds received) to be disaggregated by federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold.

For public business entities, the provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024.

There will be no impact to our consolidated balance sheets or statements of operations;

however, the Company is evaluating the effect of this pronouncement on our consolidated financial statement disclosures.

ASU 2023-09 will impact our accounting for income tax financial statement disclosure beginning with our annual report on Form 10-K for the year ending December 31, 2025, but will not impact our consolidated balance sheets, statements of operations or statements of cash flows.

We plan to adopt ASU 2023-09 on a prospective basis.

On November 4, 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures.

6 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 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

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

September 30, 2025 Amortized

Losses Fair Value Cash and Cash Equivalents

Cash $ 797,412 $ — $ — $ 797,412 $ 797,412

5 unchanged sentences

December 31, 2024 Amortized

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

Losses Fair Value Cash and Cash Equivalents

Cash $ 752,423 $ — $ — $ 752,423 $ 752,423

1 unchanged sentence

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

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

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

Fair Value Measurements

7 unchanged sentences

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 June 30, 2025 and December 31, 2024 (in thousands):

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

Description Balance as of

June 30, 2025

September 30, 2025

Cash equivalents:

12 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 $ 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.

Total accounts receivable sold under factoring arrangements were $ 10.0 million and $ 8.2 million during the three months ended September 30, 2025 and 2024, respectively, and $ 34.6 million and $ 34.2 million during the nine months ended September 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.

11 unchanged sentences

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

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 or six months ended June 30, 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 $ 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.

As a result of the settlement of foreign currency forward contracts, we recognized a net gain of $ 3.3 million and a net loss of $ 24.5 million during the three months ended September 30, 2025 and 2024, respectively, and a net loss of $ 35.3 million and a net gain $ 2.7 million, respectively, during the nine months ended September 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

As of September 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 September 30, 2025 and December 31, 2024 (in thousands):

September 30, 2025

Local Currency Amount Notional Contract Amount (USD)

1 unchanged sentence

Canadian Dollar C$ 82,500 59,356

Polish Zloty PLN 188,000 51,876

British Pound £ 39,700 53,324

Chinese Yuan ¥ 251,400 35,183

Polish Zloty PLN 175,000 48,036

Israeli Shekel ILS 94,100 28,452

3 unchanged sentences

New Taiwan Dollar NT$ 106,300 3,482

New Zealand Dollar NZ$ 5,900 3,579

Australian Dollar A$ 4,800 3,177

Czech Koruna Kč 70,000 3,329

New Zealand Dollar NZ$ 4,300 2,495

Korean Won ₩ 3,200,000 2,283

Chinese Yuan ¥ 15,000 2,108

Total notional contract amount $ 436,164

18 unchanged sentences

Inventories consist of the following (in thousands):

September 30,

2025 December 31,

3 unchanged sentences

Total inventories $ 228,161 $ 254,287

During the three months ended September 30, 2025, we recognized an impairment loss on inventory of $ 14.9 million to adjust our inventory balance to its net realizable value.

This loss was recorded in Cost of net revenues in our Condensed Consolidated Statements of Operations.

Prepaid expenses and other current assets consist of the following (in thousands):

September 30,

2025 December 31,

4 unchanged sentences

Accrued liabilities consist of the following (in thousands):

September 30,

2025 December 31,

8 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):

Six Months Ended

Nine Months Ended

September 30,

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

3 unchanged sentences

Deferred revenues consist of the following (in thousands):

September 30,

2025 December 31,

2 unchanged sentences

84,424 102,164

Total deferred revenues

$ 1,379,047 $ 1,433,310

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

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.

During the three months ended September 30, 2025 and 2024, we recognized $ 995.7 million and $ 977.9 million of net revenues, respectively, of which $ 200.0 million and $ 199.0 million was included in the deferred revenues balance at December 31, 2024 and 2023, respectively.

During the nine months ended September 30, 2025 and 2024, we recognized $ 2,987.4 million and $ 3,003.8 million of net revenues, respectively, of which $ 675.3 million and $ 658.2 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 September 30, 2025 were $ 1,383.3 million.

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

32 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 .

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

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.

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

3 unchanged sentences

Goodwill and Intangible Assets

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):

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

Clear Aligner Systems and Services Total

3 unchanged sentences

11,547 37,339 48,886

Balance as of June 30, 2025

Balance as of September 30, 2025

$ 164,192 $ 327,324 $ 491,516

3 unchanged sentences

(in years) Gross Carrying Amount as of

June 30, 2025

September 30, 2025

Amortization Accumulated

Impairment Loss Net Carrying

June 30, 2025

September 30, 2025

Existing technology 11 $ 146,651 $ ( 63,426 ) $ — $ 83,225

19 unchanged sentences

Total intangible assets, net $ 103,488

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

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

Fiscal Year Ending December 31, Amortization

2 unchanged sentences

Total $ 95,170

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.

Amortization expense for the three months ended September 30, 2025 and 2024 was $ 4.8 million and $ 4.6 million, and amortization expense for the nine months ended September 30, 2025 and 2024 was $ 14.0 million and $ 14.2 million, respectively.

Credit Facility

2 unchanged sentences

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.

As of September 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

Antitrust Class Actions

On June 5, 2020, a dental practice named Simon and Simon, PC (doing business as City Smiles) brought an antitrust action in the U.S.

On June 5, 2020, a dental practice, Simon and Simon, PC (doing business as City Smiles), brought an antitrust action in the U.S.

District Court for the Northern District of California on behalf of itself and a putative class of similarly situated practices 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.

15 unchanged sentences

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.

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.

2 unchanged sentences

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 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.

During the quarter ended September 30, 2025, Align issued a payment for the full settlement amount, $ 31.75 million, consisting of $ 27.5 million accrued as of December 31, 2024 and an additional loss accrual of $ 4.25 million in the first quarter of 2025, to an escrow agency in accordance with the court's preliminary approval.

Straumann Litigation

2 unchanged sentences

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.

The complaint asserted 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.

On August 29, 2025 Align filed an amended complaint for damages and injunctive relief.

On September 12, 2025, Defendants filed a motion to dismiss the amended complaint.

That motion to dismiss remains pending.

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.

On February 7, 2025, the magistrate judge recommended denial of the motion to dismiss.

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

A trial is scheduled for May 11, 2026.

Among other things, the counterclaims seek injunctive relief and money damages.

On August 29, 2025, Defendants filed amended counterclaims, which additionally allege that Align procured certain materials patents by fraud.

On September 26, 2025, Align filed a motion to dismiss the amended counterclaims.

That motion remains pending.

On April 10, 12 and 14, 2025, the Defendants filed eight inter partes review (“IPR”) petitions with the United States Patent Trial and Appeal Board (“PTAB”), alleging that eight of the patents asserted by Align against the Defendants are unpatentable.

On October 23, 2025, the PTAB issued decisions denying institution of two of Defendants eight IPRs.

On October 23, 2025, the PTAB issued a decision instituting proceedings on one of the IPRs.

Decisions on the remaining five IPRs are expected on or before November 8, 2025.

We believe the petitions are without merit and intend to defend ourselves vigorously.

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

We are currently unable to predict the outcome of this lawsuit and cannot determine the likelihood of loss nor estimate a range of possible loss.

We are currently unable to predict the outcome of this lawsuit and cannot determine the likelihood of loss, if any, nor estimate a range of possible loss.

Angelalign Technology, Inc.

On August 15, 2025, we initiated two actions in the European Union Patent Court against Angelalign Technology, Inc.;

Angelalign France Technology SASU;

Europe Angelalign Technology B.V.;

Angelalign Technology (Germany) GmbH;

Italy Angelalign Technology S.R.L.;

Shanghai EA Medical Instruments Co., Ltd.

(collectively the “Defendants”) for infringing certain patens related to use interface and attachments.

The Defendants responded in one action on October 23, 2025, and have yet to respond to the other.

On August 18, 2025, we filed a lawsuit in the U.S.

District Court for the Eastern District of Texas against Angelalign Technology Inc., Wuxi EA Medical Instruments Technologies Ltd., Wuxi EA Bio-Tech Co., Ltd., and Shanghai EA Medical Instruments Co., Ltd (collectively the “Defendants”).

The complaint alleges that the Defendants infringed our patents related to multilayer materials, bite ramps, and power ridges.

Defendants have not yet responded to the complaint.

On August 18, 2025, we initiated two actions in the China Intermediate People’s Court against Shanghai Angelalign Medical Devices Co., Ltd., Wuxi Angelalign Medical Device Technology Co., Ltd., and Wuxi Angelalign Biotechnology Co., Ltd (collectively the “Chinese Defendants”) for infringing patents related to attachments and force-based treatment planning.

On September 10, 2025, we filed another action against the Chinese Defendants alleging infringement of our patent related to extraction site closure.

The Chinese Defendants have yet to respond to the complaints.

On September 23, 2025, we filed a complaint at the U.S.

International Trade Commission (“ITC”) against Angelalign Technology Inc., Wuxi EA Medical Instruments Technologies Ltd., Wuxi EA Bio-Tech Co., Ltd., Shanghai EA Medical Instruments Co., Ltd., and USA Angelalign Technology Corp.

(collectively, “Respondents”).

The complaint alleges that Respondents are violating 19 U.S.C.

§ 1337 (“Section 337”) through unlawful and unauthorized importation and sale of clear aligners that infringe claims of our patents related to multilayer materials, bite ramps, and power ridges.

The complaint seeks an exclusion order blocking Respondents’ importation of the infringing clear aligners into the U.S., and a cease-and-desist order prohibiting Respondent from selling, marketing, and transferring the infringing clear aligners within the U.S.

The ITC has yet to institute this investigation and has ceased regular operations during the government shutdown.

Respondents have yet to appear.

On August 22, 2025, Shanghai Angelalign Medical Devices Co., Ltd.

and Wuxi Angelalign Medical Devices Technology Co., Ltd.

filed a legal action against us in the Beijing Intellectual Property Court.

The complaint alleges that we violate an Angelalign patent claim relating to undercut detection for mold manufacturing and seeks money damages and injunctive relief.

We believe the case is without merit and intend to defend ourselves vigorously.

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

In addition to the above, in the ordinary course of our operations, we are involved in a variety of claims, suits, investigations and proceedings, including actions with respect to intellectual property claims, patent infringement claims, government investigations, labor and employment claims, breach of contract claims, tax and other matters.

10 unchanged sentences

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 our favor indicating that clear aligners are “dental prostheses for the

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

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.

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.

On August 1, 2025, HMRC lodged their grounds for appeal to the Upper Tribunal.

A hearing in front of the Upper Tribunal has been scheduled for May 2026.

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

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

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

Stockholders’ Equity

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

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

2005 Incentive Plan, as amended, has a total reserve of 34,668,895 shares, of which 4,542,079 shares are available for issuance.

Summary of Stock-Based Compensation Expense

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):

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

6 unchanged sentences

Generally, RSUs vest over a period of four years .

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

A summary for the nine months ended September 30, 2025 is as follows:

Number of Shares

9 unchanged sentences

Forfeited ( 99 ) 280.42

Unvested as of June 30, 2025

Unvested as of September 30, 2025

1,290 $ 258.36 1.5 $ 161,601

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.

As of September 30, 2025, we expect to recognize $ 226.3 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 2.6 years.

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

3 unchanged sentences

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:

The following table summarizes the MSU performance activity for the nine months ended September 30, 2025:

Number of Shares

10 unchanged sentences

Forfeited ( 27 ) 638.92

Unvested as of June 30, 2025

Unvested as of September 30, 2025

263 $ 507.88 1.6 $ 32,997

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.

As of September 30, 2025, we expect to recognize $ 52.1 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 1.6 years.

Restricted Stock Units with Performance Conditions (“PSUs”)

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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 six months ended June 30, 2025:

The following table summarizes the PSU performance activity for the nine months ended September 30, 2025:

Number of Shares

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Forfeited — —

Unvested as of June 30, 2025

Unvested as of September 30, 2025

6 $ 206.36 1.3 $ 789

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.

As of September 30, 2025, we expect to recognize $ 0.6 million of total unamortized compensation costs, net of estimated forfeitures, related to PSUs over a weighted average period of 1.3 years.

Employee Stock Purchase Plan

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

As of September 30, 2025, we have 1,728,664 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:

Six Months Ended

Nine Months Ended

September 30,

Expected term (in years) 1.2 1.3

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Weighted average fair value at grant date $ 64.94 $ 94.70

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.

As of September 30, 2025, we expect to recognize $ 16.1 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.9 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 following tables summarize the total repurchases of our common stock pursuant to Accelerated Share Repurchase (“ASR”) agreements and open market common stock repurchases ("OMR") under the January 2023 Repurchase Program:

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

The January 2023 Repurchase Program was completed in its entirely in the second quarter of 2025.

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 .

As of September 30, 2025, we have $ 928.4 million remaining available for repurchase under the April 2025 Repurchase Program.

The following tables summarize the total repurchases of our common stock pursuant to Accelerated Share Repurchase (“ASR”) agreements and Open Market Repurchase (“OMR”) programs under the January 2023 and April 2025 Repurchase Programs:

Accelerated Share Repurchase Agreements

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Q4 2023 January 2023 $ 250.0 Q1 2024 1,086,334 $ 230.13

Open Market Common Stock Repurchases

Open Market Repurchases

Date Repurchase

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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.

April 2025 $ 71.6 N/A 1

523,203 $ 136.77

1 On August 5, 2025, we initiated a $ 200 million open market repurchase program which is expected to be completed in January 2026.

The total 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.

The amount paid, total shares received and average price per share per the table above are determined as of September 30, 2025.

Accounting for Income Taxes

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.

Our provision for income taxes was $ 38.0 million and $ 50.0 million for the three months ended September 30, 2025 and 2024, respectively, representing effective tax rates of 40.1 % and 30.1 %, respectively.

Our provision for income taxes was $ 134.1 million and $ 150.6 million for the nine months ended September 30, 2025 and 2024, respectively, representing effective tax rates of 32.8 % and 32.2 %.

Our effective tax rate differs from the statutory federal income tax rate of 21% for the three and nine months ended September 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 $ 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.

Our total gross unrecognized tax benefits, excluding interest and penalties, were $ 150.9 million and $ 145.5 million as of September 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 nine months ended September 30, 2025.

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

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.

In the third quarter of 2025, the period of enactment, we included the impact of the OBBBA tax legislation in our results of operations and financial position, which were not material.

Net Income per Share

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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1,321 1,173 1,273 689

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.

1 Represents approximately 1,320.9 thousand RSU for the three months ended September 30, 2025 and approximately 1,273.3 thousand RSU and 0.1 thousand ESPP weighted-average outstanding common stock equivalent shares for the nine months ended September 30, 2025.

Approximately 1,169.7 thousand RSU and 3.1 thousand ESPP weighted average outstanding common stock equivalent shares for the three months ended September 30, 2024 and approximately 687.7 thousand RSU and 0.8 thousand ESPP weighted-average outstanding common stock equivalent shares for the nine months ended September 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):

Six Months Ended

Nine Months Ended

September 30,

Non-cash investing and financing activities:

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We report segment information based on the management approach.

The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, for decision making and performance assessment as the basis for determining our reportable segments.

The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, for decision making and

performance assessment as the basis for determining our reportable segments.

We group our operations into two reportable segments;

Clear Aligner segment and Imaging Systems and CAD/CAM services (“Systems and Services”) segment, which are based on our predominant product lines.

Our CODM uses gross profit and income from operations to assess each reportable segments performance, by reviewing each measure against internal forecasts and historical performance.

Our CODM may also benchmark each segments performance against our competitors and external expectations.

Our CODM uses gross profit and income from operations to assess each reportable segment's performance, by reviewing each measure against internal forecasts and historical performance.

Our CODM may also benchmark each segment's performance against our competitors and external expectations.

Summarized financial information by reportable segment is as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Long-lived assets, which includes Property, plant and equipment, net and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):

September 30,

2025 December 31,

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

As of December 31, 2024, we had no remaining restructuring liability related to the 2023 Restructuring.

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 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):

Six Months Ended

During the fourth quarter of 2024, 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.

For the nine months ended September 30, 2025, we reduced our December 31, 2024 restructuring liability by approximately $ 14.6 million primarily due to cash payments, offset by approximately $ 2.1 million of additional restructuring expense recorded in Cost of net revenues.

The 2023 and 2024 restructuring charges were primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.

2025 Restructuring

During the third quarter of 2025, we initiated a plan to realign certain business groups and reduce our global workforce.

This plan represents our continued effort to right size our labor force with the current macroeconomic environment.

We anticipate incurring between $ 40.0 million and $ 50.0 million in total restructuring expenses, primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.

We recorded $ 4.8 million in Cost of net revenues and $ 31.8 million in Restructuring and other charges in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025.

All charges recorded to Cost of net revenues were allocated to our Clear Aligner reportable segment and all charges recorded to Restructuring and other charges were unallocated corporate expenses.

As of September 30, 2025, $ 32.0 million remained unpaid and was included in Accrued liabilities in our Condensed Consolidated Balance Sheets.

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

For the twelve months ended December 31, 2024

2023 Restructuring 2024 Restructuring Total

Balance at beginning of period 1

$ 5,299 $ — $ 5,299

Restructuring charges

Restructuring and other charges

( 598 ) 36,991 36,393

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$ — $ 13,001 $ 13,001

For the nine months ended September 30, 2025

2024 Restructuring 2025 Restructuring 2

Balance at beginning of period 1

$ 13,001 $ — $ 13,001

Restructuring and other charges

2,056 36,619 38,675

Cash payments and adjustments

( 14,569 ) ( 4,659 ) ( 19,228 )

Balance at end of period 1

$ 488 $ 31,960 $ 32,448

1 Included in “Accrued liabilities” within our Condensed Consolidated Balance Sheets.

2 2025 restructuring activities include an immaterial amount of charges for non post-employment benefit related restructuring expense.

Assets Held for Sale

In connection with the 2025 Restructuring activities, refer to Note 15 “Restructuring and Other Charges” , we have undertaken additional actions to optimize our manufacturing footprint.

These actions include disposing, either by sale or other than by sale, of certain capital assets, including various manufacturing assets and facilities.

For discussion of assets disposed of other than by sale refer to Note 1 “Summary of Significant Accounting Policies."

ASC Topic 360-10, Property, Plant and Equipment - Overall, requires a long-lived asset to be classified as “held for sale” in the period in which certain criteria are met.

The Company classifies real estate assets as held for sale after the following conditions have been satisfied:

(1) management, having the appropriate authority, commits to a plan to sell the asset, (2) the asset is available for immediate sale in its present condition, (3) the Company has initiated an active program to sell the asset, (4) it is probable the sale of the asset will be completed within one year, (5) the asset is being actively marketed for a reasonable price, and (6) it is unlikely the plan to sell the asset will significantly change.

At the time the Company classifies a property as held for sale, the Company ceases recording depreciation.

An asset classified as held for sale is measured and reported at the lower of its carrying amount or its estimated fair value less cost to sell.

During the third quarter of 2025, the Company committed to a plan to sell a manufacturing facility, including land, building and building improvements (collectively the “disposal group”), located in Juarez, Mexico and determined the disposal group met the criteria for classification as held for sale as of September 30, 2025.

As of September 30, 2025, the Company classified the disposal group as “Assets held for sale” in our Condensed Consolidated Balance Sheets, for $ 27.9 million, which represents the disposal group’s fair value less estimated costs to sell.

Fair value of the disposal group was determined utilizing two equally weighted valuation techniques, the Direct Capitalization and Direct Comparison methods.

The Direct Capitalization method utilizes various inputs, including estimated market rents, vacancy rates and operating expenses, to determine an estimated net operating income, and a capitalization rate.

The Direct Comparison method utilizes sales of comparable properties, adjusted for property differences such as location, physical characteristics and market conditions.

We recognized an impairment loss on assets held for sale of $ 23.1 million, recorded to Cost of net revenues in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025.

The entire impairment loss was attributable to our Clear Aligner reportable segment.

The sale of the disposal group is expected to be completed within the next 12 months.

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