ALIGN TECHNOLOGY INC 10-Q

Item 1. Financial Statements. ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues $ 995,692 $ 977,872 $ 2,987,403 $ 3,003,793 Cost of net revenues 356,491 296,098 959,977 901,575 Gross profit 639,201 681,774 2,027,426 2,102,218 Operating expenses: Selling, general and administrative 417,800 434,138 1,314,115 1,338,222 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 Total operating expenses 542,903 519,476 1,636,995 1,638,739 Income from operations 96,298 162,298 390,431 463,479 Interest income and other income (expense), net: Interest income 3,249 4,003 11,424 11,696 Other income (expense), net ( 4,813 ) ( 371 ) 6,837 ( 6,993 ) Total interest income and other income (expense), net ( 1,564 ) 3,632 18,261 4,703 Net income before provision for income taxes 94,734 165,930 408,692 468,182 Provision for income taxes 37,981 49,967 134,101 150,627 Net income $ 56,753 $ 115,963 $ 274,591 $ 317,555 Net income per share: Basic $ 0.78 $ 1.55 $ 3.77 $ 4.23 Diluted $ 0.78 $ 1.55 $ 3.77 $ 4.23 Shares used in computing net income per share: Basic 72,377 74,736 72,831 75,031 Diluted 72,419 74,757 72,880 75,149 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 3 Table of Contents ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (unaudited) Three 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: 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 4,185 10,872 59,394 14,745 Comprehensive income $ 60,938 $ 126,835 $ 333,985 $ 332,300 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 4 Table of Contents ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,004,589 $ 1,043,887 Accounts receivable, net of allowance for doubtful accounts of $ 28,250 and $ 19,131 , respectively 1,099,372 995,685 Inventories 228,161 254,287 Prepaid expenses and other current assets 174,114 198,582 Assets held for sale 27,858 — Total current assets 2,534,094 2,492,441 Property, plant and equipment, net 1,184,554 1,271,134 Operating lease right-of-use assets, net 115,038 113,376 Goodwill 491,516 442,630 Intangible assets, net 98,716 103,488 Deferred tax assets 1,555,580 1,557,372 Other assets 254,054 234,159 Total assets $ 6,233,552 $ 6,214,600 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 125,550 $ 108,693 Accrued liabilities 546,293 598,188 Deferred revenues 1,294,623 1,331,146 Total current liabilities 1,966,466 2,038,027 Income tax payable 110,595 96,466 Operating lease liabilities 87,278 88,214 Other long-term liabilities 111,755 139,908 Total liabilities 2,276,094 2,362,615 Commitments and contingencies (Note 7 and Note 8) Stockholders’ equity: Preferred stock, $ 0.0001 par value ( 5,000 shares authorized; none issued) — — Common stock, $ 0.0001 par value ( 200,000 shares authorized; 72,040 and 73,849 issued and outstanding, respectively) 7 7 Additional paid-in capital 1,475,146 1,362,234 Accumulated other comprehensive income (loss), net 65,372 5,978 Retained earnings 2,416,933 2,483,766 Total stockholders’ equity 3,957,458 3,851,985 Total liabilities and stockholders’ equity $ 6,233,552 $ 6,214,600 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 5 Table of Contents ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (unaudited) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total Three Months Ended September 30, 2025 Shares Amount Balance as of June 30, 2025 72,486 $ 7 $ 1,426,541 $ 61,187 $ 2,425,044 $ 3,912,779 Net income — — — — 56,753 56,753 Net change in foreign currency translation adjustment — — — 4,185 — 4,185 Issuance of common stock relating to employee equity compensation plans 80 — 7,839 — — 7,839 Tax withholdings related to net share settlements of equity awards ( 3 ) — ( 402 ) — — ( 402 ) Common stock repurchased and retired ( 523 ) — ( 7,209 ) — ( 64,864 ) ( 72,073 ) Stock-based compensation — — 48,377 — — 48,377 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 Nine Months Ended September 30, 2025 Shares Amount Balance as of December 31, 2024 73,849 $ 7 $ 1,362,234 $ 5,978 $ 2,483,766 $ 3,851,985 Net income — — — — 274,591 274,591 Net change in foreign currency translation adjustment — — — 59,394 — 59,394 Issuance of common stock relating to employee equity compensation plans 488 — 21,748 — — 21,748 Tax withholdings related to net share settlements of equity awards ( 103 ) — ( 20,232 ) — — ( 20,232 ) Common stock repurchased and retired ( 2,194 ) — ( 30,186 ) — ( 341,424 ) ( 371,610 ) Stock-based compensation — — 141,582 — — 141,582 Balance as of September 30, 2025 72,040 $ 7 $ 1,475,146 $ 65,372 $ 2,416,933 $ 3,957,458 6 Table of Contents Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total Three Months Ended September 30, 2024 Shares Amount Balance as of June 30, 2024 74,696 $ 7 $ 1,276,298 $ 25,041 $ 2,456,562 $ 3,757,908 Net income — — — — 115,963 115,963 Net change in unrealized gains (losses) from investments — — — 159 — 159 Net change in foreign currency translation adjustment — — — 10,713 — 10,713 Issuance of common stock relating to employee equity compensation plans 63 — 10,942 — — 10,942 Tax withholdings related to net share settlements of equity awards ( 2 ) — ( 370 ) — — ( 370 ) Stock-based compensation — — 49,039 — — 49,039 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 Nine Months Ended September 30, 2024 Shares Amount Balance as of December 31, 2023 75,075 $ 7 $ 1,162,140 $ 21,168 $ 2,447,174 $ 3,630,489 Net income — — — — 317,555 317,555 Net change in unrealized gains (losses) from investments — — — 605 — 605 Net change in foreign currency translation adjustment — — — 14,140 — 14,140 Issuance of common stock relating to employee equity compensation plans 408 — 25,281 — — 25,281 Tax withholdings related to net share settlements of equity awards ( 92 ) — ( 27,972 ) — — ( 27,972 ) Common stock repurchased and retired ( 634 ) — ( 7,922 ) — ( 142,677 ) ( 150,599 ) Equity forward contract related to accelerated stock repurchase — — 49,527 — ( 49,527 ) — Stock-based compensation — — 134,855 — — 134,855 Balance as of September 30, 2024 74,757 $ 7 $ 1,335,909 $ 35,913 $ 2,572,525 $ 3,944,354 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 7 Table of Contents ALIGN TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited ) Nine Months Ended September 30, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 274,591 $ 317,555 Adjustments to reconcile net income to net cash provided by operating activities: Deferred taxes ( 9,409 ) 17,465 Depreciation and amortization 135,441 106,905 Stock-based compensation 141,582 134,855 Non-cash operating lease cost 29,504 28,603 Impairment loss on Assets held for sale 23,142 — Impairment of equity investment 85 115 Other non-cash operating activities 29,349 6,931 Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable ( 117,709 ) ( 135,239 ) Inventories 3,055 32,304 Prepaid expenses and other assets ( 4,053 ) ( 26,283 ) Accounts payable 6,729 ( 13,283 ) Accrued and other long-term liabilities ( 67,730 ) 47,618 Long-term income tax payable 14,130 ( 5,186 ) Deferred revenues ( 88,661 ) ( 60,207 ) Net cash provided by operating activities 370,046 452,153 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired — ( 77,075 ) Purchase of property, plant and equipment ( 66,529 ) ( 92,619 ) Proceeds from maturities of marketable securities — 25,660 Proceeds from sales of marketable securities — 18,193 Purchase of equity investments ( 10,000 ) ( 75,390 ) Other investing activities — 235 Net cash used in investing activities ( 76,529 ) ( 200,996 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 21,749 25,281 Common stock repurchases, net of excise tax ( 368,691 ) ( 150,012 ) Payroll taxes paid upon the vesting of equity awards ( 20,232 ) ( 27,972 ) Net cash used in financing activities ( 367,174 ) ( 152,703 ) Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 34,502 6,008 Net (decrease) increase in cash, cash equivalents, and restricted cash ( 39,155 ) 104,462 Cash, cash equivalents and restricted cash at beginning of the period 1,044,963 938,519 Cash, cash equivalents and restricted cash at end of the period $ 1,005,808 $ 1,042,981 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 8 Table of Contents ALIGN TECHNOLOGY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1. Summary of Significant Accounting Policies Basis of Presentation and Preparation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, the “Company” or “Align”) on a consistent basis with the audited Consolidated Financial Statements for the year ended December 31, 2024, and contain all adjustments, including normal recurring adjustments, necessary to fairly state the information set forth herein. These unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosures necessary to present the unaudited Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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 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 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition and deferred revenues, useful lives of intangible assets and property, plant and equipment, goodwill, income taxes, contingent liabilities, the fair values of financial instruments, stock-based compensation and the valuation of investments in privately held companies among others. 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 Financial instruments which potentially expose the Company to concentration of credit risk, consist principally of cash and cash equivalents. These instruments have minimal credit risk exposures. Management regularly monitors their compositions and maturities. The Company maintains its cash and cash equivalents in bank accounts that exceed federally insured FDIC limits. Through September 30, 2025, the Company has not experienced any material credit losses on such deposits. We purchase certain inventory from sole suppliers. Additionally, we rely on a limited number of hardware manufacturers. The inability of any supplier or manufacturer to fulfill our supply requirements could materially and adversely impact our future operating results. Recent Accounting Pronouncements (i) New Accounting Pronouncements Recently Adopted 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 9 Table of Contents 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. We adopted this standard in the fiscal year ended December 31, 2024 . See Note 14 “ Segments and Geographical Information.” (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 threshold. 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. 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. ” The amendments in this ASU require a public entity to disclose, in the notes to the financial statements, specified information about certain costs and expenses, including the amounts of inventory purchases, employee compensation, depreciation and intangible asset amortization. For public business entities, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. 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. 10 Table of Contents Note 2. Financial Instruments 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 September 30, 2025 and Consolidated Balance Sheets as of December 31, 2024 (in thousands): Reported as: September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Cash $ 797,412 $ — $ — $ 797,412 $ 797,412 Money market funds 190,785 — — 190,785 190,785 Certificate of deposits 16,392 — — 16,392 16,392 Total $ 1,004,589 $ — $ — $ 1,004,589 $ 1,004,589 Reported as: December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Cash and Cash Equivalents Cash $ 752,423 $ — $ — $ 752,423 $ 752,423 Money market funds 291,464 — — 291,464 291,464 Total $ 1,043,887 $ — $ — $ 1,043,887 $ 1,043,887 We had no short-term or long-term marketable securities as of September 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 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. The three levels of inputs that may be used to measure fair value: Level 1 — Inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly. 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 September 30, 2025 and December 31, 2024 (in thousands): Description Balance as of September 30, 2025 Level 1 Cash equivalents: Money market funds $ 190,785 $ 190,785 Certificate of deposits 16,392 16,392 Total $ 207,177 $ 207,177 11 Table of Contents Description Balance as of December 31, 2024 Level 1 Cash equivalents: Money market funds $ 291,464 $ 291,464 Total $ 291,464 $ 291,464 Accounts Receivable Factoring We enter into factoring transactions on a non-recourse basis with financial institutions to sell certain of our non-U.S. accounts receivable. 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 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. Investments in Privately Held Companies Our investments in privately held companies in which we cannot exercise significant influence and do not own a majority equity interest or otherwise control are accounted for as investments in equity securities. We have elected to account for all investments in equity securities in accordance with the measurement alternative. Under the measurement alternative, we record the value of our investments in equity securities at cost, minus impairment, if any. Additionally, we adjust the carrying value of our investments in equity securities for observable transactions for identical or similar investments of the same issuer. On April 24, 2023 and April 22, 2024, we entered into Subscription Agreements (the “Subscription Agreements”) with Heartland Dental Holding Corporation (“Heartland”). Pursuant to the Subscription Agreements we acquired less than a 5 % equity interest in Heartland through the purchase of Class A Common Stock for $ 150 million in total. 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 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 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. 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 nine months ended September 30, 2025. Our investments in privately held companies in which we can exercise significant influence are accounted for as equity method investments. We have elected to account for our equity method investments under the fair value option. The carrying value of our investments in equity securities and equity method investments are reported in our Condensed Consolidated Balance Sheets as Other assets and any price adjustments or impairment, if any, are recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations. Derivatives Not Designated as Hedging Instruments We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain assets and liabilities. 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 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 September 30, 2025 and December 31, 2024, the fair value of outstanding foreign exchange forward contracts was no t material. 12 Table of Contents 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) Euro € 159,000 $ 186,840 Canadian Dollar C$ 82,500 59,356 British Pound £ 39,700 53,324 Polish Zloty PLN 175,000 48,036 Israeli Shekel ILS 94,100 28,452 Japanese Yen ¥ 3,300,000 22,374 Brazilian Real R$ 92,300 17,189 Swiss Franc CHF 5,600 7,048 New Taiwan Dollar NT$ 106,300 3,482 Australian Dollar A$ 4,800 3,177 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 December 31, 2024 Local Currency Amount Notional Contract Amount (USD) Euro € 176,080 $ 183,172 Polish Zloty PLN 283,000 68,633 Canadian Dollar C$ 97,000 67,446 British Pound £ 37,600 47,090 Israeli Shekel ILS 90,055 24,740 Chinese Yuan ¥ 164,500 22,417 Brazilian Real R$ 83,100 13,327 Japanese Yen ¥ 2,000,000 12,778 Swiss Franc CHF 5,700 6,314 New Zealand Dollar NZ$ 7,000 3,924 Czech Koruna Kč 72,800 3,004 Australian Dollar A$ 3,800 2,355 New Taiwan Dollar NT$ 58,700 1,786 Korean Won ₩ 2,000,000 1,361 Total notional contract amount $ 458,347 Note 3. Balance Sheet Components Inventories consist of the following (in thousands): September 30, 2025 December 31, 2024 Raw materials $ 97,264 $ 124,377 Work in process 63,097 73,660 Finished goods 67,800 56,250 Total inventories $ 228,161 $ 254,287 13 Table of Contents 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, 2024 Value added tax receivables $ 41,190 $ 34,028 Prepaid expenses 75,884 82,978 Other current assets 57,040 81,576 Total prepaid expenses and other current assets $ 174,114 $ 198,582 Accrued liabilities consist of the following (in thousands): September 30, 2025 December 31, 2024 Accrued payroll and benefits $ 210,499 $ 248,003 Accrued expenses 62,177 66,391 Accrued income taxes 39,522 48,808 Accrued sales and marketing expenses 34,247 37,617 Current operating lease liabilities 33,993 31,063 Accrued property, plant and equipment 8,411 13,462 Other accrued liabilities 157,444 152,844 Total accrued liabilities $ 546,293 $ 598,188 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): Nine Months Ended September 30, 2025 2024 Balance at beginning of period $ 31,211 $ 22,426 Charged to cost of net revenues 12,596 14,658 Actual warranty expenditures ( 9,108 ) ( 9,889 ) Balance at end of period $ 34,699 $ 27,195 Deferred revenues consist of the following (in thousands): September 30, 2025 December 31, 2024 Deferred revenues - current $ 1,294,623 $ 1,331,146 Deferred revenues - long-term 1 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 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 . 14 Table of Contents Note 4 . Business Combination On January 2, 2024 (the “Cubicure Acquisition Date”), we completed the acquisition of privately held Cubicure GmbH (“Cubicure”) (the “Cubicure Acquisition”) . Cubicure is an Austrian company and specializes in direct 3D printing solutions for polymer additive manufacturing that develops, produces and distributes innovative materials, equipment and processes for 3D printing solutions. The Cubicure Acquisition is intended to support and scale our strategic innovation roadmap and strengthen the Align Digital Platform. In fiscal year 2021, we acquired a 9.04 % equity interest in Cubicure. Subsequently, on the Cubicure Acquisition Date, we acquired the remaining equity of Cubicure. Prior to the acquisition, we also had technology license and joint development agreements with Cubicure. The fair value of consideration transferred in the acquisition is shown in the table below (in thousands): Cash paid to Cubicure stockholders $ 80,142 Fair value of pre-existing equity interest ownership 7,968 Settlement of pre-existing relationship - accounts payable ( 2,316 ) Total purchase consideration paid $ 85,794 The Cubicure Acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations ( “ASC 805”) that was achieved in stages. As a result of the Cubicure Acquisition, we remeasured our pre-existing equity interest in Cubicure at fair value prior to the Cubicure Acquisition. Based on the fair value of this equity interest, derived from the purchase price, we estimated the fair value of our 9.04 % pre-existing investment in Cubicure to be approximately $ 8.0 million. The remeasurement resulted in the recognition of a pre-tax gain of $ 4.1 million, which was reflected as a component of Other income (expense), net within our Condensed Consolidated Statements of Operations. In 2021, we initiated Joint development (“JDA”) and Technology license agreements (“TLA”) to provide us with access to Cubicure’s technology. The settlement of the JDA and TLA were concluded to be at market terms on the Cubicure Acquisition Date; therefore, no gain or loss was recorded related to the settlement of these contracts. We also had accounts payable from the pre-existing arrangements with Cubicure of $ 2.3 million, which were effectively settled and reduced from the purchase consideration of the Cubicure Acquisition. The allocation of purchase price to assets acquired and liabilities assumed is as follows (in thousands): Working capital $ 1,039 Property & equipment 975 Developed technology 47,000 Other non-current asset 1,483 Other liabilities ( 12,279 ) Goodwill 47,576 Total $ 85,794 Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets, and represents the value associated with future technology, future customer relationships and the knowledge and experience of the workforce in place. None of this goodwill is deductible for tax purposes. We allocated all goodwill to our Clear Aligner reporting unit. As part of the Cubicure Acquisition, we acquired a developed technology intangible asset. 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. Acquisition related costs are recognized separately from the business combination and are expensed as incurred. Acquisition related costs were not material. 15 Table of Contents 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. Note 5 . Goodwill and Intangible Assets Goodwill 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 Balance as of December 31, 2024 $ 152,645 $ 289,985 $ 442,630 Foreign currency translation adjustments 11,547 37,339 48,886 Balance as of September 30, 2025 $ 164,192 $ 327,324 $ 491,516 Finite-Lived Intangible Assets Acquired finite-lived intangible assets, excluding intangibles that were fully amortized, are as follows (in thousands): Weighted Average Amortization Period (in years) Gross Carrying Amount as of September 30, 2025 Accumulated Amortization Accumulated Impairment Loss Net Carrying Value as of September 30, 2025 Existing technology 11 $ 146,651 $ ( 63,426 ) $ — $ 83,225 Customer relationships 10 21,500 ( 11,825 ) — 9,675 Trademarks and tradenames 1 7 9,800 ( 7,700 ) — 2,100 Patents 12 480 ( 310 ) — 170 $ 178,431 $ ( 83,261 ) $ — 95,170 Foreign currency translation adjustments 3,546 Total intangible assets, net $ 98,716 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 (in years) Gross Carrying Amount as of December 31, 2024 Accumulated Amortization Accumulated Impairment Loss Net Carrying Value as of December 31, 2024 Existing technology 11 $ 146,651 $ ( 52,238 ) $ — $ 94,413 Customer relationships 10 21,500 ( 10,079 ) — 11,421 Trademarks and tradenames 10 16,600 ( 9,255 ) ( 4,122 ) 3,223 Patents 12 480 ( 280 ) — 200 $ 185,231 $ ( 71,852 ) $ ( 4,122 ) 109,257 Foreign currency translation adjustments ( 5,769 ) Total intangible assets, net $ 103,488 16 Table of Contents 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 Remainder of 2025 $ 4,610 2026 17,923 2027 15,607 2028 14,505 2029 14,505 2030 6,328 Thereafter 21,692 Total $ 95,170 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. Note 6 . Credit Facility 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 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. Note 7. Legal Proceedings Antitrust Class Actions 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. 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 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 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. Oral argument was held on April 10, 2025. On May 3, 2021, an individual named Misty Snow brought an antitrust action in the U.S. 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 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 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. Plaintiffs have appealed the district court’s summary judgment ruling to the United States Court of Appeals for the Ninth Circuit. Oral argument was held on April 10, 2025. 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. 17 Table of Contents 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. 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 On April 11, 2024, we filed a lawsuit in the U.S. District Court for the Western District of Texas against ClearCorrect Operating, LLC, ClearCorrect Holdings., Inc. and Institut Straumann AG (collectively the “Defendants”). 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. 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 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, 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. 18 Table of Contents 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. Regardless of the outcome, these proceedings can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Although the results of complex legal proceedings are difficult to predict and our view of these matters may change in the future as litigation and events related thereto unfold; we currently do not believe that these matters, individually or in the aggregate, will materially affect our financial position, results of operations or cash flows. Note 8 . Commitments and Contingencies Tax Matter 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. 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 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 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, 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. 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. 19 Table of Contents Indemnification Provisions In the normal course of business, to facilitate transactions in our services and products, we indemnify certain parties: customers, vendors, lessors and other parties with respect to certain matters, including, but not limited to, services to be provided by us and intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and our executive officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim. It is not possible to make a reasonable estimate of the maximum potential amount of future payments, if any, under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows or financial position. 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 September 30, 2025, we did not have any material indemnification claims that were probable or reasonably possible. Note 9. Stockholders’ Equity 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 nine months ended September 30, 2025 and 2024 is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Cost of net revenues $ 1,540 $ 3,070 $ 4,714 $ 7,716 Selling, general and administrative 35,226 34,937 99,577 97,705 Research and development 11,611 11,032 37,291 29,434 Total stock-based compensation $ 48,377 $ 49,039 $ 141,582 $ 134,855 Restricted Stock Units (“RSUs”) 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 nine months ended September 30, 2025 is as follows: Number of Shares Underlying RSUs (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Unvested as of December 31, 2024 1,019 $ 331.10 Granted 677 196.72 Vested and released ( 307 ) 356.81 Forfeited ( 99 ) 280.42 Unvested as of September 30, 2025 1,290 $ 258.36 1.5 $ 161,601 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”) 20 Table of Contents We grant MSUs to members of senior management. 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 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 nine months ended September 30, 2025: Number of Shares Underlying MSUs (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Unvested as of December 31, 2024 193 $ 679.14 Granted 127 362.98 Vested and released 1 ( 30 ) 878.35 Forfeited ( 27 ) 638.92 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 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”) Our PSUs typically include a service and performance condition. 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 nine months ended September 30, 2025: Number of Shares Underlying PSUs (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Unvested as of December 31, 2024 11 $ 204.33 Granted — — Vested and released ( 5 ) 201.63 Forfeited — — Unvested as of September 30, 2025 6 $ 206.36 1.3 $ 789 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 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: Nine Months Ended September 30, 2025 2024 Expected term (in years) 1.2 1.3 Expected volatility 56.2 % 49.2 % Risk-free interest rate 4.0 % 4.6 % Expected dividends — — Weighted average fair value at grant date $ 64.94 $ 94.70 21 Table of Contents 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. Note 10. 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 (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 Agreement Date Repurchase Program Amount Paid (in millions) Completion Date Total Shares Received Average Price per Share Q4 2023 January 2023 $ 250.0 Q1 2024 1,086,334 $ 230.13 Open Market Repurchases Agreement Date Repurchase Program Amount Paid (in millions) Completion Date Total Shares Received Average Price per Share Q4 2023 January 2023 $ 100.0 Q4 2023 465,518 $ 214.81 Q2 2024 January 2023 $ 150.0 Q2 2024 598,302 $ 250.73 Q4 2024 January 2023 $ 275.0 Q1 2025 1,241,509 $ 221.50 Q1 2025 January 2023 $ 225.0 Q2 2025 1,339,124 $ 168.02 Q3 2025 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. Note 11. Accounting for Income Taxes 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. We exercise significant judgment in regard to estimates of future market growth, forecasted earnings and projected taxable income in determining the provision for income taxes and for purposes of assessing our ability to utilize any future benefit from deferred tax assets. We continue to assess the realizability of the deferred tax assets as we take into account new information. We may be required to adjust the valuation allowance for deferred tax assets if we determine, based on available evidence at the time of the determination, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. 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 $ 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. 22 Table of Contents 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. 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. Note 12 . Net Income per Share The following table sets forth the computation of basic and diluted net income per share attributable to common stock (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator: Net income $ 56,753 $ 115,963 $ 274,591 $ 317,555 Denominator: Weighted average common shares outstanding, basic 72,377 74,736 72,831 75,031 Dilutive effect of potential common stock 42 21 49 118 Total shares, diluted 72,419 74,757 72,880 75,149 Net income per share, basic $ 0.78 $ 1.55 $ 3.77 $ 4.23 Net income per share, diluted $ 0.78 $ 1.55 $ 3.77 $ 4.23 Anti-dilutive potential common shares 1 1,321 1,173 1,273 689 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. Note 13 . Supplemental Cash Flow Information The supplemental cash flow information consists of the following (in thousands): Nine Months Ended September 30, 2025 2024 Non-cash investing and financing activities: Acquisition of property, plant and equipment in accounts payable and accrued liabilities $ 11,997 $ 17,631 Final settlement of prior year stock repurchase forward contract $ — $ 50,000 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 29,503 $ 29,854 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 19,996 $ 25,422 Note 14 . Segments and Geographical Information Segment Information 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 23 Table of Contents 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 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues Clear Aligner $ 805,799 $ 786,844 $ 2,407,259 $ 2,435,833 Systems and Services 189,893 191,028 580,144 567,960 Total net revenues $ 995,692 $ 977,872 $ 2,987,403 $ 3,003,793 Cost of net revenues 1 Clear Aligner $ 282,941 $ 234,003 $ 758,506 $ 715,309 Systems and Services 73,550 62,095 201,471 186,266 Total cost of goods sold $ 356,491 $ 296,098 $ 959,977 $ 901,575 Gross profit Clear Aligner $ 522,858 $ 552,841 $ 1,648,753 $ 1,720,524 Systems and Services 116,343 128,933 378,673 381,694 Total gross profit $ 639,201 $ 681,774 $ 2,027,426 $ 2,102,218 Other Segment expenses Clear Aligner $ 272,150 $ 276,522 $ 870,810 $ 858,341 Systems and Services 56,502 60,189 174,632 192,467 Unallocated corporate expenses 214,251 182,765 591,553 587,931 Total operating expenses $ 542,903 $ 519,476 $ 1,636,995 $ 1,638,739 Segment income from operations Clear Aligner $ 250,708 $ 276,319 $ 777,943 $ 862,183 Systems and Services 59,841 68,744 204,041 189,227 Total segment income from operations $ 310,549 $ 345,063 $ 981,984 $ 1,051,410 1 Management has identified Cost of net revenues as a significant expense for our Clear Aligner and Systems and Services reportable segments. Other segment expenses typically include employee related costs, marketing and advertising costs and depreciation and amortization expense incurred by various functions including selling, marketing, general and administrative and research and development. Our CODM does not regularly receive these operating expenses at the reportable segment level. Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment. Certain operating expenses are not directly attributable to a reportable segment and must be allocated. Each allocation is measured differently based on the nature of the cost being allocated. Certain other operating expense are not specifically allocated to segment income from operations and generally include various corporate expenses such as stock-based compensation and costs related to information technology (“IT”), facilities, human resources, accounting and finance, legal and regulatory, other separately managed general and administrative costs outside the reportable segments and restructuring costs. 24 Table of Contents The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Total segment income from operations $ 310,549 $ 345,063 $ 981,984 $ 1,051,410 Unallocated corporate expenses ( 214,251 ) ( 182,765 ) ( 591,553 ) ( 587,931 ) Total income from operations 96,298 162,298 390,431 463,479 Interest income 3,249 4,003 11,424 11,696 Other income (expense), net ( 4,813 ) ( 371 ) 6,837 ( 6,993 ) Net income before provision for income taxes $ 94,734 $ 165,930 $ 408,692 $ 468,182 The following table includes certain non-cash expenses for each reportable segment (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Stock-based compensation Clear Aligner $ 6,069 $ 7,648 $ 17,952 $ 20,031 Systems and Services 419 427 1,225 1,207 Unallocated corporate expenses 41,889 40,964 122,405 113,617 Total stock-based compensation $ 48,377 $ 49,039 $ 141,582 $ 134,855 Depreciation and amortization Clear Aligner $ 32,976 $ 17,971 $ 71,375 $ 49,027 Systems and Services 11,160 8,099 28,931 23,007 Unallocated corporate expenses 11,581 11,723 35,135 34,871 Total depreciation and amortization $ 55,717 $ 37,793 $ 135,441 $ 106,905 Our CODM does not regularly review total assets at the reportable segment level; however, we have provided geographical information related to our long-lived assets below. Geographical Information Net revenues are presented below by geographic area (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues 1 : U.S. $ 410,560 $ 421,204 $ 1,256,679 $ 1,291,838 Switzerland 210,844 216,638 670,223 739,342 Other International 374,288 340,030 1,060,501 972,613 Total net revenues $ 995,692 $ 977,872 $ 2,987,403 $ 3,003,793 1 Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities. 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, 2024 Long-lived assets 1 : Switzerland $ 543,669 $ 571,628 U.S. 200,478 207,689 Other International 555,445 605,193 Total long-lived assets $ 1,299,592 $ 1,384,510 1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets. 25 Table of Contents Note 15. Restructuring and Other Charges 2023 Restructuring 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. 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 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 and other charges ( 598 ) 36,991 36,393 Cash payments and adjustments ( 4,701 ) ( 23,990 ) ( 28,691 ) Balance at end of period 1 $ — $ 13,001 $ 13,001 For the nine months ended September 30, 2025 2024 Restructuring 2025 Restructuring 2 Total 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. Note 16 . Assets Held for Sale 26 Table of Contents 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. 27 Table of Contents