Align Technology 2025 Q1 Earnings Decline in Net Income by 11.2%

Align Technology (ALGN) reported its fiscal 2025 Q1 earnings on Apr 30th, 2025. The company experienced a decline in key financial metrics this quarter. Revenue came in at $979.26 million, slightly below the $997.43 million from the previous year, missing analysts' expectations. Despite this, the company remains optimistic, with improved guidance for Q2 2025, projecting revenues between $1.05 billion and $1.07 billion.

Revenue

Align Technology's total revenue for Q1 2025 decreased by 1.8% year-over-year to $979.26 million. The company attributed this decline to unfavorable foreign exchange impacts. Clear Aligner revenues saw a slight decrease to $796.8 million, while Imaging Systems and CAD/CAM Services generated $182.4 million, marking a modest year-over-year increase.

Earnings/Net Income

Align Technology's earnings per share declined by 9.3% to $1.27 in Q1 2025, down from $1.40 the previous year. Net income fell by 11.2% to $93.23 million. The EPS reflects challenges faced by the company this quarter.

Price Action

The stock price of Align Technology has edged down 1.58% during the latest trading day, has edged down 2.22% during the most recent full trading week, and has jumped 8.85% month-to-date.

Post Earnings Price Action Review

Following its Q1 2025 earnings release, Align Technology's stock performance showed mixed results. The 3-Day win rate post-earnings stood at 50%, indicating a relatively balanced response from investors. However, the 10-Day and 30-Day win rates were lower at 40%, suggesting a tendency for the stock to decline after earnings announcements. The stock's maximum return observed over 30 days was a modest 1.89%, pointing to limited short-term recovery post-earnings. Despite this, the overall market reaction may improve with time, reflecting the company's potential for recovery and growth.

CEO Commentary

Joseph Hogan, President and CEO, highlighted the strong growth in Clear Aligner volumes across all regions, particularly in North America and EMEA. He attributed this to innovations like the Invisalign Palate Expander and digital scanning improvements. Hogan emphasized delivering efficiency and enhanced patient experiences, expressing optimism about the company's positioning and ongoing commitment to innovation in orthodontics.

Guidance

Align Technology projects Q2 2025 revenues between $1.05 billion and $1.07 billion, anticipating sequential rises in Clear Aligner volumes and average selling prices. For fiscal 2025, mid-single-digit growth in Clear Aligner volumes and revenue growth of 3.5% to 5.5% are expected. GAAP operating margins should improve by approximately 2 points compared to 2024, targeting non-GAAP operating margins around 22.5%. Capital expenditures for the fiscal year are estimated between $100 million and $150 million.

Additional News

In recent weeks, Align Technology has been active in enhancing its product lineup and market presence. The company announced the commercial availability of the Invisalign System with mandibular advancement featuring occlusal blocks in the U.S. and Canada, targeting Class II skeletal and dental corrections. Additionally, Align launched the AI-powered Align X-ray Insights software in the EU and UK, aimed at improving diagnostic capabilities. Align also became an official partner of Bay FC in the National Women's Soccer League, showcasing its commitment to community engagement and expanding its brand reach. These strategic moves indicate Align's focus on innovation and market expansion.