Align Technology 2025 Q1 Earnings Misses Targets as Net Income Falls 11.2%

Align Technology (ALGN) reported its fiscal 2025 Q1 earnings on May 8th, 2025. Align Technology’s performance in Q1 2025 fell short of expectations, marked by a decline in both revenue and net income compared to the previous year. Despite this, the company maintains a positive outlook for the year with a projected revenue growth of 3.5% to 5.5%. Align has also announced plans for significant capital investments aimed at supporting future expansion.

Revenue

Earnings/Net Income
Align Technology's EPS declined 9.3% to $1.27 in 2025 Q1 from $1.40 in 2024 Q1. Meanwhile, the company's net income declined to $93.23 million in 2025 Q1, down 11.2% from $105.03 million reported in 2024 Q1. The decline in EPS reflects weaker profitability compared to the previous year.

Price Action
The stock price of Align Technology has climbed 3.98% during the latest trading day, has edged up 2.37% during the most recent full trading week, and has surged 17.99% month-to-date.

Post-Earnings Price Action Review
Over the past five years, the strategy of purchasing Align Technology (ALGN) shares after a quarter-over-quarter revenue drop and holding for 30 days has resulted in an 18.84% return, significantly underperforming the benchmark return of 92.56%. This strategy's compound annual growth rate stood at 3.53%, accompanied by a maximum drawdown of -67.06% and a Sharpe ratio of 0.07, indicating high risk and volatility. Despite these results, the recent stock price movements suggest some optimism among investors, potentially driven by Align's ongoing investment strategies and market opportunities.

CEO Commentary
Align Technology's CEO emphasized the company's strong market opportunity and ongoing execution of strategies aimed at increasing the adoption and utilization of its products and services globally. He noted that while the first quarter saw a decline in revenues year-over-year, driven primarily by the Clear Aligner segment, there was positive volume growth in both teen and adult patient arms across EMEA, Asia-Pacific, and North America. The CEO also highlighted significant achievements, including a rise in active Invisalign-trained practitioners and total patients treated, affirming the company's commitment to innovation and market leadership.

Guidance
Align Technology expects full-year 2025 revenue growth in the range of 3.5% to 5.5% at current spot rates, with a GAAP operating margin approximately 2 basis points above the 2024 level. The company projects second-quarter revenues between $1.05 billion and $1.07 billion. Align anticipates investing $100 million to $150 million in capital expenditures, focusing on technology upgrades and manufacturing capacity to support ongoing expansion.

Additional News
Align Technology has announced a new $1 billion stock repurchase program authorized by its Board of Directors, succeeding the prior $1 billion program completed in May 2025. This move underscores the company's strong balance sheet and cash flow generation capabilities. Align's CFO, John Morici, expressed confidence in the company’s growth trajectory and market opportunities, emphasizing the dual focus on shareholder returns and strategic investments. Additionally, Align hosted an Investor Day on May 6, 2025, providing insights into its growth strategies and market positioning. The company continues to drive innovation and expand its market reach in the digital orthodontics and restorative dentistry sectors.