Align Technology Q2 Earnings Miss, Stock Drops 36.6%

Align Technology (ALGN) reported Q2 2025 adjusted EPS of $2.49, up 3.3% YoY, but missed the Zacks Consensus Estimate by 3.1%. Revenue fell 1.6% YoY to $1.01 billion, also missing expectations by 4.6%. Analysts have cut full-year EPS estimates to $10.10, representing 8.25% annual profit growth. The 2025 topline estimate now stands at $4 billion for roughly zero growth. Despite the stock drop, CEO Joe Hogan personally purchased $1 million worth of shares, and the company announced a $200 million open market repurchase of common stock.

Align Technology Inc. (Nasdaq: ALGN), a leading global medical device company, reported mixed financial results for the second quarter of 2025. The company's adjusted earnings per share (EPS) came in at $2.49, up 3.3% year-over-year (YoY), but this figure missed the Zacks Consensus Estimate by 3.1%. Total revenues for the quarter were $1.01 billion, representing a 1.6% YoY decrease, and also fell short of expectations by 4.6%.

The quarter was marked by a decline in revenue from Clear Aligners, Align's primary product, which saw a 3.3% YoY decrease. This was primarily due to lower-than-expected volumes in Europe and North America. Conversely, Imaging Systems and CAD/CAM Services revenues saw a 13.9% sequential increase and a 5.6% year-over-year increase. Operating income was $163.0 million, resulting in an operating margin of 16.1%, while non-GAAP operating income was $215.9 million, resulting in a margin of 21.3% [1].

Align Technology also announced a restructuring plan to streamline operations and reallocate resources. The plan includes realigning certain business groups, optimizing the manufacturing footprint, and disposing of certain manufacturing capital assets. The company expects one-time charges of approximately $150 million to $170 million in the second half of 2025, primarily for the write-down of assets, accelerated depreciation expense, and restructuring charges. These actions are intended to achieve a GAAP operating margin of approximately 13.0%–14.0% and a non-GAAP operating margin slightly above 22.5% in FY 2025 [1].

Shares of Align Technology plunged 37% on the news, the company's sharpest drop in over eight years. The stock closed at $195.50 on July 30, 2025, down from $304.30 on July 22, 2025 [1].

Analysts have cut full-year EPS estimates to $10.10, representing 8.25% annual profit growth. The 2025 topline estimate now stands at $4 billion for roughly zero growth. Despite the stock drop, CEO Joe Hogan personally purchased $1 million worth of shares, and the company announced a $200 million open market repurchase of common stock.

Align Technology's Q2 2025 results reflect a challenging economic environment and operational shifts, with the company navigating through economic uncertainty and consumer interest. The restructuring plan aims to enhance capital efficiency and align operations with long-term growth objectives.

References:
[1] https://investor.aligntech.com/news-releases/news-release-details/align-technology-announces-second-quarter-2025-financial-results