Align Technology (ALGN) investor relations material

Product portfolio evolution and innovation

• Expanded aligner offerings with a new three-year, no-refinement product, providing more flexibility and pricing options for doctors.

• Continued support for the five-year unlimited and three-year limited refinement products, allowing doctors to choose based on case complexity.

• DSP (Doctor's Subscription Program) enables doctors to purchase aligners at a set price, supporting retention and minor touch-ups.

• New product launches in North America in early 2026, with phased rollouts in Europe and APEC throughout the year.

• Direct fabrication technology to debut with retainers in 2026, scaling to more complex aligners and offering design flexibility and cost savings.

Financial performance and margin outlook

• ASPs are influenced by country and product mix, with lower prices in high-growth regions like India, Turkey, and Latin America.

• Gross margins remain strong (75%-80%) on lower-cost products, with a 100 basis point operating margin improvement expected next year.

• Cost restructuring and equipment upgrades are driving productivity and margin gains.

• CapEx for direct fabrication will be managed within current facilities, maintaining 3%-4% of revenue.

• Free cash flow supports business investment and share buybacks, with no debt and $1 billion in cash.

Market trends and regional performance

• U.S. market is stable but discretionary, with DSOs growing double digits by adopting active patient engagement and local marketing.

• European markets show recovery, especially in Eastern Europe and Italy, with new products and DSO partnerships driving growth.

• Asia strategy focuses on training and utilization, with double-digit growth in Southeast Asia and tailored operations in China.

• China’s Ortho VBP rollout is delayed, but local manufacturing and operations position the business to adapt to regulatory changes.