Align Technology (ALGN) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenues reached a record $1.06 billion, up 4.3% year-over-year, driven by 8.2% Clear Aligner revenue growth and 7.4% increase in shipments, with double-digit international expansion and stable North America performance.

• Systems and Services revenues declined 10.8% year-over-year, reflecting softness in the capital equipment market and a shift to lower-priced scanners and flexible acquisition models.

• Non-GAAP operating margin was 22.9%, up 1.6 points year-over-year; GAAP operating margin was 14.6%, impacted by a $37.5 million UK VAT liability.

• Net income was $108.3 million (GAAP), with diluted EPS of $1.51; non-GAAP net income was $189.1 million, with EPS of $2.64.

• Strategic initiatives included board refreshment, a comprehensive operating model review, and increased share repurchase commitment.

Financial highlights

• Q2 2026 total revenues: $1,056.2 million, up 4.3% year-over-year; Clear Aligner revenues: $870.9 million, up 8.2%; Systems and Services revenues: $185.3 million, down 10.8%.

• Q2 Clear Aligner ASP: $1,260, up 0.8% year-over-year; gross margin: 71.7% GAAP (72.3% non-GAAP), up 1.8 points year-over-year.

• Q2 operating income: $154 million (14.6% margin); non-GAAP operating margin: 22.9%, up 1.6 points year-over-year.

• Q2 GAAP EPS: $1.51, down $0.20 year-over-year; non-GAAP EPS: $2.64, up 6% year-over-year.

• Cash and cash equivalents: $1,102.6 million as of June 30, 2026; free cash flow: $157.1 million.

Outlook and guidance

• Q3 2026 revenue expected at $1.00–$1.02 billion, down sequentially; Clear Aligner volume up mid-single digits year-over-year, ASP down sequentially.

• Q3 GAAP gross margin expected at 67.5%–68.5% due to one-time charges; non-GAAP gross margin ~71%.

• FY 2026 revenue growth expected at 3%–4% year-over-year; Clear Aligner volume growth ~6%; Systems and Services revenue down 6%–8%.

• FY 2026 GAAP operating margin: 15.1%–15.6%; non-GAAP operating margin: ~23.7%.

• $400–$500 million in share repurchases planned for 2026; capital expenditures expected at $125–$150 million.