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Align (ALGN) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Health Care· Apr 29, 2026

Source: earnings call transcript

Executive summary

Align Q1 FY26 — Strong Clear Aligner Volumes and Margin Expansion

Align Technology delivered better-than-expected Q1 FY26 results, driven by record Clear Aligner volumes and strong international growth across all patient segments and channels. The company demonstrated significant operating margin expansion due to efficiency initiatives, while navigating a mixed retail environment in North America and macroeconomic uncertainties, particularly related to the Middle East conflict. Management reaffirmed full-year guidance, maintaining a prudent stance despite the strong start to the year.

Highlights

5

  • Total revenues of $1.041 billion, up 6.2% year-over-year, exceeding expectations.

  • Clear Aligner shipments reached a record 686,000 cases, increasing 6.7% year-over-year, driven by international growth.

  • Non-GAAP operating margin expanded by 2.5 points year-over-year to 21.5%.

  • Non-GAAP diluted EPS increased 21% year-over-year to $2.58.

  • DSO Clear Aligner volumes grew double-digit across all regions, representing approximately 1/4 of total global volumes.

Concerns

4

  • Q1 Systems and Services revenue growth was modest at 0.9% year-over-year, reflecting expected capital equipment seasonality.

  • North America Clear Aligner volumes experienced a modest year-over-year decline, partially offsetting strong international growth.

  • The retail channel in the United States continued to be mixed, with doctors reporting less patient traffic during the quarter.

  • Uncertainty from ongoing military action in the Middle East is assumed to impact Q2 Clear Aligner and scanner demand.

Guidance & targets

CategoryTargetConfidence
Q2 2026 Worldwide Revenues
$1.04 billion to $1.06 billion
high materiality
High
Q2 2026 Clear Aligner Volume Growth
up sequentially and year-over-year
medium materiality
High
Q2 2026 Clear Aligner Average Selling Price (ASP)
flat sequentially and year-over-year
medium materiality
High
Q2 2026 Systems and Services Revenues
up sequentially
medium materiality
High
Q2 2026 GAAP Operating Margin
approximately 16.4%
high materiality
High
Q2 2026 Non-GAAP Operating Margin
approximately 21.5%
high materiality
High
FY 2026 Worldwide Revenue Growth
up 3% to 4% year-over-year
high materiality
High
FY 2026 Revenue Foreign Exchange Benefit
approximately 100 basis points
medium materiality
High
FY 2026 Clear Aligner Volume Growth
up mid-single digits year-over-year
high materiality
High
FY 2026 GAAP Operating Margin
slightly below 18%
high materiality
High
FY 2026 Non-GAAP Operating Margin
approximately 23.7%
high materiality
High
FY 2026 Capital Expenditures
$125 million to $150 million
medium materiality
High
Share Repurchase Program
up to an additional $200 million
medium materiality
High
FY 2026 Clear Aligner Average Selling Price (ASP) Change
1% to 2% decrease year-over-year
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Clear Aligner
Reflected double-digit volume growth in EMEA, APAC, and Latin America, with overall stability in North America. Growth driven by submitter expansion and higher utilization across Orthodontists and GP channels.
Shipments: 686,000 casesShipments growth YoY: 6.7%Shipments growth sequentially: 1.3%Orthodontists shipments growth YoY: 7.4%GPs shipments growth YoY: 5.6%Adults treated: 449,000Adults treated growth YoY: 7.8%Teens and growing kids treated: 237,000Teens and growing kids treated growth YoY: 4.8%Doctors submitted cases: >88,000Doctors submitted cases growth YoY: 3%Doctor utilization growth YoY: 3.4%DSO volumes growth: double-digitDSO volumes % of total: ~1/4
$856 million7.4%2.1%71.6%
Systems and Services
Reflected expected first quarter capital equipment seasonality. Growth driven by iTero Lumina full systems, service revenues, and CPO sales, with a mix shift towards lower-priced scanner offerings.
Total installed base of active scanners: >125,000iTero digital scans performed: >12 millionExocad revenue growth: double-digit YoY
$184.1 million0.9%declined sequentially67.2%

ALGN operating KPIs by quarter

ALGN operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Clear Aligner shipments
686K Clear Aligner shipments reached a record 686,000 cases, increasing 6.7% year-over-year, reflecting double-digit growth across our international businesses, and continued stability in North America. Source: earnings call transcript
692K We delivered a solid second quarter with record revenues of $1.06 billion, up 4.3% year-over-year, driven by record Clear Aligner volumes of 692,000 cases and 8.2% Clear Aligner revenue growth. Source: earnings call transcript
+0.9%
Doctors submitting Invisalign cases
88K+ During the quarter, more than 88,000 doctors submitted Invisalign cases globally a year-over-year increase of 3% or an additional 3,000 orthodontists and GP driven primarily by increases in APAC and the Americas, led by Latin America. Source: earnings call transcript
89.2K During the quarter, a record 89,200 doctors submitted Invisalign cases, up globally 3.4% year-over-year, while doctor utilization increased 3.8%, reflecting growth across all regions. Source: earnings call transcript
—
Clear Aligner average per case shipment price
$1,250 Q1 Clear Aligner average per case shipment price of $1,250, increased 1% or $10 per case on a year-over-year basis, primarily due to favorable foreign exchange, price increases and lower net deferrals, partially offset by higher discounts and mix shift to lower-priced countries and products mentioned previously. Source: earnings call transcript
$1,260 Q2 Clear Aligner average per case shipment price of $1,260 increased 0.8% or $10 per case on a year-over-year basis, primarily due to price increases, lower net deferrals, favorable foreign exchange, partially offset by mix shift to lower-priced countries and products and higher discounts. Source: earnings call transcript
+0.8%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Direct-3D Printed Attachments and Retainerslaunch

Risks & headwinds

Middle East military action Q2 2026 and beyond

Immaterial effect on Q1 EMEA results; assumed some impact on Q2 Clear Aligner and scanner demand. Beyond Q2, increasingly difficult to predict.

Mitigation:Prudent approach in Q2 outlook, monitoring developments closely.

Macroeconomic uncertainty FY 2026

Macroeconomic environment remains uncertain, potential for higher fuel prices and inflation impacting consumer spending.

Mitigation:Maintaining a prudent stance with respect to full-year guidance, disciplined execution, and active conversion efforts (financing, doctor support).

Retail channel weakness in the United States Q1 FY26

Retail channel continued to be mixed, with doctors reporting less patient traffic during the quarter.

Mitigation:Expanding targeted initiatives focused on affordability, patient conversion, clinical confidence, and practice efficiency (DSP, HFD, Invisalign Pay, peer-to-peer mentoring, TPS).

What to watch in Q2 FY26

Middle East Conflict Impact on Demand

next quarter
Current Assumed some impact on Q2 Clear Aligner and scanner demand
Target Actual impact on Q2 Clear Aligner and scanner demand

Why it matters

The conflict's duration and escalation could significantly affect patient traffic, consumer demand, and shipping/freight, impacting overall revenue and profitability.

Given the ongoing uncertainty, we have taken a prudent approach in our second quarter outlook by assuming some impact on both Clear Aligner and scanner demand.

Find out whether ALGN delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked about the expected ramp in profitability in H2 and the assumed impact of the Middle East conflict on Q2 guidance.

Management stated that Q1 profitability reflected the success of prior restructuring and cost actions, expecting this trend to continue. They noted that profitability typically increases with volume throughout the year. The Middle East impact is minimal directly but affects macro factors like fuel prices and inflation, which are prudently factored into Q2 guidance.

“We expect that profitability and the productivity to continue as we go through the year. And that's typically the cadence that we have as we go quarter-over-quarter, we see that profitability and especially as volume increases as well, we see that profitability come through as well.”

asked by Daniel Grosslight · answered by John Morici

2 min read 6 chapters

Detailed narrative

Global Growth Drivers and Strategic Initiatives

Align's Q1 performance was broad-based, with double-digit Clear Aligner volume growth in EMEA, APAC, and Latin America, alongside stability in North America. This growth was fueled by increased submitters and higher utilization across both orthodontist and GP channels, and strong demand from adult, teen, and growing kid patient categories. The company highlighted the success of its Doctor Subscription Program (DSP) and patient financing initiatives in driving adoption and utilization, with DSP touch-up cases growing double-digit year-over-year.

Digital Platform Expansion and Restorative Dentistry

The iTero Lumina system continues to see adoption, with the total installed base exceeding 125,000 scanners globally and over 12 million digital scans performed in Q1. Exocad delivered double-digit revenue growth, reinforcing the strategy to integrate orthodontics and restorative dentistry. The Invisalign Advanced Restorative Treatment (ART) pilot, integrating with Exocad, aims to expand reach into the restorative market by enabling tooth alignment prior to restorative work, preserving natural dentition.

Enhanced Affordability and Clinical Confidence Programs

Align is expanding targeted initiatives focused on affordability, patient conversion, clinical confidence, and practice efficiency. These include the Doctor Subscription Program (DSP), patient financing (Healthcare Finance Direct in the US, Invisalign Pay in Brazil), peer-to-peer mentoring, and Treatment Planning Services (TPS). TPS, in particular, has shown to materially increase utilization among users and contribute to low double-digit year-over-year growth in case starts in markets like Canada, addressing a key barrier for GP dentists.

Innovation for Growing Patients and Competitive Positioning

The company continues to focus on the teen and growing kid segments, which represent the largest orthodontic patient opportunity. Products like Invisalign First, Invisalign Palate Expander (IPE), and mandibular advancement with occlusal blocks are driving adoption by treating a broader range of growing patients and competing effectively against traditional wires and brackets. A clinical study found IPE effectively widens the upper jaw, achieving bone and bite changes similar to traditional metal Hyrax expanders with more controlled and predictable results.

Advancements in Direct Fabrication Technology

Align is advancing direct fabrication (direct 3D printing) deliberately and in phases, with initial limited market releases of direct-3D printed attachments and retainers in Q1. This technology is expected to unlock new design flexibility, strengthen the long-term cost structure, and improve operational efficiency by significantly reducing the 95% scrap base associated with current vacuum forming processes and isolating from petrochemical feed streams.

Financial Discipline and Capital Allocation

Align maintains a disciplined capital return program, having completed a $200 million share repurchase between August 2025 and January 2026, and authorizing an additional $200 million. The company is focused on strengthening its cost structure through restructuring actions and efficiency initiatives, aiming for improved operating leverage and sustainable margin expansion, while managing input cost pressures and investing for long-term returns.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.