Align Technology, Inc. reported fiscal 2025 fourth‑quarter results that surpassed consensus expectations, delivering record total revenue of $1.047 billion—up 5.3% year‑over‑year and 5.2% sequentially—and non‑GAAP earnings per share of $3.29, a $0.30 beat over the $2.97 consensus estimate. The company’s GAAP net income of $135.8 million and operating income of $155.3 million translated into a 14.8% operating margin, while non‑GAAP operating margin climbed to 26.1%, the highest level since 2021.
Clear aligner revenue rose to $838.1 million, a 5.5% increase from the same quarter last year, driven by a 7.7% volume gain in the U.S. and robust growth in international markets, particularly EMEA, Latin America and Asia Pacific. Systems and services revenue grew 10.3% sequentially to $209.4 million, supported by higher mix of high‑margin orthodontic and professional services contracts. The combination of a stronger product mix and disciplined cost management underpinned the overall revenue acceleration.
GAAP gross margin held at 65.3%, slightly down from 70.1% a year earlier, reflecting higher raw‑material costs and a modest shift toward lower‑margin consumer products. In contrast, non‑GAAP gross margin expanded to 72.0%, the best level since early 2022, as the company leveraged its proprietary manufacturing efficiencies and pricing power in the high‑margin orthodontic segment. The divergence between GAAP and non‑GAAP margins highlights the impact of one‑time restructuring charges and the company’s focus on core operating profitability.
Management guided for fiscal 2026 revenue growth of 3%–4% year‑over‑year, with Q1 2026 revenue expected to fall between $1.01 billion and $1.03 billion. The company reiterated its full‑year 2026 operating margin target of 25%–26%, reflecting confidence in sustaining the high‑margin mix and continued cost discipline. These guidance levels represent a modest upward revision from the prior year’s outlook, signaling management’s optimism about international demand and the effectiveness of its product‑mix strategy.
CEO Joe Hogan emphasized that the quarter’s performance “demonstrates the strength of our high‑margin mix and the resilience of our international demand.” He noted that “the 7.7% volume growth in clear aligners, driven by adult, teen and pediatric segments, confirms the continued adoption of our technology across diverse markets.” CFO John Morici added that “we expect Q1 clear‑aligner volume to be up mid‑single digits year‑over‑year, reinforcing the trajectory of our core business.”
The results reinforce Align’s competitive position as a leader in the orthodontic market, with international expansion offsetting a plateau in North American volume growth. The company’s ability to maintain high non‑GAAP margins while delivering record revenue growth suggests robust pricing power and operational leverage. Looking forward, sustained demand in emerging markets and continued focus on high‑margin product lines are expected to drive the company’s growth trajectory through 2026 and beyond.
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