Align Technology (NASDAQ:ALGN) reported fourth-quarter and full-year 2025 results that management said came in better than expected, led by record revenue, record clear aligner shipments, and improved profitability on a non-GAAP basis. The company also provided its first-quarter and full-year 2026 outlook, calling the macro environment “dynamic” but expressing cautious optimism based on execution, international momentum, and continued growth in dental service organizations (DSOs).
Fourth-quarter results: record revenue and case volume
For the fourth quarter, Align posted record revenue of $1.048 billion, up 5.3% year-over-year and up 5.2% sequentially. CEO Joe Hogan said non-GAAP gross margin and non-GAAP operating margin were above the company’s outlook, with non-GAAP operating margin the highest since 2021.
Align’s systems and services segment (which includes iTero scanners and exocad software) generated $209.4 million in Q4 revenue, up 4.2% year-over-year and up 10.3% sequentially. Management attributed the sequential increase primarily to higher scanner system sales and non-system sales. Align noted that iTero Lumina represented approximately 86% of full system units in the quarter.
Full-year 2025: record revenue and expanding teen/kids starts
For the full year 2025, Align reported record total revenue of $4.0 billion, up 1% year-over-year. Systems and services revenue totaled $790 million (up 2.7%), while clear aligner revenue was $3.2 billion (up 0.5%) on record clear aligner volume of 2.6 million cases (up 4.7%).
Hogan highlighted growth in teen and early intervention, noting a record 936,000 teens and kids started Invisalign treatment in 2025, up 7.8% year-over-year. In Q4 alone, over 230,000 teens and growing kids started treatment, up 7% year-over-year, driven by APAC (led by China), along with EMEA and Latin America, partially offset by continued softness in North America.
Management also cited growth in DSP touch-up cases, with fiscal 2025 shipments of over 136,000, up 36% versus 2024.
Regional performance and channel focus: DSOs remain a key growth lever
Align repeatedly emphasized DSOs and orthodontic service organizations (OSOs) as a major catalyst for scaling digital workflows. Hogan said Align made “strong progress” with DSOs across major regions, and described DSO growth as helping offset broader orthodontic market softness in North America retail chains.
- Americas: Clear aligner volumes increased year-over-year, with Hogan calling it one of the best growth rates since 2021. Latin America delivered double-digit growth and record quarterly shipments, and Align surpassed 1 million patients treated with Invisalign in the region in Q4.
- North America: Management described improved “stability,” with better utilization across channels and strong DSO performance. Hogan said practices that scan every patient, use chairside visualization tools, and offer financing are performing better. CFO John Morici said North America improved in Q4 versus Q3 due to “some of the retail” being less negative and continued DSO growth.
- EMEA: Clear aligner volumes grew double digits year-over-year to record Q4 levels, with double-digit growth across most markets. Align surpassed 1 million patients treated in both the UK and Iberia.
- APAC: Clear aligner volumes grew double digits year-over-year, with record Q4 shipments in China, India, and Korea, supported by strength in teens and growing kids.
On the call, management quantified DSO exposure, saying DSOs account for about 25% of Align’s business on a volume basis. Hogan also noted triple-digit growth among Align’s top 10 DSOs in EMEA, and said the company expects continued DSO penetration and expansion globally.
Margins, cash flow, and capital allocation
In Q4, Align’s GAAP gross margin was 65.3%, up 1.1 points sequentially but down 4.8 points year-over-year. On a non-GAAP basis, gross margin was 72.0%, up 1.6 points sequentially and up 1.2 points year-over-year.
GAAP operating margin was 14.8% and non-GAAP operating margin was 26.1%. Morici said Q4 operating expenses were $528.3 million, down sequentially and year-over-year primarily due to lower restructuring costs.
Align ended 2025 with $1.095 billion in cash and cash equivalents. Q4 operating cash flow was $223.2 million, and free cash flow was $187.3 million. The company repurchased about 0.7 million shares in Q4 at an average price of $142.87, and repurchased 2.9 million shares during 2025 for $465.9 million. As of December 31, 2025, $831.2 million remained available under its $1 billion repurchase program.
Morici also said that as of December 31, the company did not expect a material change to results from the latest U.S. tariff actions, referencing prior disclosures for more detail.
2026 outlook and product roadmap: cautious optimism, direct fabrication ramp
For Q1 2026, Align guided worldwide revenue to $1.01 billion to $1.03 billion, representing 3% to 5% year-over-year growth. The company expects clear aligner volume to rise mid-single digits year-over-year, with average selling price up sequentially due to geographic mix. Systems and services revenue is expected to decline sequentially in line with typical Q1 seasonality.
For full-year 2026, Align expects:
- Revenue growth of 3% to 4% year-over-year
- Clear aligner volume growth up mid-single digits
- GAAP operating margin slightly below 18% (about 400 basis points improvement versus 2025)
- Non-GAAP operating margin around 23.7% (about 100 basis points improvement year-over-year)
- Capital expenditures of $125 million to $150 million
On pricing, Morici said the company expects 2026 Invisalign ASPs to be down roughly 1% to 2% year-over-year, citing country and product mix. He added that Q4 ASP would have been flat sequentially if not for foreign exchange and mix shifts toward lower list-price countries with strong growth.
Management discussed Align’s transition toward direct fabrication (moving from thermoforming to 3D printing), noting early production will be margin dilutive until scaled. Hogan said Align remains on track for a limited market release in 2026 of Invisalign First direct 3D printed retainers and Invisalign-specific 3D printed prefab attachments, with more complex products expected to follow in 2027. Executives said the dilutive impact is included in the company’s 2026 margin outlook, and that margin accretion is expected later as scale improves.
On China’s volume-based procurement (VBP) process, Hogan said implementation delays continue, and early phases are expected to begin in the public hospital system. Management said its guidance does not include any VBP impact on volume or ASP, noting more than 85% of Align’s China business is in the private sector.
About Align Technology (NASDAQ:ALGN)
Align Technology, Inc (NASDAQ: ALGN) pioneered the use of digital technology in orthodontics through the development of the Invisalign system, a series of clear, removable aligners that provide an alternative to traditional metal braces. Since its founding in 1997 by Zia Chishti and Kelsey Wirth, the Tempe, Arizona–based company has expanded its focus to include intraoral scanners, CAD/CAM software for dental laboratories and comprehensive digital dentistry solutions.
The company’s signature Invisalign system leverages 3D imaging and computer-aided design (CAD) to create customized aligners that gradually reposition teeth, improving patient comfort and treatment predictability.
