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Align Technology (ALGN) Beats on Earnings and Revenues in Q2
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Align Technology, Inc.’s (ALGN - Free Report) second-quarter 2018 adjusted earnings per share (EPS) came in at $1.30, up 52.9% year over year. Earnings also came above the company’s guided range of $1.02-$1.06. The figure comfortably beat the Zacks Consensus Estimate of $1.09 as well.
Revenues
Revenues grew 37.5% year over year to $490.3 million in the quarter, surpassing the Zacks Consensus Estimate of $469.2 million. Revenues were well ahead of the company’s guided range of $460-$470 million.
Per management, the top line was driven by a 30.5% year-over-year increase in Invisalign case shipments to 302,685. The upside was supported by growth in North America and international regions on an expanded customer base and increased utilization along with solid worldwide teen case growth. Moreover, increased revenues from iTero scanner contributed majorly.
Segments in Detail
Revenues at the Clear Aligner segment (88.4% of total revenues) soared 35% year over year to $433.3 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographical regions.
Align Technology, Inc. Price, Consensus and EPS Surprise
In the second quarter, Invisalign case shipments amounted to 302,685, up 30.5% year over year, aided by growth across all regions as well as expansion of customer base. During the quarter, Align Technology Invisalign cases were shipped to 50,085 doctors worldwide, of which 28,280 were to North America and 21,805 to international regions.
Revenues from Scanner and Service (11.6%) improved a significant 60.9% to $57 million.
Margins
Gross margin in the quarter under review was down 140 basis points (bps) year over year to 74.6% on a 45.7% rise in cost of net revenues.
During the quarter, Align Technology witnessed a 30.2% year-over-year increase in selling, general and administrative expenses to $212.1 million and a 26.2% rise in research and development (R&D) expenses to $30.8 million. The operating margin expanded 150 bps to 25%.
Financial Details
Align Technology exited the second quarter with cash and cash equivalents and short-term marketable securities of $712.5 million, compared with $662.7 million at the end of first-quarter 2018.
In the reported quarter, Align Technology received an additional $600 million stock buy-back authorization. The company currently has approximately $100.0 million left under the April 2016 stock repurchase program.
Guidance
For the third quarter of 2018, the company projects EPS of $1.13-$1.18 on revenues of $493-$503 million. The company projects Invisalign case shipments in the band of 302,000-307,000, up 28-30% from a year ago. Meanwhile, the Zacks Consensus Estimate for second-quarter 2018 EPS is $1.18 on revenues of $499.3 million. While the earnings estimate is pegged at the high end, the estimate for revenues is within the same.
Our Take
Align Technology ended the second quarter on a solid note. We are upbeat about the continued strength in Invisalign volumes. In North America, the company continued to witness an expanding GP Dentist customer base along with sustained strength in Invisalign utilization by orthodontists. We are also encouraged by the solid performance in the Europe, Middle East and Africa region and Asia Pacific markets.
Within Scanners and Service, the company witnessed rapid uptake of iTero scanners across all geographies. Align Technology has been gaining from the shipments of the iTero Element intraoral scanner to China. Moreover, Align Technology recently announced the receipt of Certificate of Medical Device Registration and Certificate of Production from the China Food and Drug Administration (CFDA) to manufacture the iTero Element intraoral scanner in China.
We are also upbeat about the company expanding the iTero Element portfolio with the lauch of iTero Element 2 and iTero Element Flex scanners in the United States and majority of European countries, covering France, Germany, Italy, Spain, and the United Kingdom.
Align Technology has a strong cash balance that enables it to carry out share repurchases and in turn provide solid returns to investors.
On the flip side, the company is exposed to foreign exchange fluctuations, seasonal demand fluctuations, higher operating expenses pertaining to increased head count along with higher investments targeted toward expansion of geographical presence and portfolio.
Zacks Rank & Other Key Picks
Align Technology carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Amedisys, Inc. (AMED - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarter's loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for EPS is pinned at 90 cents and for revenues at $381.8 million. The company is a Zacks #1 Ranked player.
Amedisys is expected to release second-quarter 2018 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS is pinned at 78 cents and for revenues at $403.6 million. The stock carries a Zacks Rank of 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Align Technology (ALGN) Beats on Earnings and Revenues in Q2
Align Technology, Inc.’s (ALGN - Free Report) second-quarter 2018 adjusted earnings per share (EPS) came in at $1.30, up 52.9% year over year. Earnings also came above the company’s guided range of $1.02-$1.06. The figure comfortably beat the Zacks Consensus Estimate of $1.09 as well.
Revenues
Revenues grew 37.5% year over year to $490.3 million in the quarter, surpassing the Zacks Consensus Estimate of $469.2 million. Revenues were well ahead of the company’s guided range of $460-$470 million.
Per management, the top line was driven by a 30.5% year-over-year increase in Invisalign case shipments to 302,685. The upside was supported by growth in North America and international regions on an expanded customer base and increased utilization along with solid worldwide teen case growth. Moreover, increased revenues from iTero scanner contributed majorly.
Segments in Detail
Revenues at the Clear Aligner segment (88.4% of total revenues) soared 35% year over year to $433.3 million in the reported quarter, primarily driven by continued strong Invisalign case volume growth across all customer channels and geographical regions.
Align Technology, Inc. Price, Consensus and EPS Surprise
Align Technology, Inc. Price, Consensus and EPS Surprise | Align Technology, Inc. Quote
In the second quarter, Invisalign case shipments amounted to 302,685, up 30.5% year over year, aided by growth across all regions as well as expansion of customer base. During the quarter, Align Technology Invisalign cases were shipped to 50,085 doctors worldwide, of which 28,280 were to North America and 21,805 to international regions.
Revenues from Scanner and Service (11.6%) improved a significant 60.9% to $57 million.
Margins
Gross margin in the quarter under review was down 140 basis points (bps) year over year to 74.6% on a 45.7% rise in cost of net revenues.
During the quarter, Align Technology witnessed a 30.2% year-over-year increase in selling, general and administrative expenses to $212.1 million and a 26.2% rise in research and development (R&D) expenses to $30.8 million. The operating margin expanded 150 bps to 25%.
Financial Details
Align Technology exited the second quarter with cash and cash equivalents and short-term marketable securities of $712.5 million, compared with $662.7 million at the end of first-quarter 2018.
In the reported quarter, Align Technology received an additional $600 million stock buy-back authorization. The company currently has approximately $100.0 million left under the April 2016 stock repurchase program.
Guidance
For the third quarter of 2018, the company projects EPS of $1.13-$1.18 on revenues of $493-$503 million. The company projects Invisalign case shipments in the band of 302,000-307,000, up 28-30% from a year ago. Meanwhile, the Zacks Consensus Estimate for second-quarter 2018 EPS is $1.18 on revenues of $499.3 million. While the earnings estimate is pegged at the high end, the estimate for revenues is within the same.
Our Take
Align Technology ended the second quarter on a solid note. We are upbeat about the continued strength in Invisalign volumes. In North America, the company continued to witness an expanding GP Dentist customer base along with sustained strength in Invisalign utilization by orthodontists. We are also encouraged by the solid performance in the Europe, Middle East and Africa region and Asia Pacific markets.
Within Scanners and Service, the company witnessed rapid uptake of iTero scanners across all geographies. Align Technology has been gaining from the shipments of the iTero Element intraoral scanner to China. Moreover, Align Technology recently announced the receipt of Certificate of Medical Device Registration and Certificate of Production from the China Food and Drug Administration (CFDA) to manufacture the iTero Element intraoral scanner in China.
We are also upbeat about the company expanding the iTero Element portfolio with the lauch of iTero Element 2 and iTero Element Flex scanners in the United States and majority of European countries, covering France, Germany, Italy, Spain, and the United Kingdom.
Align Technology has a strong cash balance that enables it to carry out share repurchases and in turn provide solid returns to investors.
On the flip side, the company is exposed to foreign exchange fluctuations, seasonal demand fluctuations, higher operating expenses pertaining to increased head count along with higher investments targeted toward expansion of geographical presence and portfolio.
Zacks Rank & Other Key Picks
Align Technology carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the broader medical space are Insulet Corporation (PODD - Free Report) , Amedisys, Inc. (AMED - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Insulet is expected to release second-quarter fiscal 2018 results on Aug 2. The Zacks Consensus Estimate for the quarter's loss per share is pegged at 13 cents and for revenues at $132.9 million. The stock sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
Integer Holdings is slated to release second-quarter 2018 results on Aug 2. The Zacks Consensus Estimate for EPS is pinned at 90 cents and for revenues at $381.8 million. The company is a Zacks #1 Ranked player.
Amedisys is expected to release second-quarter 2018 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS is pinned at 78 cents and for revenues at $403.6 million. The stock carries a Zacks Rank of 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>