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ALGN's Q3 earnings rose 7.3% to $2.80 per share, while sales grew 1.9% to $1.01 billion, beating estimates.
Clear Aligner shipments rose 6.6%, while Systems revenues fell 7.6% amid a shift to lower-priced scanners.
ALGN cut its 2026 revenue outlook to $4.11-$4.13 billion, sending shares down 0.7% in after-hours trading.
Align Technology, Inc. (ALGN - Free Report) reported third-quarter 2026 non-GAAP earnings of $2.80 per share, up 7.3% year over year. The figure beat the Zacks Consensus Estimate by 1.5%. Revenues increased 1.9% to $1.01 billion and surpassed the consensus mark by approximately 1.5%.
The quarterly results benefited from higher Clear Aligner shipments, improved doctor utilization and broad-based international growth. Clear Aligner shipments increased 6.6% year over year to 690,635 cases.
Following the announcement, ALGN shares fell 0.7% in the after-market session yesterday.
ALGN's Clear Aligner Business Drives Growth
Clear Aligner revenues increased 4.2% year over year to $839.3 million, reflecting higher shipment volumes, price increases, lower net deferrals and higher non-case revenues. These gains were partly offset by unfavorable foreign exchange, higher discounts and an unfavorable geographic and product mix.
A record 90,910 doctors submitted Invisalign cases, while doctor utilization increased 3.4% year over year. International markets supported growth, with double-digit shipment increases across Latin America and EMEA. APAC retail shipments grew 16%, supported by demand from orthodontists and general practitioner dentists.
North American orthodontist shipments increased year over year for the first time in six quarters, supported by double-digit growth in dental service organization shipments. However, general practitioner retail demand remained pressured amid continued consumer spending challenges.
Align's Systems Revenues Face Pricing Pressure
Imaging Systems and CAD/CAM Services revenues declined 7.6% year over year to $175.5 million. The decline reflected a shift toward lower-priced scanner configurations and flexible acquisition models, including leasing, rentals and certified pre-owned systems.
However, scanner unit placements increased at a double-digit rate year over year. The global installed base expanded to more than 157,000 systems. Management indicated that scanner pricing stabilized on a comparable-product basis, while flexible purchasing options continued to support customer adoption.
The expanding scanner footprint also creates opportunities for recurring software and services revenues through increased utilization of Align's digital dentistry platform.
Third-quarter gross margin expanded approximately 450 basis points year over year to 68.7%, primarily reflecting operational efficiencies and the absence of significant prior-year charges. Non-GAAP gross margin remained flat at 70.4%, reflecting higher transportation costs, lower Clear Aligner average selling prices and unfavorable product mix.
Total operating expenses declined 2.7% year over year to $528.3 million. GAAP operating margin expanded 700 basis points to 16.7%, while non-GAAP operating margin improved 50 basis points to 24.4%.
Align Strengthens Cash Position and Shareholder Returns
Align ended the third quarter with $1.14 billion in cash and cash equivalents compared with $1.10 billion at the end of the preceding quarter. Operating cash flow totaled $183.2 million, while free cash flow reached approximately $138 million after capital expenditures of $45.1 million.
The company repurchased approximately 627,300 shares for $103.3 million during the quarter.
Align Technology, Inc. Price, Consensus and EPS Surprise
For the fourth quarter of 2026, Align expects worldwide revenues of $1.00-$1.02 billion. Clear Aligner volume is projected to increase in the low-single-digit range year over year, while average selling prices are expected to decline approximately 1%. Systems and Services revenues are expected to be in the band of $170-$180 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.05 billion.
For 2026, worldwide revenues are now projected to be in the $4.11-$4.13 billion band, suggesting a reduction from the previous outlook. Clear Aligner volume and revenue growth are expected at approximately 5-6%, while Systems and Services revenues are projected to be in the $715-$725 million range. The Zacks Consensus Estimate for full-year revenues is pegged at $4.15 billion.
Our Take
Align Technology exited the third quarter of 2026 on a solid note, with both earnings and revenues beating their respective estimates. The company’s financial results are supported by a record number of doctors submitting Invisalign cases, record third-quarter Clear Aligner shipments, improved doctor utilization and broad-based international growth.
However, management lowered its 2026 revenue outlook, primarily reflecting softer expectations for the Systems and Services business. The revised guidance also incorporates slightly lower Clear Aligner volume and average selling price (ASP) assumptions, driven by an unfavorable geographic and product mix and foreign exchange headwinds.
The expansion in operating margin during the quarter is encouraging, reflecting disciplined cost management and productivity improvements. However, declining Systems and Services revenues remain a concern.
ALGN’s Zacks Rank and Key Picks
Align Technology currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC - Free Report) , Agilent Technologies (A - Free Report) and Globus Medical (GMED - Free Report) .
Phibro Animal Health, sporting a Zacks Rank #1 (Strong Buy) at present, reported fourth-quarter fiscal 2026 adjusted EPS of 85 cents, which surpassed the Zacks Consensus Estimate by 18.06%. Revenues of $396.7 million beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC has an earnings yield of 8.9% compared with the industry’s 2.8%. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 18.36%.
Agilent Technologies, carrying a Zacks Rank #2 (Buy) at present, posted third-quarter fiscal 2026 adjusted EPS of $1.62, which exceeded the Zacks Consensus Estimate by 9.5%. Revenues of $1.88 billion topped the Zacks Consensus Estimate by 2.1%.
A has an earnings yield of 3.7% compared with the industry’s 2.8%. The company’s earnings outpaced estimates in two of the trailing four quarters, missed once and broke even in the other, the average surprise being 3.8%.
Globus Medical, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $1.34, which exceeded the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million outperformed the Zacks Consensus Estimate by 0.4%.
GMED has an estimated earnings yield of 6.6% against the industry’s 2.3% decline. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 27.9%.
View the Zacks #1 Rank List
Image: Bigstock
ALGN Q3 Earnings & Revenues Beat, '26 Sales View Down, Stock Falls
Key Takeaways
Align Technology, Inc. (ALGN - Free Report) reported third-quarter 2026 non-GAAP earnings of $2.80 per share, up 7.3% year over year. The figure beat the Zacks Consensus Estimate by 1.5%. Revenues increased 1.9% to $1.01 billion and surpassed the consensus mark by approximately 1.5%.
The quarterly results benefited from higher Clear Aligner shipments, improved doctor utilization and broad-based international growth. Clear Aligner shipments increased 6.6% year over year to 690,635 cases.
Following the announcement, ALGN shares fell 0.7% in the after-market session yesterday.
ALGN's Clear Aligner Business Drives Growth
Clear Aligner revenues increased 4.2% year over year to $839.3 million, reflecting higher shipment volumes, price increases, lower net deferrals and higher non-case revenues. These gains were partly offset by unfavorable foreign exchange, higher discounts and an unfavorable geographic and product mix.
A record 90,910 doctors submitted Invisalign cases, while doctor utilization increased 3.4% year over year. International markets supported growth, with double-digit shipment increases across Latin America and EMEA. APAC retail shipments grew 16%, supported by demand from orthodontists and general practitioner dentists.
North American orthodontist shipments increased year over year for the first time in six quarters, supported by double-digit growth in dental service organization shipments. However, general practitioner retail demand remained pressured amid continued consumer spending challenges.
Align's Systems Revenues Face Pricing Pressure
Imaging Systems and CAD/CAM Services revenues declined 7.6% year over year to $175.5 million. The decline reflected a shift toward lower-priced scanner configurations and flexible acquisition models, including leasing, rentals and certified pre-owned systems.
However, scanner unit placements increased at a double-digit rate year over year. The global installed base expanded to more than 157,000 systems. Management indicated that scanner pricing stabilized on a comparable-product basis, while flexible purchasing options continued to support customer adoption.
The expanding scanner footprint also creates opportunities for recurring software and services revenues through increased utilization of Align's digital dentistry platform.
ALGN's Operating Margin Expands Despite Cost Pressures
Third-quarter gross margin expanded approximately 450 basis points year over year to 68.7%, primarily reflecting operational efficiencies and the absence of significant prior-year charges. Non-GAAP gross margin remained flat at 70.4%, reflecting higher transportation costs, lower Clear Aligner average selling prices and unfavorable product mix.
Total operating expenses declined 2.7% year over year to $528.3 million. GAAP operating margin expanded 700 basis points to 16.7%, while non-GAAP operating margin improved 50 basis points to 24.4%.
Align Strengthens Cash Position and Shareholder Returns
Align ended the third quarter with $1.14 billion in cash and cash equivalents compared with $1.10 billion at the end of the preceding quarter. Operating cash flow totaled $183.2 million, while free cash flow reached approximately $138 million after capital expenditures of $45.1 million.
The company repurchased approximately 627,300 shares for $103.3 million during the quarter.
Align Technology, Inc. Price, Consensus and EPS Surprise
Align Technology, Inc. price-consensus-eps-surprise-chart | Align Technology, Inc. Quote
ALGN Sets Q4 View and Updates 2026 Outlook
For the fourth quarter of 2026, Align expects worldwide revenues of $1.00-$1.02 billion. Clear Aligner volume is projected to increase in the low-single-digit range year over year, while average selling prices are expected to decline approximately 1%. Systems and Services revenues are expected to be in the band of $170-$180 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.05 billion.
For 2026, worldwide revenues are now projected to be in the $4.11-$4.13 billion band, suggesting a reduction from the previous outlook. Clear Aligner volume and revenue growth are expected at approximately 5-6%, while Systems and Services revenues are projected to be in the $715-$725 million range. The Zacks Consensus Estimate for full-year revenues is pegged at $4.15 billion.
Our Take
Align Technology exited the third quarter of 2026 on a solid note, with both earnings and revenues beating their respective estimates. The company’s financial results are supported by a record number of doctors submitting Invisalign cases, record third-quarter Clear Aligner shipments, improved doctor utilization and broad-based international growth.
However, management lowered its 2026 revenue outlook, primarily reflecting softer expectations for the Systems and Services business. The revised guidance also incorporates slightly lower Clear Aligner volume and average selling price (ASP) assumptions, driven by an unfavorable geographic and product mix and foreign exchange headwinds.
The expansion in operating margin during the quarter is encouraging, reflecting disciplined cost management and productivity improvements. However, declining Systems and Services revenues remain a concern.
ALGN’s Zacks Rank and Key Picks
Align Technology currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC - Free Report) , Agilent Technologies (A - Free Report) and Globus Medical (GMED - Free Report) .
Phibro Animal Health, sporting a Zacks Rank #1 (Strong Buy) at present, reported fourth-quarter fiscal 2026 adjusted EPS of 85 cents, which surpassed the Zacks Consensus Estimate by 18.06%. Revenues of $396.7 million beat the Zacks Consensus Estimate by 8.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC has an earnings yield of 8.9% compared with the industry’s 2.8%. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 18.36%.
Agilent Technologies, carrying a Zacks Rank #2 (Buy) at present, posted third-quarter fiscal 2026 adjusted EPS of $1.62, which exceeded the Zacks Consensus Estimate by 9.5%. Revenues of $1.88 billion topped the Zacks Consensus Estimate by 2.1%.
A has an earnings yield of 3.7% compared with the industry’s 2.8%. The company’s earnings outpaced estimates in two of the trailing four quarters, missed once and broke even in the other, the average surprise being 3.8%.
Globus Medical, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $1.34, which exceeded the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million outperformed the Zacks Consensus Estimate by 0.4%.
GMED has an estimated earnings yield of 6.6% against the industry’s 2.3% decline. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 27.9%.