Align Technology (NASDAQ:ALGN) Chief Financial Officer John Morici said the company exited the year with improved stability across markets and broad-based growth, citing year-over-year volume growth of close to 8% and revenue growth of 5% as results strengthened into the third and fourth quarters.
Speaking at a Barclays event in a discussion moderated by analyst Glen Santangelo, Morici attributed the stronger finish to a combination of steadier end-market conditions and company initiatives aimed at increasing “active conversion,” including the use of iTero scans to help patients visualize outcomes and the use of financing options to support treatment decisions.
Fourth-quarter trends and market stability
In discussing the current environment, Morici said the company continues to see stability despite changing headlines and macro concerns. He added that Align has been able to navigate supply chain logistics, including potential disruptions linked to the Middle East, noting that delays can occur but that the company has been able to manage supply while keeping employees safe.
On consumer demand, Morici said Align did not plan for a boost from tax refunds, but he acknowledged it could be a tailwind—particularly for adult orthodontics, which can be more discretionary and often paid out of pocket. He referenced prior periods, such as during COVID-era stimulus, when consumers had more funds and opted to pursue elective treatments.
Growth drivers: conversion, DSOs, and underpenetrated markets
Morici emphasized that Align’s growth opportunity remains tied to what he described as an underpenetrated orthodontics market, particularly among teens, where many cases are still treated with wires and brackets. He repeatedly framed traditional braces as the company’s primary competitive set, arguing that most orthodontic case starts are still not treated with clear aligners.
He said Align is focused on helping providers improve conversion from consult to case start through tactics such as scanning, visualization, pricing discipline, and financing. Morici said DSOs have been particularly effective at applying these practices at scale, which he characterized as a key reason they are growing in double digits globally. He added that Align is working to extend that “blueprint” to independent practices, which still represent the majority of providers.
On DSOs specifically, Morici said the channel represents about 25% of the company’s business on a volume basis and benefits from ongoing consolidation in dentistry. He cited partnerships including Smile Doctors and Heartland Dental, and said DSO consolidation is also increasing in Europe and Asia. Morici described DSOs as a “force multiplier” that can leverage Align’s manufacturing scale, technology, and brand, including co-marketing capabilities.
Pricing, ASP mix, and competitive dynamics
Morici said clear aligner competitors primarily compete on price, but he noted that industry players have been raising prices, which he suggested reflects the unsustainability of earlier pricing levels. He also said switching behavior may be changing as some doctors evaluate treatment outcomes after moving to other platforms, a process he said can take months to assess case finishing.
Regarding Align’s average selling price (ASP), Morici said two main factors influence reported ASP trends as the company grows:
- Geographic mix: Faster growth in countries with lower list prices—such as India, Brazil, and Turkey—can pressure ASPs.
- Product mix: Increased volume in lower-priced offerings, such as touch-up cases with fewer aligner sets, can also lower ASP.
Morici said the company sold to more doctors than ever in the fourth quarter and argued that some lower-acuity cases can be high gross margin for Align, contributing to strong margin performance. He added that, on a like-for-like basis within individual markets, the company is not seeing abnormal pricing behavior, and that price increases where they occur are often related to currency changes.
Legal matters and intellectual property
Morici said Align’s litigation related to Angel Aligner is ongoing and spans multiple jurisdictions, including the U.S., Europe, and China. He stated that Align secured a preliminary injunction in Europe that required Angel Aligner to pull back certain live software updates. Morici said Align believes its intellectual property position is strong, citing “thousands of patents,” and claimed Angel Aligner’s product appeared to be built based on Align’s technology roadmap—an issue he said will become clearer as proceedings continue.
iTero adoption, tariffs, and capital allocation
On systems and services, Morici discussed continued upgrades to the iTero scanner line, including Lumina, which he described as a shift from confocal technology to camera-based imaging with a smaller wand and faster scans. He said Align offers a portfolio ranging from the latest Lumina scanners to mid-tier options and certified pre-owned devices, supported by financing choices such as purchases, leases, and rentals. In markets like Brazil and China, he said renting or leasing scanners has become more common than purchasing outright.
Morici also said the company is pursuing innovations that support restorative and diagnostic use cases, with a goal of making scanning more routine for general dentists—particularly since general dentistry is largely restorative. He said Align sees a direct correlation between scanner adoption and Invisalign case volume.
On tariffs, Morici said Align is incurring about $1 million per month related to a tariff on a product coming from Israel tied to its scanner business, while noting there is no tariff under USMCA on products coming out of Mexico. He characterized the tariff impact as manageable and said the company is staying active in monitoring potential changes.
Morici said Align ended the period with $1.1 billion in cash and discussed share repurchases as an important use of excess cash after funding operations. He noted the company has been buying back over half a billion dollars of shares over the last couple of years and said that bringing cash back efficiently matters because more than 80% of its cash is held outside the U.S.
Looking ahead, Morici reiterated a “starting framework” for 2026 guidance discussed during the event: 3% to 5% revenue growth in the first quarter and 3% to 4% clear aligner volume growth for the year, with international markets expected to grow faster. He said Align plans to manage the year quarter by quarter given a dynamic environment, while maintaining focus on technology, scale, brand, and initiatives designed to improve patient conversion.
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.
