AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Proprietary software and substantial operating scale are established, but relative differentiation, cost superiority and barriers to substitution are not. The moat verdict remains uncertain.
durability · — · Current relationships and experience do not establish durable economic protection. Invalidated asserted patent claims weaken one potential barrier, and direct-printing benefits remain prospective.
customer dependency · — · Training and integrated workflows suggest friction, but material dependency or costly substitution is not demonstrated. Contract fulfillment is not equivalent to renewal.
erosion resilience · — · Volume growth and improving segment margins coexist with discounting, scanner-segment revenue weakness and patent setbacks. These results do not resolve the durability of a structural moat.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Observed pricing is mixed. Americas price increases contributed $68.6 million in 2023, with promotional and mix offsets. Second-quarter 2026 pricing contributed positively together with currency, but first-half discounts and lower-priced mix reduced revenue by $26 million. The latest price effect cannot be isolated from currency.
retention · 2/4 · Indirect evidence supports continuing demand: clear aligner volume increased, scanner lease income grew across 2023–2025, and service obligations extend for years. Declining remaining obligations and trained doctors with irregular usage limit confidence. No retention rate is inferred.
margin resilience · 2/4 · Both segments reported improved first-half 2026 operating margins despite pricing and mix pressure. Improvements also reflected lower operating expenses, so resilience cannot be attributed solely to pricing. Historical promotions have had adverse profit consequences.
contractual freedom · 2/4 · Different prices and fees, realized price increases and disclosed payment terms demonstrate some commercial discretion. Collection generally precedes complete fulfillment. Freedom is constrained economically by discounts and price-focused competition; existing-contract repricing rights are not established.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 3.68
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 4.07
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade, interestCoverageGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- currentRatioGrade
- 49.02
- Current ratio (x)
- 1.36
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -2.47
- 3-year average SBC / revenue (%)
- 4.31
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual repurchases reduced outstanding shares despite equity issuance, but stock-based compensation increased and net income declined across 2023–2025. A $23.1 million asset impairment tempers the record. The planned approximately $200 million manufacturing investment is a future spending plan, not a demonstrated return. Missing cash-flow amounts limit assessment of funding discipline.
incentive alignment · 3/4 · Actual below-target cash and MSU payouts, subsequent below-target MSU vesting, CEO personal share purchases and anti-hedging policies demonstrate meaningful alignment. Bonus measurement excluded certain charges, and compensation includes time-vested equity; exceptional alignment is not established.
execution · 2/4 · Reported treatment and manufacturing milestones, growing first-half 2026 clear aligner volumes and improving segment margins support execution. Systems and Services revenue declined, discounting offset growth, and 2025 incentive results fell below target. This assessment uses operating outcomes as indirect evidence of management execution.
governance · 3/4 · An independent chair separate from the CEO, an entirely independent Audit Committee and an adopted special-meeting right support strong governance structures. The special-meeting right requires 25% ownership held for one year. Nominee independence is not treated as proof of subsequent election, and these disclosures do not establish exceptional oversight outcomes.
Evidence
We continuously upgrade our proprietary, three-dimensional treatment planning software to enhance computer analysis of treatment data and reduce time spent on manual and judgmental tasks for each case, thereby increasing the efficiency of our technicians.
Manufacturing and proprietary treatment-planning software · Filed 27/02/2026
•Major milestones: 22 million Invisalign® patients treated—including over 6.5 million teens and kids—over 295 thousand active Invisalign® trained practitioners, and over 2.4 billion clear aligners manufactured worldwide •FY 2025 Total Revenues of $4.0 billion • FY 2025 Operating Margin of 13.5%, or 21.8% on a non-GAAP basis •FY 2025 Diluted Net Income per share of $5.65, or $10.51 on a non-GAAP basis •Repurchased $466 million of Align common stock during 2025 April 7, 2026 Dear Stockholders, As I reflect on fiscal 2025, I am proud of how Align navigated a year that demanded focus, resilience, and disciplined execution.
Stockholder letter: historical operating milestones and 2025 results · Filed 07/04/2026
To date, over 22 million people worldwide have been treated with the Invisalign System.
Business: cumulative Invisalign treatments · Filed 27/02/2026
10,973,613; 11,154,384, 11,648,090, and 11,648,091 were invalid for lack of enablement.
Legal proceedings: materials patent claims found invalid · Filed 05/08/2026
We have and will likely continue to experience price-focused competition as we continue to expand into new markets, which could contribute to the commoditization of our products or services if we are unable to otherwise differentiate our offerings from those of our competitors.
Competition risks: experienced price-focused competition · Filed 05/08/2026
These increases were partially offset by higher discounts and product mix shift to lower-priced countries and products resulting in a decrease in net revenues of $26 million.
MD&A: first-half 2026 clear aligner discounts and geographic/product mix · Filed 05/08/2026
While our product portfolio facilitates this transition, our competitors may render our technology or products obsolete or economically unattractive, particularly as competitors incorporate AI and machine learning into new or existing services and technologies that facilitate changes in doctor-patient interactions, expectations and treatment workflows.
Competition risks: potential technological substitution · Filed 05/08/2026
We believe Cubicure provides direct fabrication capabilities that will support and scale our strategic innovation roadmap and strengthen the Align Digital Platform by enabling us to scale our 3D printing operations to eventually print millions of custom devices per day.
Business: management expectations for direct fabrication · Filed 27/02/2026
32 Table of Contents Net revenues for our Clear Aligner and Systems and Services segments for the three and six months ended June 30, 2026 and 2025 are as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, Net Revenues 2026 2025 Change 2026 2025 Change Clear Aligner net revenues $ 870.9 $ 804.6 $ 66.3 8.2 % $ 1,726.9 $ 1,601.5 $ 125.4 7.8 % Systems and Services net revenues 185.3 207.8 (22.5) (10.8) % 369.4 390.3 (20.9) (5.3) % Total net revenues $ 1,056.2 $ 1,012.4 $ 43.7 4.3 % $ 2,096.3 $ 1,991.7 $ 104.6 5.3 % Changes and percentages are based on actual values.
MD&A: second-quarter and first-half 2026 segment revenues · Filed 05/08/2026
On August 15, 2025, we initiated two actions in the European Unified Patent Court against various Angelalign entities including Angelalign Technology, Inc.; Angelalign France Technology SASU; Europe Angelalign Technology B.V.; Angelalign Technology (Germany) GmbH; Italy Angelalign Technology S.R.L.
Legal proceedings: named Angelalign entities in patent actions · Filed 05/08/2026
In order to provide Invisalign treatment to their patients, orthodontists and GPs must initially complete an Invisalign training course.
Business: required initial Invisalign practitioner training · Filed 27/02/2026
Our iTero intraoral scanners are used by dental professionals, labs, and service providers for restorative and orthodontic digital procedures, Invisalign case submissions, and comprehensive digital dentistry diagnosis, treatment planning and treatment monitoring.
Business: iTero clinical and treatment workflows · Filed 27/02/2026
Our portfolio of leased iTero scanners included in Property, plant and equipment, net are as follows: December 31, 2025 2024 Scanners under operating leases, gross $ 55,576 $ 33,770 Less: accumulated depreciation (26,222) (12,038) Scanners under operating leases, net $ 29,354 $ 21,732 As of December 31, 2025, the future lease payments due to us are as follows (in thousands): Fiscal Year Ending December 31, Operating Leases 2026 $ 33,898 2027 28,587 2028 8,736 2029 1,080 Thereafter — Total lease payments $ 72,301 For the years ended December 31, 2025, 2024 and 2023, operating lease income was $28.8 million, $21.7 million and $16.6 million, respectively.
Note 4: scanner operating leases, future payments and lease income · Filed 27/02/2026
This also includes performance obligations from our Systems and Services reportable segment, primarily services and support, which are fulfilled over one to five years, and contracted deliveries of additional scanners.
Revenue recognition: service, support and scanner delivery obligations · Filed 27/02/2026
Our unfulfilled performance obligations, including deferred revenues and backlog, and the estimated revenues expected to be recognized in the future related to these performance obligations are $1,352.7 million and $1,444.9 million as of December 31, 2025 and 2024, respectively.
Revenue recognition: 2025 and 2024 remaining performance obligations · Filed 27/02/2026
Our unfulfilled performance obligations, including deferred revenues and backlog, as of June 30, 2026 were $1,277.9 million.
Revenue recognition: June 2026 remaining performance obligations · Filed 05/08/2026
The program allows doctors the flexibility to order retainers and low-stage “touch-up” clear aligners within their subscribed tier and is designed for a segment of experienced Invisalign trained doctors who are currently not regularly using our retainers or low-stage aligners.
Doctor Subscription Program: targeted trained but irregular users · Filed 05/08/2026
Higher ASP includes price increases which increased net revenues by $68.6 million along with higher additional aligners which increased net revenues by $43.9 million.
MD&A: 2023 Americas realized price increases · Filed 28/02/2024
The increases in ASP were partially offset by higher promotional discounts which decreased net revenues by $44.3 million, a product mix shift to lower priced products which reduced net revenues by $37.6 million and higher sales credits which lowered net revenues $11.5 million.
MD&A: 2023 Americas discounts, mix and sales credits · Filed 28/02/2024
Clear Aligner For the three months ended June 30, 2026, Clear Aligner net revenues increased by $66 million compared to the same period in 2025, primarily due to an increase in volume, which increased net revenues by $53 million and an increase of $13 million from favorable foreign exchange rates and price increases.
MD&A: second-quarter 2026 clear aligner volume, currency and price effects · Filed 05/08/2026
For the six months ended June 30, 2026, our operating margin increased compared to the same period in 2025, primarily due to higher gross margin and lower advertising and marketing expense, partially offset by an increase in employee costs and equipment.
MD&A: first-half 2026 Clear Aligner operating-margin drivers · Filed 05/08/2026
For the six months ended June 30, 2026, our operating margin increased compared to the same period in 2025, primarily due to higher gross margin and a decrease in operating expenses related to lower employee costs, advertising and outside services partially offset by an increase in credit card transaction fees and equipment.
MD&A: first-half 2026 Systems and Services operating-margin drivers · Filed 05/08/2026
In addition, we sell our products at different prices and with varying shipping and handling charges or processing fees that may differ by country.
Pricing risks: differentiated prices, shipping charges and processing fees · Filed 27/02/2026
For both aligners and scanners, we usually collect the total consideration owed prior to all performance obligations being satisfied with payment terms generally varying from net 30 to net 180 days.
Revenue recognition: payment terms and collection before complete fulfillment · Filed 27/02/2026
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss), Net Retained Earnings Total Shares Amount Balance as of December 31, 2022 77,267 $ 8 $ 1,044,946 $ (10,284) $ 2,566,688 $ 3,601,358 Net income — — — — 445,053 445,053 Net change in unrealized gains (losses) from investments — — — 3,033 — 3,033 Net change in foreign currency translation adjustment — — — 28,419 — 28,419 Issuance of common stock relating to employee equity compensation plans 335 — 26,595 — — 26,595 Tax withholdings related to net share settlements of equity awards (70) — (22,575) — — (22,575) Common stock repurchased and retired (2,457) (1) (30,852) — (564,567) (595,420) Equity forward contract related to accelerated stock repurchase — — (10,000) — — (10,000) Stock-based compensation — — 154,026 — — 154,026 Balance as of December 31, 2023 75,075 7 1,162,140 21,168 2,447,174 3,630,489 Net income — — — — 421,362 421,362 Net change in unrealized gains (losses) from investments — — — 596 — 596 Net change in foreign currency translation adjustment — — — (15,786) — (15,786) Issuance of common stock relating to employee equity compensation plans 411 — 25,281 — — 25,281 Tax withholdings related to net share settlements of equity awards (92) — (28,125) — — (28,125) Common stock repurchased and retired (1,545) — (20,292) — (335,243) (355,535) Equity forward contract related to accelerated stock repurchase — — 49,527 — (49,527) — Stock-based compensation — — 173,703 — — 173,703 Balance as of December 31, 2024 73,849 7 1,362,234 5,978 2,483,766 3,851,985 Net income — — — — 410,351 410,351 Net change in foreign currency translation adjustment — — — 69,410 — 69,410 Issuance of common stock relating to employee equity compensation plans 494 — 21,749 — — 21,749 Tax withholdings related to net share settlements of equity awards (104) — (20,390) — — (20,390) Common stock repurchased and retired (2,875) — (39,868) — (429,960) (469,828) Stock-based compensation — — 185,870 — — 185,870 Balance as of December 31, 2025 71,364 $ 7 $ 1,509,595 $ 75,388 $ 2,464,157 $ 4,049,147 The accompanying notes are an integral part of these consolidated financial statements.
Consolidated statements of stockholders' equity: earnings, repurchases, issuance and compensation · Filed 27/02/2026
For the year ended December 31, 2025, we recognized an impairment loss of $23.1 million on assets held for sale, which was recorded within Cost of net revenues in our Consolidated Statements of Operations.
Assets held for sale: realized 2025 impairment · Filed 27/02/2026
We expect to invest approximately $200 million over the next several years in connection with the project, including both capital expenditures and operating costs.
Recent developments: planned manufacturing investment · Filed 05/08/2026
As of the date of this proxy statement, these best practices include: CEO and independent Chairman of the Board (“Chair”) are separate positions 90% of our director nominees are independent Our Board is made up of seasoned executive leaders with a diversity of viewpoints, backgrounds, national origins, and experiences Since 2017, we have added six new members to our Board We have significant stock ownership thresholds for our officers and directors that were further increased in 2025 and our CEO has purchased $8 million of our common stock since his last sale in 2021(1) Our independent directors hold routine executive sessions without management present Employees and directors are prohibited from engaging in short-selling, hedging or pledging transactions Our Board oversees our overall risk management infrastructure We promote a culture of integrity and quality that manages risks as part of our corporate strategy and day-to-day operations Since 2023, we have expanded stockholder rights by adopting proxy access bylaws (2023), eliminating supermajority voting requirements (2025) and empowering our stockholders to call special meetings (2026) (1) To ensure alignment with Align’s long-term growth objectives and that his interests are closely aligned with those of our stockholders, our CEO has purchased approximately $8 million (as valued at the time of each purchase) of our common stock using his personal funds since his last sale of our common stock in 2021.
Governance highlights: leadership separation, ownership policies and CEO purchases · Filed 07/04/2026
While we grew revenues year over year, our net revenue growth and adjusted operating income performance resulted in below target payouts on our annual cash incentive and the relative underperformance of our stock resulted in below target payouts for our long-term MSUs.
Compensation discussion: actual below-target 2025 incentive payouts · Filed 07/04/2026
As discussed below, for the 2025 Bonus Plan, the Committee made no adjustment to our constant currency revenue attainment, but excluded certain assets write-down, accelerated depreciation, restructuring charges, and legal settlement, which are all extraordinary and non-recurring items identified as non-GAAP adjustments in our earnings announcements, from the measurement of our constant currency operating income as further discussed below in “2025 Bonus Plan Financial Targets and Attainment.”
Compensation discussion: adjustments to 2025 bonus operating-income measurement · Filed 07/04/2026
The following table summarizes the MSU performance activity for the six months ended June 30, 2026: Number of Shares Underlying MSUs (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Unvested as of December 31, 2025 263 $ 507.88 Granted 149 378.44 Vested and released1 (63) 622.37 Forfeited (37) 532.75 Unvested as of June 30, 2026 312 $ 419.99 1.92 $ 52,623 1 Includes MSUs vested during the period below 100% of the original grant as actual shares released are based on our stock performance relative to a market index over the vesting period.
Stock compensation: actual first-half 2026 MSU vesting and relative-performance adjustment · Filed 05/08/2026
On February 24, 2026, upon the recommendation of our Nominating and Governance Committee, our Board amended and restated Section 2.3 of our Bylaws to provide that the Board shall call a special meeting of stockholders if properly requested by one or more stockholders of record (or beneficial owners, if any) that have continuously held not less than 25% of our outstanding shares of voting stock entitled to vote on each of the matters proposed to be considered at the special meeting (the “Requisite Percentage”) for at least one year prior the date of mailing of the request (the “One-Year Period”), and have otherwise complied with each requirement in Section 2.3 of our Bylaws (the “Special Meeting Provision”).
Special meeting provision: adopted February 2026 bylaw amendment · Filed 07/04/2026
The Audit Committee is comprised entirely of independent directors who meet all applicable Nasdaq and SEC independence requirements.
Audit Committee report: actual committee independence · Filed 07/04/2026
For the six months ended June 30, 2026, Clear Aligner net revenues increased by $125 million compared to the same period in 2025, primarily due to an increase in volume and favorable foreign exchange rates, which increased net revenues by $102 million and $49 million, respectively.
MD&A: first-half 2026 clear aligner volume and currency contribution · Filed 05/08/2026
We have a history of offering volume discounts, price reductions and other promotions to targeted customers and consumers and releasing lower priced products which have had, and may in the future have, unexpected and unintended consequences, including reduced net revenues, gross profit, operating profit and net income.
Pricing risks: realized adverse consequences of discounts and lower-priced products · Filed 05/08/2026
