Align Technology's (NASDAQ: ALGN) first quarter was one for the record books. On Thursday, Align announced its second-quarter results. The orthodontic-device maker reported all-time high revenue, earnings, and shipments of its Invisalign clear aligners. There really weren't any negatives to be found in the company's results. Here are the highlights from the company's second quarter.
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Align Technology results: The raw numbers
|$356.5 million||$269.4 million||
Net income from continuing operations
|$69.2 million||$50.1 million||
What happened with Align Technology this quarter?
Align Technology again enjoyed tremendous performance from all areas of its business in the second quarter. Revenue for its Invisalign clear aligner segment jumped 31.9% year over year, to $321 million. Revenue for Align's scanner and services segment soared 36.7% above the prior-year period performance, to $35.4 million.
Invisalign shipments were also strong, yet again, with a total of 231,890 case shipments in the second quarter. That reflected at 31% year-over-year increase and an 11.5% sequential increase. Align especially benefited from impressive international growth of 37.4% above the prior-year period.
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Second-quarter earnings growth was even higher than sales growth, thanks to the company keeping spending under control. While Align's operating expenses increased by nearly 34%, it was still less than the company's revenue increase.
Other highlights for Align Technology during the second quarter included:
- Opening a new Invisalign treatment-planning facility in Chengdu, China
- Launching a major new software update for its iTero Element intraoral scanners
- Receiving two key U.S. patents for its SmartTrack aligner material
- Kicked off a multi-million dollar marketing campaign for Invisalign
What management had to say
Align Technology CEO Joe Hogan liked what he saw in the second quarter. Hogan stated:
Our second quarter results were better than expected across key financial metrics including revenue, volume, margins, and EPS. Q2 revenues increased 32.3% year-over-year driven by strong Invisalign case shipments across all channels and especially in the teen segment. Solid execution of our strategy and key investments continue to deliver strong growth across the board, with record Invisalign volume in almost every geography. The second quarter also had an all-time high of nearly 5,000 newly trained Invisalign doctors in a quarter. Our iTero scanner business also performed well this quarter with revenues up 36.7% year-over-year.
The company projects that Invisalign case shipments in the third quarter will be between 231,000 and 234,000. That's a year-over-year increase of 30% to 32%. Net revenue for the third quarter is expected to come in between $355 million and $360 million, up 27% to 29% compared to the prior-year period. Align thinks that diluted earnings per share for the third quarter will be in the range of $0.78 to $0.81, including $0.01 of excess tax benefit.
There don't appear to be any clouds on the horizon for Align Technology right now. Demand continues to be strong for its Invisalign clear aligners. Align's iTero scanners are also selling briskly.
One key area to watch is Align's international expansion. The company's new Chinese treatment-planning facility should be important for Align's goal of achieving more growth in Asia.
Align Technology stock continues to perform strongly, tripling in value in the last three years. While it's impossible to accurately predict how well the stock will do in the next few years, the company's business model is solid, and management appears to be making smart decisions. Align's second-quarter performance underscores both points quite well.
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