GP Dental and orthodontic medical device maker Align Technology Inc. (ALGN:NASDAQ) yesterday announced financial results for the third quarter of 2020 ended September 30, 2020.
The company reported that in Q3/20 net revenues increased to $734.1 million, which was a 20.9% rise over the $607.3 million it recorded in Q3/19. The firm stated that the total net revenues were composed of $620.8 million from Clear Aligner sales and $113.4 million from Imaging Systems and CAD/CAM Services revenues, which showed respective year-over year increases of 20.2% and 24.5%.
Align Technology additionally provided details pertaining to sales volumes and stated that in Q3/20 Clear Aligner volume was 496,065 cases, which represent a 28.7% increase over the 385,360 cases it sold in Q3/19. The company indicated that Clear Aligner volume in Q3/20 grew significantly in both its Americas and international regions and advised that Clear Aligner volume in the quarter was up 24.9% and up 33.6% respectively in those markets compared to the corresponding quarter in Q3/19.
The firm reported that its operating margin was 24.1% in Q3/20, which resulted in GAAP operating income of $177.1 million. The company stated that this level was 39.3% higher than the GAAP operating income of $127.2 it achieved in Q3/19 and the 20.9% margin in that period.
Align Technology noted that in Q3/20 GAAP net income was $139.4 million, or $1.76 per diluted share, and non-GAAP net income during the same period was $177.9 million, or $2.25 per diluted share.
The company's President and CEO Joe Hogan remarked, "I'm pleased to report stronger than expected results with record third quarter revenues up 21% year-over-year reflecting strong momentum across all regions and customer channels for both Invisalign® clear aligners and iTero scanner and services. During the quarter, we continued to support doctor recovery efforts with products, programs, and virtual tools and training that helped more doctors transition their practices to digital technologies and drove record utilization across the Invisalign portfolio. Capping off our record quarter is the achievement of our 9 millionth Invisalign patient milestone. We also saw strong response to our new teen and mom-focused consumer campaign with 118% year-over-year increase in total leads, an uptick in consumer engagement from new social media influencers like Charli D'Amelio and Marsai Martin, and a 25.6% year over year increase in teenagers using Invisalign clear aligners."
The company reviewed a few of the business highlights in the quarter and stated that it just served its one millionth patient in treatment with the Invisalign system in the Asia Pacific region. The firm also stated that it has entered into an agreement with the National Football League making the Invisalign brand the NFL's Official Clear Aligner Sponsor.
The firm also announced "the global launch of the Align Digital and Practice Transformation (ADAPT) service for Invisalign and iTero doctors." The company explained that "ADAPT is an expert and independent fee-based business consulting service offered by Align to optimize practices' operational workflow and processes to enhance patients' experiences and customer and staff satisfaction, which will in turn translate into higher growth and greater efficiencies for orthodontic practices."
The firm commented at length regarding its latest product developments and highlighted that "it announced the launch of Invisalign G8 with SmartForce® Aligner Activation, the latest of the company's biomechanics innovations." The company indicated that the Invisalign G8 will be available on all Invisalign products beginning in Q1/21.
Align Technology is a medical device company based in San Jose, Calif., that designs, manufactures and markets the clear aligner Invisalign® system, which the firm states is the world's leading invisible orthodontic product, the iTero® Intraoral scanning systems and services, as well as its exocad CAD/CAM software. The firm's products are available to general practitioner dentists, orthodontists and other dental specialists, and the firm also provides training, clinical education programs and tools needed for dental industry adoption.
Align Technology started off the day with a market capitalization of around $26.5 billion with approximately 78.8 million shares outstanding and a short interest of about 3.5%. ALGN shares opened more than 26% higher today at $424.32 (+$88.51, +26.36) over yesterday's $335.81 closing price and reached a new 52-week high this morning of $459.00. The stock has traded today between $424.00 and $459.00 per share and is currently trading at $453.82 (+$118.02, +35.14%).
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