Align Technology (NASDAQ:ALGN) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Align Technology reported Q3 2026 revenues of $1.015 billion, a 1.9% increase year-over-year, with clear aligner shipments up 6.6% to 691,000.
Systems and Services revenue was $175.5 million, down 7.6% year-over-year, reflecting a shift toward lower-priced scanner configurations.
Non-GAAP gross margin was 70.4%, slightly below expectations due to higher transportation costs and geographic mix.
Align is focusing on expanding utilization among orthodontists and GP dentists and growing its digital platform, especially in international markets.
The company announced a CEO succession plan, with Jennifer Davis set to take over as CEO at the end of the year.
Align’s Q4 2026 guidance includes expected revenues between $1 billion and $1.02 billion and a non-GAAP operating margin of approximately 26%.
Align plans to repurchase $500 million of common stock in 2026, reflecting confidence in its long-term value.
Future initiatives include expanding the Invisalign product line to include sports mouthguards and leveraging 3D printing technology.
Align is not expecting a significant macroeconomic recovery in 2027 but remains focused on strategic growth opportunities.
Full Transcript
OPERATOR
Greetings, welcome to the Align third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Shirley Stacy with Align Technology. You may begin.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Good afternoon. Thank you for joining us. I’m Shirley Stacy, Vice President of Corporate Communications and Investor Relations. Joining me for today’s call is Joe Hogan, President and CEO, and John Morici, CFO. We issued third quarter 2026 financial results today via Business Wire, which is available on our website at investor.aligntech.com. Today’s conference call is being audio webcast and will be archived on our website for approximately one month.
As a reminder, the information provided and discussed today will include forward-looking statements, including statements about Align’s future events, product outlook, and financial expectations. These forward-looking statements are only predictions and involve risks and uncertainties that are described in more detail in our most recent periodic reports filed with the Securities and Exchange Commission, available on our website and at sec.gov. Actual results may vary significantly, and Align expressly assumes no obligation to update any forward-looking statement.
We posted historical financial statements with corresponding reconciliations, including our GAAP to non-GAAP reconciliation, if applicable, and our third quarter 2026 conference call slides on our website under Quarterly Results. Please refer to these files for more detailed information. With that, I’d like to turn the call over to Align Technology’s President and CEO, Joe Hogan.
Joe Hogan (Chief Executive Officer)
Thanks, Shirley. Good afternoon and thanks for joining us. On today’s call I’ll review our third quarter performance and the growth priorities we’re executing across Align. John will then discuss our financial results and outlook for Q4 and fiscal 2026. Before we start, I’d like to note that we announced our CEO succession plan earlier today. I’ll return to this topic at the end of the call. For now, let’s focus on our third quarter results. We delivered solid third quarter results with record doctor submitters, record third quarter clear aligner shipments, improved utilization, and broad-based international growth. Worldwide revenue was 1.015 billion, up 1.9% year over year, or 2.4% at constant currency and in line with our outlook. Clear aligner shipments increased 6.6% to 691,000, at the high end of our expectation for mid–single-digit growth in Q3. Systems and Services revenue was 175.5 million, down 7.6% year over year and generally consistent with the guidance we provided at Q2.
Reported revenue can reflect a shift toward lower-priced scanner configurations and more flexible acquisition models and stable ASP on a like-for-like basis, while our installed base and customer footprint continue to expand. From a profitability perspective, non-GAAP gross margin was 70.4%, modestly below our expectation, reflecting higher fuel-related transportation costs, lower clear aligner ASP, and the impact of geographic and product mix. Disciplined expense management and productivity improvements contributed to non-GAAP operating margin of 24.4%, above our outlook.
Overall, Q3 demonstrated our ability to execute in a challenging environment, delivering continued clear aligner growth, expanding our digital platform and consumer footprint, and improving profitability. We remain focused on continuing to drive growth and building on this progress across several key areas. We continue to drive adoption and utilization across customer channels. That includes increasing utilization among orthodontists, expanding Invisalign adoption among GP dentists, and growing with DSOs and strategic accounts. During Q3, a record 91,000 doctors submitted Invisalign cases, up more than 3% year over year, while overall utilization increased 3.4%. We are expanding the patients and clinical needs that we address. Younger patients remain one of our largest growth opportunities and were again an important contributor to our Q3 performance.
Younger patient shipments increased at a double-digit rate in international markets, with strong teen performance across APAC and EMEA. Our growing patient portfolio, including Invisalign First, Invisalign Palatal Expander, and mandibular advancement with occlusal blocks, enables doctors to address younger and more complex patients while expanding the range of orthodontic needs that can be addressed with Invisalign. Treatment affordability and patient conversion continue to be important focuses for us. Our Zero Additional Aligner offering provides doctors with greater treatment and pricing flexibility, and our patient financing and commercial programs are designed to help practices convert more prospective patients worldwide. 0AA volume increased triple digits year over year during Q3. We’re also continuing to expand the value of the Align Digital Platform. The opportunity goes beyond clear aligners or scanner placements.
Individually, we are connecting iTero scanning and diagnostics, AI-enabled treatment planning, Invisalign treatment, exocad restorative workflows, and practice applications to create a more integrated digital workflow for doctors and patients. This also represents a growth opportunity beyond traditional orthodontics. Through dental laboratories, we can reach GP dentists more broadly and enable digital workflows that integrate tooth movement with restorative treatment and planning.
Invisalign Advanced Restorative Treatment, or ART as we refer to it, is a compelling example of how Align is expanding its role in comprehensive dentistry, creating new clinical use cases, strengthening ecosystem connectivity, and increasing our long-term opportunity across the broader dental marketplace. Importantly, this approach also aligns with the growing focus on oral health by helping clinicians plan treatment more holistically, recognizing the relationship between tooth position, function, restorative outcomes, and long-term patient care.
These growth opportunities reinforce one another—expanding our doctor customer base, increasing utilization, addressing more patients and clinical needs, improving affordability and conversion, and deepening adoption of our digital platform. Together, they give us multiple pathways to drive growth across Align. With that context, let me turn to our regional performance and the commercial priorities we’re executing to drive growth in the Americas. Clear aligner shipments increased approximately 1.5% year over year, reflecting different performance trends across North America and Latin America. For the first time in six quarters, North America total orthodontist shipments increased year over year, supported by growth from DSOs. North American DSO shipments increased at a double-digit rate overall, including growth across both orthodontist and GP customers.
While the broader retail channel remains pressured, particularly for GP customers, orthodontist retail shipments improved sequentially in Q3, with teen orthodontist retail shipments also increasing year over year. We view the return to year-over-year orthodontist case growth, strong DSO performance, and sequential improvements in orthodontic retail as an encouraging indicator, particularly given continued consumer softness. These early signs of improvement in North America reflect our focus on what we can control—strengthening commercial execution, sharpening our go-to-market strategies, and deepening key partnerships to help drive conversion.
Through sustained efforts to further this progress, we believe we will return North America back to growth. Our collaboration with HFD Healthcare Finance Direct integrates patient financing options into the Invisalign workflow to give patients greater payment flexibility and reduce administrative function for practices. We’re seeing encouraging early traction with these offerings and are evaluating additional financing opportunities, including our new CareCredit pilot.
Patient interest in Invisalign remains strong, but affordability can be a barrier to starting treatment. These initiatives are part of our broader effort to address that barrier and convert more patient interest into treatment starts rather than waiting for the consumer environment to improve. During the quarter, we launched the Shift Happens campaign to consumers to increase adult consumer awareness and Invisalign consideration. Our commercial focus is on helping practices convert that interest into consultations and treatment starts.
In Latin America, clear aligner growth remained strong across channels and was up double digits year over year. DSO shipments increased significantly year over year while retail also grew, including positive performance across both GP dentists and orthodontists. Our Latin American priorities are centered on affordability and digital adoption, including expanding DSP availability, advancing Invisalign Pay initiatives, and broadening iTero access through additional partners, financing alternatives, and scanner configurations.
Turning to EMEA, clear aligner shipments increased at a double-digit growth rate year over year, supported by strong utilization across orthodontists and GP dentists and double-digit DSO growth. Retail was also an important contributor. EMEA retail shipments increased 8% year over year, with growth across both orthodontist and GP dentist customers. In EMEA, we are focused on orthodontist utilization, teen and growing patient treatment, and clinical education—especially Class II.
We’re working to expand GP engagement through digital workflows and broader treatment opportunities, including ART. With DSOs, we continue to focus on improving conversion and scaling adoption across practice locations. In Systems and Services, our focus is on expanding iTero Lumina, targeting competitive and legacy iTero scanner users, and expanding submitters through ART and third-party partnerships. In APAC, clear aligner shipments are up double digits sequentially and increased year over year, driven by record doctor submitters and strong younger patient demand. Teen shipments increased double digits year over year, led by China. Retail was the primary channel growth driver in APAC during Q3. APAC retail shipments increased 16% year over year, with double-digit growth across both orthodontist and GP dentist customers. In APAC, we are focused on expanding adoption, improving conversion, and strengthening the customer experience.
This includes expanding private distributor coverage in China, increasing penetration in lower-tier cities and activating DSOs, and accelerating tween and teen treatment. We’re also focused on improving patient conversion in Japan through orthodontist growth programs as well as driving iTero initiatives across the rest of Asia. Our focus is on building on the momentum in higher-growth markets including India, Korea, and Taiwan. Customer experience is also an important growth lever.
Across APAC, we’re focused on clinical support, customer service, simplifying commercial processes, and improving the digital experience. Together, these actions give us multiple avenues to expand growth across orthodontists, GP dentists, retail practices, DSOs, younger patients, and digital workflows. We continue to see a significant opportunity to expand Invisalign adoption among GP dentists by connecting orthodontic treatment more closely with restorative and broader oral healthcare workflows. GP performance remains variable by market and channel. North America GP retail remains pressured, while EMEA and APAC GP retail both delivered positive year-over-year growth, and North America GP DSO grew double digits. These results reinforce our view that GP adoption can expand through clinical education, affordability, digital workflows, and broader restorative treatment opportunities.
ART is one example of how we are connecting alignment and restorative treatment planning along with iTero, exocad, and our broader digital platform. These workflows help us engage GP dentists across a wider range of treatment options and create new opportunities to incorporate Invisalign into restorative patient care. Turning to Systems and Services, Q3 revenue was 175.5 million, down 7.6% year over year. The difference between reported revenue and underlying adoption remains important. This reflects a deliberate strategic shift toward flexible acquisition models rather than weakening demand. Revenue continues to reflect a greater mix of lower-price configurations as well as flexible acquisition models, including leasing, financing, rentals, and certified pre-owned systems.
The mix of iTero leased units continues to grow and was up double digits again year over year. These customer-focused solutions are designed to lower the initial barrier to adoption, expand our customer footprint, and give doctors more ways to access our digital technology. Our focus remains on expanding iTero’s reach, and in Q3 the number of scanner units placed, including leased, rented, and certified pre-owned systems, increased double digits year over year to more than 157,000 systems globally.
In a limited pilot, 11 DSO location practices integrating iTero Lumina with Invisalign practice staff increased new patient exam capacity by approximately 15% without adding staff or extending operating hours; nearly three quarters of participating locations improved productivity. The long-term value of Systems and Services extends beyond the initial scanner placement. A larger, more engaged, and trained installed base creates opportunities to expand adoption of restorative workflows and generate recurring software and services revenue.
Before turning the call over to John, I want to briefly update you on our strategic initiatives we discussed last quarter. Following our constructive and ongoing discussions with Elliott Management, the first of our three independent directors joined Align’s Board in August. Quentin Blackford, President and CEO of iRhythm Technologies, is an accomplished global healthcare and med tech leader, and we’re pleased to welcome him to Align. Our strategic and operating model review is progressing, with work focused on commercial effectiveness, organizational scalability, operating efficiency, and resource allocation.
We’re particularly focused on ways to improve performance in North America and identifying additional margin expansion opportunities without compromising growth. We are incorporating early observations into our planning and operating process and will provide additional detail as objectives are finalized and we can quantify their expected impact. The operating improvements we are already delivering also reflect broader work across manufacturing productivity, automation, treatment efficiency, and disciplined resource allocation.
Our goal is straightforward: drive profitable growth while building a more efficient and scalable business. With that, I’ll turn the call over to John.
John Morici (Chief Financial Officer)
Thank you, Joe. Before turning to our results, I’d like to express my sincere gratitude for your leadership and partnership over the years, as well as your many contributions to Align Technology. Your impact will continue to benefit the company and help shape our future success. Total revenues for the third quarter were $1,014.8 million, up 1.9% year over year and in line with our Q3 expectations. On a constant currency basis, total revenue was up 2.4% year over year. Q3 clear aligner revenue was $839.33 million, up 4.2% year over year, primarily reflecting higher volume, price increases, lower net deferrals, and higher non-case revenue, partially offset by geographic and product mix, higher discounts, and unfavorable foreign exchange.
On a constant currency basis, Q3 clear aligner revenue was up 0.7% year over year. Clear aligner revenue per case shipment was $1,215, down 2.3% year over year, or 1.8% at constant currency, consistent with our expectation, primarily due to mix shift to lower-priced countries and products and higher discounts, partially offset by price increases and lower net deferrals. Q3 Systems and Services revenue was $175.5 million, down 7.6% year over year.
Revenue continued to reflect the mix towards lower-priced scanners and flexible acquisition models. On a constant currency basis, Systems and Services revenue was down 7.1% year over year. Importantly, like-for-like scanner pricing stabilized during the quarter. Moving on to gross margin. Third quarter overall gross margin was 68.7%, up approximately 4.5 percentage points year over year, or 5.3 percentage points in constant currency. Performance primarily reflected operational efficiencies and the absence of significant prior year charges, partially offset by lower ASP, restructuring and other charges, and unfavorable foreign exchange. Importantly, the lower ASP is primarily due to product and geographic mix rather than a change in pricing discipline.
On a non-GAAP basis, Q3 gross margin was 70.4%, flat year over year, and approximately 0.7 percentage points higher at constant currency, but modestly below our outlook of approximately 71%. The variance primarily reflected lower clear aligner ASP, product and geographic mix, and Systems and Services mix, partially offset by manufacturing productivity, automation, and lower refinement rates. Q3 clear aligner gross margin was 69.3%, up approximately 4.4 percentage points year over year, primarily reflecting operational efficiencies and lower depreciation expense on assets disposed of other than by sale, partially offset by elevated freight costs, restructuring costs, and lower ASP. On a constant currency basis, Q3 clear aligner gross margin was up 5.2 percentage points year over year. Q3 Systems and Services gross margin was 66.2%, up approximately 4.9 percentage points year over year, primarily due to lower restructuring COGS, efficiencies, and lower U.S. tariff rates, partially offset by lower ASP.
On a constant currency basis, Q3 Systems and Services gross margin was up 5.5 percentage points year over year. Third quarter operating income was $169.2 million, resulting in an operating margin of 16.7%, up approximately 7 percentage points year over year, or 8.5 percentage points at constant currency. On a non-GAAP basis, Q3 operating margin was 24.4%, up approximately 0.5 percentage points year over year and approximately 1.4 percentage points at constant currency. Disciplined expense management and continued productivity improvements allowed us to exceed our non-GAAP operating margin expectations despite the modest gross margin shortfall.
Our Q3 GAAP effective tax rate was 20.6%, compared with 40.1% in the third quarter of 2025, primarily reflecting the prior-year impact of restructuring charges, our jurisdictional mix of income, and lower U.S. taxes on foreign earnings. In the current quarter, our Q3 non-GAAP effective tax rate was 20%. Third quarter diluted net income per share was $1.90, up $1.12 compared to the prior year. On a non-GAAP basis, Q3 diluted net income per share was $2.80, up 7.3% year over year.
GAAP and non-GAAP EPS were each unfavorably impacted by approximately $0.24 year over year from foreign exchange. As of September 30, cash and cash equivalents totaled $1,145,000,000, up approximately $140,000,000 year over year. Cash flow from operations was $183.2 million, capital expenditures were $45.1 million, and free cash flow was approximately $138 million. During Q3 we repurchased approximately 627,000 shares at an average price of $164.73 per share, returning $103.3 million to our shareholders.
Year to date, we have repurchased $200 million of common stock. For fiscal 2026, we expect to repurchase approximately $500 million of common stock, up from $466 million repurchased in 2025 and reflecting the conviction of our board and management in Align Technology’s long-term value. Now turning to Q4 and fiscal 2026. I am pleased to deliver third quarter revenue and clear aligner volume in line with our outlook while improving year-over-year profitability consistent with our first and second quarters. These results were achieved against a challenging market backdrop as demand across the dental and orthodontic industry continued to be affected by a softer environment for discretionary healthcare spending and capital equipment investment.
Those conditions persisted through the third quarter, and our fourth quarter outlook reflects what we continue to see across the broader market. Our updated 2026 guidance reflects a reduction in expected reported revenue versus our prior outlook provided at Q2, driven by two main factors. First, our Q4 Systems and Services revenue outlook is lower than our prior guidance. Although we expect scanner volume growth and saw scanner ASPs stabilize on a like-for-like basis during Q3, product mix continues to shift towards lower-priced scanners and more flexible acquisition models, which resonates well with customers amid a more challenging environment for capital equipment purchases. Second, we have slightly lowered our clear aligner volume as well as ASP assumption, largely driven by product and geographic mix in addition to foreign exchange, assuming no circumstances occur beyond our control that could impact our business.
For Q4 2026, we expect worldwide revenues to be in the range of $1,000,000,000 to $1,020,000,000. We expect Q4 clear aligner volume to be up low single digits year over year. We expect clear aligner ASP to be down approximately 1% year over year. We expect Systems and Services revenue to be in the range of $170 to $180 million. We expect worldwide GAAP gross margin to be approximately 71% and non-GAAP gross margin to be approximately 72%. We expect operating margin to be approximately 20%.
We expect non-GAAP operating margin to be approximately 26%. For Q4 2026, we expect to repurchase up to $300 million of our common stock. For fiscal 2026, we expect worldwide revenue to be approximately $4.11 billion to $4.13 billion. We continue to expect 2026 clear aligner volume and revenue growth to be up approximately 5% to 6% year over year. We expect 2026 clear aligner ASP to be slightly below 2025. We expect 2026 Systems and Services revenue to be $715 to $725 million. We expect 2026 GAAP operating margin to be approximately 16.2%, up approximately 2.7 points year over year.
We expect 2026 non-GAAP operating margin of approximately 23.7%, representing approximately 100 basis points improvement year over year. Consistent with our previous guidance, we expect capital expenditures of approximately $125 to $150 million. We expect to repurchase approximately $500 million of our common stock during 2026. As we look to 2027, we believe we are well positioned to deliver another year of revenue growth and margin expansion. Importantly, our preliminary planning assumes an operating environment broadly consistent with current conditions and does not require a consumer recovery. We expect to continue driving Invisalign volume growth in 2027. Record doctor submitters, improving utilization, and the growth initiatives discussed today support that confidence, with additional initiatives under development.
We also continue to expect a broadly stable clear aligner pricing environment, with ASP slightly down, driven primarily by product and geographic mix. For Systems and Services, 2026 has been a transition year for revenue. We expect solid unit growth and continued expansion of our installed base, and we expect stable ASPs, positioning Systems and Services for revenue growth in 2027. On profitability, we continue to target at least another 100 basis points of non-GAAP operating margin improvement in 2027, building on the approximately 100 basis points we expect to deliver in 2026.
Our focus is on improving efficiency while preserving investment in the initiatives that support sustainable revenue growth. Share repurchases should provide an additional benefit to earnings per share growth, as we continue to view buybacks as an attractive use of capital at prices that we do not believe reflect Align Technology’s long-term value creation potential. We will provide our full 2027 outlook when we report fourth quarter results, following the completion of our strategic and operating model review with Jen leading the business.
With that, I’ll turn it back to Joe.
Joe Hogan (Chief Executive Officer)
Thanks, John. Let me close by bringing together. Let me close by bringing together what you’ve heard today. We delivered solid Q3 performance with record third quarter clear aligner shipments, record doctor submitters, improved utilization, continued expansion of our iTero customer footprint and stronger operating performance varied by market and channel. But we also saw important areas of traction including overall orthodontist growth, strong DSO performance in Latin America, broad-based growth in EMEA, and strong retail performance in APAC and Americas.
While the external environment remains challenging, our results continue to demonstrate that we have meaningful opportunities to improve performance through execution regardless of the pace of the macroeconomic recovery. We’re focusing on increasing utilization among orthodontists, expanding Invisalign adoption among GP dentists, growing with DSOs and strategic accounts, extending our leadership in kids and teens, improving affordability and patient conversion, and increasing adoption of our digital workflows across systems and services. Our priorities are to expand the iTero customer footprint, increase utilization, and connect scanning more deeply with diagnostics, treatment planning, restorative workflows, and Invisalign treatment across the Align digital platform.
We also have a significant innovation pipeline ahead of us across digital treatment planning, AI-enabled capabilities, growing patient treatment, restorative workflows, scanning solutions, and CAD/CAM software. We’re investing in technologies that can expand clinical applicability, improve the customer experience, and make our business more productive at scale. We continue to be excited about our next-generation Direct Fabrication 3D-printed materials platform, what we call NXT technology. NXT unlocks greater control, consistency, and precision across appliance designs and enables an entirely new level of Invisalign performance and personalization. Building on the Invisalign Palatal Expander, our first direct 3D-printed orthodontic appliance, we are broadening the application of 3D printing across the Invisalign portfolio as well as expanding it into new categories.
Invisalign Specific Attachment System, launched this year, expands our 3D printing capabilities beyond aligners and appliances into the attachment system itself. By connecting digital treatment planning, manufacturing, and clinical delivery, it represents another step toward a fully integrated digital workflow. This week we will begin a US pilot of a new product category, sports mouthguards. Powered by our 3D printing technology and material science capabilities, sports mouthguards represent a large and growing market opportunity amid growing awareness of concussion risk in contact sports. There’s also significant overlap with kids and teens as we expect it to drive awareness and utilization of Invisalign treatment through Invisalign doctors while providing incremental revenues.
The Invisalign Sports Guard is a custom, direct 3D-printed sports mouthguard made from an iTero digital scan. It comes in multiple thickness options and will be available through participating Invisalign providers. And Invisalign Sports Guards are customizable for each athlete’s unique needs for comfort and sport, optimized for high performance specific to the activity, thanks to the power of high-performance polymers and unique 3D-printed designs, expected to offer over time a broader set of diagnostics and other sensing capabilities.
These are important steps in a broader roadmap that includes additional orthodontic applications and the opportunity to apply direct fabrication technology more broadly to aligner treatment. We will continue to advance the roadmap as we scale the technology and validate each application. What gives me confidence looking ahead is that we are not dependent on any single growth driver, geography, or customer segment. We have opportunities to increase orthodontist utilization, expand GP adoption, grow with DSOs, extend our leadership in kids and teens, improve affordability and patient conversion, and increase adoption of the Align digital platform.
Before we open the call for questions, I want to briefly address my decision to step down and the planned CEO succession announcement we made today. Leading Align has been a tremendous privilege and this is a meaningful and amazing decision for me as we move forward. The process has been carefully planned for some time and reflects a thoughtful long-term focus. As announced, our Board has appointed Jennifer Davis as Align’s next CEO. Jen will join us on November 2nd as CEO-elect and a member of our Board.
She will assume the CEO and President’s role on December 31st of this year. Jen brings 33 years of leadership experience, including leading Procter & Gamble’s global healthcare business, with global experience across innovation, digital transformation, brand building, operations, and customer development in oral health. Jen will be joining the company with a powerful innovation platform, a talented global team, trusted relationships with doctors around the world, and significant opportunities across orthodontics and digital dentistry.
I’m extremely proud of Align, the strong foundation we’ve established and the relentless contributions of every member of our Board, management team, and organization. I am confident in this transition plan and I’m looking forward to working closely with Jen over the coming months. I strongly believe she is the right leader to build on that foundation and lead Align through the next phase of growth and value creation. My focus remains squarely on driving the business, executing the priorities we discussed today, and continuing to advance the growth, innovation, and operating initiatives underway across Align.
I remain confident in the opportunities ahead for Align, in the team executing our strategy, and in our ability to continue to build long-term value for our customers, shareholders, and employees. Thank you for joining us. Operator, we’re now open for questions.
OPERATOR
Thank you. At this time we’ll be conducting a question-and-answer session. If you would like to ask a question, please press star 11 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 11 again if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we take questions.
And our first question comes from Michael Czerny with Leerink Partners. You may proceed.
Michael Czerny (Analyst at Leerink Partners)
Afternoon. Hey everyone. Thanks for taking the question. Joe, best of luck in retirement as you move on. I’ll just ask one now—I’m sure there’s plenty of others. But as you think about the changing conditions that you saw underlying the difference in views, in particular in case starts between what you saw in 3Q versus what you saw in 4Q, can you give us a sense on what some of the factors were relative to the low single-digit case start expectations?
What are you seeing from a leading indicator perspective? Anything else you can point to in terms of the drivers and the build on the 4Q numbers? The 3Q level is very strong across the board. Curious what you’re seeing relative to how the setup is for 4Q though, as you look into next year. Thank you.
Joe Hogan (Chief Executive Officer)
Thanks, Michael. We felt great about our third quarter. We see a challenged market really across the globe in so many countries. And as I mentioned in the script, and John mentioned in his script too, we felt really good about being able to deliver in that kind of environment. As we look at the fourth quarter, we see a continued challenged consumer overall. And that’s a common theme we see across the board. I mean, obviously with our Systems and Services business, we have a reorientation that, you know, you saw in the third quarter, you’ve seen this year. And that’s reflected, you know, in our go-forward statement too. So this is not a singular type of variable that we’re discussing here. This is a broad-based, I think, reticent consumer that we sense not just in North America, but different parts of the world and being reflected in our guidance.
OPERATOR
Thank you. Our next question comes from John Block with Stifel. You may proceed.
John Block (Analyst at Stifel)
Thanks, guys. Good afternoon. Joe, I’ll start with a question that’s likely for you and probably Jennifer as well—the sports mouthguard. I know it’s a bit early, but more importantly, just big picture, what does it say about Align? Is this the start of going into adjacencies? You called out mouthguards before. When you first got there, we heard about sleep apnea. Is this a clear aligner company going forward? Is this a 3D printing company going forward?
Would just love your thoughts there.
Joe Hogan (Chief Executive Officer)
Hey, John, great question. Look, when I started, obviously sleep apnea was on the table, and I shot that because I felt the technology was diversionary. I thought it was a channel we didn’t understand—overall, a reimbursement system we had not a prayer of understanding and being able to sell in front of a customer. And it was also an item that is very difficult to be able to manufacture and do it at scale like we have to do. And so I just thought it was a diversion in the sense of what the company would focus on.
As I look at mouthguards, John, I can tell you that almost every orthodontist we have out there is asking for mouthguards. They feel that’s a leader product for them in that teen market, especially with schools and different kind of demand profiles with schools and kids in those specific ZIP codes. The reason I thought it was time to do this is we have a unique resin we developed that has significant advantages over resins that are used for mouthguards today.
It’s 3D printed—so the first mouthguard that you can make specifically for certain sports, certain configurations in the way people speak and how they present themselves. And it gives you a huge amount of flexibility in the sense of how you can go after that marketplace. Sports mouthguard business is anywhere between $6 to $8 billion, depending on how you look at it. It’s primarily a boil-and-bite kind of a marketplace—it means non-exact kind of manufacturing science that’s used around it.
So John, why is unique technology very unique from a consumer standpoint? Right in line with our channels of distribution. Our orthos want to have it—GPs want it too, but orthos also—so we can sell it through our current channels without any kind of friction. So I look at it as 180 degrees versus sleep apnea devices.
John Block (Analyst at Stifel)
Thank you. And then as the follow-up, John, for the quarterly cases—better, I think certainly better and better than feared. ASP light. Maybe you can give a little bit more on that dynamic, because if I’m thinking about this correctly, comp NOA is not an upfront ASP hit. Arguably. Maybe you could just also touch on the exit rate. I know most of the revisions for 4Q were around Systems and Services and maybe a little FX, but it does seem like you noodled down clear aligner a bit.
So maybe you can just talk about that exit rate there. Thanks, guys.
Joe Hogan (Chief Executive Officer)
Thanks, John.
John Morici (Chief Financial Officer)
I’ll start with ASP. Yes, ASPs were about what we expected. We had a little bit of favorable effects. We continued product mix. So the reasons driving some of that ASP kind of sequentially down, really the growth that you see in many of these markets that just have a lower list price. So you see India and China and others that are sequentially and year over year growing. That shows up from an ASP standpoint as well as introducing DSP and some of that touch-up cases that we have.
We do see that it’s a low-price product that ends up showing up ASP, but it was able to help us again drive volume, as we said, and ultimately deliver the margin that we needed. That’s how we looked at that. I would say when we think about the exit rate, we’re factoring in our guidance what we saw in Q3, we factor in what we see in October and that’s what we use to inform our guide. So no change in terms of how we do it or what we look at. It’s just a reflection of a continued challenging market and things that we’re doing to try to help offset it.
OPERATOR
Thank you. Our next question comes from Brandon Vasquez with William Blair. You may proceed.
Joe Hogan (Chief Executive Officer)
Hi, Brandon, everyone.
Brandon Vasquez (Analyst at William Blair)
Thanks for taking the questions. And Joe, congrats on a great career at Align and good luck on the next steps. I wanted to focus first. Let’s double click on the macro a little bit. I think the prior two were asking something similar to this, but can you talk a little bit more granular about what have things incrementally from Q2 to Q3 on the macro side, are there any pockets of things getting worse or better? Joe, I think you had said North America declined in the quarter in your prepared remarks.
Did I hear that correctly? And again, is that better or worse? We don’t always get figures like that. So just curious if you can kind of level set us on relative to last quarter, how some of the key geographies are doing.
Joe Hogan (Chief Executive Officer)
Yeah, Brandon, good question. Let’s start with the US where you started with two in North America, we felt good about Latin America and our performance there was great. I was happy to see that we had positive orthodontic growth for the first time in I think it’s six quarters that we’ve had in the US which is really positive. On the GP side, obviously we saw continued erosion. That’s a larger bucket of doctors we have to call on. There’s challenges across keeping up with those doctors and pushing those doctors.
The consumers that we talked about being a little less reticent, especially in that GP channel to convert. I feel, as I mentioned in the script too, I feel good about our ability to really push on the GP side. You see our DSO business there continues to grow. It’s that retail segment that’s challenging. In particular GPs that are doing less than 10 cases a year. But I feel we’ve arranged our workforce properly to be able to go after that. We have good early warning signals right now where we might be losing GPs in different places that we can move our sales force in that way.
So I see a challenged market, a challenge, but I feel good about our product base and I feel good about our ability to address it. The products that are really starting to take hold. We talked a lot about the no AA or reduced amount of AA type products. They’re growing and across the globe growing, growing at a triple-digit rate, which is great. That’s really helping win with doctors, especially in that gray area with that upfront cost. And then we also talked a lot about and we’re seeing more and more especially in this challenged environment where those potential patients are turning to financing to be able to help them afford that treatment.
And you see our partnerships with many finance companies, not just in North America, but it’s really now become more across the globe and that’s helping win those gray areas as well with those patients.
Brandon Vasquez (Analyst at William Blair)
Got it. And then intra-quarter we had gotten a lot of questions around China VBP. I know there’s some nuances to your exposure to China and then the private versus the public. Hopefully I missed something in the prepared remarks. Maybe good opportunity to kind of level set investors what the potential exposure is to China VBP in the orthodontic side and then also what kind of is latest in expectations of timing. Thanks guys.
John Morici (Chief Financial Officer)
Yeah, Brandon, this is John. VBP will participate in it’s going through its process. I would expect that, you know, as things open up into the fourth quarter in terms of products that will be entered into will participate. As you know, it’s been well documented. Usually starts on the public side. We don’t have a lot of exposure on the public side. Only about 15% of our business in China is public. Most of it’s private. But we’ll participate in that.
We think that it helps grow in this market where like we said, from a company standpoint, most of our product is on the private side. But the vast majority of cases done in China are done with wires and brackets. So if VBP allows more exposure, more people to be able to use clear aligners, that will help participate and help drive. We feel that with our operations there, our treatment planning, the sales force, everything that we have on a go-to-market standpoint really will help us as we navigate through that process.
OPERATOR
Next question please. Thank you. Our next question comes from Vic Chopra with BMO Capital Markets. You may proceed.
Vic Chopra (Analyst at BMO Capital Markets)
Oh, hey, good afternoon. Thanks for taking the call, Joe. Best of luck to you and thanks for all your help over the past few years. The question for me is on 2027 framework that you laid out, you’ve targeted another hundred basis points of margin improvement without a concern recovery. Can you talk about the biggest drivers of that? Is this a floor or a base case and does the Elliott operating review, is there potential for that to add to that?
John Morici (Chief Financial Officer)
Yeah, I could start with that, Vic, when you know we have a lot of productivity and programs in place. Obviously we know how to manufacture and manufacture at scale, maybe drive productivity. So many of the actions that we’ve been doing for the last several years are coming to fruition that is that improved productivity we’re seeing that this year we see the gross margin improvements that we’ve had in the business. Some of it’s product related, that less dependence on these complicated products that have multiple refinements and we go to fewer refinement type products.
You know, that drives a lot of productivity in our business. So some of it’s at the product level, some of it’s at the initiatives that we have to be able to help drive improvements in productivity. Of course we’re going through this strategic review and understanding where we could save money, where we can invest to be able to drive growth and do it in a profitable way. So feel good about the efforts that we have up until this point. We’ll continue to make refinements to it and then at the end of Q4 here we’ll be prepared to talk about what that means for 2027.
But we hold to the fact that the OP margin improvement next year that we’ve committed to that at least 100 basis point improvement is progressing well and we’ll update more about what that means for the P&L next quarter.
OPERATOR
Thank you. Our next question comes from Jeff Johnson with Baird. You may proceed.
Jeff Johnson (Analyst at Baird)
Yeah, thanks. Good afternoon guys and Joe, again I’ll just add the congrats on a great career and good luck in retirement. Let me ask one follow up question on VBP if I could and then I want to ask case volume question as well. But John, on VBP, obviously a lot of moving parts as you said, maybe getting bigger into the public side if you bid on that side of the business here in this round on the private side we are hearing the Chinese government kind of pushing for private docs to also participate from a price perspective in VBP.
I guess net we don’t know how that’s going to play out. But should VBP be a good guy, a bad guy for you guys next year there’s all the moving parts on what happens in your private market pricing versus if you get public market incremental volume. So help us out maybe on just net how we should think about this?
John Morici (Chief Financial Officer)
Well, as you’re right, there are a lot of moving pieces to it. I think when you look at it as, you know, if it gets private, the real question will become is what doctors do with those price differences? Do they pass them on to the potential patients? We hope they do because that will drive increased amount of utilization and adoption of clear aligners. So we hope that that’s where it ends up going. But we see increases volume that will come through.
That’s typically what happens with VBP. We think we’re properly positioned in China to be able to kind of in China for China to be able to manage the cost. And I think when you evolve from a net revenue standpoint to us it’s neutral to positive. Just from the standpoint you’re going to drive a lot of volume as it works its way through the system and you will have some. But I think the volume helps offset it. And as long as you, you know that product portfolio that we have is in place as well as some of the in-China operations that we think properly positioned.
Jeff Johnson (Analyst at Baird)
All right, fair enough. And then just on the case volume side, you know you’re guiding low single digits for 4Q. I think when I think about how you guided 26 previously on last quarter’s call and guided 3Q on the 2Q call feels like that 4Q case volume guidance globally is maybe down a 0.2 relative to what you were thinking. You know, taking your pulse on that, is that about maybe a point or two lighter than you would have been expecting? Number one and you’ll hit very similar comps.
You hit a seven plus comp here in the fourth quarter, the next few comps into 27 are going to be similar. Is that kind of low single digit for 4Q against a 7 comp about the way we should think about coming up against those other 7% comps through the first few quarters of next year as well. Thanks.
John Morici (Chief Financial Officer)
You’re right. From a stack standpoint, the stack is very similar to the two-year stack that we’ve seen at Q3 and then kind of the applied guidance for Q4. So you get, Jeff, I think what you see is continued consumer that’s challenged across markets. You’ve got to do a lot of things to try to motivate them to go into treatment when they have that challenge, financing some of the product portfolio and other things that we’re trying to do to go-to-market efforts.
So slight tweaks that we’ve made based on what we’re seeing on a global basis, but in that overall revenue that we’re talking about for the year, that 5% to 6% and similar from a volume standpoint for clear aligner. So overall that hasn’t changed too much from the total year standpoint, but just adjusting slightly for Q4.
OPERATOR
Thank you. Our next question comes from Elizabeth Anderson with Evercore ISI. You may proceed.
Elizabeth Anderson (Analyst at Evercore ISI)
Hi guys. Good afternoon. Thanks for the question and congratulations Joe, on your retirement. I wanted to dig in a little bit on the scanner side. I mean if we think about the implied scanner guide, it’s a little bit lower I think than expectations. But also to Jeff’s just point now the comps get a lot tougher. So I guess how do you think about it kind of lapping last year’s upgrade sales? You talked about the lower price scanner mix after leasing some of the capital leasing that you’re sort of off of, I guess could you help us double click on some of those different components so we can sort of understand the layout, the landscape for that demand environment and sort of how to think about that going forward.
John Morici (Chief Financial Officer)
Thank you. That’s a good question. Elizabeth, this is John. So first and foremost, scanner equipment sales that we have, the unit volume has been very strong. We see the installed up double digits. So we’re getting good adoption of our scanners and we’re very pleased with that. It’s a great scanner. Great portfolio we have, being able to get to those doctors. Some still want to have the latest and greatest luminaries, all the bells and whistles — great. And that comes through as equipment sell-through.
Some doctors are like, I don’t need the full system. I’ll do more of a flex model where they just hook into a laptop and it fits their needs. Some doctors are looking at maybe the certified pre-owned. Any which way they want those units, we’re happy to sell — just whatever fits their needs. The added component that we see, a lot more leasing, a lot more rental, and those doctors are like, we want the scanner, I just don’t want to pay for it up front. So we’re seeing those placements happening. You’re starting to build up more of that rent income because it’s previous-quarter rental revenue that’s from previous quarters that’s now building up into whatever current quarter you’re in, as well as leasing and so on. So that’s an evolution that continues to happen within the business.
What we saw as we went from the third quarter, we saw relatively stable pricing on an overall equipment standpoint. So that was a good sign for us that it’s kind of more bottomed out there from a price standpoint, and we feel good that we can build off of that for Q4. And more importantly, as we look into 2027, we build off of that to ’27 such that we expect Systems and Services to grow next year because the pricing has stabilized because of the trade-offs that are happening between equipment sale and leasing.
So that when we look at 2027, it’s much more stable. And as we’ve said in the past, as we talked about, you get about the same growth between the equipment side of our business as well as the clear aligner side. And that’s what our expectation would be for next year.
Elizabeth Anderson (Analyst at Evercore ISI)
And then if we think about that scanner growth, talk about the switch to leasing — we’ve obviously historically seen a really nice attach rate of case growth to those scanner sales. Are you seeing anything different in the attach rate in terms of new cases from one of those placements or leases or secondhand sales as what we’ve seen historically versus when you just had the prior model of just new sales?
John Morici (Chief Financial Officer)
Yeah. What you see is you see doctors who might not have wanted to go and use our scanner. What we see, we talked about a record number of submitters that we have in the quarter. Some of that is helping by being able to get a scanner that they might not have gone to before. The acquisition cost is less because they’re leasing it — it’s just this monthly fee that they pay — and then it starts the front end of the digital ecosystem. They’re starting to use Invisalign and digitize so that it helps them grow their business in a digital orthodontic way.
So we like the combination of being able to help them digitize their practice and really be as efficient and beneficial for their patients as possible.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Thanks, Elizabeth. Next question, please.
OPERATOR
Thank you. Our next question comes from Jason Bednar with Piper Sandler. You may proceed.
Jason Bednar (Analyst at Piper Sandler)
Hi there. Good afternoon, Joe. I’ll just echo the congrats there and pleasure working with you over the past several years, guys. I do appreciate the color here on 2027, the framework there. Maybe I want to layer onto some of the questions earlier. I know this business can be tough to predict at times, but you are throwing out some initial guardrails or floors — whatever you want them. What are the macro assumptions you’re embedding in that aligner outlook? Is it more or less status quo for the U.S. and international?
And then get a little bit more detailed: we’ve been poking around at some of the different moving parts, but just on the ASP outlook, what are the puts and takes that are contributing to the 2027 framework?
John Morici (Chief Financial Officer)
Yeah, when we look at 2027 framework, first off, we’re not expecting much of a change in the overall consumer. The consumer will be what it does. It’s a challenging environment for inflation and other inputs that those potential patients have. So we’re not expecting really a change from that. What we are pushing and helping drive is how do we go to market with various products and combinations to be able to get to our doctors, to be able to help them start cases, ultimately do more cases.
You couple that with financing to those potential patients, really trying to get those reluctant patients to actually get into treatment. So that’s how we’re building throughout this year in this challenging environment and what we would expect for next year. As we think about our growth and what we’ve seen from growth this year and our expectation for next year is, look, you’re going to see some of those markets where we’ve had great growth on the international side, we expect those to continue. India and China and Latin America and others — they’re going to continue. Those are great growth opportunities for us. That continues. They come at a lower list price; it’s just what the market is. You’re also going to see some of these products like the DSP touch-up cases and so on that will end up growing faster too.
Those two combinations — geographic plus product mix — take our ASPs down. And what we’ve been seeing is that 1% to 2%. This year it’ll be down about 1%. But I think from a planning standpoint, through that geographic product mix, about 1% to 2%.
Jason Bednar (Analyst at Piper Sandler)
Okay, that’s helpful. And maybe I’ll follow up just on scanners and services. To follow up on Elizabeth’s question previously, where does the confidence come from that ’26 here will be the bottom and that the shift to the alternate purchasing model won’t gain further momentum as we move into next year? Just where the confidence lies that this is some secular shift that you won’t see play out again next year.
John Morici (Chief Financial Officer)
Yeah, think about it, Jason. We’ve got, from a product standpoint, we’ve certainly seen some of that price shifting. And we started seeing this in the first quarter, really played out in the second quarter. It was stable in the third quarter, meaning that pricing was about equal. And this is really across the globe. So what we also see is strong demand. There’s demand for this product — that installed base growing like it is. The product is well received; all the products that we have are well received. It’s just that in some cases it’s at a lower price. But we think that stabilized. And then when you look at the leasing and rental, some markets have shifted to that. It isn’t in all markets, but in some markets it shifted to that. And what you do is you just sort of forego — you know, you don’t get as much revenue up front — but you get that revenue later on. The key for us is we want those doctors to be able to have that scanner at their practice, help them digitize, and lead to more use of digital orthodontics.
And we think that’s a good thing and we’re expecting to build on that as we go into 2027.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Thanks, Jason. Next question, please.
OPERATOR
Thank you. Our next question comes from Steven Valakut with Mizuho Securities. You may proceed.
Steven Valakut (Analyst at Mizuho Securities)
Yeah, thanks. Good afternoon, everybody. Let me also offer my congrats to Joe on 11-plus years of successful leadership at Align. I guess just for me, again, not to ask too many questions on 2027 overall in this call, but the comment again about expecting it to continue to drive Invisalign volume growth in 2027. I know it’s kind of intentionally vague because it’s a preliminary view and you can be wide open to interpretations. I guess there’s a further message within that I’m just trying to confirm.
Maybe yes or no, is there anything structurally right now that would prevent the growth in 2027 being similar to the mid-single-digit that you have in 2026? Without stating the obvious, something like 5% to 10% growth would be phenomenal, but 1% growth — while it’s growth — would not be viewed great right now relative to expectations and consensus, et cetera. So hopefully that question makes sense. Thanks.
John Morici (Chief Financial Officer)
Look, I think, Steve, this is John. So when you think of what we’re trying to do, we’re expecting a challenging macro environment. I don’t know if it magically gets better into next year. So given that, the work that we’re doing from the product portfolio, what we’re doing to go to market, as well as some of that consumer and other financing options to be able to help with those patients going to treatment — it served us well this year. When we think about our Clear Aligner revenue and volume, as we talked about for the full year, that 5% to 6%, that served us well in 2026.
We’ll give more details about what it means for 2027 in light of all the efforts that we have going on. But we feel good about what we’re trying to do to try to drive that utilization and adoption go-to-market because the underlying overall market hasn’t changed. The vast majority of cases are still done with wires and brackets. And we have the opportunity to grow in this space. It’s just that macro that we have to work against, and that’s why we want to make sure that we can continue to grow.
Joe Hogan (Chief Executive Officer)
Yeah, I think what I want to emphasize too, and just sort of John’s comments, because there’s a lot of questions on 2027: we’re not predicting 2027 is going to fall off in some way. Just like John said, we expect — we can’t predict what the economy is going to look like. We feel good about our ability to execute in a difficult situation from a consumer standpoint, and we’ll continue to execute that way.
Steven Valakut (Analyst at Mizuho Securities)
Okay, that’s helpful.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Thanks. Next question, please.
OPERATOR
Thank you. Our next question comes from Erin Wright with Morgan Stanley. You may proceed.
Erin Wright (Analyst at Morgan Stanley)
Great, thanks. And Joe, again, it was great working with you. You mentioned financing a few times now. Can you speak to some of the newer financing initiatives in terms of where that stands overall and just anything that you can give us in terms of how that’s translating into conversion? And then just a second question, on macro and the pressures that you’re seeing: what are you seeing in terms of also share shift back to brackets and wires or something like that?
Or is it just purely underlying kind of demand trend and who’s walking in the front door? Thanks.
John Morici (Chief Financial Officer)
Maybe I could start with some of the financing. We’re seeing many countries and many regions adopting financing using external financing that really haven’t done it before, and we’re helping lead the way and do it in a way where we’re working with some of these financing companies, being able to get them into those offices through our sales team, be able to talk about the financing options. More and more in this environment, people are looking for ways to be able to afford things and that gets ultimately down to a month-by-month basis.
So I would say, Erin, you’re seeing this much broader across the U.S., and it’s helping us in those gray areas with potential patients. And what I’m really encouraged about is we’re solving some of these in Europe that we never really thought we could get through. These finance companies are now much more willing to partner with us and be partners with us to be able to help provide financing solutions to consumers. So it’s early that we’re seeing this, but it’s good progress and we feel good about this as being a differentiator to help, especially in this economy, to be able to help grow the business.
Joe Hogan (Chief Executive Officer)
And in your second part of your question, Erin, about wires and brackets and how we’re doing, remember, majority of the cases we do are adults still. From a teen standpoint, you hear more and more about wires and brackets and different things. But as I mentioned in my script, we really feel good about the early intervention that we have. When you look at Invisalign, first you look at IPE mandibular advancements. Those products are growing at double digits for us right now.
And it gives us really good access into that teen and tween marketplace overall. So we’ll keep pushing those products and we’ll keep driving adults too. And that’s our shift happens piece is aimed right at that to help the orthodontist grow their adult side and then also with the GP side also. So I feel good about our go to market both in product and also from a marketing standpoint.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Thanks, Erin. Next question, please.
OPERATOR
Thank you. Our next question comes from Kevin Caliendo with UBS. You may proceed.
Kevin Caliendo (Analyst at UBS)
Hi. Thanks for taking my question, Joe. Good luck with everything going forward. In case our paths don’t cross again, I want to talk about a little bit because it’s certainly interesting. Is this a product that do you anticipate distributing through like a retail channel? Meaning are you going to go to Dick’s Sporting Goods and see an Align mouth guard or is it a mouth guard that’s going to be specific for, you know, people that might be going to the orthodontist already or a GP, like, where’s the end user going to learn about these mouth guards?
And I guess the pricing strategy here is it’s like a premium product versus a generic, because it doesn’t sound like generic if you have some kind of resin that’s proprietary. And I guess my concern is if you sell it somewhere that’s not in a retail setting, it potentially impact the retainer business because I’m guessing the pricing of a retainer might be a lot more than a mouth guard. But I just love to hear a little bit about the strategy, more about the mouthguard.
Joe Hogan (Chief Executive Officer)
It’s a good question. First of all, we won’t be selling it directly to consumers. That’s not the game. We have the channels that we want to work it through with orthodontists really asking for this product line because of their strong teen marketplace. And parents are very concerned in that way. And we think our GP channel will do it too. So we will keep with our channel strategy and not go outside that. From an OEM standpoint, it is a premium product.
When you look at it from a retainer standpoint, it won’t hurt the retainer business at all because it’s just completely different functionality. Overall, it is unique. As I mentioned, it’s really the only truly 3D printed mouthguard that we know with this kind of unique. We’re going to need a lot of, obviously, design flexibility in order to make it as comfortable and as functional as we possibly can for athletes. And we like the idea that they can kind of design the mouth guard that they want and we’ll stay within those protective procedures for that particular sport.
So I see this as just right in line with our channel strategy. It’s right in line with our technical strategy with 3D printing. It’s a big opportunity for us overall.
Kevin Caliendo (Analyst at UBS)
If I can ask a quick follow up, I’ve got some soccer and hockey and football parents asking me to ask, is this something that you can strap onto a helmet? Because they always get lost and chewed upon.
Joe Hogan (Chief Executive Officer)
Kevin, I have two answers to that. One is we can 3D print that. We can make it any way you want to. So if you want to have a strap on it that snaps, we could do that. But secondly, we plan to make these things so comfortable that kids aren’t going to want to take them out of their mouth. A lot of times. What our research basically says, they take it out because they can’t speak often, they can’t swallow properly and they have to pull it out. They put it on their helmets.
So that’s again why we like this technology. We can design this in a different way because it is a higher performance resin and a much more capable design criterion. You could go with boil and bite and form and fill kind of mouthguards now.
Kevin Caliendo (Analyst at UBS)
Interesting. Well, thank you so much.
Joe Hogan (Chief Executive Officer)
Yeah, welcome.
OPERATOR
Thank you. And we have reached the end of our question and answer session. Now turn the call back over to Shirley Stacy for any closing remarks.
Shirley Stacy (Vice President of Corporate Communications and Investor Relations)
Thank you everyone for joining us today. We look forward to meeting and speaking with you at upcoming investor conferences and industry meetings. If you have any follow up questions or need more information, please contact Align Investor Relations. Thanks and have a great day.
OPERATOR
Thank you. This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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