Align Technology (ALGN) 10-K risk factor changes: FY2015 vs FY2014

We depend on the sale of the Invisalign system for the vast majority of our net revenues, and any decline in sales of Invisalign treatment for any reason, [removed: a continued weakness in general economic conditions,] or a decline in average selling prices would adversely affect net revenues, gross margin and net income.

Weakness in the global economy results in a challenging environment for selling dental technologies and dentists may postpone investments in capital equipment, [removed: such as intra-oral scanners.]

If we introduce any price reductions or consumer rebate programs; if we expand our discount programs in the future or participation in these programs increases; if our product mix shifts to lower priced products or products that have a higher percentage of deferred [removed: revenue] [added: revenue,] our average selling prices would be adversely affected and our net revenues, gross profit, gross margin and net income may be reduced.

[removed: Furthermore, although] [added: Although] the U.S. dollar is our reporting currency, a portion of our net revenues and net income are generated in foreign currencies.

As a result, negative movements in currency exchange rates against the U.S. dollar will adversely affect our [removed: average selling price and consequently the amount of] net revenues and net income in our consolidated financial statements.

[removed: Because] [added: In addition, because] we cannot immediately adapt our production capacity and related cost structures to changing market conditions, our manufacturing capacity may at times exceed or fall short of our production requirements.

Any or all of these problems could result in the loss of customers, provide an opportunity for competing products to [removed: gain market acceptance and otherwise harm our business and financial results.]

| • | if participation in our customer rebate [removed: program] [added: or discount programs] increases our average selling price will be adversely affected; |

| • | inaccurate forecasting of net revenues, production and other operating [removed: costs; and] [added: costs,] |

| • | investments in research and development to develop new products and [removed: enhancements.] [added: enhancements; and] |

[removed: Any failure in our ability to successfully develop and introduce or achieve market] acceptance of our new products or enhanced versions of existing products could have a material adverse effect on our operating results and could cause our net revenues to decline.

In addition to the research and development efforts conducted in our [removed: San Jose, California facility,] [added: North America facilities,] we also carry out research and development at locations in Moscow, Russia.

[removed: A] [added: Treatment planning is a] key step [removed: in] [added: leading to] our manufacturing process [added: which] relies on sophisticated computer technology [removed: that requires] [added: requiring] new technicians to undergo a relatively long training process.

Currently, our products compete directly against products manufactured and distributed by various companies, both within and outside the U.S. Many of these manufacturers, including Danaher Corporation, 3M, Sirona Dental Systems, Inc. and Dentsply International, have substantially greater financial resources and manufacturing and marketing experience than we do and may, in [removed: the future, attempt to develop an orthodontic system similar to ours or combine technologies that make our product economically unattractive.]

As of December 31, [removed: 2014,] [added: 2015,] we had issued [removed: 352] [added: 384] U.S. patents, [removed: 97 pending U.S. patent applications, and 257] [added: 276] foreign issued patents, and [removed: 108] [added: 236] pending [removed: foreign] [added: global] patent applications.

[added: Additionally, any patents issued to us may be challenged, invalidated, held unenforceable,] circumvented, or may not be sufficiently broad to prevent third parties from producing competing products similar in design to our products.

[removed: The report] includes, among other things, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective.

As a result, if this third party manufacturer fails to deliver its [removed: components or] [added: components,] if we lose its [removed: services,] [added: services or if] we [added: fail to negotiate acceptable terms, we] may be unable to deliver our products in a timely manner and our business may be harmed.

Any difficulties encountered by the third party manufacturer with respect to hiring [removed: personnel,] [added: personnel] and maintaining acceptable manufacturing standards, controls, procedures and policies could disrupt our ability to deliver our products in a timely manner.

Furthermore, we may be unable to obtain the necessary clearances for new devices that [removed: we intend to market in the future.]

Additional reporting obligations are being [removed: considered] [added: proposed] by the European Union.

The [removed: implementation of the existing] U.S. requirements and any additional requirements in Europe could affect the sourcing and availability of metals used in the manufacture of a limited number of parts (if any) contained in our products.

These broad market and industry factors may seriously harm the market price of our common stock, regardless [added: of our operating performance.]

Our accounting policies that recently have [removed: been] [added: been,] or may be affected by changes in the accounting rules [removed: are as follows:][added: relate to revenue recognition.]

The primary objective of [removed: most of] our investment activities is to preserve principal.

These factors include, but are not limited to, changes in tax laws, regulations and/or rates, non-deductible goodwill impairments, changing interpretations of existing tax laws or regulations, changes in the relative proportions of revenues and income before taxes in the [added: various jurisdictions in which we operate that have differing statutory tax rates, the future levels of tax benefits of stock option deductions relating to incentive stock options and employee stock purchase plans, settlement of income tax audits, and changes in overall levels of pretax earnings.]

The Costa Rica corporate income tax rate that would apply, absent the incentives, is 30% for [removed: 2014.][added: 2015, 2014 and 2013.]

As a result of these incentives, our income taxes were reduced by [added: $32.7 million,] $32.5 [removed: million] [added: million,] and $27.7 million for the year ended December 31, [removed: 2014] [added: 2015, 2014,] and 2013, respectively, representing a benefit to diluted net income per share of [added: $0.40,] $0.40 and $0.34 in [added: 2015,] 2014 and 2013, respectively.

such as intra-oral scanners.

In July 2015, we launched a new product policy called "Additional Aligners at No Charge" that addresses one of our customer's top complaints.

With this product policy change, we no longer distinguish between mid-course correction and case refinements and allow doctors to order additional aligners to address either treatment need at no charge, subject to certain requirements.

Based on this new product policy, beginning in the third quarter of 2015, we deferred more revenue as a result of providing free additional aligners for eligible treatments.

Additionally, as we grandfathered over 1 million open cases, we will recognize lower revenues as additional aligners are shipped for at least the next two years until these cases complete.

We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.

The exchange rate between the U.S. dollar and foreign currencies has fluctuated substantially in recent years and may continue to fluctuate substantially in the future.

As a result, beginning in September 2015, we began entering into currency hedging transactions in an effort to cover some of our exposure to foreign currency exchange fluctuations.

These transactions may not operate to fully or effectively hedge our exposure to currency fluctuations, and, under certain circumstances, these transactions could have an adverse effect on our financial condition.

In addition, in order to meet the demands from expected volumes, we purchased a second manufacturing facility in Juarez, Mexico.

We began manufacturing aligners in this second facility in September 2015 while continuing to manufacture Aligners at our existing facility in Juarez.

Our ability to plan, construct and equip additional manufacturing facilities is subject to significant risk and uncertainty, including risks inherent in the establishment of a new manufacturing facility, such as hiring and retaining employees and delays and cost overruns as a result of a number of factors, any of which may be out of our control.

If the transition into this additional facility is significantly delayed or demand for our product exceeds our current expectations, we may not be able to fulfill orders timely, which may negatively impact our financial results and overall business.

gain market acceptance and otherwise harm our business and financial results.

| • | our inability to scale production of our iTero Element scanner to meet customer demand; |

| • | unanticipated delays in our receipt of patient records made through an intraoral scanner for any reason; |

| • | our ability to successfully hedge against a portion of our foreign currency-denominated assets and liabilities. |

Any failure in our ability to successfully develop and introduce or achieve market

the future, attempt to develop an orthodontic system similar to ours or combine technologies that make our product economically unattractive.

The report

We rely on a third party manufacturer in the Czech Republic to supply key sub-assemblies for our iTero Element scanner.

we intend to market in the future.

We are currently under audit by the California Franchise Tax Board for fiscal year 2011, 2012 and 2013.

| • | our inability to predict from period to period the number of trainers or the availability of doctors required to complete intra-oral scanner installations, which may impact the timing of when revenue is recognized; |

Additionally, any patents issued to us may be challenged, invalidated, held unenforceable,

We rely on a third party manufacturer in Israel to assemble our iTero scanner.

As of December 31, 2014, our North American sales organization consisted of approximately 280 people.

Internationally, we had approximately 160 people engaged in direct sales and sales support as of December 31, 2014.

Effective January 1, 2013, as a medical device manufacturer, we were required to pay an excise tax on the price for which we sell our medical devices in the U.S. This Medical Device Excise Tax ("MDET") applies to most medical devices, including our products, which could have a material, negative impact on our results of operations and our cash flows.

During March 2014, Align had extensive discussions with the IRS and they informed us that our aligners are not subject to the MDET; however, our scanners are still subject to the MDET.

As a result of these discussions, beginning in March 2014, we ceased expensing and paying the MDET for aligners, which reduced our general and administrative expense for the year ended December 31, 2014 by approximately $6.8 million compared to the prior year period.

The excise tax expense was $7.1 million for the year ended December 31, 2013; however, MDET for year ended December 31, 2014 was reduced to $0.3 million due to the changes noted above.

Additionally, we are in process of claiming a $6.8 million refund of MDET paid in 2013 related to our aligners; however, because this claim is subject to review and approval by the IRS, we have not recorded a receivable as the outcome of the audit is undeterminable.

Any future changes in the applicability of the MDET as it applies to us or refunds of amounts previously paid will be recorded as an additional expense or a credit to the consolidated statement of operations in the period in which it becomes probable and reasonably estimable.

The MDET is included in general and administrative expenses in the consolidated statements of operations.

of our operating performance.

| • | revenue recognition; and |

| • | leases. |

We have adopted a shareholders rights’ plan to limit the possibility that we are acquired, which may mean that a transaction that shareholders are in favor of or are benefited by may be prevented.

Our Board of Directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the rights, preferences, privileges and restrictions of such shares without any further vote or action by our shareholders.

To date, our Board has designated 200,000 shares as Series A participating preferred stock in connection with our shareholder rights’ plan.

The issuance of preferred stock under certain circumstances could have the effect of delaying or preventing an acquisition of Align or otherwise adversely affecting the rights of the holders of our stock.

The shareholder rights’ plan may have the effect of rendering more difficult or discouraging an acquisition of our company which is deemed undesirable by our board of directors.

The shareholder rights’ plan may cause substantial dilution to a person or group attempting to acquire us on terms or in a manner not approved by our board of directors, except pursuant to an offer conditioned on the negation, purchase or redemption of the rights issued under the shareholder rights’ plan.

various jurisdictions in which we operate that have differing statutory tax rates, the future levels of tax benefits of stock option deductions relating to incentive stock options and employee stock purchase plans, settlement of income tax audits, and changes in overall levels of pretax earnings.

Income taxes were reduced by $9.7 million in both the three months ended December 31, 2014 and 2013, representing a benefit to diluted net income per share of $0.12 in each period.

Our goal is to establish Invisalign clear aligners as the standard method for treating malocclusion and to establish the iTero [removed: intra-oral] [added: intraoral] scanner as the preferred scanning device for 3D digital scans, ultimately driving increased product adoption by dental professionals.

The successful execution of our business strategy and our results in [removed: 2014] [added: 2015] and beyond may be affected by a number of other [removed: factors, which are updated below:][added: factors including:]

| • | New Products, Feature Enhancements and Technology Innovation. Product innovation drives greater treatment predictability and clinical applicability, and ease of use for our customers, which supports adoption of Invisalign in their practices. Increasing applicability and treating more complex cases requires that we move away from individual features to more comprehensive solutions so that Invisalign providers can more predictably treat the whole case, such as with Invisalign G5 for deep bite [removed: treatment. Launched in February 2014,] [added: treatment,] Invisalign [removed: G5 was engineered to help doctors achieve even better clinical outcomes when treating patients with deep bites - a prevalent orthodontic problem. In North America, in February 2014, we also launched] [added: G6 for premolar extraction and] ClinCheck Pro, the next generation Invisalign treatment software tool, designed to provide more precise control over final tooth position and to help Invisalign providers achieve their treatment goals. [removed: We intend to launch ClinCheck Pro] [added: In addition, we began shipping the next generation iTero Element Intraoral Scanner] in [added: September 2015 and expect to ramp up] our [removed: other country markets in] [added: production over] the [removed: first quarter of 2015. Most recently, in November 2014,] [added: next few quarters accordingly; however, if] we [removed: announced the upcoming release of Invisalign G6 clinical innovations for first premolar extraction. Invisalign G6 is engineered] [added: are unable] to [removed: improve clinical outcomes for orthodontic treatment] [added: scale production] of [removed: severe crowding and bimaxillary protrusion. Invisalign G6 clinical innovations will be available] [added: our iTero Element scanner] to [removed: Invisalign-trained providers beginning in the first quarter of 2015 with limited commercialization, followed by full commercialization in Asia Pacific, Europe, Middle East and Africa ("EMEA"), and Latin America geographies throughout 2015 and North America in early 2016.] [added: meet customer demand, our financial results may be negatively impacted.] We believe that over the long-term, clinical solutions and treatment tools will increase adoption of [removed: Invisalign;] [added: Invisalign and increase sales of our intraoral scanners;] however, it is difficult to predict the rate of adoption which may vary by region and channel. |

| • | Invisalign [removed: Utilization rates.] [added: Adoption.] Our goal is to establish Invisalign as the treatment of choice for treating malocclusion ultimately driving increased product adoption and frequency of use by dental professionals, also known as "utilization rates." Our quarterly utilization rates for the previous 9 quarters are as follows: |

[removed: ][added: ]

[removed: On a year-over-year basis, total] [added: Total] utilization [added: in the fourth quarter] of [removed: 4.4] [added: 2015 increased to 4.9] cases per doctor [added: compared to 4.4] in the fourth quarter of [removed: 2014 remained flat compared to the][added: 2014.]

We expect that over the long-term our utilization rates will gradually improve as a result of advancements in product and technology, which continue to strengthen our doctors’ clinical confidence in the use of Invisalign, [added: however, we expect that our utilization rates may fluctuate from period to period due to a variety of factors, including seasonal trends in our business] along with [removed: the implementation] [added: adoption rates] of [removed: our Go-To-Market strategy (as discussed below).][added: new products and features.]

| • | International Clear [removed: Aligner.] [added: Aligner Growth.] We will continue to focus our efforts towards increasing adoption of our products by dental professionals in our direct international markets. International volume [added: for 2015] increased [removed: 28.6% in 2014 from 2013] [added: 32.5%] driven primarily by [removed: growth in Europe as well as by] strong performance in the Asia Pacific [removed: region.] [added: region as well as growth in Europe.] In [removed: 2015,] [added: 2016,] we are continuing to expand in our existing markets through targeted investments in sales coverage and professional marketing and education programs, along with consumer marketing in selected country markets. We expect international revenues to continue to grow at a faster rate than North America for the foreseeable future due to our continued investment in international market expansion, the size of the market opportunity, and our relatively low market penetration in this region. [added: As our international revenues have increased from $219.7 million in 2014 to $250.1 million in 2015, we are increasingly subject to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Although we have historically accepted the exposure to exchange rate movements without using derivative financial instruments to manage risk, in the third quarter of 2015 we initiated a foreign currency economic hedging program to mitigate] |

| • | Operating Expenses. We expect operating expenses to increase in [removed: 2015] [added: 2016] compared to [removed: 2014] [added: 2015] due in part to: |

Net revenues by Reportable Segment Comparison for Year Ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012:][added: 2013:]

We group our operations into two reportable segments: Clear Aligner segment and Scanner [removed: and Services] segment.

| • | Our Scanner [removed: and Services] segment consists of intra-oral scanning systems and additional services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. This segment includes our iTero scanner and OrthoCAD services. |

Net revenues for our Clear Aligner segment by region and [removed: product and] our Scanner segment [removed: by region] for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] is as follows (in millions):

| | December 31, [removed: 2014] [added: 2015] | | | | December 31, [removed: 2013] [added: 2014] | | | | Change | | | | | | | December 31, [removed: 2013] [added: 2014] | | | | December 31, [removed: 2012] [added: 2013] | | | | Change | | | | | |

| Clear Aligner [added: Revenues:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| North America | $ | [removed: 446.6] [added: 498.7] | | | $ | [removed: 408.2] [added: 446.6] | | | $ | [removed: 38.4] [added: 52.1] | | | [removed: 9.4] [added: 11.7] | % | | $ | [removed: 408.2] [added: 446.6] | | | $ | [removed: 361.1] [added: 408.2] | | | $ | [removed: 47.1] [added: 38.4] | | | [removed: 13.0] [added: 9.4] | % |

| International | [removed: 219.7] [added: 250.1] | | | | [removed: 161.7] [added: 219.7] | | | | [removed: $] [added: 30.4] | [removed: 58.0] | | | [removed: 35.9] [added: 13.8] | % | | [removed: 161.7] [added: 219.7] | | | | [removed: 124.8] [added: 161.7] | | | | [removed: 36.9] [added: 58.0] | | | | [removed: 29.6] [added: 35.9] | % |

| Invisalign non-case net revenues | [removed: 46.2] [added: 51.4] | | | | [removed: 44.7] [added: 46.2] | | | | [removed: $] [added: 5.2] | [removed: 1.5] | | | [removed: 3.4] [added: 11.3] | % | | [removed: 44.7] [added: 46.2] | | | | [removed: 30.7] [added: 44.7] | | | | [removed: 14.0] [added: 1.5] | | | | [removed: 45.6] [added: 3.4] | % |

| Total Clear Aligner net revenues [removed: 1] | $ | [removed: 712.5] [added: 800.2] | | | $ | [removed: 614.6] [added: 712.5] | | | $ | [removed: 97.9] [added: 87.7] | | | [removed: 15.9] [added: 12.3] | % | | $ | [removed: 614.6] [added: 712.5] | | | $ | [removed: 516.6] [added: 614.6] | | | $ | [removed: 98.0] [added: 97.9] | | | [removed: 19.0] [added: 15.9] | % |

[removed: | Scanner: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |][added: Scanner]

| Total Scanner net revenues | $ | [removed: 49.1] [added: 45.3] | | | $ | [removed: 45.6] [added: 49.1] | | | $ | [removed: 3.5] [added: (3.8] | [added: )] | | [removed: 7.7] [added: (7.7] | [removed: %] [added: )%] | | $ | [removed: 45.6] [added: 49.1] | | | $ | [removed: 43.4] [added: 45.6] | | | $ | [removed: 2.2] [added: 3.5] | | | [removed: 5.1] [added: 7.7] | % |

| Total net revenues | $ | [removed: 761.6] [added: 845.5] | | | $ | [removed: 660.2] [added: 761.6] | | | $ | [removed: 101.4] [added: 83.9] | | | [removed: 15.4] [added: 11.0] | % | | $ | [removed: 660.2] [added: 761.6] | | | $ | [removed: 560.0] [added: 660.2] | | | $ | [removed: 100.2] [added: 101.4] | | | [removed: 17.9] [added: 15.4] | % |

Clear Aligner Case Volume by [removed: Channel and Product][added: Region]

Case volume data which represents Invisalign case shipments by [removed: region and product,] [added: region,] for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013 is] as follows (in millions):

| Region [removed: and Channel] | December 31, [removed: 2014] [added: 2015] | | | December 31, [removed: 2013] [added: 2014] | | | Change | | | | | | December 31, [removed: 2013] [added: 2014] | | | December 31, [removed: 2012] [added: 2013] | | | Change | | | | |

| North American Invisalign | [removed: 338.5] [added: 398.4] | | | [removed: 313.9] [added: 338.5] | | | [removed: 24.6] [added: 59.9] | | | [removed: 7.8] [added: 17.7] | % | | [removed: 313.9] [added: 338.5] | | | [removed: 276.7] [added: 313.9] | | | [removed: 37.2] [added: 24.6] | | | [removed: 13.4] [added: 7.8] | % |

| International Invisalign | [removed: 139.5] [added: 184.8] | | | [removed: 108.5] [added: 139.5] | | | [removed: 31.0] [added: 45.3] | | | [removed: 28.6] [added: 32.5] | % | | [removed: 108.5] [added: 139.5] | | | [removed: 86.8] [added: 108.5] | | | [removed: 21.7] [added: 31.0] | | | [removed: 25.0] [added: 28.6] | % |

| Total Invisalign case volume | [removed: 478.0] [added: 583.2] | | | [removed: 422.4] [added: 478.0] | | | [removed: 55.6] [added: 105.2] | | | [removed: 13.2] [added: 22.0] | % | | [removed: 422.4] [added: 478.0] | | | [removed: 363.5] [added: 422.4] | | | [removed: 58.9] [added: 55.6] | | | [removed: 16.2] [added: 13.2] | % |

Clear Aligner [added: - International]

Clear Aligner North America net revenues increased by $38.4 [removed: million, or 9.4%,] [added: million] in 2014 compared to 2013 primarily due to Invisalign case volume growth of approximately $32.1 million across all channels and products, and, to a lesser extent, higher [removed: average selling prices ("ASP")] [added: ASP] which contributed approximately $6.3 million to the increase in net revenues.

Clear Aligner international net revenues increased by $58.0 [removed: million, or 35.9%,] [added: million] in 2014 compared to 2013 primarily driven by Invisalign case volume growth of $46.2 million along with higher ASP which contributed approximately $11.8 million to the increase in net revenues.

Foreign exchange rates had a favorable impact [removed: to] [added: on] revenues in 2014 as compared to 2013, despite the weakening of the Euro to the U.S. dollar in the last six months of 2014.

Scanner [removed: and Services] net revenues increased by [removed: $3.5 million, or] 7.7%, in 2014 compared to 2013 due to an increase in both services revenue as well as scanner revenue.

Fiscal Year [removed: 2013] [added: 2015] compared to Fiscal Year [removed: 2012][added: 2014]

Total net revenues increased by [removed: $100.2] [added: $83.9] million in [removed: 2013] [added: 2015] as compared to [removed: 2012] [added: 2014] primarily as a result of Invisalign case volume growth across all regions and products as well as increased Invisalign non-case revenue.

Clear Aligner North America net revenues increased by [removed: $47.1 million, or 13.0%,] [added: $52.1 million] in [removed: 2013] [added: 2015] compared to [removed: 2012] [added: 2014] primarily due to Invisalign case volume growth of approximately [removed: $48.5] [added: $79.0] million across all channels and [removed: products, offset in part, by lower average selling prices ("ASP") which decreased net revenues by approximately $1.4 million.][added: products.]

Invisalign non-case net revenues, consisting of training fees and ancillary product revenues, increased by [removed: $14.0 million, or 45.6%,] [added: $5.2 million] in [removed: 2013] [added: 2015] as compared to [removed: 2012] [added: 2014] primarily due to [removed: the consolidation of our Vivera product shipments in North America from four shipments per year to one shipment along with] increased Vivera volume both in North America and [removed: international.][added: International.]

| | December 31, [removed: 2014] [added: 2015] | | | | December 31, [removed: 2013] [added: 2014] | | | | Change | | | | December 31, [removed: 2013] [added: 2014] | | | | December 31, [removed: 2012] [added: 2013] | | | | Change | | |

| Cost of net revenues | $ | [removed: 149.7] [added: 172.0] | | | $ | [removed: 129.8] [added: 149.7] | | | $ | [removed: 19.9] [added: 22.3] | | | $ | [removed: 129.8] [added: 149.7] | | | $ | [removed: 110.6] [added: 129.8] | | | $ | [removed: 19.2] [added: 19.9] | |

| % of net segment revenues | [removed: 21.0] [added: 21.5] | | % | | [removed: 21.1] [added: 21.0] | | % | | | | | | [removed: 21.1] [added: 21.0] | | % | | [removed: 21.4] [added: 21.1] | | % | | | | |

| • | Additional Aligners at No Charge. In July 2015, we launched a new product policy called "Additional Aligners at No Charge" that addresses one of our customers' top complaints. Previously, we charged customers for additional aligners ordered beyond those covered by the initial treatment plan. With this product policy change, we no longer distinguish between mid-course corrections and case refinements and allow doctors to order additional aligners to address either treatment need at no charge, subject to certain requirements. These changes were effective for all new Invisalign Full, Teen, and Assist treatments shipped worldwide after July 18, 2015 as well as any open Invisalign Full, Teen and Assist cases as of that date. |

Based on this new product policy, beginning in the third quarter of 2015, we deferred more revenue as a result of providing free additional aligners for eligible treatments.

Additionally, since we grandfathered over 1 million open cases, we will recognize lower revenues as additional aligners are shipped.

We expect lower amounts of revenue to be recognized for at least the next two years until these cases complete.

In the fourth quarter of 2015, the new product policy decreased Clear Aligner net revenues by approximately $7.0 million and reduced operating margin by 2.2% and diluted earnings per share by $0.07 per share.

We expect a decrease in Clear Aligner net revenues by approximately $7.0 million to $8.0 million in the first quarter of 2016, and by approximately $25.0 million to $30.0 million in fiscal year 2016.

While this product policy change will impact the timing of our revenue recognition, we believe this policy change will result in a significant improvement in customer satisfaction and loyalty, and ultimately increase Invisalign utilization and volume over time.

Utilization among our North American orthodontist customers reached an all time high of 9.9 cases per doctor in the fourth quarter of 2015 compared to 8.6 in the fourth quarter of 2014.

International doctor utilization increased to 5.0 cases in the fourth quarter of 2015 from 4.5 in the fourth quarter of 2014.

North American GP doctor utilization increased to 3.1 cases in the fourth quarter of 2015 from 2.9 in the fourth quarter of 2014.

The increase in North America orthodontist utilization reflects improvements in product and technology, which continues to strengthen our doctors’ clinical confidence in the use of Invisalign such that they now utilize Invisalign more often and on more complex cases, including their teenage patients.

Increased International utilization reflects growth in both the EMEA and Asia Pacific regions driven by go-to-market and sales coverage investments, improving clinical education and support as well as ongoing technology innovation.

| • | Number of new Invisalign doctors trained. We continue to expand our Invisalign customer base through the training of new doctors. In 2015, Invisalign growth was driven primarily by increased utilization across all regions as well as by the continued expansion of our customer base as we trained a total of 9,795 new Invisalign doctors, of which 56% were trained internationally. |

the foreign currency risk in countries where we have significant monetary assets and liabilities denominated in currencies other than the functional currency.

The impact from these forward contracts was not material to our financial statements for the year ended December 31, 2015.

In addition, as we plan for further international expansion over the next several years, we must provide better support to our customers in these regions and be geographically closer to their practices.

Accordingly, we intend to make further investments in our manufacturing over the next few years to enhance our regional capabilities.

| • | Establish Regional Order Acquisition and Treatment Planning facilities: We intend to establish additional Order Acquisition and Treatment Planning facilities closer to our International customers in order to improve our operational efficiency and provide doctors with a great experience to further improve their confidence in using Invisalign to treat more patients, more often. If demand for our product in 2016 exceeds our current expectations, or if the timing of receipt of case product orders during a given quarter is different from our expectations, we may not be able to fulfill orders in a timely manner, which may negatively impact our financial results and overall business. Conversely, if demand decreases or if we fail to forecast demand accurately, we could be required to record excess capacity charges, which would lower our gross margin. |

| ◦ | investments in international expansion in new country markets such as India and Korea; |

| ◦ | the increase in sales and customer support resources; and |

| ◦ | product and technology innovation to address such things as treatment times, indications unique to teens, and predictability. |

Clear Aligner - North America

These increases were offset in part by lower average selling prices ("ASP"), which decreased net revenues by $26.9 million.

The decrease in ASP was primarily as a result of higher net revenue deferrals of $16.0 million, which includes the impact of our new additional aligner product policy launched in July 2015 of $8.9 million and the impact of higher promotional discounts in 2015 as compared to 2014 of $11.7 million.

These decreases in ASP were offset in part by the price increase on our Full Products, effective April 1, 2015.

Clear Aligner international net revenues increased by $30.4 million in 2015 compared to 2014 primarily driven by Invisalign case volume growth of $71.5 million across all products.

This was partially offset by lower ASP which decreased net revenues by approximately $41.1 million.

The decrease in ASP was primarily as a result of the unfavorable impact from foreign exchange rates primarily due to the weakening of the Euro compared to the U.S. dollar in 2015 compared to 2014 of $34.5 million, and to a lesser extent higher net revenue deferrals of $7.8 million which includes the impact of our new additional aligner product policy launched in July 2015 of $4.7 million, as well as higher promotional discounts of $6.3 million in 2015 compared to 2014.

These decreases were partially offset by an increase in ASP as we transitioned to direct sales in certain Asia Pacific countries and Europe, Middle East and Africa regions, as well as the price increase on our Full Products effective July 1, 2015.

Clear Aligner - Invisalign Non-Case

Scanner net revenues decreased by $3.8 million in 2015 compared to 2014 primarily due to a decrease in scanner revenue, offset in part by a slight increase in services revenue.

In March 2015, we announced our next generation scanner which began shipping in September 2015.

Net revenues declined in 2015 primarily due to fewer scanners recognized and permanent price reductions on our previous generation scanner.

Clear Aligner - North America

Clear Aligner - International

Clear Aligner - Invisalign Non-Case

The increase in services revenue was primarily due to an increase in the volume of CAD/CAM services resulting from a larger installed base of scanners.

Fiscal Year 2015 compared to Fiscal Year 2014

The gross margin percentage declined in 2015 compared to 2014 due to lower ASP which was partially offset by lower costs per unit.

The gross margin percentage decreased in 2015 compared to 2014 due to lower ASP from permanent price reductions on our previous generation scanner and higher manufacturing costs from lower production volumes and higher inventory reserves.

Align Technology, Inc. is a global medical device company that advanced the invisible orthodontics market with the introduction of the Invisalign System in 1999.

Today, we are focused on designing, manufacturing and marketing innovative technology-rich products to help dental professionals achieve the clinical results they expect and deliver effective, convenient cutting-edge dental treatment options to their patients.

Align Technology was founded in March 1997 and is headquartered in San Jose, California with offices worldwide.

Our international headquarters are located in Amsterdam, the Netherlands.

We have two operating segments: (1) Clear Aligner, known as the Invisalign System; and (2) Scanner and Services ("Scanner"), known as the iTero intra-oral scanners and OrthoCAD services (which we previously referred to as Scanner and CAD/CAM Services ("SCCS")).

We received FDA clearance in 1998 and began our first commercial sales of Invisalign to U.S. orthodontists in 1999 followed by U.S. General Practitioner Dentists ("GPs") in 2002.

Over the next decade, we introduced Invisalign to the European market and Japan, added distribution partners in Asia Pacific, Latin America, and Europe Middle East and Africa ("EMEA"), and introduced a full range of treatment options including Invisalign Express 10, Invisalign Teen, Invisalign Assist, and Vivera Retainers.

By 2011, we launched significant new aligner and software features across all Invisalign products that make it easier for doctors to use Invisalign on more complex cases, and introduced Invisalign to the People’s Republic of China.

In 2013, we launched SmartTrack, the next generation of Invisalign clear aligner material, which became the new standard aligner material for Invisalign products in North America, Europe and other international markets where we have obtained regulatory approval.

Over the last several years’ we have continued to build upon our technology and expertise to deliver enhanced clinical innovations aimed at helping our customers treat some of the most challenging cases.

These innovations, both launched in early 2014, include Invisalign G5, specifically designed for treatment of deep bite malocclusion, as well as ClinCheck Pro, the next generation Invisalign treatment software tool designed to help Invisalign providers achieve their treatment goals.

Most recently, in November 2014, we announced the upcoming release of Invisalign G6 clinical innovations for first premolar extraction.

We also sell iTero intra-oral scanners and provide computer-aided design and computer-aided manufacturing ("CAD/CAM") services.

Intra-oral scanners provide a dental “chair-side” platform for accessing valuable digital diagnosis and treatment tools, with potential for enhancing accuracy of records, treatment efficiency, and the overall patient experience.

We believe there are numerous benefits for customers and the opportunity to accelerate the adoption of Invisalign through interoperability with our intra-oral scanners.

The use of digital technologies such as CAD/CAM for restorative dentistry or in-office restorations has been growing rapidly and intra-oral scanning is a critical part of enabling these new digital technologies and procedures in dental practices.

In late 2012, we commercially launched the Invisalign Outcome Simulator, the first Invisalign chair-side application powered by the iTero scanner.

The interactive application provides dentists and orthodontists an enhanced platform for patient education and is designed to increase treatment acceptance by helping patients visualize the benefits possible with Invisalign treatment.

In January 2014, we announced that the 3M™ True Definition scanner was qualified for use with Invisalign case submissions.

This qualification enables Invisalign providers with a True Definition scanner to submit a digital impression in place of a traditional PVS impression as part of the Invisalign case submission process.

The 3M True Definition scanner is currently the only third-party scanner that has been qualified for use with Invisalign treatment.

We continue to believe in an open systems approach to digital impressions, and are committed to working with other intra-oral scanning companies interested in developing interoperability for use with Invisalign treatment.

The Invisalign System is offered in more than 80 countries and has been used to treat more than 3.0 million patients.

Our iTero intra-oral scanner, which is primarily sold in North America, provides dental professionals with an open choice to send digital impressions to any laboratory-based CAD/CAM system or to any of the more than 2,400 dental labs worldwide.

| | |

| --- | --- |

Total utilization in the fourth quarter of 2014 was 4.4 cases per doctor which is flat when compared to the third quarter of 2014; however, in the fourth quarter of 2013, utilization rates increased for our International doctors which was offset by a decrease in utilization by our North American orthodontic doctors.

The decrease by our North American orthodontic doctors reflects a seasonal decline in the number of teen-aged cases shipped as summer is typically the busiest season for orthodontists with practices that have a high percentage of adolescent and teenage patients as many parents want to get their teenagers started in treatment before the start of the school year.

fourth quarter of 2013.

However, we expect that our utilization rates may fluctuate from period to period.

| • | Number of new Invisalign doctors trained. We continue to expand our Invisalign customer base through the training of new doctors. In 2014, Invisalign growth was driven primarily by increased utilization by our North American orthodontist doctors and International doctors as well as by the continued expansion of our customer base as we trained a total of 9,440 new Invisalign doctors, of which 56% were trained internationally. GPs are one of the keys to driving growth in the adult segment, and, in 2014, we launched Invisalign Fundamentals, a new training course, designed to improve practice integration and increase utilization for newly trained doctors. We have implemented this new Invisalign Fundamentals program across North America and will look for opportunities to adjust our international training programs as we work to help our GP practices worldwide more successfully adopt Invisalign into their practices. We believe that this new training approach has the potential to increase the number of doctors submitting cases 90-days post-training, as well as the number of cases submitted per doctor. |

| • | Go-To-Market Evolution. In order to provide more comprehensive sales and service coverage, we are currently implementing an updated go-to-market strategy with an expanded team and new structure in North America. In order to ensure our North America sales and marketing team can increase time in-office and help each practice become more successful, we are in the process of adding approximately 50 sales team members in 2015, the majority of which are in place as of the date of this Form 10-K. We believe that these investments in a refined go-to-market strategy and the strategic deployment of more people will improve adoption and utilization of Invisalign by our customers. |

| ▪ | the increase in North American sales force coverage discussed above, as well as additions to our sales force in EMEA and Asia Pacific regions |

| ▪ | infrastructure investments, including a project to implement a new enterprise resource planning system which we started in late 2014 with expected "go-live" for various modules and subsidiaries throughout 2016; and |

| ▪ | investments in new products and markets like our recently announced intention to develop new products for dentists who treat mild to moderate obstructive sleep apnea with oral appliance therapy. |

| • | Increase in Invisalign Selling Price. We have historically invested in research and development and continuous product innovation. In order to continue and even accelerate this product innovation cycle, we recently announced a price increase of $50 per treatment, or approximately 3%, on Invisalign Full and Invisalign Teen products, effective April 1, 2015 in North America. The prices for Invisalign Assist, Invisalign Express 10 and Invisalign Express 5 products will remain unchanged. |

| • | Foreign exchange rates. Although the U.S. dollar is our reporting currency, a portion of our net revenues and income are generated in foreign currencies. Net revenues and income generated by subsidiaries operating outside of the U.S. are translated into U.S. dollars using exchange rates effective during the respective period and as a result are affected by changes in exchange rates. We have generally accepted the exposure to exchange rate movements without using derivative financial instruments to manage this risk; therefore, both positive and negative movements in currency exchange rates against the U.S. dollar will continue to affect the reported amount of net revenues and income in our consolidated financial statements. In the third and fourth quarter of 2014 combined, our net revenues were negatively impacted by $3.1 million, and we incurred foreign currency translation net losses of $4.1 million in Interest and Other Income (Expense) net, primarily due to the weakening of the Euro and other foreign currencies relative to the |

U.S. Dollar.

If the U.S. Dollar continues to strengthen compared to other foreign currencies, including the Euro, our reported amount of net revenues and income will be negatively impacted compared to the same period last year.

| • | Medical Device Excise Tax. During March 2014, Align had extensive discussions with the IRS and they informed us that our aligners are not subject to the medical device excise tax ("MDET") which we had been paying and expensing in general and administrative expenses in the consolidated statements of operations since January 1, 2013; however, our scanners are still subject to the MDET. As a result of these discussions, beginning in March 2014, we ceased expensing and paying the MDET for aligners. In June 2014, we received a $1.2 million refund for MDET paid in 2014 related to our aligners which reduced general and administrative expenses for the three months ended June 30, 2014. For the year ended December 31, 2014, MDET expense was lower by approximately $6.8 million compared to the prior year. Additionally, we are in process of claiming a $6.8 million refund of MDET paid in 2013 related to our aligners; however, because this claim is subject to review and approval by the IRS, we have not recorded a receivable as the outcome of the audit is uncertain. Any future changes in the applicability of the MDET as it applies to us or refunds of amounts previously paid will be recorded as an additional expense or a credit to the consolidated statement of operations in the period in which it becomes probable and reasonably estimable. |

As of December 31, [removed: 2014,] [added: 2015,] we had approximately [removed: $402.7] [added: $511.0] million invested in available-for-sale marketable securities.

We do not have interest bearing liabilities as of December 31, [removed: 2014,] [added: 2015,] and, therefore, we are not subject to risks from immediate interest rate increases.

We [added: generally] sell our products in the local currency [removed: for] [added: of] the respective countries.

This provides some natural hedging because most of the subsidiaries’ operating expenses are [added: generally] denominated in their local currencies as discussed further below.

Regardless of this natural hedging, our results of operations may be adversely impacted by [removed: the] exchange rate [removed: fluctuation.][added: fluctuations.]

Although we will continue to monitor our exposure to currency fluctuations, and, where appropriate, may use financial hedging techniques in the future to minimize the effect of these fluctuations, [removed: we are not currently engaged] [added: the impact of an aggregate change of 10%] in [removed: any] [added: foreign currency exchange rates relative to the U.S. dollar on our results of operations and] financial [removed: hedging transactions.][added: position could be material.]

In September 2015, we entered into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on cash and certain trade and intercompany receivables and payables.

These forward contracts are not designated as hedging instruments and do not subject us to material balance sheet risk due to fluctuations in foreign currency exchange rates.

The gains and losses on these forward contracts are intended to offset the gains and losses in the underlying foreign currency denominated monetary assets and liabilities being economically hedged.

These instruments are marked to market through earnings every period and generally are one month in original maturity.

We do not enter into foreign currency forward contracts for trading or speculative purposes.

As our international operations grow, we will continue to reassess our approach to managing the risks relating to fluctuations in currency rates.

It is difficult to predict the impact hedging activities could have on our results of operations.

The fair value of foreign exchange forward contracts outstanding as of December 31, 2015 was not material.

The impact of an aggregate change of 10% in foreign currency exchange rates relative to the U.S. dollar on our results of operations and financial position could be material.

We have two operating segments: (1) Clear Aligner, known as the Invisalign System; and (2) Scanners and Services ("Scanner"), known as the iTero intra-oral scanner and OrthoCAD services and formerly referred to as our Scanners and CAD/CAM Services [removed: segment ("SCCS").][added: segment.]

For the year ended December 31, [removed: 2014,] [added: 2015,] Clear Aligner revenues represent approximately [removed: 94] [added: 95] percent of worldwide revenue, while [removed: Scanners] [added: Scanner] represent the remaining [removed: 6] [added: 5] percent of worldwide revenues.

The [added: Invisalign-trained] dental professional prepares and sends us a patient’s treatment data package which consists of a prescription form, a polyvinyl-siloxane, (or "PVS") impression of the relevant dental arches, photographs of the patient and, at the dental professional’s election, x-rays of the patient’s dentition.

The [added: Invisalign-trained] dental professional can also submit an intra-oral scan or “digital impression” instead of a physical PVS impression through either [added: Align's] iTero [removed: or 3M] [added: scanner, 3M's] True [removed: Definition,] [added: Definition or Sirona's CEREC Omnicam scanner,] currently the only other Invisalign qualified intra-oral [removed: scanner.][added: scanners.]

The ClinCheck plan simulates appropriate tooth movement broken down into a series of two-week increments, and details timing and placement of [removed: any attachments that will be used during treatment.]

[added: |] Scanners and Services [removed: Segment][added: | 5 | | | 6 | | | 7 | |]

[removed: By] [added: BY] enabling the dental practitioner to create a 3D image of the [removed: patient’s] [added: patient's] teeth using a handheld intra-oral scanner inside the mouth, intra-oral scanning is more efficient and precise and more comfortable for patients, compared to the mess, [removed: discomfort,] [added: discomfort] and subjective nature of taking physical impressions.

| Percentage of Net Revenues by Product | [removed: 2014] [added: 2015] | | | [removed: 2013] [added: 2014] | | | [removed: 2012] [added: 2013] | |

| Invisalign Full Products | [removed: 77] [added: 78] | % | | [removed: 75] [added: 77] | % | | [removed: 78] [added: 75] | % |

| Invisalign Express Products | 11 | | | 11 | | | [removed: 9] [added: 11] | |

| Invisalign Non-case* | 6 | | | [removed: 7] [added: 6] | | | [removed: 5] [added: 7] | |

| * | Non-case net revenues include retainers, training revenues, and ancillary offerings under our Clear Aligner product [removed: lines] [added: lines.] |

Invisalign Teen treatment aligners (other than the replacement aligners) are manufactured and [added: then delivered to the dental professionals in a single shipment.]

Invisalign Express 10 and Invisalign Express 5, which are sold in the U.S. and Canada, uses up to 10 and 5 sets of aligners, [removed: respectively.][added: respectively, and are also available as a single arch option.]

Each set of Vivera Retainers is intended to be used for three [removed: consecutive months and deliver one year of retention.]

| • | Precision Cuts, which are custom mesial and distal hooks used to provide anchorage for elastics and button cutouts to accommodate buttons bonded to the tooth aimed to help treat patients with Class II and Class III [removed: malocclusion; and] [added: malocclusion.] |

Invisalign G6 clinical innovations [removed: will be available to Invisalign-trained providers beginning in the first quarter of 2015 with limited commercialization, followed by full commercialization] [added: was launched] in Asia Pacific, Europe, Middle East and Africa, and Latin America geographies throughout 2015 and [added: will be launched in] North America in early 2016.

[removed: SmartTrack, the next generation of Invisalign clear aligner material] [added: SmartTrack] is a proprietary, custom-engineered [added: Invisalign Clear Aligner] material that delivers gentle, more constant force considered ideal for orthodontic tooth movements.

| • | IOS Technologies [removed: Inc,] [added: Inc.,] a wholly owned subsidiary of Glidewell Laboratories, provides the option to mill same-day restorations in the office. |

The [added: Invisalign Outcome Simulator is an] interactive application [added: that] provides GPs and orthodontists an enhanced platform for patient education and is designed to increase treatment acceptance by helping patients visualize the benefits possible with Invisalign treatment.

As the only Invisalign chair-side intra-oral scanning application on the market, the Invisalign Outcome Simulator's unique dual view layout shows a prospective patient an image of his/her own current [removed: dentition next to his/her simulated final position of how their teeth may look after Invisalign treatment.]

Other proprietary software mentioned in this Annual Report on Form 10-K such as ClinCheck and ClinCheck Pro software, the Invisalign Doctor Site, and enhanced feature solutions such as Invisalign [removed: G5] [added: G6] are included as part of the Invisalign System and are not sold separately nor do they contribute as individual items of revenue.

| 2. | Doctor Preference. We want all of our doctors to have the confidence and motivation to lead with Invisalign for every patient that walks into their practice. We strive to achieve this by investing in two areas. First, continuing to improve product predictability and applicability for more complex cases thereby expanding the types of malocclusion that our Invisalign products can treat. As an example, we launched Invisalign G5 in February 2014, which represented our first set of features engineered specifically to treat deep bite malocclusion. We estimate that deep bite manifests itself in approximately 30% to 40% of the orthodontic cases treated worldwide depending on geography. [removed: We also recently] [added: In 2015, we did a phased launch of Invisalign G6 clinical innovations for first premolar extractions. The nature of malocclusion that requires first premolar tooth extraction is an orthodontic problem that affects more than 50% of people in Asia, 20% in Europe and 12% in North America. Secondly, enhancing the customer’s experience by making it easier to treat with and integrate Invisalign into their practices. As an example, we launched ClinCheck Pro in February 2014, the next generation Invisalign treatment software tool, designed to simplify the treatment process and help our doctors achieve their treatment goals.] |

| 3. | Brand Strength. Our goal is to make Invisalign a highly recognized name brand worldwide by creating awareness for Invisalign treatment among consumers and motiving potential patients to seek treatment from an Invisalign provider. In support of this objective, we invest in initiatives designed to strengthen our global brand name recognition and drive [removed: consumer purchase intent. We accomplish this objective through an integrated consumer marketing strategy that includes television, media, social networking and event marketing.] |

[added: We continued] to expand in our existing markets through targeted investments in sales coverage, professional marketing and education programs, along with consumer marketing in selected country markets.

In [removed: 2014,] [added: 2015,] we had approximately [removed: 43,340] [added: 48,170] active Invisalign providers.

Our research and development expenses were [removed: $52.8] [added: $61.2] million, [removed: $44.1] [added: $52.8] million, and [removed: $42.9] [added: $44.1] million for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] respectively.

As of December 31, [removed: 2014,] [added: 2015,] we had [removed: 352] issued [added: 384] U.S. patents, [removed: 97 pending U.S. patent applications, and 257] [added: 276] foreign issued patents, [removed: as well as 108] [added: and 236] pending [removed: foreign] [added: global] patent applications.

Due to the individualized nature of an Invisalign treatment which is prescribed by a doctor, no two cases are alike, [removed: and] [added: thus] we maintain relatively low levels of backlog.

Our intra-oral scanner backlog as of December 31, [removed: 2014] [added: 2015] was not material.

[removed: Although the number of competitors varies by segment, currently our products compete directly] against products manufactured and distributed by various companies, both within and outside the U.S., including Danaher Corporation, 3M, Sirona Dental Systems, [removed: Inc. and] [added: Inc.,] Dentsply International, Inc. [removed: Information regarding risks associated with increased competition may be found in Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.”][added: and other private competitors.]

In order for us to market our products, we must obtain regulatory authorization and comply with extensive product and quality system [removed: regulations.][added: regulations both within and outside the United States.]

[removed: We are also subject to] [added: In addition, we must comply with] numerous data protection requirements that span from individual state and national laws in the US to multinational requirements in the EU.

As of December 31, [removed: 2014,] [added: 2015,] we had approximately [removed: 3,580] [added: 4,375] employees, including [removed: 2,320] [added: 2,805] in manufacturing and operations, [removed: 730] [added: 950] in sales and marketing which includes customer care, [removed: 260] [added: 310] in research and development and [removed: 270] [added: 310] in general and administrative functions.

The following table sets forth certain information regarding our executive officers as of February [removed: 26, 2015:][added: 25, 2016:]

| [removed: Thomas] [added: Joseph] M. [removed: Prescott] [added: Hogan] | [removed: 59] [added: 58] | President and Chief Executive Officer |

| David L. White | [removed: 59] [added: 60] | Chief Financial Officer |

| Jennifer M. Erfurth | [removed: 45] [added: 46] | Vice President, Global Human Resources |

| Roger E. George | [removed: 49] [added: 50] | Vice President, Corporate and Legal Affairs and General Counsel |

| Timothy A. Mack | [removed: 56] [added: 57] | Vice President, Business Development |

any attachments that will be used during treatment.

consecutive months and deliver one year of retention.

In 2015, we did a phased launch of Invisalign G6 clinical innovations for first premolar extraction.

Scanner Segment

In March 2015, we announced that the Sirona CEREC Omnicam with the new CEREC Ortho software 1.1 was qualified for use with Invisalign case submissions.

The new CEREC Omnicam scanner was available in select markets in the summer of 2015.

The 3M True Definition scanner and Sirona CEREC Omnicam scanner are the only third-party scanners that have been qualified for use with Invisalign treatment.

In March 2015, we announced our next generation iTero Element Intraoral Scanner which features a more compact footprint, enhanced wand and multi-touch display and is engineered to enable faster scan speeds for more efficient, real-time clinical evaluation.

We began shipping the iTero Element Intraoral Scanner in September 2015 and expect to ramp up our production over the next few quarters accordingly.

dentition next to his/her simulated final position of how their teeth may look after Invisalign treatment.

consumer purchase intent.

We accomplish this objective through an integrated consumer marketing strategy that includes television, media, social networking and event marketing.

Although the number of competitors varies by segment, currently our products compete directly

In addition, the expiration of certain key patents commencing in 2017 owned by us may result in additional competition.

Information regarding risks associated with increased competition may be found in Item 1A of this Annual Report on Form 10-K under the heading “Risk Factors.”

Certain of the Company’s products are classified as medical devices under the United States Food, Drug, and Cosmetic Act (the “FDCA”).

The FDCA requires these products, when sold in the United States, to be safe and effective for their intended use and to comply with the regulations administered by the United States Food and Drug Administration (“FDA”).

Our products may also be regulated by comparable agencies in non-U.S. countries in which they are produced or sold.

In the European Union, our products are subject to the medical devices laws of the various member states, which are based on a Directive of the European Commission.

Such laws generally regulate the safety of the products in a similar way to the FDA regulations.

| Simon Beard | 49 | Vice President and Managing Director, EMEA |

| Raphael Pascaud | 44 | Chief Marketing Portfolio and Business Development Officer |

| Julie Tay | 49 | Vice President and Managing Director, Asia Pacific |

Joseph M.

Prior to joining us, Mr. Hogan was Chief Executive Officer of ABB Ltd., a global power and automation technologies company based in Zurich, Switzerland from 2008 to 2013.

Prior to working in ABB, Mr. Hogan worked at General Electric Company (GE) in a variety of executive and management roles from 1985 to 2008, including eight years as Chief Executive Officer of GE Healthcare from 2000 to 2008.

Simon Beard has served as our Vice President and Managing Director, EMEA since November 2014.

Prior to joining us, from December 2012 to October 2014, Mr. Beard was Regional Director for the South East Asia business of Smith & Nephew, a multinational medical equipment manufacturing company.

From October 2006 to November 2012, Mr. Beard was Director & General Manager for UK and Ireland for Smith & Nephew's Advanced Woundcare business.

Prior to Smith & Nephew, Mr. Beard held multiple commercial, strategic, and general management positions in companies such as DePuy International (Johnson & Johnson), Sankyo Pharmaceutical and Sanofi Aventis.

Prior to

Mr. Mack will be retiring in March 2016.

Raphael Pascaud was promoted to Chief Marketing Portfolio and Business Development Officer in July 2015.

Julie Tay was appointed Vice President and Managing Director, Asia Pacific in March 2013.

Prior to joining us, Ms. Tay was regional head of Bayer Healthcare (Diabetes Care) overseeing operations across Asia, from 2010 to 2013.

From 2006 to 2010, Ms. Tay served as director of marketing and corporate accounts at Sealed Air Corporation (formerly Johnson Diversey), a global provider of food safety and security, facility hygiene and product protection.

Prior to that, Ms. Tay spent 15 years with Johnson & Johnson Medical.

Although advancements have been made in materials used for taking dental impressions since their introduction one hundred years ago, the overall impression process has remained relatively unchanged.

Shortcomings such as voids, pulls, and the general margin for error have remained inherent in conventional impressions, and subsequent retakes create unnecessary costs for a clinical practice.

As the only intra-oral scanner in the market based on parallel confocal imaging, the iTero intra-oral scanner utilizes laser and optical scanning to capture the contours of the patient’s dentition, gingival structures and the bite.

iTero captures 100,000 points of laser light in perfect focus without the use of powder to coat the teeth, allowing for contact of the wand and tooth.

The benefit of contact scanning for the clinician is that it eliminates the challenge of hovering over the teeth at a specific distance which can be complicated.

For the patient, they enjoy a more comfortable powder free experience which allows the clinician to provide a very comfortable patient centric experience.

Within minutes, an accurate 3D digital impression can be viewed on the screen.

The iTero intra-oral scanner consists of a mobile computer unit, display screen, control foot pedal and wand to scan and capture a patient’s dentition (full or partial dental arch).

iTero software features include occlusal map, eraser tool, edge trim tool, real-time modeling and an option to submit scans for Invisalign treatment.

iTero provides doctors and labs with an open choice to export generic digital files of their digital impression to use with other third party dental service providers.

This allows the digital impression to integrate with cone beam CT images for implant and orthodontic treatment planning.

In-office training on the system and features is provided after the unit is delivered to the practice.

| Scanners and Services | 6 | | | 7 | | | 8 | |

then delivered to the dental professionals in a single shipment.

Most recently, in November 2014, we announced the upcoming release of Invisalign G6 clinical innovations for first premolar extraction.

SmartTrack became the new standard clear aligner material for Invisalign products in North America beginning January 2013 and in February 2013 for Europe and other international markets where we have obtained regulatory approval.

Scanners and Services Products

Scanners

In January 2013, we announced the commercial availability of the Invisalign Outcome Simulator, our first Invisalign chair-side application powered by the iTero scanner.

announced the upcoming release of Invisalign G6 clinical innovations for first premolar extractions.

The nature of malocclusion that requires first premolar tooth extraction is an orthodontic problem that affects more than 50% of people in Asia, 20% in Europe and 12% in North America.

Secondly, enhancing the customer’s experience by making it easier to treat with and integrate Invisalign into their practices.

As an example, we launched ClinCheck Pro in February 2014, the next generation Invisalign treatment software tool, designed to simplify the treatment process and help our doctors achieve their treatment goals.

We continued

In addition, given the significant long term potential the EMEA geography represents and the support we can now provide by utilizing our direct coverage model in Europe, beginning in February 2014, we began the transition of a small number of countries into direct sales regions.

We continued the transition of additional smaller countries during the year which will continue through February 2015.

We expect to leverage our existing infrastructure and resources to bring sales coverage and customer support to these countries, most of which are adjacent to our directly covered European countries.

Due to the small volume of business from our EMEA distributor, we do not anticipate that this transition will have a material effect on our financial results in the next several years.

We market Invisalign by communicating the benefits of the Invisalign System to dental professionals through our training programs, online and traditional mail campaigns, trade shows, trade journals and print.

We also promote the benefits of Invisalign through our integrated consumer marketing platform which combines traditional print and broadcast media with a balanced mix of public relations, event marketing, and social media.

The goal of this platform is to raise awareness of Invisalign as the best options for a healthy, beautiful smile among adults and teenagers.

In addition, our consumer marketing platform enables us to help prospective patients find a great Invisalign treatment practice that can meet their needs.

For intra-oral scanners, in addition to leveraging Invisalign customer events and industry trade-shows to communicate the benefits of digital scanning to dental professionals, we also have training programs, educational websites and limited print advertising.

Country-specific regulatory framework and requirements are highlighted in the following examples:

U.S.

In the U.S., the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act ("FDA Act") and its subsequent amendments, and the regulations, provide the FDA with authority over medical devices and the research, clinical testing, manufacture, labeling, distribution, sale, and promotion of such devices.

Medical devices are classified into one of three classes (Class I, II or III).

The class to which the device is assigned determines, among other things, the type of pre-marketing submission/application required for market authorization.

Our Invisalign aligners and intra-oral scanners are classified as Class II medical devices and we have obtained applicable 510(k) clearances for our marketed products.

The FDA Act also requires manufactured devices to comply with applicable Quality System Regulations which impose certain procedural and documentation requirements upon us with respect to design, development, manufacturing and quality assurance activities, including the reporting of adverse experiences with the use of the device.

Prescott (“Mr. Prescott”), Align’s [added: former] President and Chief Executive Officer, and Kenneth B.

[added: Specifically,] the [added: amended complaint alleged that during the] purported class period defendants failed to take an appropriate goodwill impairment charge related to the April 29, 2011 acquisition of Cadent Holdings, Inc. in the fourth quarter of 2011, the first quarter of 2012 or the second quarter of 2012, which rendered our financial statements and projections of future earnings materially false and misleading and in violation of U.S. GAAP.

Specifically, the amended complaint alleged that during

For the fiscal year ended December 31, [removed: 2014][added: 2015]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $4,457,461,725] [added: $3,646,077,546] as of June 30, [removed: 2014] [added: 2015] based on the closing sale price of the registrant’s common stock on the NASDAQ Global Market on such date.

On February [removed: 20, 2015, 80,720,243] [added: 19, 2016, 79,625,640] shares of the registrant’s common stock were outstanding.

Portions of the registrant’s definitive Proxy Statement relating to its [removed: 2014] [added: 2016] Annual Stockholders’ Meeting to be filed pursuant to Regulation 14A within 120 days after the registrant’s fiscal year end of December 31, [removed: 2014] [added: 2015] are incorporated by reference into Part III of this Annual Report on Form 10-K.

For the Year Ended December 31, [removed: 2014][added: 2015]

| Item 1. | Business | [removed: [3](#s729756F7C591EC3F83639A475C146CA9)] [added: [3](#s074BAD764DAD5926AC939D293C00CC95)] |

| | Executive Officers of the Registrant | [removed: [14](#s68427DE3FA85CF4E16C59A47658F1DD4)] [added: [13](#s9BAD09926C96570D9B47833121505910)] |

| Item 1A. | Risk Factors | [removed: [15](#s747752262D6A6082C1A79A4765B7852F)] [added: [14](#s6B9FC73241655060AE377E9A961DE273)] |

| Item 1B. | Unresolved Staff Comments | [removed: [28](#s7EA1C97BEF28742D07879A4765D9249D)] [added: [27](#s0AAE12C43508588CA6FDAE4254361218)] |

| Item 2. | Properties | [removed: [28](#s3387AC4A26F9D7D584069A47660B650D)] [added: [27](#s73D13287332C543D8273368B3D0C6BA4)] |

| Item 3. | Legal Proceedings | [removed: [28](#sBD62685EE3D29EAAB1D69A47662D85DD)] [added: [28](#sF3AA9B8A686059DFB2D0DE363DA5400D)] |

| Item 4. | Mine Safety Disclosures | [removed: [29](#s0777E6FE888AEDA045BC9A47666ED33E)] [added: [29](#s82D1B9A067F7583A8CA204CB8435F9F9)] |

| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | [removed: [30](#sC33120922327764761339A4766B17D2E)] [added: [30](#s49C8C62AC99656A0828A123C4F6B6857)] |

| Item 6. | Selected Consolidated Financial Data | [removed: [32](#s0F702FA7C2ED114C40D19A4766D39978)] [added: [32](#sA2984C7C43E9599C9B8616D98DC07B1D)] |

| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | [removed: [34](#s05CB6F744307530A7BA99A476704EB7F)] [added: [34](#s56869DE089175DCEAB1F30DB548D1889)] |

| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | [removed: [54](#sC60C74527B27ACBC5CF69A4769198D2B)] [added: [50](#sD993CBF0CBE751CFAEDFFC5CEEC081D0)] |

| Item 8. | Consolidated Financial Statements and Supplementary Data | [removed: [54](#sB4A8BCEB9AAA85B99D1C9A475A763824)] [added: [51](#sEFA7E56F1026576F925414F130303DC6)] |

| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | [removed: [94](#sC10B11DBD210615D939C9A476E2ED465)] [added: [89](#s4405EB1F10A4520D83C47C3718A39D9A)] |

| Item 9A. | Controls and Procedures | [removed: [94](#s4383D879073D1B77E2B19A476E4F5D89)] [added: [89](#s348CD8DC99A85DF193094ABA97C7B9CC)] |

| Item 9B. | Other Information | [removed: [94](#s85BCDF3FB90CCFD663DD9A476E819604)] [added: [89](#s57A33C7B069F51F8BF69F37BE4AA19F7)] |

| PART III | | [removed: [95](#sFF32465539A7899BA5219A476EA3CAC2)] [added: [90](#s3C99AFFC941D56EDB1124077BC9F9D25)] |

| Item 10. | Directors, Executive Officers and Corporate Governance | [removed: [95](#sD670DE354AA43F57F6FA9A476ED5D2FF)] [added: [90](#s43CBF0B9B89A500FB2541EA406E8AC56)] |

| Item 11. | Executive Compensation | [removed: [95](#s4ABDB2684383C59B4DDF9A476EF6F004)] [added: [90](#s1F03354713B35D3AA1DD4D285B1225F5)] |

| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | [removed: [95](#sD79B0DE296C392E2DBCD9A475AD7685F)] [added: [90](#s852EFA6F0A6D5D459406FF0B146D4751)] |

| Item 13. | Certain Relationships and Related Transactions and Director Independence | [removed: [96](#s8B280A725A5B4EB94FE49A476F497ED7)] [added: [91](#sA46E5AFD297152E592E3A1295A6BFD8A)] |

| Item 14. | Principal Accounting Fees and Services | [removed: [96](#s2907ECB2104FA2F7EA5D9A476F7BF855)] [added: [91](#sA80EE1DB71D5563C8F61197BC9B0F0BA)] |

| Item 15. | Exhibits, Financial Statement Schedules | [removed: [97](#s9348CB81FF390DA872E49A47554E9DA3)] [added: [92](#sFE1F8CBED1A05C738FD136B5440F6C96)] |

Invisalign, Align, the Invisalign logo, ClinCheck, Invisalign Assist, Invisalign Teen, Vivera, SmartForce, SmartTrack, SmartStage, Power Ridge, iTero, [added: iTero Element,] Orthocad, iCast and iRecord, among others, are trademarks and/or service marks of Align Technology, Inc. or one of its subsidiaries or affiliated companies and may be registered in the United States and/or other countries.

10-K 1 algn-20151231x10k.htm 10-K

UNITED STATES

_______________________________________________________

| [PART I](#s798E3D2015075730BEC2C2C5C29696CB) | | [3](#s798E3D2015075730BEC2C2C5C29696CB) |

| [PART II](#s3FFB199845745B28A2D24FE9719654E5) | | [30](#s3FFB199845745B28A2D24FE9719654E5) |

| PART IV | | [92](#s654448494DCE5C4A850D13C8E7808092) |

| Signatures | | [96](#s94A56C4CAEB7515BBAAD98D657600693) |

10-K 1 algn-20141231x10k.htm 10-K

_____________________________________________________________________

| [PART I](#s4C47F27F1B61DA7300C79A476533756C) | | [3](#s4C47F27F1B61DA7300C79A476533756C) |

| [PART II](#s2F600083CC24D74A153E9A47667FFC35) | | [30](#s2F600083CC24D74A153E9A47667FFC35) |

| PART IV | | [97](#sCFE24A7222BB38DC86459A476F9D958E) |

| Signatures | | [101](#s7A1174DD0779C3910A139A47700288E6) |

We occupy several leased and owned facilities with total office and manufacturing area of over [removed: 870,000] [added: 898,000] square feet.

At December 31, [removed: 2014,] [added: 2015,] the significant facilities were occupied as follows:

| Juarez, Mexico | Own | Manufacturing and office [removed: facility] [added: facilities] for manufacturing and administrative personnel | Clear Aligner and Scanner | N/A |

| Raleigh, North Carolina | Lease | Office for research & development and administrative personnel | Clear Aligner | August 2020 |

In February 2015, we purchased another facility in Juarez, Mexico in order to expand our manufacturing capacity to support additional growth.

We believe that our facilities are adequate to meet current requirements and that additional or substitute space will be available as needed to accommodate any expansion of operations.

| Year Ended December 31, [removed: 2013] [added: 2015:] | | | | | | | |

On February [removed: 20, 2015,] [added: 19, 2016,] the closing price of our common stock on the NASDAQ Global Market was [removed: $56.81] [added: $63.29] per share.

As of [removed: January 31, 2015] [added: February 19, 2016] there were approximately [removed: 110] [added: 101] holders of record of our common stock.

The graph tracks the performance of a $100 investment in our common stock, in the peer group, and the index (with the reinvestment of all dividends) from December 31, [removed: 2009] [added: 2010] to December 31, [removed: 2014.][added: 2015.]

[removed: ][added: ]

Following is a summary of stock repurchases for the three months ended December 31, [removed: 2014:][added: 2015:]

(1) On April 23, 2014, we announced that our Board of Directors had authorized a stock repurchase program pursuant to which we may purchase up to $300.0 million of our common stock over [removed: the next] three years, with $100.0 million of that amount authorized to be purchased [removed: over the first] [added: during each] twelve [removed: months.][added: month period.]

| Fourth quarter | $ | 68.48 | | | $ | 54.69 | |

| Third quarter | $ | 66.53 | | | $ | 52.01 | |

| Second quarter | $ | 64.99 | | | $ | 51.65 | |

| First quarter | $ | 64.75 | | | $ | 51.77 | |

| October 1, 2015 through October 31, 2015 | | 103,000 | | | $ | 59.97 | | | 103,000 | | | $ | 104,989,100 | |

| November 1, 2015 through November 30, 2015 | | 75,875 | | | $ | 66.04 | | | 75,875 | | | $ | 99,978,175 | |

| December 1, 2015 through December 31, 2015 | | — | | | $ | — | | | — | | | $ | 99,978,175 | |

As of December 31, 2015, we have approximately $100 million remaining under the April 2014 stock repurchase program.

| Fourth quarter | $ | 60.00 | | | $ | 41.83 | |

| Third quarter | $ | 49.08 | | | $ | 36.92 | |

| Second quarter | $ | 38.74 | | | $ | 29.53 | |

| First quarter | $ | 33.70 | | | $ | 25.61 | |

*$100 invested on 12/31/09 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31.

| October 1, 2014 through October 31, 2014 | | 280,015 | | | $ | 47.59 | | | 280,015 | | | $ | 209,257,956 | |

| November 1, 2014 through November 30, 2014 | | 85,584 | | | $ | 53.31 | | | 85,584 | | | $ | 204,695,591 | |

| December 1, 2014 through December 31, 2014 | | 51,900 | | | $ | 56.40 | | | 51,900 | | | $ | 201,768,477 | |

In addition, in January 2015, our Board of Directors has authorized the next $100 million under the program to be repurchased which we anticipate completing within twelve months.

The following tables set forth the selected consolidated financial data for each of the years in the five-year period ended December 31, [removed: 2014.][added: 2015.]

We have derived the statement of operations data for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] and the balance sheet data as of December 31, [removed: 2014] [added: 2015] and [removed: 2013] [added: 2014] from the consolidated audited financial statements included elsewhere in this Annual Report on Form 10-K.

The statement of operations data for the year ended December 31, [removed: 2011] [added: 2012] and [removed: 2010] [added: 2011] and the balance sheet data as of December 31, [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010] [added: 2011] were derived from the consolidated audited financial statements that are not included in this Annual Report on Form 10-K.

| | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | |

| Net revenues 1 | $ | [removed: 761,653] [added: 845,486] | | | $ | [removed: 660,206] [added: 761,653] | | | $ | [removed: 560,041] [added: 660,206] | | | $ | [removed: 479,741] [added: 560,041] | | | $ | [removed: 387,126] [added: 479,741] | |

| Gross profit 2 | $ | [removed: 578,443] [added: 640,110] | | | $ | [removed: 498,106] [added: 578,443] | | | $ | [removed: 416,388] [added: 498,106] | | | $ | [removed: 361,283] [added: 416,388] | | | $ | [removed: 303,417] [added: 361,283] | |

| Income from operations 3 | [removed: 193,576] [added: 188,634] | | | | [removed: 94,212] [added: 193,576] | | | | [removed: 85,592] [added: 94,212] | | | | [removed: 90,360] [added: 85,592] | | | | [removed: 102,734] [added: 90,360] | | |

| [removed: Other] [added: Interest and other] income (expense), net | [removed: (3,207] [added: (2,533] | | ) | | [removed: (1,073] [added: (3,207] | | ) | | [removed: (1,296] [added: (1,073] | | ) | | [removed: (419] [added: (1,296] | | ) | | [removed: (731] [added: (419] | | ) |

| Net income before provision for income taxes 3 | [removed: 190,369] [added: 186,101] | | | | [removed: 93,139] [added: 190,369] | | | | [removed: 84,296] [added: 93,139] | | | | [removed: 89,941] [added: 84,296] | | | | [removed: 102,003] [added: 89,941] | | |

| Provision for income taxes | [removed: 44,537] [added: 42,081] | | | | [removed: 28,844] [added: 44,537] | | | | [removed: 25,605] [added: 28,844] | | | | [removed: 23,225] [added: 25,605] | | | | [removed: 27,750] [added: 23,225] | | |

| Net income 3 | $ | [removed: 145,832] [added: 144,020] | | | $ | [removed: 64,295] [added: 145,832] | | | $ | [removed: 58,691] [added: 64,295] | | | $ | [removed: 66,716] [added: 58,691] | | | $ | [removed: 74,253] [added: 66,716] | |

| Basic | $ | [removed: 1.81] [added: 1.80] | | | $ | [removed: 0.80] [added: 1.81] | | | $ | [removed: 0.73] [added: 0.80] | | | $ | [removed: 0.86] [added: 0.73] | | | $ | [removed: 0.98] [added: 0.86] | |

| Diluted | $ | 1.77 | | | $ | [removed: 0.78] [added: 1.77] | | | $ | [removed: 0.71] [added: 0.78] | | | $ | [removed: 0.83] [added: 0.71] | | | $ | [removed: 0.95] [added: 0.83] | |

| Basic | [removed: 80,754] [added: 79,998] | | | | [removed: 80,551] [added: 80,754] | | | | [removed: 80,529] [added: 80,551] | | | | [removed: 77,988] [added: 80,529] | | | | [removed: 75,825] [added: 77,988] | | |

| Diluted | [removed: 82,283] [added: 81,521] | | | | [removed: 82,589] [added: 82,283] | | | | [removed: 83,040] [added: 82,589] | | | | [removed: 80,294] [added: 83,040] | | | | [removed: 78,080] [added: 80,294] | | |

| Working capital 4 | $ | [removed: 455,349] [added: 460,338] | | | $ | [removed: 369,338] [added: 455,349] | | | $ | [removed: 330,022] [added: 369,338] | | | $ | [removed: 236,699] [added: 330,022] | | | $ | [removed: 295,637] [added: 236,699] | |

| Total assets | [removed: 987,997] [added: 1,158,633] | | | | [removed: 832,147] [added: 987,997] | | | | [removed: 756,312] [added: 832,147] | | | | [removed: 649,264] [added: 756,312] | | | | [removed: 476,943] [added: 649,264] | | |

| Total long-term liabilities | [removed: 33,415] [added: 39,035] | | | | [removed: 22,839] [added: 33,415] | | | | [removed: 19,224] [added: 22,839] | | | | [removed: 10,366] [added: 19,224] | | | | [removed: 6,222] [added: 10,366] | | |

| Stockholders’ equity | $ | [removed: 752,771] [added: 847,926] | | | $ | [removed: 633,970] [added: 752,771] | | | $ | [removed: 581,317] [added: 633,970] | | | $ | [removed: 490,781] [added: 581,317] | | | $ | [removed: 377,747] [added: 490,781] | |

| 1 | Net revenues for the year ended December 31, 2011 include eight months of revenues from our Scanners [removed: and Services] segment of approximately $28.0 million as a result of our acquisition of Cadent Holdings, Inc. on April 29, 2011. [removed: Net revenues for the year ended December 31, 2010 include a $14.3 million release of previously deferred revenue for Invisalign Teen replacement aligners.] |

| | 2015 | | | | 2014 | | | | 2013 | | | | 2012 | | | | 2011 | | |

| | |

| --- | --- |

| • | $14.3 million release of previously deferred revenue for Invisalign Teen replacement aligners and $0.8 million for amortization of prepaid royalties related to the litigation settlement with Ormco in 2010 |

| • | |

| • | $14.3 million release of previously deferred revenue for Invisalign Teen replacement aligners in 2010 |

| • | $0.8 million of amortization of prepaid royalties related to the litigation settlement with Ormco in 2010 |

| • | $4.5 million related to the class action litigation settlement with Leiszler in 2010 |

| • | $8.7 million benefit related to an insurance settlement over a disputed coverage under our general liability umbrella that was not previously reimbursed by our insurer related to the OrthoClear litigation in 2010 |

| | [removed: 2014 | | | | | | | |] [added: 2015] | | | | [added: 2014] | | | | 2013 | | | [removed: | | | | | | | | | | | |]

| | December 31, [removed: 2014] [added: 2015] | | | | September 30, [removed: 2014] [added: 2015] | | | | June 30, [removed: 2014] [added: 2015] | | | | March 31, [removed: 2014] [added: 2015] | | | | December 31, [removed: 2013] [added: 2014] | | | | September 30, [removed: 2013] [added: 2014] | | | | June 30, [removed: 2013] [added: 2014] | | | | March 31, [removed: 2013] [added: 2014] | | |

| Net revenues | $ | [removed: 198,600] [added: 230,276] | | | $ | [removed: 189,876] [added: 207,636] | | | $ | [removed: 192,531] [added: 209,488] | | | $ | [removed: 180,646] [added: 198,086] | | | $ | [removed: 178,292] [added: 198,600] | | | $ | [removed: 164,506] [added: 189,876] | | | $ | [removed: 163,828] [added: 192,531] | | | $ | [removed: 153,580] [added: 180,646] | |

| Gross profit | [removed: 150,662] [added: 172,810] | | | | [removed: 145,054] [added: 157,576] | | | | [removed: 145,476] [added: 158,634] | | | | [removed: 137,251] [added: 151,090] | | | | [removed: 136,476] [added: 150,662] | | | | [removed: 125,090] [added: 145,054] | | | | [removed: 123,691] [added: 145,476] | | | | [removed: 112,849] [added: 137,251] | | |

| Income from operations 1 | [removed: 51,493] [added: 59,339] | | | | [removed: 51,547] [added: 38,046] | | | | [removed: 48,732] [added: 42,325] | | | | [removed: 41,804] [added: 48,924] | | | | [removed: 52,923] [added: 51,493] | | | | [removed: 41,464] [added: 51,547] | | | | [removed: 37,901] [added: 48,732] | | | | [removed: (38,075] [added: 41,804] | | [removed: )] |

| Net income 1 [removed: 2 3] | [removed: 39,541] [added: 48,877] | | | | [removed: 38,247] [added: 27,616] | | | | [removed: 35,600] [added: 31,350] | | | | [removed: 32,444] [added: 36,177] | | | | [removed: 42,422] [added: 39,541] | | | | [removed: 34,537] [added: 38,247] | | | | [removed: 29,320] [added: 35,600] | | | | [removed: (41,983] [added: 32,444] | | [removed: )] |

| Diluted | $ | [removed: 0.48] [added: 0.60] | | | $ | [removed: 0.47] [added: 0.34] | | | $ | [removed: 0.43] [added: 0.39] | | | $ | [removed: 0.39] [added: 0.44] | | | $ | [removed: 0.51] [added: 0.48] | | | $ | [removed: 0.42] [added: 0.47] | | | $ | [removed: 0.36] [added: 0.43] | | | $ | [removed: (0.52] [added: 0.39] | [removed: )] |

[removed: 3] [added: 1] In the three months ended June 30, 2014, we recorded an out of period correction that resulted in an increase in the provision for income taxes of $2.1 million, which $1.8 million related to prior years and $0.3 million related to the three months ended March 31, 2014.

| Report of Management on Internal Control over Financial Reporting | [removed: [57](#sCBF4D0543A829287D0A49A47699FAE78)] [added: [53](#s8FC347D8145E59AEA8D3E8C69CEBF8C9)] |

| Report of Independent Registered Public Accounting Firm | [removed: [58](#sA2B5C4FDF578C77D808F9A4769C15A12)] [added: [54](#s3164FCF07A3C5EFAA0533110398DD5E9)] |

| Consolidated Statements of Operations | [removed: [59](#sBCF3F21E253D71CA04B09A4754E79DBB)] [added: [55](#sCB999D273C095D85AB2E41A190F2FE0C)] |

[removed: | Consolidated Statements of Comprehensive Income | [60](#s51B4827C24B7633B72749A47549B9EC0) |][added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME]

| Consolidated Balance Sheets | [removed: [61](#s2045B057E9924A291C969A47567D4D69)] [added: [57](#s38133F6B57E35129A9D888D9AC4C972D)] |

| Consolidated Statements of Stockholders’ Equity | [removed: [62](#s5B06444299FB0436352D9A475612F90B)] [added: [58](#s6D15536E719957AA9EE7F17912E8C2E5)] |

| Consolidated Statements of Cash Flows | [removed: [63](#s39122CE8157BB99A53EB9A4754CDBA90)] [added: [59](#s2126977D5A8A58E18AD159DA7E93F296)] |

| Notes to Consolidated Financial Statements | [removed: [64](#sAC56D2BD52AFEA4B34E89A476AED3955)] [added: [60](#s4C8A316162C65085BCEDF8C84050C1FD)] |

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2014.][added: 2015.]

Based on its assessment, management has concluded that, as of December 31, [removed: 2014,] [added: 2015,] our internal control over financial reporting was effective based on criteria in Internal Control - Integrated Framework (2013) issued by the COSO.

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2014] [added: 2015] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

In our opinion, the consolidated financial statements listed in the index appearing under Item [removed: 15(a)(1),] [added: 15(a) (1),] present fairly, in all material respects, the financial position of Align Technology, Inc. and its subsidiaries at December 31, [removed: 2014] [added: 2015] and December 31, [removed: 2013,] [added: 2014,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2014] [added: 2015] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2014,] [added: 2015,] based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

| | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Net revenues | $ | [removed: 761,653] [added: 845,486] | | | $ | [removed: 660,206] [added: 761,653] | | | $ | [removed: 560,041] [added: 660,206] | |

| Cost of net revenues | [removed: 183,210] [added: 205,376] | | | | [removed: 162,100] [added: 183,210] | | | | [removed: 143,653] [added: 162,100] | | |

| Gross profit | [removed: 578,443] [added: 640,110] | | | | [removed: 498,106] [added: 578,443] | | | | [removed: 416,388] [added: 498,106] | | |

| Research and development | [removed: 52,799] [added: 61,237] | | | | [removed: 44,083] [added: 52,799] | | | | [removed: 42,869] [added: 44,083] | | |

| Impairment of goodwill | — | | | | [removed: 40,693] [added: —] | | | | [removed: 36,591] [added: 40,693] | | |

| Impairment of long lived assets | — | | | | [removed: 26,320] [added: —] | | | | [removed: —] [added: 26,320] | | |

| Total operating expenses | [removed: 384,867] [added: 451,476] | | | | [removed: 403,894] [added: 384,867] | | | | [removed: 330,796] [added: 403,894] | | |

| Income from operations | [removed: 193,576] [added: 188,634] | | | | [removed: 94,212] [added: 193,576] | | | | [removed: 85,592] [added: 94,212] | | |

| Interest and other income (expense), net | [removed: (3,207] [added: (2,533] | | ) | | [removed: (1,073] [added: (3,207] | | ) | | [removed: (1,296] [added: (1,073] | | ) |

| Net income before provision for income taxes | [removed: 190,369] [added: 186,101] | | | | [removed: 93,139] [added: 190,369] | | | | [removed: 84,296] [added: 93,139] | | |

| Provision for income taxes | [removed: 44,537] [added: 42,081] | | | | [removed: 28,844] [added: 44,537] | | | | [removed: 25,605] [added: 28,844] | | |

| Net income | $ | [removed: 145,832] [added: 144,020] | | | $ | [removed: 64,295] [added: 145,832] | | | $ | [removed: 58,691] [added: 64,295] | |

| Basic | $ | [removed: 1.81] [added: 1.80] | | | $ | [removed: 0.80] [added: 1.81] | | | $ | [removed: 0.73] [added: 0.80] | |

| Diluted | $ | 1.77 | | | $ | [removed: 0.78] [added: 1.77] | | | $ | [removed: 0.71] [added: 0.78] | |

| Basic | [removed: 80,754] [added: 79,998] | | | | [removed: 80,551] [added: 80,754] | | | | [removed: 80,529] [added: 80,551] | | |

| Diluted | [removed: 82,283] [added: 81,521] | | | | [removed: 82,589] [added: 82,283] | | | | [removed: 83,040] [added: 82,589] | | |

[removed: CONSOLIDATED STATEMENTS COMPREHENSIVE INCOME][added: | Consolidated Statements of Comprehensive Income | [56](#sDC197AF3E956521C8A558BA74E0819A2) |]

| Net change in cumulative translation adjustment | [removed: (196] [added: (154] | | ) | | [removed: 62] [added: (196] | | [added: )] | | [removed: 129] [added: 62] | | |

| | 2015 | | | | | | | | | | | | | | | | 2014 | | | | | | | | | | | | | | |

| Basic | $ | 0.61 | | | $ | 0.35 | | | $ | 0.39 | | | $ | 0.45 | | | $ | 0.49 | | | $ | 0.47 | | | $ | 0.44 | | | $ | 0.40 | |

| Basic | 79,481 | | | | 79,808 | | | | 80,257 | | | | 80,459 | | | | 80,266 | | | | 80,629 | | | | 81,027 | | | | 81,120 | | |

| Diluted | 81,051 | | | | 81,092 | | | | 81,394 | | | | 81,824 | | | | 81,691 | | | | 82,014 | | | | 82,341 | | | | 82,817 | | |

| /S/ JOSEPH M. HOGAN |

| Joseph M. Hogan |

| February 25, 2016 |

| February 25, 2016 |

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it classifies deferred income tax assets and liabilities in 2015.

February 25, 2016

| Selling, general and administrative | 390,239 | | | | 332,068 | | | | 292,798 | | |

| Net income | $ | 144,020 | | | $ | 145,832 | | | $ | 64,295 | |

| | 2015 | | | | 2014 | | |

| Cash and cash equivalents | $ | 167,714 | | | $ | 199,871 | |

| Tax benefits from stock-based awards | — | | | — | | | | 27,103 | | | | — | | | | — | | | | 27,103 | | |

| Tax benefits from stock-based awards | — | | | — | | | | 21,393 | | | | — | | | | — | | | | 21,393 | | |

| Common stock repurchased and retired | (1,696 | ) | | — | | | | (15,669 | | ) | | — | | | | (86,122 | | ) | | (101,791 | | ) |

| Tax (shortfalls) benefits from stock-based awards | — | | | — | | | | 10,224 | | | | — | | | | — | | | | 10,224 | | |

| Balances at December 31, 2015 | 79,500 | | | $ | 8 | | | $ | 821,507 | | | $ | (980 | ) | | $ | 27,391 | | | $ | 847,926 | |

| Net income | $ | 144,020 | | | $ | 145,832 | | | $ | 64,295 | |

| Deferred taxes | (11,424 | | ) | | 4,088 | | | | (5,899 | | ) |

| Tax (shortfalls) benefits from stock-based awards | 10,224 | | | | 21,393 | | | | 27,103 | | |

Derivative Financial Instruments

In September 2015, we began entering into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on cash and certain trade and intercompany receivables and payables.

These forward contracts are not designated as hedging instruments and do not subject us to material balance sheet risk due to fluctuations in foreign currency exchange rates.

The gains and losses on these forward contracts are intended to offset the gains and losses in the underlying foreign currency denominated monetary assets and liabilities being economically hedged.

We do not enter into foreign currency forward contracts for trading or speculative purposes.

These instruments are marked to market through earnings every period and generally are one month in original maturity.

The net gain or loss from the settlement of these foreign currency forward contracts is recorded in Interest and other income (expense), net in the Consolidated Statements of Operations.

similar products or service offered by multiple third parties considering the degree of customization and similarity of product or service sold.

Invisalign Full, Invisalign Teen, and Invisalign Assist products include optional Additional Aligners at no charge for a period of up to five years after initial shipment.

Invisalign Lite includes one optional case refinement in the price of the product.

Discounts are deducted from revenue at the time of sale.

merits, including resolution of any related appeals or litigation processes.

In the first quarter of 2015, the IRS approved our MDET refund claim of $6.8 million refund of MDET paid in 2013 related to our aligners; reducing expense for the year ended December 31, 2015.

In May 2014, the Financial Accounting Standards Board (" FASB") released Accounting Standards Update ("ASU") 2014-9 "Revenue from Contracts with Customers" to supersede nearly all existing revenue recognition guidance under GAAP.

The core principle of the standard is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for the goods or services.

The new standard defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation.

In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

In August 2015, the FASB deferred the effective date of the update by one year, with early adoption on the original effective date permitted.

| Basic | $ | 0.49 | | | $ | 0.47 | | | $ | 0.44 | | | $ | 0.40 | | | $ | 0.53 | | | $ | 0.43 | | | $ | 0.36 | | | $ | (0.52 | ) |

| Basic | 80,266 | | | | 80,629 | | | | 81,027 | | | | 81,120 | | | | 80,432 | | | | 79,967 | | | | 80,576 | | | | 81,248 | | |

| Diluted | 81,691 | | | | 82,014 | | | | 82,341 | | | | 82,817 | | | | 82,438 | | | | 81,848 | | | | 82,149 | | | | 81,248 | | |

| | |

| --- | --- |

| 1 | Income from operations included $40.7 million and $26.3 million of goodwill and long-lived asset impairment, respectively, in the three months ended March 31, 2013. Net income included these same items, net of tax. |

| 2 | In the three months ended December 31, 2013, we recorded an out of period correction that resulted in decreases in cost of net revenues of approximately $1.3 million and operating expense of $1.5 million offset in part by an increase in the provision |

for income taxes of $0.6 million.

The overall increase of $2.2 million in net income related to the out of period correction was not material to the consolidated financial statements for any quarter within 2013.

| /S/ THOMAS M. PRESCOTT |

| Thomas M. Prescott |

| February 26, 2015 |

February 26, 2015

ALIGN TECHNOLOGY, INC. AND SUBSIDIARIES

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Sales and marketing | 217,262 | | | | 180,046 | | | | 152,041 | | |

| General and administrative | 114,806 | | | | 112,752 | | | | 99,295 | | |

| Balances at December 31, 2011 | 78,776 | | | $ | 8 | | | $ | 607,240 | | | $ | 46 | | | $ | (116,513 | ) | | $ | 490,781 | |

| Common stock repurchased and retired | (1,730 | ) | | — | | | | (15,399 | | ) | | — | | | | (31,804 | | ) | | (47,203 | | ) |

| Excess tax benefit from share based payment arrangements | — | | | — | | | | 21,393 | | | | — | | | | — | | | | 21,393 | | |

| Deferred taxes | 25,481 | | | | 21,204 | | | | 17,783 | | |

| Excess tax benefit from share-based payment arrangements | (21,393 | | ) | | (27,103 | | ) | | (17,187 | | ) |

| Excess tax benefit from share-based payment arrangements | 21,393 | | | | 27,103 | | | | 17,187 | | |

| Cash and cash equivalents, beginning of year | 242,953 | | | | 306,386 | | | | 240,675 | | |

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

These reclassifications had no impact on previously reported gross profit or financial position.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For year ended December 31, 2013, foreign currency gains and losses were not significant.

If the carrying value of our investments exceeds the fair value, and the

Any excess of the carrying value of the reporting unit’s goodwill over the implied fair value of the reporting unit’s goodwill is recorded as an impairment loss.

During March 2013, changes in the competitive environment for intra-oral scanners, including announcements from our competitors of new low-priced scanners targeted at orthodontists and general practitioner dentists ("GPs") in North America, caused us to lower our expectations for growth and profitability for our Scanner reporting unit.

There was no triggering event related to the Clear Aligner goodwill.

Refer to Note 5 for details of the impairment analysis.

The remaining goodwill is entirely attributable to our Clear Aligner reporting unit.

In 2013, we used a DCF approach, utilizing harvest model, to estimate the fair value of a reporting unit, which we believe is the most reliable indicator of fair value of a business, and is most consistent with the approach of a marketplace participant would use.

Key assumptions used in measuring the fair values of Scanner reporting unit included the discount rate (based on the weighted-average cost of capital) and revenue growth.

The fair value of Scanner’s trademark was determined using a risk-adjusted DCF model under the relief-from-royalty method.

The royalty

rate used was based on a consideration of market rates.

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of December 31, [removed: 2014] [added: 2015] to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

There have been no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2014] [added: 2015] that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

Certain information required by Part III is omitted from this Form 10-K because we intend to file a definitive Proxy Statement for our [removed: 2014] [added: 2016] Annual Meeting of Stockholders (the “Proxy Statement”) not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain information to be included therein is incorporated herein by reference.

The information required by Item [added: 407(c)(3), 407(d)(4) and] 407(d)(5) of Regulation S-K is incorporated by reference to the Proxy Statement under the section entitled “Corporate [removed: Governance—Board of Directors & Committee Meetings—Audit Committee”.][added: Governance”.]

The following table provides information as of December 31, [removed: 2014] [added: 2015] about our common stock that may be issued upon the exercise of options and rights granted to employees, consultants or members of our Board of Directors under all existing equity compensation plans, including the 1997 Equity Incentive Plan, the Employee Stock Purchase Plan ("ESPP"), the 2001 Stock Incentive Plan and the 2005 Incentive Plan, each as amended, and certain individual arrangements.

Please see Note [removed: 10] [added: 9] “Stockholders’ Equity” in the Notes to [removed: our Consolidated Financial Statements] [added: consolidated financial statements] for [added: a] description of equity compensation plans.

| 1 | Includes [removed: 2,123,351] [added: 2,078,136] restricted stock units, including [removed: 497,500] [added: 611,150] market-performance based restricted stock units at target, which have an exercise price of zero. |

| 2 | Includes [removed: 1,363,827] [added: 1,133,749] shares available for issuance under our ESPP. We are unable to ascertain with specificity the number of securities to be issued upon exercise of outstanding rights or the weighted average exercise price of outstanding rights under the ESPP. |

| 3 | Excludes [removed: 418,187] [added: 546,933] of potentially issuable MSUs if performance targets are achieved at maximum payout. |

| Equity compensation plans approved by security holders | 3,185,509 | | 1 | $ | 15.14 | | | 6,550,307 | | 2, 3 |

| Total | 3,185,509 | | | $ | 15.14 | | | 6,550,307 | | |

| Equity compensation plans approved by security holders | 3,288,512 | | 1 | $ | 15.43 | | | 8,688,957 | | 2, 3 |

| Total | 3,288,512 | | | $ | 15.43 | | | 8,688,957 | | |

| Report of Independent Registered Public Accounting Firm | [removed: [58](#sA2B5C4FDF578C77D808F9A4769C15A12)] [added: [54](#s3164FCF07A3C5EFAA0533110398DD5E9)] |

| Consolidated Statement of Operations for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] | [removed: [59](#sBCF3F21E253D71CA04B09A4754E79DBB)] [added: [55](#sCB999D273C095D85AB2E41A190F2FE0C)] |

| Consolidated Statement of Comprehensive Income for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] | [removed: [60](#s51B4827C24B7633B72749A47549B9EC0)] [added: [56](#sDC197AF3E956521C8A558BA74E0819A2)] |

| Consolidated Balance Sheet as of December 31, [removed: 2014] [added: 2015] and [removed: 2013] [added: 2014] | [removed: [61](#s2045B057E9924A291C969A47567D4D69)] [added: [57](#s38133F6B57E35129A9D888D9AC4C972D)] |

| Consolidated Statement of Stockholders’ Equity for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] | [removed: [62](#s5B06444299FB0436352D9A475612F90B)] [added: [58](#s6D15536E719957AA9EE7F17912E8C2E5)] |

| Consolidated Statement of Cash Flows for the year ended December 31, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012] [added: 2013] | [removed: [63](#s39122CE8157BB99A53EB9A4754CDBA90)] [added: [59](#s2126977D5A8A58E18AD159DA7E93F296)] |

| Notes to Consolidated Financial Statements | [removed: [64](#sAC56D2BD52AFEA4B34E89A476AED3955)] [added: [60](#s4C8A316162C65085BCEDF8C84050C1FD)] |

| | Balance at Beginning of Period | | | | Additions (reductions) to Costs and Expenses | | | | Write offs | | | | Charged to Other Accounts [removed: 1] | | | | Reclass from Other Accounts | | | | Balance at End of Period | | |

| [removed: 10.20†] [added: 10.17†] | Summary of [removed: 2013] [added: 2015] Incentive Awards for Named Executive Officers. | Form 8-K | [removed: 2/8/2014] [added: 2/5/2016] | | | |

| [removed: 10.21†] [added: 10.18†] | Form of Market Stock Unit Agreement (officer) | Form 8-K | 2/23/2011 | 10.1 | | |

| [removed: 10.22†] [added: 10.19†] | Form of Market Stock Unit Agreement (CEO) | Form 8-K | 2/23/2011 | 10.2 | | |

| [removed: 10.23†] [added: 10.20†] | Description of Executive Officer Incentive Plan | Form 8-K | 2/23/2011 | Item 5.02 | | |

| [removed: 10.25] [added: 10.21] | [removed: Credit] [added: Employment] Agreement [removed: dated March 22, 2013] between Align Technology, Inc. and [removed: Wells Fargo Bank, National Association] [added: David L. White] | Form 8-K | [removed: 3/27/2013] [added: 8/5/2013] | 10.1 | | |

| [removed: 10.26] [added: 10.21] | [removed: Transition] [added: Employment] Agreement [removed: dated March 4, 2013] between Align Technology, Inc. and [removed: Kenneth B. Arola] [added: David L. White] | Form [removed: 10-Q] [added: 8-K] | [removed: 5/3/2013] [added: 8/5/2013] | 10.1 | | |

| [removed: 10.29] [added: 10.22] | Fixed Dollar Accelerated Repurchase Transaction Agreement dated April 28, 2014 between Goldman, Sachs & Co. and registrant | Form 10-Q | 7/31/2014 | 10.29 | | |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February [removed: 26, 2015.][added: 25, 2016.]

| [removed: By: |] /S/ THOMAS M. PRESCOTT | [added: | Director | | February 25, 2016 |]

Know All Men By These Presents, that each person whose signature appears below constitutes and appoints [removed: Thomas] [added: Joseph] M.

[removed: Prescott,] [added: Hogan,] his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

| /S/ [removed: THOMAS] [added: JOSEPH] M. [removed: PRESCOTT] [added: HOGAN] | | President and Chief Executive Officer (Principal Executive Officer) | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ DAVID L.WHITE | | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ JOSEPH LACOB | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ C. RAYMOND LARKIN | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ GEORGE J. MORROW | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ DAVID C. NAGEL | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ ANDREA L. SAIA | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ GREG J. SANTORA | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| /S/ WARREN S. THALER | | Director | | February [removed: 26, 2015] [added: 25, 2016] |

| Year ended December 31, 2015 | $ | 1,563 | | | $ | 8,944 | | | $ | (8,035 | ) | | $ | — | | | $ | — | | | $ | 2,472 | |

| Year ended December 31, 2015 | $ | 32,498 | | | $ | (813 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | 31,685 | |

| 10.23 | Amended and Restated Chief Executive Officer Employment Agreement between Align Technology, Inc. and Joseph Hogan | Form 10-Q | 5/1/2015 | 10.30 | | |

| 10.24 | 2005 Incentive Plan Notice of Grant of Restricted Stock units (Chief Executive Officer) | Form 10-Q | 7/30/2015 | 10.31 | | |

| 10.25 | Transition Agreement between Thomas M. Prescott and registrant | Form 10-Q | 7/30/2015 | 10.32 | | |

| 10.26 | Fixed Dollar Accelerated Repurchase Transaction Agreement dated April 28, 2015 between Morgan Stanley & Co. and registrant | Form 10-Q | 7/30/2015 | 10.33 | | |

| 10.27 | Amended and Restated 2005 Incentive Plan Notice of Grant of Market Stock Units (Chief Executive Officer) | Form 10-Q | 7/30/2015 | 10.34 | | |

| By: | /S/ JOSEPH M. HOGAN |

| | Joseph M. Hogan |

| Joseph M. Hogan | | | | |

| 10.17† | Summary of 2015 Incentive Awards for Named Executive Officers. | Form 8-K | 2/5/2016 | | | |

| 10.18† | Form of Market Stock Unit Agreement (officer) | Form 8-K | 2/23/2011 | 10.1 | | |

| 10.19† | Form of Market Stock Unit Agreement (CEO) | Form 8-K | 2/23/2011 | 10.2 | | |

| 10.20† | Description of Executive Officer Incentive Plan | Form 8-K | 2/23/2011 | Item 5.02 | | |

| 10.22 | Fixed Dollar Accelerated Repurchase Transaction Agreement dated April 28, 2014 between Goldman, Sachs & Co. and registrant | Form 10-Q | 7/31/2014 | 10.3 | | |

| 10.23 | Amended and Restated Chief Executive Officer Employment Agreement between Align Technology, Inc. and Joseph Hogan | Form 10-Q | 5/1/2015 | 10.30 | | |

| 10.24 | 2005 Incentive Plan Notice of Grant of Restricted Stock units (Chief Executive Officer) | Form 10-Q | 7/30/2015 | 10.3 | | |

| 10.25 | Transition Agreement between Thomas M. Prescott and registrant | Form 10-Q | 7/30/2015 | 10.3 | | |

| 10.26 | Fixed Dollar Accelerated Repurchase Transaction Agreement dated April 28, 2015 between Morgan Stanley & Co. and registrant | Form 10-Q | 7/30/2015 | 10.3 | | |

| 10.27 | Amended and Restated 2005 Incentive Plan Notice of Grant of Market Stock Units (Chief Executive Officer) | Form 10-Q | 7/30/2015 | 10.3 | | |

| Year ended December 31, 2012 | $ | 1,500 | | | $ | 4,417 | | | $ | (2,735 | ) | | $ | — | | | $ | (15 | ) | | $ | 3,167 | |

| Year ended December 31, 2012 | $ | 20,224 | | | $ | 8,507 | | | $ | (1,675 | ) | | $ | — | | | $ | — | | | $ | 27,056 | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Exhibit Number | Description | Form | Date | Exhibit Number Incorporated by reference herein | | Filed herewith |

| 4.2 | Preferred Stock Rights Agreement dated October 25 between the registrant and EquiServe Trust Company, N.A. | Form 8-K | 10/27/2005 | 4.1 | | |

| 10.17 | Settlement Agreement dated as of August 16, 2009 between Align Technology, Inc. and Ormco Corporation | Form 10-Q/A | 2/24/2010 | 10.1 | | |

| 10.18 | Stock Purchase Agreement dated as of the 16th day of August by and between Align Technology, Inc. and Danaher Corporation | Form 10-Q | 11/5/2009 | 10.2 | | |

| 10.19†† | Joint Development, Marketing and Sales Agreement entered in as of August 16, 2009 by and between Align Technology, Inc. and Ormco Corporation | Form 10-Q/A | 2/24/2010 | 10.3 | | |

| 10.24 | Agreement of Plan Merger between Registrant and Cadent Holdings, Inc. amongst other dated March 29, 2011 | Form 8-K | 4/1/2011 | 10.1 | | |

| 10.27 | Offer Letter dated June 12, 2013 between Align Technology, Inc. and David L. White | Form 8-K | 7/18/2013 | 10.1 | | |

| 10.28 | Employment Agreement between Align Technology, Inc. and David L. White | Form 8-K | 8/5/2013 | 10.1 | | |

| | Thomas M. Prescott |