Item 1. Financial Statements.

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Item 1. Financial Statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Net revenues	$	979,262	$	997,431
Cost of net revenues	299,154		299,615
Gross profit	680,108		697,816
Operating expenses:
Selling, general and administrative	447,629		451,822
Research and development	97,201		91,859

Legal settlement loss	4,178		—
Total operating expenses	549,008		543,681
Income from operations	131,100		154,135
Interest income and other income (expense), net:
Interest income	5,316		4,392
Other income (expense), net	4,026		(141)
Total interest income and other income (expense), net	9,342		4,251
Net income before provision for income taxes	140,442		158,386
Provision for income taxes	47,212		53,358
Net income	$	93,230	$	105,028

Net income per share:
Basic	$	1.27	$	1.40
Diluted	$	1.27	$	1.39
Shares used in computing net income per share:
Basic	73,562		75,175
Diluted	73,615		75,322

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Net income	$	93,230	$	105,028
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax	12,199		(2,932)
Change in unrealized gains (losses) on investments, net of tax	—		203

Other comprehensive income (loss)	12,199		(2,729)
Comprehensive income	$	105,429	$	102,299

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)


	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	873,012	$	1,043,887

Accounts receivable, net of allowance for doubtful accounts of $22,469 and $19,131, respectively	1,061,976		995,685
Inventories	246,567		254,287
Prepaid expenses and other current assets	220,474		198,582
Total current assets	2,402,029		2,492,441

Property, plant and equipment, net	1,264,847		1,271,134
Operating lease right-of-use assets, net	113,179		113,376
Goodwill	457,611		442,630
Intangible assets, net	102,750		103,488
Deferred tax assets	1,523,479		1,557,372
Other assets	238,925		234,159
Total assets	$	6,102,820	$	6,214,600

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	125,382	$	108,693
Accrued liabilities	546,173		598,188
Deferred revenues	1,319,393		1,331,146
Total current liabilities	1,990,948		2,038,027
Income tax payable	99,781		96,466
Operating lease liabilities	86,487		88,214
Other long-term liabilities	131,361		139,908
Total liabilities	2,308,577		2,362,615
Commitments and contingencies (Note 7 and Note 8)
Stockholders’ equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)	—		—
Common stock, $0.0001 par value (200,000 shares authorized; 73,057 and 73,849 issued and outstanding, respectively)	7		7
Additional paid-in capital	1,386,807		1,362,234
Accumulated other comprehensive income (loss), net	18,177		5,978
Retained earnings	2,389,252		2,483,766
Total stockholders’ equity	3,794,243		3,851,985
Total liabilities and stockholders’ equity	$	6,102,820	$	6,214,600

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Three Months Ended March 31, 2025	Shares	Amount
Balance as of December 31, 2024	73,849	$	7	$	1,362,234	$	5,978	$	2,483,766	$	3,851,985
Net income	—	—		—		—		93,230		93,230

Net change in foreign currency translation adjustment	—	—		—		12,199		—		12,199
Issuance of common stock relating to employee equity compensation plans	393	—		13,909		—		—		13,909
Tax withholdings related to net share settlements of equity awards	(99)	—		(19,577)		—		—		(19,577)
Common stock repurchased and retired	(1,086)	—		(14,756)		—		(187,744)		(202,500)

Stock-based compensation	—	—		44,997		—		—		44,997
Balance as of March 31, 2025	73,057	$	7	$	1,386,807	$	18,177	$	2,389,252	$	3,794,243


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Three Months Ended March 31, 2024	Shares	Amount
Balance as of December 31, 2023	75,075	$	7	$	1,162,140	$	21,168	$	2,447,174	$	3,630,489
Net income	—	—		—		—		105,028		105,028
Net change in unrealized gains (losses) from investments	—	—		—		203		—		203
Net change in foreign currency translation adjustment	—	—		—		(2,932)		—		(2,932)
Issuance of common stock relating to employee equity compensation plans	328	—		14,339		—		—		14,339
Tax withholdings related to net share settlements of equity awards	(86)	—		(26,055)		—		—		(26,055)
Common stock repurchased and retired	(36)	—		—		—		—		—
Equity forward contract related to accelerated stock repurchase	—	—		49,527		—		(49,527)		—
Stock-based compensation	—	—		38,788		—		—		38,788
Balance as of March 31, 2024	75,281	$	7	$	1,238,739	$	18,439	$	2,502,675	$	3,759,860

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	93,230	$	105,028
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes	33,683		18,047
Depreciation and amortization	39,148		32,946
Stock-based compensation	44,997		38,788
Non-cash operating lease cost	9,457		9,612


Other non-cash operating activities	2,950		(2,359)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable	(65,302)		(69,589)
Inventories	7,396		15,573
Prepaid expenses and other assets	(21,970)		(79,160)
Accounts payable	8,575		4,100
Accrued and other long-term liabilities	(67,877)		(34,473)
Long-term income tax payable	3,316		4,570
Deferred revenues	(34,927)		(14,419)
Net cash provided by operating activities	52,676		28,664
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired	—		(77,075)
Purchase of property, plant and equipment	(25,289)		(9,369)

Proceeds from maturities of marketable securities	—		6,035
Proceeds from sales of marketable securities	—		831



Other investing activities	—		(6)
Net cash used in investing activities	(25,289)		(79,584)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	13,909		14,339
Common stock repurchases, net of excise tax	(201,088)		—

Payroll taxes paid upon the vesting of equity awards	(19,577)		(26,055)
Net cash used in financing activities	(206,756)		(11,716)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash	8,480		(9,004)
Net decrease in cash, cash equivalents, and restricted cash	(170,889)		(71,640)
Cash, cash equivalents and restricted cash at beginning of the period	1,044,963		938,519
Cash, cash equivalents and restricted cash at end of the period	$	874,074	$	866,879

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ALIGN TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation and Preparation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, the “Company” or “Align”) on a consistent basis with the audited Consolidated Financial Statements for the year ended December 31, 2024, and contain all adjustments, including normal recurring adjustments, necessary to fairly state the information set forth herein. These unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosures necessary to present the unaudited Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 28, 2025. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 or any other future period, and we make no representations related thereto.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition and deferred revenues, useful lives of intangible assets and property, plant and equipment, goodwill, income taxes, contingent liabilities, the fair values of financial instruments, stock-based compensation and the valuation of investments in privately held companies among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Certain Risks and Uncertainties

Financial instruments which potentially expose the Company to concentration of credit risk, consist principally of cash and cash equivalents. These instruments have minimal credit risk exposures. Management regularly monitors their compositions and maturities. The Company maintains its cash and cash equivalents in bank accounts that exceed federally insured FDIC limits. Through March 31, 2025, the Company has not experienced any material credit losses on such deposits.

We purchase certain inventory from sole suppliers. Additionally, we rely on a limited number of hardware manufacturers. The inability of any supplier or manufacturer to fulfill our supply requirements could materially and adversely impact our future operating results.

Recent Accounting Pronouncements

(i) New Accounting Pronouncements Recently Adopted

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 (“ASU 2023-07”), “Improvements to Reportable Segment Disclosures.**” The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and other segment expenses. For public business entities, the provisions of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We adopted this standard in the fiscal year ended December 31, 2024. See Note 14 *“*Segments and Geographical Information.”

(ii) Recent Accounting Pronouncements Not Yet Effective

On December 14, 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.**” The amendments in this ASU require a public entity to disclose in tabular format, using both percentages and reporting currency amounts, specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative

threshold. The amendments in this ASU also require taxes paid (net of refunds received) to be disaggregated by federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. For public business entities, the provisions of ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. There will be no impact to our consolidated balance sheets or statements of operations; however, the Company is evaluating the effect of this pronouncement on our consolidated financial statement disclosures.

On November 4, 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures.**” The amendments in this ASU require a public entity to disclose, in the notes to the financial statements, specified information about certain costs and expenses, including the amounts of inventory purchases, employee compensation, depreciation and intangible asset amortization. For public business entities, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. There will be no impact to our consolidated balance sheets or statements of operations; however, the Company is evaluating the effect of this pronouncement on our consolidated financial statement disclosures.

Note 2. Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash, cash equivalents and marketable securities balances in our Condensed Consolidated Balance Sheets as of March 31, 2025 and Consolidated Balance Sheets as of December 31, 2024 (in thousands):


									Reported as:
March 31, 2025	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable securities, short-term		Marketable securities, long-term
Cash	$	757,327	$	—	$	—	$	757,327	$	757,327	$	—	$	—
Money market funds	100,608		—		—		100,608		100,608		—		—
Certificate of deposits	15,077		—		—		15,077		15,077		—		—





Total	$	873,012	$	—	$	—	$	873,012	$	873,012	$	—	$	—


									Reported as:
December 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable securities, short-term		Marketable securities, long-term
Cash	$	752,423	$	—	$	—	$	752,423	$	752,423	$	—	$	—
Money market funds	291,464		—		—		291,464		291,464		—		—






Total	$	1,043,887	$	—	$	—	$	1,043,887	$	1,043,887	$	—	$	—

We had no short-term or long-term marketable securities as of March 31, 2025 or December 31, 2024.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received from selling an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1 — Inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly.

Level 3 — Inputs to the valuation techniques that are unobservable for the assets or liabilities.

The following tables summarize our financial assets measured at fair value as of March 31, 2025 and December 31, 2024 (in thousands):


Description	Balance as of March 31, 2025		Level 1		Level 2
Cash equivalents:
Money market funds	$	100,608	$	100,608	$	—
Certificate of deposits	15,077		15,077		—














	$	115,685	$	115,685	$	—


Description	Balance as of December 31, 2024		Level 1		Level 2
Cash equivalents:
Money market funds	$	291,464	$	291,464	$	—














	$	291,464	$	291,464	$	—

Accounts Receivable Factoring

We enter into factoring transactions on a non-recourse basis with financial institutions to sell certain of our non-U.S. accounts receivable. We account for these transactions as sales of financial assets and include the cash proceeds as a part of our cash flows from operations in the Condensed Consolidated Statements of Cash Flows. Total accounts receivable sold under factoring arrangements was $6.4 million and $14.6 million during the three months ended March 31, 2025 and 2024, respectively. Factoring fees on the sales of receivables were recorded in other income (expense), net in our Condensed Consolidated Statements of Operations and were not material.

Investments in Privately Held Companies

Our investments in privately held companies in which we cannot exercise significant influence and do not own a majority equity interest or otherwise control are accounted for as investments in equity securities. We have elected to account for all investments in equity securities in accordance with the measurement alternative. Under the measurement alternative, we record the value of our investments in equity securities at cost, minus impairment, if any. Additionally, we adjust the carrying value of our investments in equity securities for observable transactions for identical or similar investments of the same issuer.

On April 24, 2023 and April 22, 2024, we entered into Subscription Agreements (the “Subscription Agreements”) with Heartland Dental Holding Corporation (“Heartland”). Pursuant to the Subscription Agreements we acquired less than a 5% equity interest in Heartland through the purchase of Class A Common Stock for $150 million in total. In the fourth quarter of 2024 we recorded a $6 million increase to the carrying value of our investment, which increased the total carrying value of our investment in Heartland to $156 million.

On December 19, 2024, we entered into a Subscription Agreement (the “Smile Doctors Subscription Agreement”) with New SD Holding Company, L.P. (“SD Holding Company”). Pursuant to the Smile Doctors Subscription Agreement we acquired less than a 3% equity interest in SD Holding Company through the purchase of Class A Common Units for $30 million. SD Holding Company owns a controlling interest, through intermediary entities, in Smile Doctors, LLC.

We account for our investments in Heartland and SD Holding Company as investments in equity securities, utilizing the measurement alternative. Based on a review of the relevant facts and circumstances, primarily observable transactions for identical investments, we determined that no adjustments to the carrying values of our investments were necessary for the three months ended March 31, 2025.

Our investments in privately held companies in which we can exercise significant influence are accounted for as equity method investments. We have elected to account for our equity method investments under the fair value option.

The carrying value of our investments in equity securities and equity method investments are reported in our Condensed Consolidated Balance Sheets as Other assets and any price adjustments or impairment, if any, are recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations.

Derivatives Not Designated as Hedging Instruments

We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain assets and liabilities. These forward contracts are classified within Level 2 of the fair value hierarchy. As a result of the settlement of foreign currency forward contracts, we recognized a net loss of $11.5 million and a net gain of $19.7 million, during the three months ended March 31, 2025 and 2024, respectively. Recognized gains and losses from the settlement of foreign currency forward contracts are recorded to Other income (expense), net in our Condensed Consolidated Statements of Operations. As of March 31, 2025 and December 31, 2024, the fair value of outstanding foreign exchange forward contracts was not material.

The following tables present the gross notional value of all our foreign exchange forward contracts outstanding as of March 31, 2025 and December 31, 2024 (in thousands):


	March 31, 2025
	Local Currency Amount	Notional Contract Amount (USD)
Euro	€166,020	$	179,590
Canadian Dollar	C$95,300	66,393
Polish Zloty	PLN199,200	51,328
British Pound	£34,500	44,598
Chinese Yuan	¥260,000	35,862
Japanese Yen	¥3,300,000	22,105
Israeli Shekel	ILS80,600	21,646
Brazilian Real	R$101,800	17,605
Swiss Franc	CHF9,300	10,567
Australian Dollar	A$5,400	3,369
Czech Koruna	Kč76,800	3,321
New Taiwan Dollar	NT$66,000	1,991
New Zealand Dollar	NZ$3,000	1,700

Korean Won	₩2,430,000	1,654
		$	461,729


	December 31, 2024
	Local Currency Amount	Notional Contract Amount (USD)
Euro	€176,080	$	183,172
Polish Zloty	PLN283,000	68,633
Canadian Dollar	C$97,000	67,446
British Pound	£37,600	47,090
Israeli Shekel	ILS90,055	24,740
Chinese Yuan	¥164,500	22,417
Brazilian Real	R$83,100	13,327
Japanese Yen	¥2,000,000	12,778
Swiss Franc	CHF5,700	6,314
New Zealand Dollar	NZ$7,000	3,924
Czech Koruna	Kč72,800	3,004
Australian Dollar	A$3,800	2,355
New Taiwan Dollar	NT$58,700	1,786
Korean Won	₩2,000,000	1,361

		$	458,347

Note 3. Balance Sheet Components

Inventories consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Raw materials	$	118,333	$	124,377
Work in process	69,432		73,660
Finished goods	58,802		56,250
Total inventories	$	246,567	$	254,287

Prepaid expenses and other current assets consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Value added tax receivables	$	33,168	$	34,028
Prepaid expenses	104,081		82,978
Other current assets	83,225		81,576
Total prepaid expenses and other current assets	$	220,474	$	198,582

Accrued liabilities consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Accrued payroll and benefits	$	192,101	$	248,003
Accrued expenses	73,120		66,391
Accrued income taxes	47,838		48,808
Accrued sales and marketing expenses	43,086		37,617
Current operating lease liabilities	32,048		31,063
Accrued property, plant and equipment	10,023		13,462

Other accrued liabilities	147,957		152,844
Total accrued liabilities	$	546,173	$	598,188

Accrued warranty, which is included in the “Other accrued liabilities” category of the Total accrued liabilities table above, consists of the following activity (in thousands):


	Three Months Ended March 31,
	2025		2024
Balance at beginning of period	$	31,211	$	22,426
Charged to cost of net revenues	4,719		5,449
Actual warranty expenditures	(3,332)		(3,312)
Balance at end of period	$	32,598	$	24,563

Deferred revenues consist of the following (in thousands):


	March 31, 2025		December 31, 2024
Deferred revenues - current	$	1,319,393	$	1,331,146
Deferred revenues - long-term 1	$	93,317	$	102,164

1 Included in Other long-term liabilities within our Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2025 and 2024, we recognized $979.3 million and $997.4 million of net revenues, respectively, of which $246.0 million and $236.8 million was included in the deferred revenues balance at December 31, 2024 and 2023, respectively.

Our unfulfilled performance obligations, including deferred revenues and backlog, as of March 31, 2025 were $1,418.6 million. These performance obligations are expected to be fulfilled over a period up to five years.

Note 4**. Business Combination**

On January 2, 2024 (the “Cubicure Acquisition Date”), we completed the acquisition of privately-held Cubicure GmbH (“Cubicure”) (the “Cubicure Acquisition”). Cubicure is an Austrian company and specializes in direct 3D printing solutions for polymer additive manufacturing that develops, produces and distributes innovative materials, equipment and processes for 3D printing solutions. The Cubicure Acquisition is intended to support and scale our strategic innovation roadmap and strengthen the Align Digital Platform. In fiscal year 2021, we acquired a 9.04% equity interest in Cubicure. Subsequently, on the Cubicure Acquisition Date, we acquired the remaining equity of Cubicure. Prior to the acquisition, we also had technology license and joint development agreements with Cubicure.

The fair value of consideration transferred in the acquisition is shown in the table below (in thousands):


Cash paid to Cubicure stockholders	$	80,142
Fair value of pre-existing equity interest ownership	7,968
Settlement of pre-existing relationship - accounts payable	(2,316)
Total purchase consideration paid	$	85,794

The Cubicure Acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations (“ASC 805”) that was achieved in stages. As a result of the Cubicure Acquisition, we remeasured our pre-existing equity interest in Cubicure at fair value prior to the Cubicure Acquisition. Based on the fair value of this equity interest, derived from the purchase price, we estimated the fair value of our 9.04% pre-existing investment in Cubicure to be approximately $8.0 million. The remeasurement resulted in the recognition of a pre-tax gain of $4.1 million, which was reflected as a component of Other income (expense), net within our Condensed Consolidated Statements of Operations.

In 2021, we initiated Joint development (“JDA”) and Technology license agreements (“TLA”) to provide us with access to Cubicure’s technology. The settlement of the JDA and TLA were concluded to be at market terms on the Cubicure Acquisition Date; therefore, no gain or loss was recorded related to the settlement of these contracts. We also had accounts payable from the pre-existing arrangements with Cubicure of $2.3 million, which were effectively settled and reduced from the purchase consideration of the Cubicure Acquisition.

The allocation of purchase price to assets acquired and liabilities assumed is as follows (in thousands):


Working capital	$	1,039
Property & equipment	975
Developed technology	47,000
Other non-current asset	1,483
Other liabilities	(12,279)
Goodwill	47,576
Total	$	85,794

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets, and represents the value associated with future technology, future customer relationships and the knowledge and experience of the workforce in place. None of this goodwill is deductible for tax purposes. We allocated all goodwill to our Clear Aligner reporting unit.

As part of the Cubicure Acquisition we acquired a developed technology intangible asset. The acquired developed technology had an estimated fair value of $47.0 million as of the Cubicure Acquisition Date and will be amortized over a useful life of thirteen years.

The fair value of developed technology was estimated under the Multi-Period Excess Earnings Method and the fair value estimates for developed technology include significant assumptions in the prospective financial information which include, but are not limited to, the projected future cash flows associated with the technology, the asset's life cycle and a present value factor.

Acquisition related costs are recognized separately from the business combination and are expensed as incurred. Acquisition related costs were not material.

Our consolidated financial statements include the operating results of Cubicure from the Cubicure Acquisition Date. Separate post-acquisition operating results and pro forma results of operations for this acquisition have not been presented as the effect is not material to our consolidated financial results.

Note 5**. Goodwill and Intangible Assets**

Goodwill

The change in the carrying value of goodwill for the three months ended March 31, 2025, categorized by reportable segment, is as follows (in thousands):


	Clear Aligner		Systems and Services		Total
Balance as of December 31, 2024	$	152,645	$	289,985	$	442,630

Foreign currency translation adjustments	3,534		11,447		14,981
Balance as of March 31, 2025	$	156,179	$	301,432	$	457,611

Finite-Lived Intangible Assets

Acquired finite-lived intangible assets, excluding intangibles that were fully amortized, are as follows (in thousands):


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of March 31, 2025		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of March 31, 2025
Existing technology	11	$	146,651	$	(56,004)	$	—	$	90,647
Customer relationships	10	21,500		(10,750)		—		10,750
Trademarks and tradenames1	7	9,800		(7,000)		—		2,800
Patents	12	480		(290)		—		190
		$	178,431	$	(74,044)	$	—	104,387
Foreign currency translation adjustments								(1,637)
Total intangible assets, net								$	102,750

1 The Weighted Average Amortization Period decreased from 10 years to 7 years due an intangible asset with a useful life of 15 years becoming fully amortized during the current quarter.


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2024		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of December 31, 2024
Existing technology	11	$	146,651	$	(52,238)	$	—	$	94,413
Customer relationships	10	21,500		(10,079)		—		11,421
Trademarks and tradenames	10	16,600		(9,255)		(4,122)		3,223
Patents	12	480		(280)		—		200
		$	185,231	$	(71,852)	$	(4,122)	109,257
Foreign currency translation adjustments								(5,769)
Total intangible assets, net								$	103,488

The total estimated future amortization expense for these acquired finite-lived intangible assets as of March 31, 2025, is as follows (in thousands):


Fiscal Year Ending December 31,	Amortization
Remainder of 2025	$	13,827
2026	17,923
2027	15,607
2028	14,505
2029	14,505
2030	6,328
Thereafter	21,692
Total	$	104,387

Amortization expense for the three months ended March 31, 2025 and 2024 was $4.6 million and $5.0 million, respectively.

Note 6**. Credit Facility**

We have a credit facility, as amended in December 2022, that provides for a $300.0 million unsecured revolving line of credit, along with a $50.0 million letter of credit. Our credit facility has a maturity date of December 23, 2027 and bears interest, at our option, at either a rate based on the SOFR for the applicable interest period or a base rate, in each case plus a margin. The credit facility requires us to comply with specific financial conditions and performance requirements. As of March 31, 2025, we had no outstanding borrowings under the credit facility and were in compliance with the conditions and performance requirements in all material respects.

Note 7. Legal Proceedings

Antitrust Class Actions

On June 5, 2020, a dental practice named Simon and Simon, PC doing business as City Smiles brought an antitrust action in the U.S. District Court for the Northern District of California on behalf of itself and a putative class of similarly situated practices seeking treble monetary damages, interest, costs, attorneys’ fees and injunctive relief relating to our alleged market activities in alleged clear aligner and intraoral scanner markets. Plaintiff filed an amended complaint and added VIP Dental Spas as a plaintiff on August 14, 2020. On December 18, 2023, the court certified a class of persons or entities that purchased Invisalign directly from Align between January 1, 2019 and March 31, 2022. The court denied Plaintiffs’ motion to certify a class of purchasers of scanners. On February 21, 2024, the court granted Align’s motion for summary judgment on all claims brought by the plaintiffs. Plaintiffs have appealed the district court’s summary judgment ruling to the United States Court of Appeals for the Ninth Circuit. Oral argument was held on April 10, 2025.

On May 3, 2021, an individual named Misty Snow brought an antitrust action in the U.S. District Court for the Northern District of California on behalf of herself and a putative class of similarly situated individuals seeking treble monetary damages, interest, costs, attorneys’ fees and injunctive relief relating to our alleged market activities in alleged clear aligner and intraoral scanner markets based on Section 2 of the Sherman Act. Plaintiffs have filed several amended complaints adding new plaintiffs, various state law claims and allegations based on Section 1 of the Sherman Act. On November 29, 2023, the court certified a class of indirect purchasers of Invisalign between July 1, 2018 and December 31, 2023 and a class of indirect purchasers of Invisalign seeking injunctive relief. On February 21, 2024, the court granted Align’s motion for summary judgment on the claims related to Section 2 allegations. The court entered judgment for the Section 2 and related state law claims on March 22, 2024. Plaintiffs have appealed the district court’s summary judgment ruling to the United States Court of Appeals for the Ninth Circuit. Oral argument was held on April 10, 2025.

We are currently unable to predict the outcome of these lawsuits and therefore we cannot determine the likelihood of loss, if any, nor estimate a range of possible loss.

In June 2024, Align and the Section 1 plaintiffs reached a settlement in principle to resolve all remaining claims in the Section 1 lawsuit. In March, 2025, Align and plaintiffs agreed to a revised settlement to resolve all Section 1 claims for a $31.75 million cash payment. On April 24, 2025 Plaintiffs filed a motion requesting the court approve the revised settlement. A

hearing on the motion is scheduled for May 22, 2025. We are unable to predict the timeline or outcome of the motion to approve the settlement. We continue to believe that plaintiffs’ Section 1 claims are without merit and remain ready to vigorously defend ourselves against those claims.

For the quarter ended March 31, 2025, Align accrued a total loss of $31.75 million, $27.5 million as of December 31, 2024 and an additional loss accrual of $4.25 million in the first quarter of 2025, for the settlement of the Section 1 claims described above.

Straumann Litigation

On April 11, 2024, we filed a lawsuit in the U.S. District Court for the Western District of Texas against ClearCorrect Operating, LLC, ClearCorrect Holdings., Inc. and Institut Straumann AG (“Defendants”). The complaint asserts claims of false advertising, unfair competition, civil conspiracy and infringement of Align patents related to aligner material, treatment planning, and intraoral scanner technologies. Among other things, the complaint seeks relief enjoining Defendants’ infringement of multiple Align multilayer material patents through Defendants’ manufacture, sale and offer for sale of aligners made with Zendura FLX/ClearQuartz materials. Defendants filed motions to dismiss the complaint, which are pending. Defendants are also seeking to invalidate all of Align’s asserted patents at the district court and United States Patent and Trial Appeal Board.

On July 9, 2024, Defendants filed counterclaims against Align for alleged antitrust violations, false advertising, unfair competition and breach of contract. Among other things, the counterclaims seek to stop Align’s accused business practices and money damages. On September 13, 2024, we filed a motion to dismiss defendants’ counterclaims. On February 7, 2025, the magistrate judge recommended denial of the motion to dismiss. On February 21, 2025, we filed objections to the recommendation, which are pending before the district court judge. A trial is scheduled for February 16, 2026.

We believe Defendants’ counterclaims are without merit and intend to vigorously defend ourselves. We are currently unable to predict the outcome of this lawsuit and cannot determine the likelihood of loss nor estimate a range of possible loss.

In addition to the above, in the ordinary course of our operations, we are involved in a variety of claims, suits, investigations and proceedings, including actions with respect to intellectual property claims, patent infringement claims, government investigations, labor and employment claims, breach of contract claims, tax and other matters. Regardless of the outcome, these proceedings can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Although the results of complex legal proceedings are difficult to predict and our view of these matters may change in the future as litigation and events related thereto unfold; we currently do not believe that these matters, individually or in the aggregate, will materially affect our financial position, results of operations or cash flows.

Note 8**. Commitments and Contingencies**

Tax Matter

Beginning in the third quarter of 2023 and continuing through the first quarter of 2024, the Company received cumulative assessments of approximately $100 million from His Majesty’s Revenue and Customs (“HMRC”) for unpaid value added tax (“VAT”) related to certain clear aligner sales made during the period of October 2019 through May 2023. We were required to pay these assessments prior to contesting or litigating the matter in statutory appeal. The Company has historically asserted and continues to assert that doctor prescribed clear aligners sold by dentists for the orthodontic treatment of patient malocclusions are exempt from VAT, that the Company has reasonably relied upon statements and guidance by HMRC and that the Company’s interpretation of United Kingdom legislation is appropriate.

In October 2024, the Company and HMRC reached a settlement agreement regarding the unpaid VAT related to certain aligner sales made during the period of October 2019 through mid-October 2023. As part of the settlement, HMRC agreed to vacate the judicial review (before the Administrative Court) originally scheduled for October 9th and October 10th, 2024, refund to the Company all assessments paid for the period of October 2019 through May 2023 and withdraw any potential assessments for the period from June 2023 through mid-October 2023. HMRC has refunded to the Company all assessed amounts, approximately $100 million.

The Company has remaining exposure in the amount of approximately $6.0 million for periods up to December 2023. A statutory appeal (before the First-tier Tribunal - “Tax Tribunal”) was held on January 27th through January 30th, 2025. On April 24, 2025, the Tax Tribunal issued a ruling in Align’s favor indicating that clear aligners are “dental prostheses for the

purposes of VAT”, which is a key condition for the VAT exemption. HMRC has until June 19, 2025 to appeal the Tax Tribunal decision. HMRC may also attempt to challenge the applicability of VAT on a different basis.

It is not possible at this stage to accurately evaluate the likelihood of an unfavorable outcome from the Tax Tribunal statutory appeal. The Company has determined that a potential loss related to VAT accounted for in the periods up to December 2023 is not probable.

Indemnification Provisions

In the normal course of business to facilitate transactions in our services and products, we indemnify certain parties: customers, vendors, lessors and other parties with respect to certain matters, including, but not limited to, services to be provided by us and intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and our executive officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. Several of these agreements limit the time within which an indemnification claim can be made and the amount of the claim.

It is not possible to make a reasonable estimate of the maximum potential amount of future payments, if any, under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Additionally, we have a limited history of prior indemnification claims and the payments we have made under such agreements have not had a material adverse effect on our results of operations, cash flows or financial position. However, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our results of operations or cash flows in a particular period. As of March 31, 2025, we did not have any material indemnification claims that were probable or reasonably possible.

Note 9. Stockholders’ Equity

As of March 31, 2025, the Align Technology, Inc. 2005 Incentive Plan, as amended, has a total reserve of 32,168,895 shares, of which 1,877,934 shares are available for issuance.

Summary of Stock-Based Compensation Expense

The stock-based compensation related to our stock-based awards and employee stock purchase plan for the three months ended March 31, 2025 and 2024 is as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Cost of net revenues	$	1,538	$	2,064
Selling, general and administrative	30,866		28,494
Research and development	12,593		8,230
Total stock-based compensation	$	44,997	$	38,788

Restricted Stock Units (“RSUs”)

The fair value of RSUs is based on our closing stock price on the date of grant. RSUs granted generally vest over a period of four years. A summary for the three months ended March 31, 2025 is as follows:


	Number of Shares Underlying RSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024	1,019	$	331.10
Granted	650	197.93
Vested and released	(286)	362.30
Forfeited	(32)	318.19
Unvested as of March 31, 2025	1,351	$	260.72	2.0	$	214,594

As of March 31, 2025, we expect to recognize $293.0 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 3.1 years.

Market-Performance Based Restricted Stock Units (“MSUs”)

We grant MSUs to members of senior management. Each MSU represents the right to one share of our common stock. The actual number of MSUs which will be eligible to vest will be based on the performance of Align’s stock price relative to the performance of a stock market index over the vesting period. MSUs vest over a period of three years and the maximum number of shares eligible to vest in the future is 250% of the MSUs initially granted.

The following table summarizes the MSU performance activity for the three months ended March 31, 2025:


	Number of Shares Underlying MSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024	193	$	679.14
Granted	127	362.98
Vested and released 1	(26)	915.22
Forfeited	(10)	915.22
Unvested as of March 31, 2025	284	$	506.66	2.1	$	45,057

1 Includes MSUs vested during the period below 100% of the original grant as actual shares released is based on Align’s stock performance relative to a market index over the vesting period.

As of March 31, 2025, we expect to recognize $78.6 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 2.1 years.

Restricted Stock Units with Performance Conditions (“PSUs”)

Our PSUs typically include a service and performance condition. We recognize share-based compensation expense for PSUs if it is probable that the performance condition will be achieved.

The following table summarizes the PSU performance activity for the three months ended March 31, 2025:


	Number of Shares Underlying PSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024	11	$	204.33
Granted	—	—
Vested and released	(5)	201.63
Forfeited	—	—
Unvested as of March 31, 2025	6	$	206.36	1.8	$	1,001

As of March 31, 2025, we expect to recognize $0.9 million of total unamortized compensation costs, net of estimated forfeitures, related to PSUs over a weighted average period of 1.8 years.

Employee Stock Purchase Plan

As of March 31, 2025, we have 1,800,725 shares available for future issuance under the Align Technology, Inc. 2010 Employee Stock Purchase Plan (as amended and restated, the “2010 Purchase Plan”).

The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:


	Three Months Ended March 31,
		2025			2024
Expected term (in years)		1.1			0.9
Expected volatility		40.9		%	56.0		%
Risk-free interest rate		4.2		%	4.8		%
Expected dividends		—			—
Weighted average fair value at grant date		$	70.62		$	100.10

As of March 31, 2025, we expect to recognize $13.4 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.9 years.

Note 10. Common Stock Repurchase Programs

In January 2023, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock (“January 2023 Repurchase Program”). The January 2023 Repurchase Program does not have an expiration date.

The following tables summarize the total repurchases of our common stock pursuant to Accelerated Share Repurchase (“ASR”) agreements and open market common stock repurchases under the January 2023 Repurchase Program:

Accelerated Share Repurchase Agreements


Agreement Date	Repurchase Program	Amount Paid (in millions)		Completion Date	Total Shares Received	Average Price per Share


Q4 2023	January 2023	$	250.0	Q1 2024	1,086,334	$	230.13

Open Market Common Stock Repurchases


Agreement Date	Repurchase Program	Amount Paid (in millions)		Completion Date	Total Shares Received	Average Price per Share
Q4 2023	January 2023	$	100.0	Q4 2023	465,518	$	214.81
Q2 2024	January 2023	$	150.0	Q2 2024	598,302	$	250.73
Q4 2024	January 2023	$	275.0	Q1 2025	1,241,509	$	221.50
Q1 2025	January 2023	$	129.0	N/A1	753,993	$	171.03

1 In May 2025, we completed the open market repurchase program initiated in Q1 2025. In total we repurchased approximately 1.3 million shares of our common stock at an average price of $168 per share for an aggregate purchase price of approximately $225.0 million.

As of March 31, 2025 we had $96.0 million available for repurchase under the January 2023 Repurchase Program, which was used to repurchase shares through May 2, 2025. These subsequent repurchases completed the January 2023 Repurchase Program.

In April 2025, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock (“April 2025 Repurchase Program”), none of which has been utilized.

Note 11. Accounting for Income Taxes

Our provision for income taxes was $47.2 million and $53.4 million for the three months ended March 31, 2025 and 2024, respectively, representing effective tax rates of 33.6% and 33.7%, respectively. Our effective tax rate differs from the statutory federal income tax rate of 21% for the three months ended March 31, 2025 and 2024 primarily due to the recognition of additional tax expense resulting from U.S. taxes on foreign earnings, foreign income taxed at different rates, state income taxes and non-deductible expenses in the U.S.

We exercise significant judgment in regard to estimates of future market growth, forecasted earnings and projected taxable income in determining the provision for income taxes and for purposes of assessing our ability to utilize any future benefit from deferred tax assets. We continue to assess the realizability of the deferred tax assets as we take into account new information. We may be required to adjust the valuation allowance for deferred tax assets if we determine, based on available evidence at the time of the determination, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. Changes to the valuation allowance could have a material adverse effect on our results of operations.

Our total gross unrecognized tax benefits, excluding interest and penalties, were $147.4 million and $145.5 million as of March 31, 2025 and December 31, 2024, respectively, a material amount of which would impact our effective tax rate if recognized. The increase in our unrecognized tax benefits relates primarily to positions taken on income tax return calculations finalized during the three months ended March 31, 2025.

Note 12**. Net Income per Share**

The following table sets forth the computation of basic and diluted net income per share attributable to common stock (in thousands, except per share amounts):


	Three Months Ended March 31,
	2025		2024
Numerator:
Net income	$	93,230	$	105,028
Denominator:
Weighted average common shares outstanding, basic	73,562		75,175
Dilutive effect of potential common stock	53		147
Total shares, diluted	73,615		75,322

Net income per share, basic	$	1.27	$	1.40
Net income per share, diluted	$	1.27	$	1.39

Anti-dilutive potential common shares 1	964		571

1 Represents approximately 964 thousand RSU weighted average outstanding common stock equivalent shares for the three months ended March 31, 2025 and approximately 569 thousand RSU and 2 thousand ESPP weighted average outstanding common stock equivalent shares for the three months ended March 31, 2024 that are excluded from the calculation of diluted net income per share as the effect would have been anti-dilutive.

Note 13**. Supplemental Cash Flow Information**

The supplemental cash flow information consists of the following (in thousands):


	Three Months Ended March 31,
	2025		2024
Non-cash investing and financing activities:
Acquisition of property, plant and equipment in accounts payable and accrued liabilities	$	13,851	$	21,284
Final settlement of prior year stock repurchase forward contract	—		50,000
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,592	$	9,998
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	5,024	$	10,568

Note 14**. Segments and Geographical Information**

Segment Information

We report segment information based on the management approach. The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, for decision making and performance assessment as the basis for determining our reportable segments. We group our operations into two reportable segments; Clear Aligner segment and Imaging Systems and CAD/CAM services (“Systems and Services”) segment, which are based on our predominant product lines.

Our CODM uses gross profit and income from operations to assess each reportable segments performance, by reviewing each measure against internal forecasts and historical performance. Our CODM may also benchmark each segments performance against our competitors and external expectations.

Summarized financial information by reportable segment is as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Net revenues
Clear Aligner	$	796,843	$	817,251
Systems and Services	182,419		180,180
Total net revenues	$	979,262	$	997,431
Cost of net revenues1
Clear Aligner	$	234,754	$	238,105
Systems and Services	64,400		61,510
Total cost of goods sold	$	299,154	$	299,615
Gross profit
Clear Aligner	$	562,089	$	579,146
Systems and Services	118,019		118,670
Total gross profit	$	680,108	$	697,816
Other Segment expenses
Clear Aligner	$	301,865	$	292,908
Systems and Services	59,556		68,977
Unallocated corporate expenses	187,587		181,796
Total operating expenses	$	549,008	$	543,681
Segment income from operations
Clear Aligner	$	260,224	$	286,238
Systems and Services	58,463		49,693
Total segment income from operations	$	318,687	$	335,931

1 Management has identified cost of net revenues as a significant expense for our Clear Aligner and Systems and Services reportable segments.

Other segment expenses typically include employee related costs, marketing and advertising costs and depreciation and amortization expense incurred by various functions including selling, marketing, general and administrative and research and development. Our CODM does not regularly receive these operating expenses at the reportable segment level.

Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment. Certain operating expenses are not directly attributable to a reportable segment and must be allocated. Each allocation is measured differently based on the nature of the cost being allocated. Certain other operating expense are not specifically allocated to segment income from operations and generally include various corporate expenses such as stock-based compensation and costs related to information technology (“IT”), facilities, human resources, accounting and finance, legal and regulatory, other separately managed general and administrative costs outside the reportable segments and restructuring costs.

The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes (in thousands):


	Three Months Ended March 31,
	2025		2024
Total segment income from operations	$	318,687	$	335,931
Unallocated corporate expenses	(187,587)		(181,796)



Total income from operations	131,100		154,135
Interest income	5,316		4,392
Other income (expense), net	4,026		(141)

Net income before provision for income taxes	$	140,442	$	158,386

The following table includes certain non-cash expenses for each reportable segment (in thousands):


	Three Months Ended March 31,
	2025		2024
Stock-based compensation
Clear Aligner	$	5,818	$	3,764
Systems and Services	403		359
Unallocated corporate expenses	38,776		34,665
Total stock-based compensation	$	44,997	$	38,788
Depreciation and amortization
Clear Aligner	$	18,904	$	14,433
Systems and Services	8,469		6,838
Unallocated corporate expenses	11,775		11,675
Total depreciation and amortization	$	39,148	$	32,946

Our CODM does not regularly review total assets at the reportable segment level; however, we have provided geographical information related to our long-lived assets below.

Geographical Information

Net revenues are presented below by geographic area (in thousands):


	Three Months Ended March 31,
	2025		2024
Net revenues 1:
U.S.	$	423,318	$	432,101
Switzerland	224,132		251,758
Other International	331,812		313,572
Total net revenues	$	979,262	$	997,431

1 Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities.

Long-lived assets, which includes Property, plant and equipment, net and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):


	March 31, 2025		December 31, 2024
Long-lived assets 1:
Switzerland	$	568,693	$	571,628
U.S.	203,140		207,689


Other International	606,193		605,193
Total long-lived assets	$	1,378,026	$	1,384,510

1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.

Note 15. Restructuring and Other Charges

2023 Restructuring

During the fourth quarter of 2023, we incurred approximately $14.0 million in restructuring expenses, of which $5.3 million remained unpaid and were included in Accrued liabilities as of December 31, 2023. During the first quarter of 2024, we reduced our December 31, 2023 restructuring liability by approximately $3.9 million, primarily due to cash payments.

2024 Restructuring

During the fourth quarter of 2024, we initiated a restructuring plan to increase efficiencies across the organization which is expected to be completed in the second half of 2025. We incurred approximately $37.0 million in restructuring expenses, of which $13.0 million remained unpaid and were included in Accrued liabilities as of December 31, 2024. During the first quarter of 2025, we reduced our December 31, 2024 restructuring liability by approximately $11.0 million primarily due to cash payments, offset by approximately $2.1 million of additional restructuring expense recorded in Cost of net revenues.

The 2023 and 2024 restructuring activities were primarily related to employee severance and other one-time post-employment benefits.

Activity related to the restructuring liabilities associated with our restructuring initiatives consist of the following (in thousands):


	Three Months Ended March 31,
	2025		2024
Balance at beginning of period1	$	13,001	$	5,299
Restructuring charges	2,056		(152)
Cash payments and adjustments	(11,018)		(3,752)

Balance at end of period 1	$	4,039	$	1,395

1 Included in “Accrued liabilities” within our Condensed Consolidated Balance Sheets.

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