Item 1. Financial Statements.

ALIGN TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

						Three Months Ended March 31,
						2026						2025
Net revenues						$	1,040,087					$	979,262
Cost of net revenues						303,500						299,154
Gross profit						736,587						680,108
Operating expenses:
Selling, general and administrative						465,342						447,629
Research and development						98,658						97,201
Legal settlements						30,632						4,178
Total operating expenses						594,632						549,008
Income from operations						141,955						131,100
Interest income and other income (expense), net:
Interest income						3,911						5,316
Other income (expense), net						3,020						4,026
Total interest income and other income (expense), net						6,931						9,342
Net income before provision for income taxes						148,886						140,442
Provision for income taxes						36,115						47,212
Net income						$	112,771					$	93,230
Net income per share:
Basic						$	1.58					$	1.27
Diluted						$	1.57					$	1.27
Shares used in computing net income per share:
Basic						71,425						73,562
Diluted						71,614						73,615

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,
						2026						2025
Net income						$	112,771					$	93,230
Other comprehensive income:
Change in foreign currency translation adjustment, net of tax						(5,295)						12,199
Other comprehensive income (loss)						(5,295)						12,199
Comprehensive income						$	107,476					$	105,429

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, 2026						December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents						$	1,059,834					$	1,094,908
Accounts receivable, net of allowance for doubtful accounts of $36,361 and $34,213, respectively						1,125,114						1,101,757
Inventories						214,944						226,343
Prepaid expenses and other current assets						215,706						165,571
Assets held for sale						39,832						27,983
Total current assets						2,655,430						2,616,562
Property, plant and equipment, net						1,108,092						1,131,453
Operating lease right-of-use assets, net						110,223						108,322
Goodwill						503,041						491,833
Intangible assets, net						100,818						93,933
Deferred tax assets						1,471,425						1,513,542
Other assets						365,144						278,048
Total assets						$	6,314,173					$	6,233,693
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable						$	123,720					$	121,450
Accrued liabilities						546,879						536,749
Deferred revenues						1,235,254						1,261,816
Total current liabilities						1,905,853						1,920,015
Income tax payable						67,287						68,200
Operating lease liabilities						83,422						82,507
Other long-term liabilities						108,192						113,824
Total liabilities						2,164,754						2,184,546
Commitments and contingencies (Note 6 and Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)						—						—
Common stock, $0.0001 par value (200,000 shares authorized; 71,617 and 71,364 issued and outstanding, respectively)						7						7
Additional paid-in capital						1,530,934						1,509,595
Accumulated other comprehensive income, net						70,093						75,388
Retained earnings						2,548,385						2,464,157
Total stockholders’ equity						4,149,419						4,049,147
Total liabilities and stockholders’ equity						$	6,314,173					$	6,233,693

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, 2026						Shares						Amount
Balance as of December 31, 2025						71,364						$	7					$	1,509,595					$	75,388					$	2,464,157					$	4,049,147
Net income						—						—						—						—						112,771						112,771
Net change in foreign currency translation adjustment						—						—						—						(5,295)						—						(5,295)
Issuance of common stock relating to employee equity compensation plans						592						—						11,718						—						—						11,718
Tax withholdings related to net share settlements of equity awards						(153)						—						(28,651)						—						—						(28,651)
Common stock repurchased and retired						(186)						—						(2,652)						—						(28,543)						(31,195)
Stock-based compensation						—						—						40,924						—						—						40,924
Balance as of March 31, 2026						71,617						$	7					$	1,530,934					$	70,093					$	2,548,385					$	4,149,419

						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

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,
						2026						2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income						$	112,771					$	93,230
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes						40,644						33,683
Depreciation and amortization						56,548						39,148
Stock-based compensation						40,924						44,997
Non-cash operating lease cost						10,062						9,457
Gain on Assets held for sale						(11,699)						—
Fair value adjustment for equity investment						(7,724)						—
Other non-cash operating activities						7,309						2,950
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable						(40,989)						(65,302)
Inventories						9,349						7,396
Prepaid expenses and other assets						(44,492)						(21,970)
Accounts payable						4,929						8,575
Accrued and other long-term liabilities						5,376						(67,877)
Long-term income tax payable						(913)						3,316
Deferred revenues						(31,053)						(34,927)
Net cash provided by operating activities						151,042						52,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired						(18,963)						—
Purchase of property, plant and equipment						(30,785)						(25,289)
Investment in convertible notes						(31,342)						—
Purchase of equity investments						(50,491)						—
Net cash used in investing activities						(131,581)						(25,289)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock						11,718						13,909
Common stock repurchases, net of excise tax						(31,195)						(201,088)
Payroll taxes paid upon the vesting of equity awards						(28,651)						(19,577)
Net cash used in financing activities						(48,128)						(206,756)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash						(6,387)						8,480
Net decrease in cash, cash equivalents, and restricted cash						(35,054)						(170,889)
Cash, cash equivalents and restricted cash at beginning of the period						1,096,186						1,044,963
Cash, cash equivalents and restricted cash at end of the period						$	1,061,132					$	874,074

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, 2025, 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, 2025, as filed with the SEC on February 27, 2026. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 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.

In connection with the 2025 Restructuring activities discussed in Note 14 “Restructuring and Other Charges,” we committed to a plan to dispose of, other than by sale, specifically identified manufacturing assets prior to the end of their estimated useful lives during the third quarter of 2025. Accordingly, we have revised the estimated useful lives of these assets to reflect our use through the disposal date. For the three months ended March 31, 2026, we recorded $15.6 million of accelerated depreciation expense related to these assets. The increase in depreciation expense negatively impacted Net income, net of tax, by $11.8 million or $0.17 per basic share and $0.16 per diluted share. We have materially completed the disposition of these assets as of March 31, 2026.

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, 2026, 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 July 30, 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05 (“ASU 2025-05”), “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” The amendments in this update provide a practical expedient for entities estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606,

Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. The guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. The Company adopted ASU 2025-05 effective January 1, 2026 on a prospective basis. The adoption of ASU 2025-05 did not have a material impact on the financial statements and related disclosures.

(ii) Recent Accounting Pronouncements Not Yet Effective

On September 29, 2025, the FASB issued ASU 2025-07, "Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract," which applies to all entities that enter into non-exchange-traded contracts with underlyings based on operations or activities specific to one of the parties to the contract. The new guidance excludes from derivative accounting non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those periods. Early adoption is permitted. The Company does not believe the adoption of the standard will have a material effect on the Company’s consolidated financial position or results of operations.

On September 18, 2025, the FASB issued ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software.” The amendments in this ASU simplify the accounting for internal-use software by eliminating the existing project development stages and introducing new guidance for evaluating the probable-to-complete threshold for capitalization. The amendments in this ASU also require the application of ASC 360-10 disclosure requirements for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. The provisions of ASU 2025-06 are effective for all entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect of this pronouncement on its annual consolidated financial statements.

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, 2026 and December 31, 2025 (in thousands):

																														Reported as:
March 31, 2026						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Cash and Cash Equivalents
Cash						$	860,883					$	—					$	—					$	860,883					$	860,883
Money market funds						183,339						—						—						183,339						183,339
Certificate of deposits						15,612						—						—						15,612						15,612
Total						$	1,059,834					$	—					$	—					$	1,059,834					$	1,059,834

																														Reported as:
December 31, 2025						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Cash and Cash Equivalents
Cash						$	770,051					$	—					$	—					$	770,051					$	770,051
Money market funds						308,940						—						—						308,940						308,940
Certificates of deposit						15,917						—						—						15,917						15,917
Total						$	1,094,908					$	—					$	—					$	1,094,908					$	1,094,908

We had no short-term or long-term marketable securities as of March 31, 2026 or December 31, 2025.

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 U.S. 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, 2026 and December 31, 2025 (in thousands):

Description						Balance as of March 31, 2026						Level 1
Cash equivalents:
Money market funds						$	183,339					$	183,339
Certificate of deposits						15,612						15,612
Total						$	198,951					$	198,951

Description						Balance as of December 31, 2025						Level 1
Cash equivalents:
Money market funds						$	308,940					$	308,940
Certificate of deposits						15,917						15,917
Total						$	324,857					$	324,857

We have investments in convertible notes of $40.5 million that are classified as loans receivable and measured on an amortized cost basis, net of an allowance for credit losses and included in Other assets within our Condensed Consolidated Balance Sheets. The instruments are classified within Level 3 of the fair value hierarchy as the fair value is derived from techniques in which one or more significant inputs are unobservable. As of March 31, 2026, the carrying value of our loans receivable approximated the fair value.

We had no Level 2 instruments as of March 31, 2026 or December 31, 2025.

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 were $11.2 million and $6.4 million during the three months ended March 31, 2026 and 2025, 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 “Heartland Subscription Agreements”) with Heartland Dental Holding Corporation (“Heartland”). Pursuant to the Subscription Agreements, we acquired less than a 5% equity interest in total through the purchase of Class A Common Stock for $150.0 million ($75.0 million each in April 2023 and April 2024). In the fourth quarters of 2024 and 2025, we recorded a $6.0 million and $18.0 million increase to the carrying value of our Heartland investment, respectively. These adjustments increased the total carrying value of our investment in Heartland to $174.0 million as of December 31, 2025.

On March 19, 2026, we entered into a new Subscription Agreement with Heartland (the “March 2026 Subscription Agreement”). Pursuant to the March 2026 Subscription Agreement, we acquired additional Class A Common Stock for $50.0 million. Following this investment, our total equity interest in Heartland was still less than 5%. Based on a review of the relevant facts and circumstances, primarily observable transactions for identical investments, we recorded a $7.7 million increase to the carrying value of our Heartland investment in the first quarter of 2026. The total carrying value of our investment in Heartland was $231.7 million as of March 31, 2026.

On December 19, 2024 and June 5, 2025, we entered into Subscription Agreements (the “Smile Doctors Subscription Agreements”) with New SD Holding Company, L.P. (“SD Holding Company”). Pursuant to the Smile Doctors Subscription Agreements, we acquired less than a 3% equity interest through the purchase of Class A Common Units for $40 million. SD Holding Company owns a controlling interest, through intermediary entities, in Smile Doctors, LLC. Based on a review of the relevant facts and circumstances, primarily observable transactions for identical investments, we determined that no adjustment to the carrying value of our investment was necessary for the three months ended March 31, 2026.

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. As of March 31, 2026, we did not hold any material investments in which we exercised significant influence.

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 gain of $8.0 million and a net loss of $11.5 million during the three months ended March 31, 2026 and 2025, respectively. Recognized gains and losses from the settlement of foreign currency forward contracts are recorded in Other income (expense), net in our Condensed Consolidated Statements of Operations. As of March 31, 2026 and December 31, 2025, 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, 2026 and December 31, 2025 (in thousands):

			March 31, 2026
			Local Currency Amount						Notional Contract Amount (USD)
Euro			€227,700						$	262,936
Canadian Dollar			C$87,800						63,105
Polish Zloty			PLN176,500						47,451
British Pound			£35,500						47,032
Israeli Shekel			ILS80,500						25,479
Japanese Yen			¥2,900,000						18,286
Brazilian Real			R$88,000						16,726
Chinese Yuan			¥39,800						5,784
Swiss Franc			CHF2,700						3,386
New Taiwan Dollar			NT$106,600						3,306
New Zealand Dollar			NZ$4,700						2,697
Korean Won			₩3,870,000						2,529
Australian Dollar			A$3,400						2,337
Czech Koruna			Kč13,700						645
Total notional contract amount									$	501,699

			December 31, 2025
			Local Currency Amount						Notional Contract Amount (USD)
Euro			€183,700						$	215,895
Canadian Dollar			C$90,000						65,802
British Pound			£38,500						51,782
Polish Zloty			PLN174,800						48,605
Israeli Shekel			ILS80,500						25,283
Japanese Yen			¥3,200,000						20,447
Brazilian Real			R$63,500						11,440
Chinese Yuan			¥52,000						7,461
Swiss Franc			CHF4,200						5,316
New Taiwan Dollar			NT$121,500						3,851
New Zealand Dollar			NZ$6,020						3,474
Korean Won			₩4,600,000						3,207
Australian Dollar			A$3,500						2,337
Czech Koruna			Kč26,000						1,262
Total notional contract amount									$	466,162

Note 3. Balance Sheet Components

Inventories consist of the following (in thousands):

						March 31, 2026						December 31, 2025
Raw materials						$	96,429					$	107,296
Work in process						68,890						65,679
Finished goods						49,625						53,368
Total inventories						$	214,944					$	226,343

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

						March 31, 2026						December 31, 2025
Value added tax receivables1						$	51,387					$	55,819
Prepaid expenses						107,260						62,478
Other current assets						57,059						47,274
Total prepaid expenses and other current assets						$	215,706					$	165,571

1 Refer to Note 7 "Commitments and Contingencies" of the Notes to Condensed Consolidated Financial Statements for discussion of tax matter.

Accrued liabilities consist of the following (in thousands):

						March 31, 2026						December 31, 2025
Accrued payroll and benefits						$	205,321					$	226,149
Accrued expenses						67,676						61,049
Accrued professional fees						48,270						12,245
Accrued sales and marketing expenses						35,012						29,941
Accrued income taxes						34,916						44,049
Current operating lease liabilities						32,622						31,939
Accrued property, plant and equipment						7,455						10,469
Other accrued liabilities						115,607						120,908
Total accrued liabilities						$	546,879					$	536,749

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,
						2026						2025
Balance at beginning of period						$	24,411					$	31,211
Charged to cost of net revenues						(6,776)						4,719
Actual warranty expenditures						(2,748)						(3,332)
Balance at end of period						$	14,887					$	32,598

Deferred revenues consist of the following (in thousands):

						March 31, 2026						December 31, 2025
Deferred revenues - current						$	1,235,254					$	1,261,816
Deferred revenues - long-term 1						77,863						85,543
Total deferred revenues						$	1,313,117					$	1,347,359

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

During the three months ended March 31, 2026 and 2025, we recognized $1,040.1 million and $979.3 million of net revenues, respectively, of which $246.4 million and $246.0 million was included in the deferred revenues balance at December 31, 2025 and 2024, respectively.

Our unfulfilled performance obligations, including deferred revenues and backlog, as of March 31, 2026 were $1,314.3 million. These performance obligations are expected to be fulfilled over a period of up to five years.

Note 4**. Goodwill and Intangible Assets**

Goodwill

The change in the carrying value of goodwill for the three months ended March 31, 2026, categorized by reportable segment, is as follows (in thousands):

			Clear Aligner						Systems and Services						Total
Balance as of December 31, 2025			$	164,255					$	327,578					$	491,833
Additions from acquisition1			—						18,592						18,592
Foreign currency translation adjustments			(1,615)						(5,769)						(7,384)
Balance as of March 31, 2026			$	162,640					$	340,401					$	503,041

1 We recorded $18.6 million of goodwill within the Systems and Services segment for an immaterial acquisition that was completed in the first quarter of 2026. The amount recorded is based on preliminary estimates of the fair values of assets acquired and liabilities assumed and is subject to adjustment during the measurement period.

Intangible Assets

Acquired 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, 2026						Accumulated Amortization												Net Carrying Value as of March 31, 2026
Existing technology			11						$	146,651					$	(70,849)											$	75,802
Customer relationships			10						21,500						(12,900)												8,600
Trademarks and tradenames			7						9,800						(8,400)												1,400
Patents			12						480						(330)												150
Total finite-lived intangible assets									178,431						$	(92,479)											85,952
In-process research and development1									12,554																		12,554
Foreign currency translation adjustments																											2,312
Total intangible assets, net																											$	100,818

1 In connection with the immaterial acquisition completed during the first quarter of 2026, the Company recorded $12.6 million in acquired in-process research and development within the Systems and Services segment.

			Weighted Average Amortization Period (in years)						Gross Carrying Amount as of December 31, 2025						Accumulated Amortization												Net Carrying Value as of December 31, 2025
Existing technology			11						$	146,651					$	(67,138)											$	79,513
Customer relationships			10						21,500						(12,363)												9,137
Trademarks and tradenames1			7						9,800						(8,050)												1,750
Patents			12						480						(320)												160
									$	178,431					$	(87,871)											90,560
Foreign currency translation adjustments																											3,373
Total intangible assets, net																											$	93,933

1 The weighted average amortization period decreased from 10 years to 7 years due to an intangible asset with a useful life of 15 years becoming fully amortized during the first quarter of 2025.

The total estimated future amortization expense for the acquired finite-lived intangible assets as of March 31, 2026 is as follows (in thousands):

Fiscal Year Ending December 31,						Amortization
Remainder of 2026						$	13,314
2027						15,607
2028						14,505
2029						14,505
2030						6,328
2031						3,615
Thereafter						18,078
Total						$	85,952

Amortization expense for the three months ended March 31, 2026 and 2025 was $4.8 million and $4.6 million, respectively.

Note 5**. Credit Facility**

We maintain a credit facility, as amended in March 2026, that includes a $300.0 million unsecured revolving line of credit and a $50.0 million letter of credit sub-limit. The facility matures on December 23, 2027 and loans under the facility accrue interest, at our election, based on either the Secured Overnight Financing Rate (“SOFR”) for the applicable period or a base rate, in each case plus an applicable margin.

The facility includes financial covenants and performance requirements. As of March 31, 2026, we had no outstanding borrowings under the facility and were in compliance with the terms and conditions of the facility in all material respects.

Note 6. Legal Proceedings

Under Securities and Exchange Commission Regulation S-K, Item 103, we are required to briefly describe any material pending legal proceedings other than ordinary routine litigation incidental to our business, to which we or any of our subsidiaries are a party or of which any of our or our subsidiaries’ property is subject.

The descriptions below are intended to comply with such regulations based on information reasonably known to us as of the date of this Quarterly Report on Form 10-Q. These descriptions are not intended to imply or predict outcomes in any of the matters described or any other litigation or disputes to which we are or may hereafter be a party. We are currently unable to predict the outcome of these lawsuits or any future litigation, and therefore we cannot determine the likelihood of loss, if any, nor estimate a range of possible loss.

During the three months ending March 31, 2026, we accrued $30.6 million for legal settlements.

Antitrust Class Actions

On June 5, 2020, a dental practice, 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 us 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 our 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 since filed several amended complaints adding new plaintiffs and various state law claims. 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 our 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.

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, (collectively the “Defendants”). The complaint asserted infringement of our patents related to aligner material, treatment planning, and intraoral scanner technologies. Among other things, the complaint seeks relief enjoining the Defendants’ infringement of multiple Align multilayer material patents through Defendants’ manufacture, sale and offer for sale of aligners made with Zendura FLX/ClearQuartz materials. On September 12, 2025, Defendants filed a motion to dismiss the amended complaint. That motion to dismiss remains pending. Defendants are also seeking to invalidate all of our asserted patents at the district court.

On July 9, 2024, Defendants filed counterclaims against us alleging antitrust violations and unfair competition. Among other things, the counterclaims seek injunctive relief and money damages. On August 29, 2025, Defendants filed amended counterclaims, which additionally allege that Align procured certain materials patents by fraud. On September 26, 2025, Align filed a motion to dismiss the amended counterclaims. That motion is still pending. On March 24, 2026, both Plaintiffs and Defendants filed summary-judgment and Daubert motions. Briefing is ongoing. The matter is currently set for trial beginning on June 22, 2026.

On April 10, 12 and 14, 2025, Defendants filed eight inter partes review (“IPR”) petitions with the United States Patent Trial and Appeal Board (“PTAB”), alleging that eight of the patents asserted by Align against the Defendants are unpatentable. On October 23, 2025, the PTAB issued decisions denying institution of two of Defendants eight IPRs. On October 23, October 27, October 30, and November 6, 2025, the PTAB issued decisions instituting proceedings on the remaining six IPRs. We anticipate that the final decisions from the PTAB on each IPR will be issued no later than November 9, 2026. We believe the petitions are without merit and intend to defend ourselves vigorously.

We believe Defendants’ counterclaims are without merit and intend to vigorously defend ourselves.

Angelalign Litigation

On August 15, 2025, we initiated two actions in the European Unified Patent Court against various Angelalign entities including Angelalign Technology, Inc.; Angelalign France Technology SASU; Europe Angelalign Technology B.V.; Angelalign Technology (Germany) GmbH; Italy Angelalign Technology S.R.L. and Shanghai EA Medical Instruments Co., Ltd. One of these actions, alleging infringement of a patent related to user interfaces for treatment planning, sought provisional measures (i.e., provisional remedies) including a preliminary injunction. The other action alleged infringement of a patent related to the “power ridge” feature of clear aligners. Subsequently, on November 27, 2025, we initiated a third action in the Unified Patent Court against the same entities seeking provisional measures for infringement of a patent related to treatments in complex cases. The accused entities challenged the validity of the asserted patent in each of these actions. On January 13, 2026,

Angelalign Technology (Germany) GmbH filed an action in the European Patent Office challenging the validity of the treatment-planning patent referenced above.

On February 12, 2026, the Unified Patent Court issued its decision in the provisional-measures action related to treatment planning, entering a preliminary injunction in Align’s favor and against Angel that prohibits Angel from using its “Live Now” feature, a user interface for treatment planning. Angel must pay €20,000 EUR per day or cease offering this infringing software feature. Angel was also ordered to pay interim costs of €400,000 EUR to Align. Angel has appealed the decision issued in this provisional-measures action. On March 16, 2026, Align initiated a merits infringement action under the treatment-planning patent seeking a permanent injunction and damages. This merits action additionally named UK Angelalign Technology Ltd. and Angel Technology Spain, S.L. as defendants.

The actions before the Unified Patent Court related to the “power ridge” feature and to treatments in complex cases referenced above are currently pending.

On August 18, 2025, we initiated an action in the U.S. District Court for the Eastern District of Texas against Angelalign Technology Inc; Wuxi EA Medical Instruments Technologies Ltd.; Wuxi EA Bio-Tech Co., Ltd.; and Shanghai EA Medical Instruments Co., Ltd. This action alleges infringement of patents related to multilayer materials for clear aligners and “bite ramp” and “power ridge” features of clear aligners. On January 2, 2026, following institution of an investigation by the U.S. International Trade Commission, referenced below, this action was stayed pending further order of the court.

On August 18, 2025, we initiated two actions in China’s Zhengzhou Intermediate People’s Court against Shanghai Angelalign Medical Devices Co., Ltd.; Wuxi Angelalign Medical Device Technology Co., Ltd.; and Wuxi Angelalign Biotechnology Co., Ltd. These actions allege infringement of patents related to tooth attachments and treatment planning. Separately, on September 10, 2025, we filed an action against the same entities in the Jinan Intermediate People’s Court alleging infringement of a patent related to extraction site closure. And on January 12, 2026, we filed an action against these entities in the Fuzhou Intermediate People’s Court alleging infringement of a patent related to extraction site closure. On April 4, 2026, we initiated an additional civil action against these entities alleging infringement of a patent related to treatment planning. These actions are currently pending.

On January 16, 2026, Shanghai Angelalign Medical Devices Co., Ltd. filed a petition with the China National Intellectual Property Administration (“CNIPA”) challenging the validity of our patent related to extraction site closure, which patent is the subject of the above-referenced infringement action filed before Jinan Intermediate People’s Court. On January 22 and February 12, 2026, Shanghai Angelalign Medical Devices Co., Ltd. filed two separate petitions with the CNIPA challenging the validity of our patent related to tooth attachments and another patent related to treatment planning, both of which are the subject of the above-referenced infringement actions filed with Zhengzhou Intermediate People’s Court. These invalidity actions are currently pending.

On August 22, 2025, Shanghai Angelalign Medical Devices Co., Ltd. and Wuxi Angelalign Medical Devices Technology Co., Ltd. initiated an action against us in the Beijing Intellectual Property Court. The complaint alleges that we infringe a patent relating to undercut detection for mold manufacturing. We believe that these allegations are without merit and intend to defend ourselves vigorously. On January 19, 2026, we filed a petition with the CNIPA challenging the validity of the above-referenced Angel patent related to undercut detection for mold manufacturing.

On September 23, 2025, we filed a complaint at the U.S. International Trade Commission (“ITC”) against Angelalign Technology Inc., Wuxi EA Medical Instruments Technologies Ltd.; Wuxi EA Bio-Tech Co., Ltd.; Shanghai EA Medical Instruments Co., Ltd.; and USA Angelalign Technology Corp. (collectively, “the ITC Respondents”). This complaint alleges unlawful importation and sale of clear aligners that infringe patents related to multilayer materials for clear aligners and “bite ramp” and “power ridge” features of clear aligners, in violation of 19 U.S.C.§ 1337. Further, the complaint requests that the ITC institute an investigation and issue an exclusion order blocking the ITC Respondents’ importation of infringing products into the United States, and a cease-and-desist order prohibiting the ITC Respondents from selling, marketing, or transferring infringing products within the United States. On December 19, 2025, the ITC instituted the requested investigation, which is currently pending. On January 26, 2026, the Chief Administrative Law Judge (“CALJ”) presiding over the investigation set a 14.7-month target date of March 22, 2027, which is the date by which the ITC’s final determination is expected to be issued. On February 10, 2026, the CALJ issued a Procedural Schedule setting the evidentiary hearing (trial) in the investigation for July 20-24, 2026. The CALJ’s initial determination on the merits is due by November 20, 2026.

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 7**. Commitments and Contingencies**

Tax Matter

Beginning in the third quarter of 2023 and continuing through the first quarter of 2024, we 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. We have historically asserted and continue to assert that doctor prescribed clear aligners sold by dentists for the orthodontic treatment of patient malocclusions are exempt from VAT, that we have reasonably relied upon statements and guidance by HMRC and that our 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 the assessed amounts, approximately $100 million.

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 our favor indicating that clear aligners are “dental prostheses for the purposes of VAT”, which is a key condition for the VAT exemption. On June 13, 2025, HMRC applied for permission to appeal the Tax Tribunal decision, which was granted on July 15, 2025. On August 1, 2025, HMRC lodged their grounds for appeal to the Upper Tribunal. A hearing in front of the Upper Tribunal has been scheduled for May 2026.

In August 2025, we stopped charging VAT to our United Kingdom customers. It is not possible at this stage to accurately evaluate the likelihood of an unfavorable outcome from the Upper Tribunal statutory appeal, nor estimate a range of possible loss.

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, 2026, we did not have any material indemnification claims that were probable or reasonably possible.

Note 8. Stockholders’ Equity

As of March 31, 2026, the Align Technology, Inc. 2005 Incentive Plan, as amended, has a total reserve of 34,668,895 shares, of which 2,815,995 shares are available for issuance.

Summary of Stock-Based Compensation Expense

Stock-based compensation related to our stock-based awards and employee stock purchase plan for the three months ended March 31, 2026 and 2025 is as follows (in thousands):

						Three Months Ended March 31,
						2026						2025
Cost of net revenues						$	1,620					$	1,538
Selling, general and administrative						28,992						30,866
Research and development						10,312						12,593
Total stock-based compensation						$	40,924					$	44,997

Restricted Stock Units (“RSUs”)

The fair value of RSUs is based on the closing price of our stock on the date of grant. Generally, RSUs vest over a period of four years.

A summary for the three months ended March 31, 2026 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, 2025			1,250						$	256.80
Granted			770						189.99
Vested and released			(430)						287.72
Forfeited			(33)						235.20
Unvested as of March 31, 2026			1,557						$	215.68					1.98						$	266,886

As of March 31, 2026, we expect to recognize $286.3 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 our 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 is 250% of the MSUs initially granted.

The following table summarizes the MSU performance activity for the three months ended March 31, 2026:

			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, 2025			263						$	507.88
Granted			149						378.44
Vested and released1			(59)						629.53
Forfeited			(28)						559.27
Unvested as of March 31, 2026			325						$	421.83					2.14						$	55,691

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

As of March 31, 2026, we expect to recognize $78.4 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 2.14 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. As of March 31, 2026, the service and performance condition was not met, and there are no outstanding performance shares and no remaining unrecognized stock based compensation to record.

Employee Stock Purchase Plan

As of March 31, 2026, we have 1,626,275 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,
						2026						2025
Expected term (in years)						1.0						1.1
Expected volatility						44.3		%				40.9		%
Risk-free interest rate						3.6		%				4.2		%
Expected dividends						—						—
Weighted average fair value at grant date						$	55.37					$	70.62

As of March 31, 2026, we expect to recognize $9.0 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.9 years.

Note 9. 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 (the “January 2023 Repurchase Program”). The January 2023 Repurchase Program was completed in its entirety in the second quarter of 2025.

In April 2025, our Board of Directors authorized a plan to repurchase up to $1.0 billion of our common stock (the “April 2025 Repurchase Program”). The April 2025 Repurchase Program is expected to be completed over a period of up to three years. As of March 31, 2026, we have $800.0 million remaining available for repurchase under the April 2025 Repurchase Program.

The following tables summarize the total repurchases of our common stock pursuant to Accelerated Share Repurchase (“ASR”) agreements and Open Market Repurchase (“OMR”) programs under the January 2023 and April 2025 Repurchase Programs:

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 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						$	225.0					Q2 2025						1,339,124						$	168.02
Q3 20251						April 2025						$	200.0					Q1 2026						1,390,364						$	143.85

1 On August 5, 2025, we initiated a $200 million open market repurchase program, which was completed in January 2026.

In January 2026, we repurchased approximately 0.2 million shares of our common stock at an average price of $167.28 per share for an aggregate purchase price of approximately $31.2 million.

Note 10. Accounting for Income Taxes

Our provision for income taxes was $36.1 million and $47.2 million for the three months ended March 31, 2026 and 2025, respectively, representing effective tax rates of 24.3% and 33.6%, respectively. Our effective tax rate differs from the statutory federal income tax rate of 21% for the three months ended March 31, 2026 and 2025 primarily due to the recognition of additional tax expense resulting from U.S. taxes on foreign earnings, state income taxes, and non-deductible expenses in the U.S., partially offset by the foreign income taxed at different rates.

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. This assessment includes deferred tax assets associated with our Switzerland tax deductible basis created from our 2020 intra-entity transfer of intellectual property, which have a finite utilization period and depend on our ability to generate sufficient taxable income in that jurisdiction. Any changes to the valuation allowance, particularly those related to our Switzerland deferred tax assets, could have a material adverse effect on our results of operations.

Our total gross unrecognized tax benefits, excluding interest and penalties, were $119.0 million and $117.4 million as of March 31, 2026 and December 31, 2025, 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, 2026.

Note 11**. 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,
						2026						2025
Numerator:
Net income						$	112,771					$	93,230
Denominator:
Weighted average common shares outstanding, basic						71,425						73,562
Dilutive effect of potential common stock						189						53
Total shares, diluted						71,614						73,615
Net income per share, basic						$	1.58					$	1.27
Net income per share, diluted						$	1.57					$	1.27
Anti-dilutive potential common shares1						845						964

1 Represents approximately 843 thousand RSU and 2 thousand ESPP weighted-average outstanding common stock equivalent shares for the three months ended March 31, 2026 and approximately 964 thousand RSU weighted average outstanding common stock equivalent shares for the three months ended March 31, 2025 that are excluded from the calculation of diluted net income per share as the effect would have been anti-dilutive.

Note 12**. Supplemental Cash Flow Information**

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

						Three Months Ended March 31,
						2026						2025
Non-cash investing and financing activities:
Acquisition of property, plant and equipment in accounts payable and accrued liabilities						$	14,444					$	13,851
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	10,498					$	9,592
Right-of-use assets obtained in exchange for lease obligations:
Operating leases						$	11,706					$	5,024

Note 13**. 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 segment's performance, by reviewing each measure against internal forecasts and historical performance. Our CODM may also benchmark each segment's performance against our competitors and external expectations.

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

						Three Months Ended March 31,
						2026						2025
Net revenues
Clear Aligner						$	856,024					$	796,843
Systems and Services						184,063						182,419
Total net revenues						$	1,040,087					$	979,262
Cost of net revenues1
Clear Aligner						$	243,155					$	234,754
Systems and Services						60,345						64,400
Total cost of net revenues						$	303,500					$	299,154
Gross profit
Clear Aligner						$	612,869					$	562,089
Systems and Services						123,718						118,019
Total gross profit						$	736,587					$	680,108
Other Segment expenses
Clear Aligner						$	305,070					$	301,865
Systems and Services						57,642						59,556
Unallocated corporate expenses						231,920						187,587
Total operating expenses						$	594,632					$	549,008
Segment income from operations
Clear Aligner						$	307,799					$	260,224
Systems and Services						66,076						58,463
Total segment income from operations						$	373,875					$	318,687

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 expenses 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 income taxes (in thousands):

						Three Months Ended March 31,
						2026						2025
Total segment income from operations						$	373,875					$	318,687
Unallocated corporate expenses						(231,920)						(187,587)
Total income from operations						141,955						131,100
Interest income						3,911						5,316
Other income (expense), net						3,020						4,026
Net income before provision for income taxes						$	148,886					$	140,442

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

						Three Months Ended March 31,
						2026						2025
Stock-based compensation
Clear Aligner						$	5,949					$	5,818
Systems and Services						377						403
Unallocated corporate expenses						34,598						38,776
Total stock-based compensation						$	40,924					$	44,997
Depreciation and amortization
Clear Aligner1						$	37,638					$	18,904
Systems and Services						10,534						8,469
Unallocated corporate expenses						8,376						11,775
Total depreciation and amortization						$	56,548					$	39,148

1 Includes $15.6 million of accelerated depreciation as disclosed in Note 1 “Summary of Significant Accounting Policies."

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,
						2026						2025
Net revenues 1:
U.S.						$	404,488					$	423,318
Switzerland						245,148						224,132
Other International						390,451						331,812
Total net revenues						$	1,040,087					$	979,262

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, 2026						December 31, 2025
Long-lived assets 1:
Switzerland						$	480,698					$	493,584
U.S.						197,753						200,343
Other International						539,864						545,848
Total long-lived assets						$	1,218,315					$	1,239,775

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

Note 14. Restructuring and Other Charges

2024 Restructuring

In the fourth quarter of 2024, 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 year ended 2025, we reduced our December 31, 2024 restructuring liability by approximately $14.6 million primarily due to cash payments, offset by approximately $2.1 million of additional restructuring expense recorded in Cost of net revenues. As of March 31, 2026, we had no remaining restructuring liability related to the 2024 Restructuring.

2025 Restructuring

In the third quarter of 2025, we initiated a plan to realign certain business groups and reduce our global workforce as part of our continued effort to right size our labor force in response to the current macroeconomic environment. We incurred approximately $40.9 million in restructuring expenses, of which $17.1 million remained unpaid and were included in Accrued liabilities as of December 31, 2025. For the three months ended March 31, 2026, we reduced our December 31, 2025 restructuring liability by approximately $11.6 million primarily due to cash payments, offset by approximately $0.7 million of additional restructuring expenses, most of which was recorded in Selling, general and administrative expense in our Condensed Consolidated Statements of Operations. As of March 31, 2026, $6.3 million remained unpaid and was included in Accrued liabilities in our Condensed Consolidated Balance Sheets.

We have completed the 2025 restructuring plan and incurred approximately $41.6 million in total restructuring expenses. We do not expect to incur additional restructuring expenses in connection with the plan.

The 2024 and 2025 restructuring activities were primarily related to involuntary termination benefits, including employee severance and other post-employment benefits.

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

						For the twelve months ended December 31, 2025
						2024 Restructuring						2025 Restructuring2						Total
Balance at beginning of period1						$	13,001					$	—					$	13,001
Restructuring and other charges						2,056						40,888						42,944
Cash payments and adjustments						(14,569)						(23,776)						(38,345)
Balance at end of period1						$	488					$	17,112					$	17,600

						For the three months ended March 31, 2026
						2024 Restructuring						2025 Restructuring2						Total
Balance at beginning of period1						$	488					$	17,112					$	17,600
Restructuring and other charges						—						726						726
Cash payments and adjustments						(488)						(11,575)						(12,063)
Balance at end of period1						$	—					$	6,263					$	6,263

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

2 2025 restructuring activities include an immaterial amount of charges for non post-employment benefit related restructuring expense.

Note 15. Assets Held for Sale

In connection with the 2025 restructuring activities discussed in Note 14 “Restructuring and Other Charges,” during the third quarter of 2025, we committed to a plan to sell a manufacturing facility, including land, building and building improvements (collectively the “disposal group”) in Juarez, Mexico. During the third quarter of 2025, we classified the disposal group as held for sale for $27.9 million and recognized an impairment loss of $23.1 million, which was recorded within Cost of net revenues and attributable to our Clear Aligner reportable segment. As of December 31, 2025, we had assets held for sale of $28.0 million.

During the first quarter of 2026, we recognized a gain of $11.7 million resulting from an increase in fair value less costs to sell, driven by updated market‑based information. The gain was recorded within Cost of net revenues in our Condensed Consolidated Statement of Operations and was attributable to our Clear Aligner reportable segment. As of March 31, 2026, we had assets held for sale of $39.8 million, which are presented separately as Assets held for sale in our Condensed Consolidated Balance Sheets.