- Austria / Österreich
- Bosnia and Herzegovina / Босна и Херцеговина
- Bulgaria / България
- Croatia / Hrvatska
- Czech Republic & Slovakia / Česká republika & Slovensko
- Finland / Suomi
- France / France
- Germany / Deutschland
- Greece / ΕΛΛΑΔΑ
- Italy / Italia
- Netherlands / Nederland
- Nordic / Nordic
- Poland / Polska
- Portugal / Portugal
- Romania & Moldova / România & Moldova
- Slovenia / Slovenija
- Serbia & Montenegro / Србија и Црна Гора
- Spain / España
- Switzerland / Schweiz
- Turkey / Türkiye
- UK & Ireland / UK & Ireland
TEMPE, Ariz., US: Align Technology performed notably well in 2020, even as the pandemic took a bite out of income streams, and the company broke its own sales records in 2021, banking a staggering US$4.0 billion (€3.5 billion) in revenue for that year. The first quarter of this year marked the end of the Invisalign manufacturer’s record run, however, and sequential declines in revenue and product shipments have shaken the company’s stock price.
Align recorded six consecutive quarters of sequential revenue growth prior to the three-month period beginning in January 2022. From January to March, total sales of US$973.2 million (€914.0 million) represented a 5.6% decline compared with the prior quarter. On a sequential basis, clear aligner revenue for the period was down by 0.7%, revenue from systems and services by 24.2% and clear aligner case shipments by 5.1%.
The company shipped 598,800 Invisalign cases during the period, including 175,200 cases for teenage patients, the latter representing a sequential drop of 3.6%.
Despite these negative figures, Align’s total revenue during the period still represented an increase of 8.8% (compared with the first quarter of 2021, when the company’s sales more than doubled), and year-on-year gains of 7.5% and 15.6% were recorded for sales of clear aligners and systems and services. Analysts commented, however, that Align’s fourth-quarter 2021 results had already hinted at a potential slowdown in sales and that its recent report appeared to describe a continuing trend.
News of the sequential dips caused the company’s stock (Nasdaq: ALGN) to fall. The latest earnings report was released on 27 April, and the stock price had fallen from US$360.43 to US$304.66 by the end of trading on the following day. By 25 May, the stock had recovered from a 30-day low of US$256.11 to reach US$270.18; however, it remained down by more than 50% compared with a 52-week high of US$737.45.
In a webcast call with analysts, Align Technology President and CEO Joseph Hogan said that three factors had resulted in a challenging quarter. These were the continued impact of the COVID-19 pandemic, particularly the strict measures in place in China; a difficult economic environment driven by inflation, waning consumer confidence and supply chain disruptions; and fallout from the war in Ukraine.
Hogan noted that Align had discontinued all its operations in Russia that were not essential to continuity of orthodontic care being provided there and was adhering to international sanctions placed on Russia by Western nations.
Commenting on the key Americas region, where Invisalign case volumes were down by 1.5% year on year and 4.3% sequentially, Hogan explained: “The latest data from the Gaidge practice analysis tool that collects and consolidates data from about 700 ortho practices, covering more than 1,000 orthodontists across 1,600 locations in the United States and Canada, showed weakening underlying patient demand trends in the first quarter for both adult and teens and across wires and brackets and clear aligner products.” New patient visits in the region during the period were down by 7.6% year on year, Hogan added.
For the Europe, Middle East and Africa region, where case volumes had increased by 2.1% year on year, Hogan said that growth had been driven by sales in Italy and the region covering Austria, Germany and Switzerland.
Case volumes in the Asia Pacific region increased by 4.7% year on year. The company’s result in the region was affected by lockdowns in China, but boosted by sales in Japan and Taiwan and growth in the emerging markets of South Korea, India and Thailand.
John Morici, Align’s chief financial officer, told analysts that the pressures that the company faced from January to March had not eased during April and had increased uncertainty in all markets in which Align operates. “We also anticipate capital equipment sales will be increasingly constrained throughout the year as practices adjust to these headwinds,” Morici said.
Hogan added that Align’s flagship product Invisalign is a “unique mass customisation business operating in real time with no inventory or distribution at the front end of our market. Consequently, fluctuations in the macroeconomic environment are felt faster at Align than [any that] I have ever experienced anywhere in my career.”