The investor's view
+10.3%
growth in revenue a year, FY2020 to FY2025
- Five fundamentals, each ranked against the Health Care companies covered
- A peer map of growth against margin
- Where the profit is made: 2 segments, by share of sales and of profit
Aligners earn more than the whole company reports
Q2 FY2026, the quarter to Jun 30, 2026 · 10-Q filed Aug 5, 2026
Largest source of revenue: Clear Aligner, 82.5% of the total.
Both segments run at high margins; the profit thins out in corporate costs the filing does not assign to either.
Clear Aligner segment income from operations was $325.5M on $870.9M of segment revenue, a 37.4% margin. Systems and Services earned $77.7M on $185.3M, a 41.9% margin. Company income from operations was $154.0M, a 14.6% margin, so Clear Aligner alone earned 211.3% of it and Systems and Services a further 50.4%.1
The filing explains the gap: certain operating costs are not allocated to the segments, generally stock-based compensation, IT, facilities, human resources, accounting and finance, legal and regulatory, and restructuring costs. Those sit at the center, outside either product line.1
Over the longer run, company operating margin was 24.7% in FY2021 on $3.95B of revenue and 13.5% in FY2025 on $4.03B, each a ratio of operating income to revenue in that year. Revenue was roughly flat across those years while the margin fell to a little over half its FY2021 level.1
AnalysisRead this way, the product economics look stronger than the company margin suggests, and the question for the company margin is central cost as much as aligner pricing. This is a reading of the segment table, not a statement in the filing.
Gross margin widened, yet operating income fell, because a new legal line equalled 25.1% of operating income.
Gross margin rose to 71.7% from 69.9% a year earlier, as cost of net revenues fell 1.8% while revenue rose 4.3%. Operating margin still fell to 14.6% from 16.1%, a drop of 1.5 points, and income from operations fell 5.5% to $154.0M.1
Legal settlements and contingencies, nil a year earlier, were $38.7M, or 3.7% of revenue: more than the 1.5-point fall in operating margin. SG&A rose 3.1% and R&D 5.8%, while total operating expenses rose 10.7%. The filing says most of the charge is an estimated UK VAT liability, recorded after a UK tribunal held in July that clear aligners are subject to VAT; the company intends to appeal.1
The filing attributes the gross-margin gain primarily to tariff refunds, the roll-off of accelerated depreciation and higher clear aligner prices per case.1
AnalysisTwo of those three causes are one-off by nature, and the legal charge may or may not recur. The underlying quarter sits between the two readings: better than the operating line shows, less durable than the gross margin suggests. This is analysis, not a statement in the filing.
Case volume grew 7.4%, faster than the doctor count, so existing customers, not just new ones, carried growth.
Doctor submitters rose to 89.2 thousand from 86.3 thousand, a 3.4% increase, while utilization rose to 7.8 cases per doctor from 7.5. Clear Aligner case volume grew 7.4%, and shipments for teens and growing patients rose to 239.2 thousand from 223.2 thousand, or 7.2%.1
Revenue per case shipment rose only to $1,260 from $1,250, or 0.8%. Clear Aligner revenue grew 8.2%, which the filing attributes mainly to volume, with a smaller lift from favorable exchange rates and price increases.1
The filing also says orthodontic starts have been down for four consecutive years, and that doctors who offer both options have shifted starts to wires and brackets when patient traffic is uneven.1
AnalysisHigher use per doctor in a soft market for orthodontic starts suggests aligners are gaining ground inside existing practices, not only riding market growth. A single quarter does not establish a trend. This is analysis.
Free cash flow exceeded net income, and most of the new legal charge was booked as a liability, not yet paid.
Free cash flow was $157.1M, 14.9% of revenue and 145% of net income of $108.3M. A year earlier it was $107.2M, 86% of net income of $124.6M. Operating cash flow was $192.8M, 1.78 times net income, and capital spending was $35.7M, 3.4% of revenue.1
The filing records the estimated UK VAT liability under accrued liabilities on the balance sheet, so the charge reduced this quarter's profit without a matching cash payment in the quarter.1
Quarterly cash flow is uneven: free cash flow was $27.4M in Q1 FY2025 and $187.3M in Q4 FY2025. Over FY2025 as a whole it was $490.8M against net income of $410.4M.1
AnalysisIf the VAT appeals fail, the cash leaves in a later period, so part of this quarter's cash strength is timing rather than a change in the business. This is analysis.
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Where Align Technology stands among its peers, ten years of growth and cash, where the profit is made, and the edge and the risks.
How Align Technology's model works step by step, where every $100 of revenue goes against the industry, and how long it took to scale.
Revenue went from $304.0M in FY2008 to $4.0B in FY2025, the operating margin from 5.1% to 13.5%, over 17 years.
Member research, then your own questions on ChatGPT.
What Align Technology's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
Which of this quarter's margin drivers can repeat, and what price per case and doctor use must do for the company margin to recover.
How central costs, legal charges and currency sit between strong segment margins and a thinner company result.
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Business Lens describes Align Technology from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.