Segments and Geographical Information

9 Months Ended

Sep. 30, 2025

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net revenues
Clear Aligner	$	805,799	$	786,844	$	2,407,259	$	2,435,833
Systems and Services	189,893		191,028		580,144		567,960
Total net revenues	$	995,692	$	977,872	$	2,987,403	$	3,003,793
Cost of net revenues1
Clear Aligner	$	282,941	$	234,003	$	758,506	$	715,309
Systems and Services	73,550		62,095		201,471		186,266
Total cost of goods sold	$	356,491	$	296,098	$	959,977	$	901,575
Gross profit
Clear Aligner	$	522,858	$	552,841	$	1,648,753	$	1,720,524
Systems and Services	116,343		128,933		378,673		381,694
Total gross profit	$	639,201	$	681,774	$	2,027,426	$	2,102,218
Other Segment expenses
Clear Aligner	$	272,150	$	276,522	$	870,810	$	858,341
Systems and Services	56,502		60,189		174,632		192,467
Unallocated corporate expenses	214,251		182,765		591,553		587,931
Total operating expenses	$	542,903	$	519,476	$	1,636,995	$	1,638,739
Segment income from operations
Clear Aligner	$	250,708	$	276,319	$	777,943	$	862,183
Systems and Services	59,841		68,744		204,041		189,227
Total segment income from operations	$	310,549	$	345,063	$	981,984	$	1,051,410

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Total segment income from operations	$	310,549	$	345,063	$	981,984	$	1,051,410
Unallocated corporate expenses	(214,251)		(182,765)		(591,553)		(587,931)



Total income from operations	96,298		162,298		390,431		463,479
Interest income	3,249		4,003		11,424		11,696
Other income (expense), net	(4,813)		(371)		6,837		(6,993)

Net income before provision for income taxes	$	94,734	$	165,930	$	408,692	$	468,182

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Stock-based compensation
Clear Aligner	$	6,069	$	7,648	$	17,952	$	20,031
Systems and Services	419		427		1,225		1,207
Unallocated corporate expenses	41,889		40,964		122,405		113,617
Total stock-based compensation	$	48,377	$	49,039	$	141,582	$	134,855
Depreciation and amortization
Clear Aligner	$	32,976	$	17,971	$	71,375	$	49,027
Systems and Services	11,160		8,099		28,931		23,007
Unallocated corporate expenses	11,581		11,723		35,135		34,871
Total depreciation and amortization	$	55,717	$	37,793	$	135,441	$	106,905

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net revenues 1:
U.S.	$	410,560	$	421,204	$	1,256,679	$	1,291,838
Switzerland	210,844		216,638		670,223		739,342
Other International	374,288		340,030		1,060,501		972,613
Total net revenues	$	995,692	$	977,872	$	2,987,403	$	3,003,793

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):


	September 30, 2025		December 31, 2024
Long-lived assets 1:
Switzerland	$	543,669	$	571,628
U.S.	200,478		207,689


Other International	555,445		605,193
Total long-lived assets	$	1,299,592	$	1,384,510

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

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

ALIGN TECHNOLOGY INC 10-Q