Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Align Technology (ALGN) posted modest FY2025 revenue growth of +0.9% to $4.03B, but profitability deteriorated across the board as cost of revenue surged 10.3%, compressing gross margin by ~280 bps to 67.2% and driving operating income down 10.2% to $546M.
Revenue
$4.03B
+0.90% YoY
EPS (Diluted)
$5.65
+0.53% YoY
Gross Margin
67.2%
-2.8 pts YoY
Operating Income
$545.75M
-10.18% YoY
Source: SEC XBRL
Align Technology (ALGN) reported FY2025 revenue of $4.03B, up 0.9% year over year. Operating margin was 13.5%, down 1.7 points from 15.2% a year earlier. Operating cash flow was $593.22M, down 19.6% year over year.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 2.64 | 2.66 | Miss -0.9% |
| Mar 2026 | 2.58 | 2.33 | Beat +11.0% |
| Dec 2025This filing | 3.29 | 3.03 | Beat +8.5% |
| Sep 2025 | 2.61 | 2.45 | Beat +6.5% |
Reported EPS of $3.29 versus the $3.03 analyst consensus — a +8.5% beat for Dec 2025.
Compiled by AI from this SEC filing
Total revenue grew just 0.9% year-over-year to $4.03B in FY2025 (from $3.999B in FY2024), indicating a challenging demand environment for Align's clear aligner and intraoral scanner products despite a large global addressable market.
Source: 10-K Income Statement
Cost of revenue jumped 10.3% YoY to $1.32B, significantly outpacing revenue growth of 0.9%, which compressed gross margin from 70.0% to 67.2% — a decline of approximately 280 basis points. This suggests rising manufacturing, materials, or fulfillment costs.
Source: 10-K Income Statement
Operating income fell 10.2% to $545.8M, with operating margin contracting from 15.2% to 13.5%. While SG&A was slightly reduced (-0.4% to $1.756B), it was insufficient to offset the gross profit decline of $88M.
Source: 10-K Income Statement
Operating cash flow dropped 19.6% YoY to $593.2M from $738.2M, a significant deterioration that may reflect working capital changes or lower earnings quality. D&A surged 63.7% to $237.4M, suggesting accelerated depreciation or new asset additions.
Source: 10-K Cash Flow Statement
Align repurchased $465.9M in shares in FY2025, up 32.0% from $352.9M in FY2024, driving financing cash outflows of -$464.6M. This capital return to shareholders was funded partly by the existing cash balance, which still grew modestly to $1.09B.
Source: 10-K Cash Flow Statement
Compiled by AI from this SEC filing · 3 high, 2 medium, 0 low
Cost of revenue grew more than 10x faster than revenue in FY2025, compressing gross margin by ~280 bps to 67.2%. If input costs, manufacturing expenses, or product mix continue to shift unfavorably, profitability could deteriorate further even if top-line growth recovers.
Source: 10-K Income Statement
Operating cash flow fell nearly 20% YoY to $593M despite only a modest decline in net income, suggesting potential working capital headwinds or one-time items. Sustained cash flow deterioration could limit Align's ability to fund R&D, buybacks, and strategic investments simultaneously.
Source: 10-K Cash Flow Statement
Revenue grew only 0.9% in FY2025, a deceleration that raises questions about market saturation, competitive pressure from rivals in the clear aligner and dental scanner markets, or macroeconomic headwinds affecting consumer dental spending. With SG&A at $1.76B (43.5% of revenue), the cost structure requires robust top-line growth to sustain margins.
Source: 10-K Income Statement
Align accelerated buybacks by 32% to $466M in FY2025 even as operating cash flow declined 19.6%. This combination reduces financial flexibility and could pressure the balance sheet if business conditions worsen, though the current ratio of 1.36x and $1.09B cash provide a near-term buffer.
Source: 10-K Cash Flow Statement & Balance Sheet
D&A expense surged 63.7% YoY to $237.4M, which may reflect significant recent capital expenditures or accelerated depreciation schedules on existing assets. If these assets do not generate commensurate revenue growth, returns on invested capital could decline.
Source: 10-K Cash Flow Statement
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 4.03 $B | 4.00 $B | +0.90% |
Cost of Revenue $B | 1.32 $B | 1.20 $B | +10.34% |
Gross Profit $B | 2.71 $B | 2.80 $B | -3.15% |
Operating Income $M | 545.76 $M | 607.63 $M | -10.18% |
Net Income $M | 410.35 $M | 421.00 $M | -2.53% |
EPS (Basic) $ | 5.66 $ | 5.63 $ | +0.53% |
EPS (Diluted) $ | 5.65 $ | 5.62 $ | +0.53% |
R&D Expense $M | 369.91 $M | 364.20 $M | +1.57% |
SG&A Expense $B | 1.76 $B | 1.76 $B | -0.42% |
Answers draw on this SEC filing and the data on this page
Align Technology's Q2 FY2026 revenue grew 4.3% on strong Clear Aligner demand, but a $38.7 million legal contingency and higher costs pushed net income down 13.1%.
Align Technology delivered solid Q1 FY2026 results with revenue of $1.04B (+6.2% YoY), net income surging 21.0% to $112.8M, and operating cash flow nearly tripling to $151.0M, reflecting improved profitability and a strengthened balance sheet.
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