Align Technology closed 2025 with something it hasn’t been able to deliver consistently since the post-pandemic boom: a quarter where volumes, revenue and profitability all moved in the right direction, and management sounded more like operators than forecasters.
Fourth-quarter revenue rose 5.3% from a year earlier to a record $1.048 billion, and the company posted record Invisalign case shipments of 677,000, up 7.7%. For the full year, revenue reached a record $4.0 billion, even if growth was a modest 1%—a reminder that clear aligners have become a mature category in North America and a competitive one globally.
The company’s message to investors was straightforward: the market is “stable,” execution is improving, and the levers that matter—large dental service organizations, international adoption and a broader portfolio for teens and younger patients—are working.
A record quarter, but pricing stays slippery
Align’s results were helped by the simplest driver in medical devices: more units. Clear aligner revenue rose 5.5% year over year to $838.1 million, while Systems and Services—led by iTero scanners and exocad—grew 4.2% to $209.4 million.
Yet pricing remains a pressure point, less because Align is cutting list prices than because growth is coming from places and products with lower average selling prices. The company said the average revenue per case shipped was $1,240 in the quarter, down $25 from a year earlier, reflecting higher discounts and a shift toward lower-priced geographies and product configurations.
That mix dynamic is now baked into the outlook. Chief Financial Officer John Morici told analysts to model 2026 aligner ASPs down roughly 1% to 2% year over year, driven by country and product mix. That guidance matters because Invisalign is a scale business: when the company is shipping more cases into lower-priced markets, it has to defend margins with manufacturing productivity and operational discipline.
On that score, Align delivered an important marker. Non-GAAP gross margin rose to 72% in the fourth quarter, and non-GAAP operating margin reached 26.1%, which the company described as its best in years. The GAAP picture was noisier—reported gross margin was 65.3% and was weighed down year over year by depreciation tied to assets disposed of “other than by sale,” among other items—but the underlying trend was what management wanted investors to see: the cost base is becoming more efficient again.
Earnings per share followed. GAAP diluted EPS was $1.89, and non-GAAP EPS was $3.29, helped by higher revenue and lower restructuring costs.
The DSO engine and the teen pipeline
If there was a hero of the call, it wasn’t a new product so much as a customer segment. Align leaned hard into dental and orthodontic service organizations—DSOs and OSOs—arguing that consolidation in dentistry is turning these networks into the “most influential forces shaping digital dentistry.” Management said its top 10 DSOs in the Americas grew double digits and retention improved, while in EMEA DSO growth was also double digits, with triple-digit growth among the top 10 accounts.
Morici put a number on it: DSOs account for about 25% of Align’s volume. That’s large enough to move results but still small enough to suggest runway—especially as DSOs standardize workflows and push consistent adoption of scanning and chairside visualization, the very behaviors Align says correlate with higher Invisalign conversion.
The geographic story is increasingly the mirror image of North America. In the fourth quarter, year-over-year aligner volume growth was driven by EMEA, Latin America and APAC, with “stability” in North America. Latin America was a standout, with double-digit growth and a milestone of one million Invisalign patients treated in the region.
Teen and younger-patient orthodontics is the second pillar. Align said 936,000 teens and kids started treatment in fiscal 2025, up 7.8%, and fourth-quarter teen and growing-kids starts rose 7% year over year to more than 230,000, though they fell sequentially after an unusually strong third-quarter season.
Management’s emphasis is that younger patients are not just incremental volume; they can be a pipeline. One example: the company said that when doctors use the Invisalign Palatal Expander alongside Invisalign First, about 40% of the time that early intervention “will evolve into” an Invisalign First case—turning a device sale into a fuller aligner treatment.
Still, Align was careful not to declare victory in North America. CEO Joe Hogan described the U.S. retail market as pressured by consumer sentiment and patient inflow, and said the improvement was more about “stability” and better execution than a healthier economy.
A digital-dentistry platform, with a manufacturing bet
Beyond aligners, Align is building what it wants investors to treat as a platform company: Invisalign, iTero scanners, and exocad software feeding a unified digital workflow from diagnosis to treatment planning to restorative work. Systems and Services benefited in the quarter from continued adoption of iTero Lumina, which represented about 86% of full-system units, and the company highlighted exocad’s efforts to expand deeper into restorative workflows with its ART pilot.
The product roadmap also carries a manufacturing risk that Align is now acknowledging more openly: direct fabrication, the shift from thermoforming aligners to 3D printing. Hogan said early production will be margin-dilutive in 2026 while the company scales, with more meaningful scaling expected in 2027 and margin accretion targeted later as utilization improves.
Guidance for 2026 aims to balance those moving parts. Align forecast revenue growth of 3% to 4% and mid-single-digit aligner volume growth, with GAAP operating margin “slightly below 18%” and non-GAAP operating margin around 23.7%, implying continued improvement even as direct fabrication ramps. For the first quarter, it projected revenue of $1.010 billion to $1.030 billion, and a seasonally lower non-GAAP operating margin near 19.5%.
There are also uncertainties the company is choosing not to model. In China, management said implementation delays continue around the volume-based procurement process, and the company’s guidance assumes no VBP impact on price or volume.
Perhaps the most telling note was the one Align struck on competition. Executives said they are watching rival clear-aligner pricing move higher—possibly due to tariffs or profitability pressures—but emphasized that competitor behavior is not embedded in guidance. Align wants the narrative to be about controllable execution: scanning more patients, converting more consults, and winning the large networks reshaping dentistry.
For now, the quarter gave management credibility to make that case. The question investors will keep pressing in 2026 is whether “stability” in North America can turn into growth—and whether a company that once thrived on premium pricing can keep expanding profit while its next wave of volume comes from new geographies, new channels and younger patients.
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