10-Q 1 algn-20220630.htm 10-Q algn-20220630
000109714912/312022Q2false00010971492022-01-012022-06-3000010971492022-07-29xbrli:shares00010971492022-04-012022-06-30iso4217:USD00010971492021-04-012021-06-3000010971492021-01-012021-06-30iso4217:USDxbrli:shares00010971492022-06-3000010971492021-12-310001097149us-gaap:CommonStockMember2022-03-310001097149us-gaap:AdditionalPaidInCapitalMember2022-03-310001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001097149us-gaap:RetainedEarningsMember2022-03-3100010971492022-03-310001097149us-gaap:RetainedEarningsMember2022-04-012022-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001097149us-gaap:CommonStockMember2022-04-012022-06-300001097149us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001097149us-gaap:CommonStockMember2022-06-300001097149us-gaap:AdditionalPaidInCapitalMember2022-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001097149us-gaap:RetainedEarningsMember2022-06-300001097149us-gaap:CommonStockMember2021-12-310001097149us-gaap:AdditionalPaidInCapitalMember2021-12-310001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001097149us-gaap:RetainedEarningsMember2021-12-310001097149us-gaap:RetainedEarningsMember2022-01-012022-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001097149us-gaap:CommonStockMember2022-01-012022-06-300001097149us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001097149us-gaap:CommonStockMember2021-03-310001097149us-gaap:AdditionalPaidInCapitalMember2021-03-310001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001097149us-gaap:RetainedEarningsMember2021-03-3100010971492021-03-310001097149us-gaap:RetainedEarningsMember2021-04-012021-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001097149us-gaap:CommonStockMember2021-04-012021-06-300001097149us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001097149us-gaap:CommonStockMember2021-06-300001097149us-gaap:AdditionalPaidInCapitalMember2021-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001097149us-gaap:RetainedEarningsMember2021-06-3000010971492021-06-300001097149us-gaap:CommonStockMember2020-12-310001097149us-gaap:AdditionalPaidInCapitalMember2020-12-310001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001097149us-gaap:RetainedEarningsMember2020-12-3100010971492020-12-310001097149us-gaap:RetainedEarningsMember2021-01-012021-06-300001097149us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001097149us-gaap:CommonStockMember2021-01-012021-06-300001097149us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001097149us-gaap:CashMember2022-06-300001097149us-gaap:CashMemberus-gaap:CashAndCashEquivalentsMember2022-06-300001097149us-gaap:MoneyMarketFundsMember2022-06-300001097149us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberalgn:MarketableSecuritiesShortTermMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberalgn:MarketableSecuritiesLongTermMember2022-06-300001097149us-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149algn:MarketableSecuritiesShortTermMemberus-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149algn:MarketableSecuritiesLongTermMemberus-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMemberalgn:MarketableSecuritiesShortTermMember2022-06-300001097149algn:MarketableSecuritiesLongTermMemberus-gaap:AssetBackedSecuritiesMember2022-06-300001097149us-gaap:MunicipalBondsMember2022-06-300001097149algn:MarketableSecuritiesShortTermMemberus-gaap:MunicipalBondsMember2022-06-300001097149algn:MarketableSecuritiesLongTermMemberus-gaap:MunicipalBondsMember2022-06-300001097149us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-06-300001097149algn:MarketableSecuritiesLongTermMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-06-300001097149us-gaap:CashAndCashEquivalentsMember2022-06-300001097149algn:MarketableSecuritiesShortTermMember2022-06-300001097149algn:MarketableSecuritiesLongTermMember2022-06-300001097149us-gaap:CashMember2021-12-310001097149us-gaap:CashMemberus-gaap:CashAndCashEquivalentsMember2021-12-310001097149us-gaap:MoneyMarketFundsMember2021-12-310001097149us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:CashAndCashEquivalentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberalgn:MarketableSecuritiesShortTermMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberalgn:MarketableSecuritiesLongTermMember2021-12-310001097149us-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149algn:MarketableSecuritiesShortTermMemberus-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149algn:MarketableSecuritiesLongTermMemberus-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMemberalgn:MarketableSecuritiesShortTermMember2021-12-310001097149algn:MarketableSecuritiesLongTermMemberus-gaap:AssetBackedSecuritiesMember2021-12-310001097149us-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:CashAndCashEquivalentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149algn:MarketableSecuritiesShortTermMemberus-gaap:MunicipalBondsMember2021-12-310001097149algn:MarketableSecuritiesLongTermMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-12-310001097149algn:MarketableSecuritiesLongTermMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-12-310001097149us-gaap:CashAndCashEquivalentsMember2021-12-310001097149algn:MarketableSecuritiesShortTermMember2021-12-310001097149algn:MarketableSecuritiesLongTermMember2021-12-310001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2022-06-300001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel1Member2022-06-300001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2022-06-300001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Member2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Member2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2022-06-300001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:OtherAssetsMember2022-06-300001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherAssetsMember2022-06-300001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:OtherAssetsMember2022-06-300001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2022-06-300001097149us-gaap:FairValueInputsLevel1Member2022-06-300001097149us-gaap:FairValueInputsLevel2Member2022-06-300001097149us-gaap:FairValueInputsLevel3Member2022-06-300001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CashEquivalentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:USTreasuryBondSecuritiesMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:MunicipalBondsMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:ShortTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryBondSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:CorporateBondSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberalgn:LongTermInvestmentsMember2021-12-310001097149algn:IsraeliSeveranceFundsMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001097149algn:IsraeliSeveranceFundsMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:FairValueInputsLevel2Memberalgn:IsraeliSeveranceFundsMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001097149algn:IsraeliSeveranceFundsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:OtherAssetsMember2021-12-310001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:OtherAssetsMember2021-12-310001097149us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:OtherAssetsMember2021-12-310001097149us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:OtherAssetsMember2021-12-310001097149us-gaap:FairValueInputsLevel1Member2021-12-310001097149us-gaap:FairValueInputsLevel2Member2021-12-310001097149us-gaap:FairValueInputsLevel3Member2021-12-310001097149us-gaap:ForeignExchangeForwardMember2022-04-012022-06-300001097149us-gaap:ForeignExchangeForwardMember2021-04-012021-06-300001097149us-gaap:ForeignExchangeForwardMember2022-01-012022-06-300001097149us-gaap:ForeignExchangeForwardMember2021-01-012021-06-300001097149us-gaap:ForeignExchangeForwardMember2021-12-310001097149us-gaap:ForeignExchangeForwardMember2022-06-300001097149currency:EURus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2022-06-30iso4217:EUR0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CNY2022-06-30iso4217:CNY0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:PLN2022-06-30iso4217:PLN0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CAD2022-06-30iso4217:CAD0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:BRL2022-06-30iso4217:BRL0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:JPY2022-06-30iso4217:JPY0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:GBP2022-06-30iso4217:GBP0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CHF2022-06-30iso4217:CHF0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:MXN2022-06-30iso4217:MXN0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:ILS2022-06-30iso4217:ILS0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:AUD2022-06-30iso4217:AUD0001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2022-06-300001097149currency:EURus-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CAD2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CNY2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:PLN2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:BRL2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:JPY2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:GBP2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:ILS2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:MXN2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:CHF2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Membercurrency:AUD2021-12-310001097149us-gaap:ForeignExchangeForwardMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2021-12-3100010971492022-07-012022-06-3000010971492022-07-01srt:MinimumMember2022-06-3000010971492023-01-01srt:MaximumMember2022-06-300001097149algn:ClearAlignerMember2021-12-310001097149algn:ImagingSystemsAndCADCAMServicesMember2021-12-310001097149algn:ClearAlignerMember2022-01-012022-06-300001097149algn:ImagingSystemsAndCADCAMServicesMember2022-01-012022-06-300001097149algn:ClearAlignerMember2022-06-300001097149algn:ImagingSystemsAndCADCAMServicesMember2022-06-300001097149algn:ExistingTechnologyMember2022-01-012022-06-300001097149algn:ExistingTechnologyMember2022-06-300001097149us-gaap:CustomerRelationshipsMember2022-01-012022-06-300001097149us-gaap:CustomerRelationshipsMember2022-06-300001097149us-gaap:TrademarksAndTradeNamesMember2022-01-012022-06-300001097149us-gaap:TrademarksAndTradeNamesMember2022-06-300001097149us-gaap:PatentsMember2022-01-012022-06-300001097149us-gaap:PatentsMember2022-06-300001097149algn:ExistingTechnologyMember2021-01-012021-12-310001097149algn:ExistingTechnologyMember2021-12-310001097149us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001097149us-gaap:CustomerRelationshipsMember2021-12-310001097149us-gaap:TrademarksAndTradeNamesMember2021-01-012021-12-310001097149us-gaap:TrademarksAndTradeNamesMember2021-12-310001097149us-gaap:PatentsMember2021-01-012021-12-310001097149us-gaap:PatentsMember2021-12-310001097149algn:CreditFacility2020Member2020-07-210001097149algn:CreditFacility2020Memberus-gaap:LetterOfCreditMember2020-07-210001097149us-gaap:BaseRateMemberalgn:CreditFacility2020Member2020-07-212020-07-21xbrli:pure0001097149algn:CreditFacility2020Memberus-gaap:LondonInterbankOfferedRateLIBORMember2020-07-212020-07-210001097149algn:CreditFacility2020Memberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MinimumMember2020-07-212020-07-210001097149algn:CreditFacility2020Memberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MaximumMember2020-07-212020-07-210001097149us-gaap:BaseRateMemberalgn:CreditFacility2020Membersrt:MinimumMember2020-07-212020-07-210001097149us-gaap:BaseRateMemberalgn:CreditFacility2020Membersrt:MaximumMember2020-07-212020-07-210001097149algn:CreditFacility2020Member2022-06-300001097149algn:ShareholderDerivativeLawsuitMember2019-01-31algn:claim0001097149algn:StockIncentivePlan2005Member2022-06-300001097149us-gaap:CostOfSalesMember2022-04-012022-06-300001097149us-gaap:CostOfSalesMember2021-04-012021-06-300001097149us-gaap:CostOfSalesMember2022-01-012022-06-300001097149us-gaap:CostOfSalesMember2021-01-012021-06-300001097149us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300001097149us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-300001097149us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300001097149us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-300001097149us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001097149us-gaap:ResearchAndDevelopmentExpenseMember2021-04-012021-06-300001097149us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001097149us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-06-300001097149us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-06-300001097149us-gaap:RestrictedStockUnitsRSUMember2021-12-310001097149us-gaap:RestrictedStockUnitsRSUMember2022-06-300001097149algn:MarketPerformanceBasedRestrictedStockUnitsMember2022-01-012022-06-300001097149algn:MarketPerformanceBasedRestrictedStockUnitsMember2021-12-310001097149algn:MarketPerformanceBasedRestrictedStockUnitsMember2022-06-300001097149algn:EmployeeStockPurchasePlanMember2022-06-300001097149algn:EmployeeStockPurchasePlanMember2022-01-012022-06-300001097149algn:EmployeeStockPurchasePlanMember2021-01-012021-06-300001097149algn:EmployeeStockPurchasePlanMember2022-01-012022-06-300001097149algn:May2018RepurchaseProgramMember2018-05-310001097149algn:May2021RepurchaseProgramMember2021-05-310001097149algn:May2021RepurchaseProgramMember2022-06-300001097149algn:May2018RepurchaseProgramMember2021-04-012021-06-300001097149algn:May2018RepurchaseProgramMember2021-04-012021-09-300001097149algn:May2021RepurchaseProgramMember2021-04-012021-06-300001097149algn:May2021RepurchaseProgramMember2021-04-012021-09-300001097149algn:May2021RepurchaseProgramMember2022-04-012022-06-300001097149algn:May2021RepurchaseProgramMember2022-01-012022-06-30algn:segment0001097149algn:ClearAlignerMember2022-04-012022-06-300001097149algn:ClearAlignerMember2021-04-012021-06-300001097149algn:ClearAlignerMember2021-01-012021-06-300001097149algn:ImagingSystemsAndCADCAMServicesMember2022-04-012022-06-300001097149algn:ImagingSystemsAndCADCAMServicesMember2021-04-012021-06-300001097149algn:ImagingSystemsAndCADCAMServicesMember2021-01-012021-06-300001097149algn:ClearAlignerMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001097149algn:ClearAlignerMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001097149algn:ClearAlignerMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001097149algn:ClearAlignerMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001097149algn:ImagingSystemsAndCADCAMServicesMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001097149algn:ImagingSystemsAndCADCAMServicesMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001097149algn:ImagingSystemsAndCADCAMServicesMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001097149algn:ImagingSystemsAndCADCAMServicesMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001097149us-gaap:CorporateNonSegmentMember2022-04-012022-06-300001097149us-gaap:CorporateNonSegmentMember2021-04-012021-06-300001097149us-gaap:CorporateNonSegmentMember2022-01-012022-06-300001097149us-gaap:CorporateNonSegmentMember2021-01-012021-06-300001097149us-gaap:OperatingSegmentsMember2022-04-012022-06-300001097149us-gaap:OperatingSegmentsMember2021-04-012021-06-300001097149us-gaap:OperatingSegmentsMember2022-01-012022-06-300001097149us-gaap:OperatingSegmentsMember2021-01-012021-06-300001097149country:US2022-04-012022-06-300001097149country:US2021-04-012021-06-300001097149country:US2022-01-012022-06-300001097149country:US2021-01-012021-06-300001097149country:CH2022-04-012022-06-300001097149country:CH2021-04-012021-06-300001097149country:CH2022-01-012022-06-300001097149country:CH2021-01-012021-06-300001097149algn:OtherInternationalMember2022-04-012022-06-300001097149algn:OtherInternationalMember2021-04-012021-06-300001097149algn:OtherInternationalMember2022-01-012022-06-300001097149algn:OtherInternationalMember2021-01-012021-06-300001097149country:CH2022-06-300001097149country:CH2021-12-310001097149country:US2022-06-300001097149country:US2021-12-310001097149country:CN2022-06-300001097149country:CN2021-12-310001097149algn:OtherInternationalMember2022-06-300001097149algn:OtherInternationalMember2021-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________ 
FORM 10-Q
____________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to
Commission file number: 000-32259
____________________________
ALIGN TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
____________________________ 
Delaware94-3267295
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
410 North Scottsdale Road, Suite 1300
Tempe, Arizona 85281
(Address of principal executive offices)
(602) 742-2000
(Registrant’s telephone number, including area code)
 ____________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par valueALGNThe NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No 
The number of shares outstanding of the registrant’s Common Stock, $0.0001 par value, as of July 29, 2022 was 78,108,185.

1


ALIGN TECHNOLOGY, INC.
TABLE OF CONTENTS
 
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Invisalign, Align, the Invisalign logo, ClinCheck, Made to Move, Invisalign Assist, Invisalign Teen, Invisalign Go, Vivera, SmartForce, SmartTrack, SmartStage, SmileView, iTero, iTero Element, Orthocad, iCast, iRecord and exocad, among others, are trademarks and/or service marks of Align Technology, Inc. or one of its subsidiaries or affiliated companies and may be registered in the United States and/or other countries.
2

PART I—FINANCIAL INFORMATION

Item 1.        Financial Statements.

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net revenues$969,553 $1,010,808 $1,942,772 $1,905,579 
Cost of net revenues281,994 252,270 545,867 469,943 
Gross profit687,559 758,538 1,396,905 1,435,636 
Operating expenses:
Selling, general and administrative426,398 431,921 865,855 829,036 
Research and development72,965 57,715 144,772 112,252 
Total operating expenses499,363 489,636 1,010,627 941,288 
Income from operations188,196 268,902 386,278 494,348 
Interest income and other income (expense), net:
Interest income245 383 922 2,026 
Other income (expense), net(14,832)(483)(26,105)34,049 
      Total interest income and other income (expense), net(14,587)(100)(25,183)36,075 
Net income before provision for income taxes173,609 268,802 361,095 530,423 
Provision for income taxes60,809 69,088 113,997 130,333 
Net income$112,800 $199,714 $247,098 $400,090 
Net income per share:
Basic
$1.44 $2.53 $3.15 $5.06 
Diluted
$1.44 $2.51 $3.13 $5.02 
Shares used in computing net income per share:
Basic
78,395 79,008 78,568 79,004 
Diluted
78,545 79,638 78,840 79,737 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net income$112,800 $199,714 $247,098 $400,090 
Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax(13,756)586 (21,067)(13,865)
Change in unrealized gains (losses) on investments, net of tax(301) (3,029)(20)
Other comprehensive income (loss)(14,057)586 (24,096)(13,885)
Comprehensive income$98,743 $200,300 $223,002 $386,205 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
June 30,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$877,501 $1,099,370 
Marketable securities, short-term22,138 71,972 
Accounts receivable, net of allowance for doubtful accounts of $9,520 and $9,245, respectively
931,854 897,198 
Inventories310,046 230,230 
Prepaid expenses and other current assets235,265 195,305 
Total current assets2,376,804 2,494,075 
Marketable securities, long-term77,551 125,320 
Property, plant and equipment, net1,182,444 1,081,926 
Operating lease right-of-use assets, net117,912 121,257 
Goodwill390,100 418,547 
Intangible assets, net93,817 109,709 
Deferred tax assets1,518,648 1,533,767 
Other assets52,843 57,509 
Total assets$5,810,119 $5,942,110 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$145,607 $163,886 
Accrued liabilities416,459 607,315 
Deferred revenues1,242,348 1,152,870 
Total current liabilities1,804,414 1,924,071 
Income tax payable116,414 118,072 
Operating lease liabilities98,332 102,656 
Other long-term liabilities191,878 174,597 
Total liabilities2,211,038 2,319,396 
Commitments and contingencies (Notes 6 and 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; none issued)
  
Common stock, $0.0001 par value (200,000 shares authorized; 78,059 and 78,710 issued and outstanding, respectively)
8 8 
Additional paid-in capital1,016,882 999,006 
Accumulated other comprehensive income (loss), net(19,770)4,326 
Retained earnings2,601,961 2,619,374 
Total stockholders’ equity3,599,081 3,622,714 
Total liabilities and stockholders’ equity$5,810,119 $5,942,110 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Three Months Ended June 30, 2022SharesAmount
Balance as of March 31, 202278,805 $8 $992,287 $(5,713)$2,680,270 $3,666,852 
Net income— — — — 112,800 112,800 
Net change in unrealized gains (losses) from investments— — — (301)— (301)
Net change in foreign currency translation adjustment— — — (13,756)— (13,756)
Issuance of common stock relating to employee equity compensation plans11 — — — —  
Tax withholdings related to net share settlements of equity awards— — (654)— — (654)
Common stock repurchased and retired(757)— (8,891)— (191,109)(200,000)
Stock-based compensation— — 34,140 — — 34,140 
Balance as of June 30, 202278,059 $8 $1,016,882 $(19,770)$2,601,961 $3,599,081 


Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Six Months Ended June 30, 2022SharesAmount
Balance as of December 31, 202178,710 $8 $999,006 $4,326 $2,619,374 $3,622,714 
Net income— — — — 247,098 247,098 
Net change in unrealized gains (losses) from investments— — — (3,029)— (3,029)
Net change in foreign currency translation adjustment— — — (21,067)— (21,067)
Issuance of common stock relating to employee equity compensation plans250 — 14,827 — — 14,827 
Tax withholdings related to net share settlements of equity awards— — (52,187)— — (52,187)
Common stock repurchased and retired(901)— (10,525)— (264,511)(275,036)
Stock-based compensation— — 65,761 — — 65,761 
Balance as of June 30, 202278,059 $8 $1,016,882 $(19,770)$2,601,961 $3,599,081 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.













6

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)
(in thousands)
(unaudited)

Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Three Months Ended June 30, 2021SharesAmount
Balance as of March 31, 202179,136 $8 $948,362 $29,030 $2,416,176 $3,393,576 
Net income— — — — 199,714 199,714 
Net change in foreign currency translation adjustment— — — 586 — 586 
Issuance of common stock relating to employee equity compensation plans89 — — — —  
Tax withholdings related to net share settlements of equity awards— — (38,321)— — (38,321)
Common stock repurchased and retired(277)— (3,065)— (156,935)(160,000)
Equity forward contract related to
accelerated stock repurchase
— — (40,000)— — (40,000)
Stock-based compensation— — 28,855— — 28,855 
Balance as of June 30, 202178,948 $8 $895,831 $29,616 $2,458,955 $3,384,410 



Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss), NetRetained EarningsTotal
Six Months Ended June 30, 2021SharesAmount
Balance as of December 31, 202078,860 $8 $974,556 $43,501 $2,215,800 $3,233,865 
Net income— — — — 400,090 400,090 
Net change in unrealized gains (losses) from investments— — (20)— (20)
Net change in foreign currency translation adjustment— — — (13,865)— (13,865)
Issuance of common stock relating to employee equity compensation plans365 — 13,133 — — 13,133 
Tax withholdings related to net share settlements of equity awards— — (104,889)— — (104,889)
Common stock repurchased and retired(277)— (3,065)— (156,935)(160,000)
Equity forward contract related to
accelerated stock repurchase
— — (40,000)— — (40,000)
Stock-based compensation— — 56,096— — 56,096 
Balance as of June 30, 202178,948 $8 $895,831 $29,616 $2,458,955 $3,384,410 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

ALIGN TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 Six Months Ended
June 30,
 20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $247,098 $400,090 
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred taxes14,747 39,961 
Depreciation and amortization59,907 51,527 
Stock-based compensation65,761 56,096 
Non-cash operating lease cost15,075 12,413 
Arbitration award gain (43,403)
Other non-cash operating activities16,172 13,174 
Changes in assets and liabilities:
Accounts receivable(53,462)(164,822)
Inventories(91,060)(49,070)
Prepaid expenses and other assets(14,219)(70,132)
Accounts payable(23,944)(5,736)
Accrued and other long-term liabilities(212,896)65,650 
Long-term income tax payable(1,657)7,535 
Deferred revenues136,021 231,408 
Net cash provided by operating activities
157,543 544,691 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment(163,348)(167,668)
Purchase of marketable securities(20,466) 
Proceeds from maturities of marketable securities21,690  
Proceeds from sales of marketable securities92,235  
Repayment on unsecured promissory note 4,594 
Proceeds from arbitration award 43,403 
Other investing activities(2,189)(4,249)
Net cash used in investing activities(72,078)(123,920)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock14,827 13,133 
Common stock repurchases(275,036)(160,000)
Payments for equity forward contracts related to accelerated share repurchase agreements (40,000)
Payroll taxes paid upon the vesting of equity awards(52,187)(104,889)
Net cash used in financing activities(312,396)(291,756)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash4,978 (3,511)
Net (decrease) increase in cash, cash equivalents, and restricted cash(221,953)125,504 
Cash, cash equivalents, and restricted cash at beginning of the period1,100,139 961,474 
Cash, cash equivalents, and restricted cash at end of the period$878,186 $1,086,978 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8

ALIGN TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by Align Technology, Inc. (“we”, “our”, "Company", or “Align”) on a consistent basis with the audited Consolidated Financial Statements for the year ended December 31, 2021, and contains all adjustments, including normal recurring adjustments, necessary to state fairly state the information set forth herein. The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosures necessary to present the unaudited Condensed Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“U.S.”).

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any other future period, and we make no representations related thereto. 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the U.S. requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, useful lives of intangible assets and property and equipment, long-lived assets and goodwill, income taxes, contingent liabilities, the fair values of financial instruments, stock-based compensation and the valuation of investments in privately held companies among others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Certain Risks and Uncertainties

The military conflict between Russia and Ukraine and its impact on the economy has caused significant worldwide challenges. While the situation is highly uncertain and evolving, its impact on the economy, including inflation, volatilities in the financial market, supply chain challenges, impacts on consumer confidence, purchasing power, sanctions and retaliatory sanctions among others, have impacted and could potentially subject our business to materially adverse consequences should any portion of its impacts become prolonged or escalate beyond its current scope.

Further, as the COVID-19 pandemic continues and new variants of the virus emerge, we are continuing to see fluctuations in the numbers of patients seeking treatment for dental services and the number of doctors providing services and treatments globally. The full extent to which the pandemic, including as a result of any new variants, business restrictions or lockdowns, and the impact of vaccinations, will directly or indirectly impact our business, results of operations, cash flows, and financial condition will depend on future developments that are highly uncertain and cannot be accurately determined. Additionally, we could also be materially adversely affected by uncertain or reduced demand, labor shortages, delays in collection of outstanding receivables and the impact of any initiatives or programs that we may undertake to address financial and operational challenges faced by our customers.

Revenue Recognition

Our revenues are derived primarily from the sale of aligners, scanners, and services from our Clear Aligner and Systems and Services segments. We enter into sales contracts that may consist of multiple distinct performance obligations where certain performance obligations of the sales contract are not delivered in one reporting period. We measure and allocate revenues according to ASC 606-10, “Revenues from Contracts with Customers.”

We identify a performance obligation as distinct if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract.
9

Determining the standalone selling price (“SSP”) in order to allocate consideration from the contract to the individual performance obligations is the result of various factors, such as changing trends and market conditions, historical prices, costs, and gross margins. While changes in the allocation of the SSP between performance obligations will not affect the amount of total revenues recognized for a particular contract, any material changes could impact the timing of revenue recognition, which would have a material effect on our financial position and result of operations. This is because the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

Clear Aligner

We enter into contracts (“treatment plan(s)”) that involve multiple future performance obligations. Invisalign Comprehensive, Invisalign First, Invisalign Moderate, and Lite and Express Packages include optional additional aligners at no charge for a certain period of time ranging from six months to five years after initial shipment, and Invisalign Go and Invisalign Go Plus includes optional additional aligners at no charge for a period of up to two years after initial shipment.

Our treatment plans comprise the following performance obligations that also represent distinct deliverables: initial aligners, the option of additional aligners, case refinement, and replacement aligners. We take the practical expedient to consider shipping and handling costs as activities to fulfill the performance obligation. We allocate revenues for each treatment plan based on each unit’s SSP. Management considers a variety of factors such as same or similar product historical sales, costs, and gross margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation in making these estimates. In addition to historical data, we take into consideration changing trends and market conditions. For treatment plans with multiple future performance obligations, we also consider usage rates, which is the number of times a customer is expected to order additional aligners. Our process for estimating usage rates requires significant judgment and evaluation of inputs, including historical usage data by region, country and channel. We recognize the revenues upon shipment, as the customers obtain physical possession, and we have enforceable rights to payment. As we collect most consideration upfront, we consider whether a significant financing component exists; however, as the delivery of the performance obligations are at the customer’s discretion, we conclude that no significant financing component exists.

Systems and Services

We sell intraoral scanners and CAD/CAM services through both our direct sales force and distribution partners. The intraoral scanner sales price includes one year of warranty and unlimited scanning services. The customer may also select, for additional fees, extended warranty and unlimited scanning services for periods beyond the initial year. When intraoral scanners are sold with an unlimited scanning service agreement and/or extended warranty, we allocate revenues based on the respective SSP of the scanner and the subscription service. We estimate the SSP of each element, taking into account factors such as same or similar historical prices and discounting strategies. Revenues are then recognized over time as the monthly services are rendered and upon shipment of the scanner, as that is when we deem the customer to have obtained control. CAD/CAM services, where sold separately, include the initial software license and maintenance and support. We allocate revenues based upon the respective SSPs of the software license and the maintenance and support. We estimate the SSP of each element using data such as historical prices. Revenues related to the software license are recognized upfront and revenues related to the maintenance and support are recognized over time. For both scanner and service sales, most consideration is collected upfront and in cases where there are payment plans, consideration is collected within one year and, therefore, there are no significant financing components.

Recent Accounting Pronouncements Not Yet Effective

We continue to monitor new accounting pronouncements issued by the Financial Accounting Standards Board and do not believe any of the recently issued accounting pronouncements will have a material impact on our consolidated financial statements or related disclosures.

10

Note 2. Financial Instruments

Cash, Cash Equivalents and Marketable Securities

The following tables summarize our cash and cash equivalents, and marketable securities on our Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (in thousands):
Reported as:
June 30, 2022Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair ValueCash and Cash EquivalentsMarketable securities, short-termMarketable securities, long-term
Cash$758,365 $— $— $758,365 $758,365 $— $— 
Money market funds119,148 — (12)119,136 119,136 — — 
Corporate bonds70,808  (2,812)67,996 — 8,488 59,508 
U.S. government treasury bonds
18,609  (495)18,114 — 6,490 11,624 
Asset-backed securities7,042  (59)6,983 — 3,113 3,870 
Municipal bonds5,541  (100)5,441 — 4,047 1,394 
U.S. government agency bonds1,201  (46)1,155 — — 1,155 
Total$980,714 $ $(3,524)$977,190 $877,501 $22,138 $77,551 

Reported as:
December 31, 2021Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair ValueCash and Cash EquivalentsMarketable securities, short-termMarketable securities, long-term
Cash$754,802 $— $— $754,802 $754,802 $— $— 
Money market funds343,012 — (2)343,010 343,010 — — 
Corporate bonds115,507 9 (398)115,118 1,042 35,065 79,011 
U.S. government treasury bonds
42,976  (48)42,928 — 22,251 20,677 
Asset-backed securities32,031  (40)31,991 — 10,999 20,992 
Municipal bonds7,628  (15)7,613 516 3,657 3,440 
U.S. government agency bonds1,201  (1)1,200 — — 1,200 
Total$1,297,157 $9 $(504)$1,296,662 $1,099,370 $71,972 $125,320 

The following table summarizes the fair value of our available-for-sale marketable securities classified by contractual maturity as of June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022December 31, 2021
Due in 1 year or less $17,185 $59,737 
Due in 1 year through 5 years82,504 139,113 
Total$99,689 $198,850 

The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. Our unrealized losses as of June 30, 2022 and December 31, 2021 are primarily due to changes in interest rates and credit spreads.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

11

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. We obtain fair values for our Level 2 investments. Our custody bank and asset managers independently use professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

The following tables summarize our financial assets measured at fair value as of June 30, 2022 and December 31, 2021 (in thousands):
DescriptionBalance as of
June 30, 2022
Level 1

Level 2
Level 3
Cash equivalents:
Money market funds$119,136 $119,136 $ $ 
Short-term investments:
U.S. government treasury bonds6,490 6,490   
Corporate bonds8,488  8,488  
Municipal bonds4,047  4,047  
Asset-backed securities3,113  3,113  
Long-term investments:
U.S. government treasury bonds11,624 11,624   
Corporate bonds59,508  59,508  
Municipal bonds1,394  1,394  
U.S. government agency bonds1,155  1,155  
Asset-backed securities3,870  3,870  
Other assets:
Investments in privately held companies11,793   11,793 
$230,618 $137,250 $81,575 $11,793 

12

DescriptionBalance as of December 31, 2021Level 1Level 2Level 3
Cash equivalents:
Money market funds$343,010 $343,010 $ $ 
Corporate bonds1,042  1,042  
Municipal bonds516  516  
Short-term investments:
U.S. government treasury bonds22,251 22,251   
Corporate bonds35,065  35,065  
Municipal bonds3,657  3,657  
Asset-backed securities10,999  10,999  
Long-term investments:
U.S. government treasury bonds
20,677 20,677   
Corporate bonds79,011  79,011  
Municipal bonds
3,440  3,440  
U.S. government agency bonds
1,200