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Investing.com -- Align Technology Inc. (NASDAQ:ALGN) shares plummeted 35.3% after the dental products maker reported second-quarter earnings that missed analyst expectations and provided weaker-than-expected guidance, citing economic uncertainty and reduced patient traffic.
The maker of Invisalign clear aligners reported adjusted earnings of $2.49 per share, falling short of analyst estimates of $2.57. Revenue came in at $1.01 billion, below the consensus forecast of $1.06 billion and down 1.6% YoY. The company also issued disappointing third-quarter revenue guidance of $965-985 million, well below analyst expectations of $1.04 billion.
Align’s stock suffered its worst single-day decline in years as investors reacted to the company’s mixed results and cautious outlook. CEO Joe Hogan attributed the underperformance to "uneven patient case conversion" and lower-than-expected volumes in Europe and North America.
"As we assessed our Q2 results and the activity in our customers’ offices, we believe it was impacted in part by U.S. tariff turmoil in and outside of the U.S. and less affordable financing options for orthodontic treatment," said Hogan.
Clear Aligner revenues fell 3.3% YoY to $804.6 million, while Imaging Systems and CAD/CAM Services revenues increased 5.6% to $207.8 million. The company’s operating margin on a non-GAAP basis was 21.3%, down 1.0 percentage point from the year-ago period.
In response to the challenging environment, Align announced plans to streamline operations, including workforce reductions and manufacturing optimization. These actions are expected to incur one-time charges of $150-170 million in the second half of 2025.
For the full fiscal year 2025, Align expects Clear Aligner volume growth in the low-single digits with revenue growth flat to slightly up from 2024. The company anticipates a non-GAAP operating margin slightly above 22.5%.
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