Align Technology at UBS Conference: Strategic Growth Amidst Challenges

Align Technology (NASDAQ:ALGN) presented its strategic vision at the UBS Global Healthcare Conference on Tuesday, 11 November 2025. The company highlighted its robust year-over-year performance, driven by innovative product launches and strategic doctor engagement. However, challenges remain, including economic instability and competitive pressures in the clear aligner market.

Key Takeaways

• Align Technology reported improved performance in 9 out of its top 10 markets from Q2 to Q3.
• New products like the palatal expander and mandibular advancement are key growth drivers.
• The company is focusing on converting orthodontic cases from wires and brackets to Invisalign.
• Align aims for 5-15% volume and revenue growth, despite economic challenges.
• The US market offers growth opportunities, particularly in teen adoption and DSOs.

Financial Results

• Broad improvement in top 10 markets was reported for the third quarter.
• Teen growth increased by 8% year-over-year in Q3.

Operational Updates

• Align sold to a record 88,000 doctors, with over 90% using iTero scanners.
• The company is re-engaging doctors through iTero sales and new product offerings.
• New product introductions include the palatal expander and mandibular advancement.
• The Lumina scanner launch is boosting the install base, with rental and leasing options available.

Market and Competition

• Align Technology faces growing competition in the clear aligner market, with competitors often entering at lower price points.
• Despite this, Align maintains premium pricing and focuses on innovation.
• 80% of orthodontic cases globally still use wires and brackets, presenting a conversion opportunity for Invisalign.

Future Outlook

• Align targets 5-15% volume and revenue growth, contingent on economic conditions.
• The company plans to drive conversion through co-marketing and treatment planning services.
• Teen market growth is expected to outpace adult growth due to market opportunities.

Q&A Highlights

• Doctors with multiple scanners drive more cases by scanning every patient.
• Align is enhancing scanner capabilities with diagnostic features to improve patient outcomes.
• The company emphasizes the importance of macroeconomic stability for business growth.

In conclusion, Align Technology continues to focus on innovation and strategic market engagement to drive growth. For more details, please refer to the full transcript below.

Full transcript - UBS Global Healthcare Conference 2025:

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Good afternoon, everybody. I’m Kevin Caliendo, Healthcare IT Distribution Dental Analyst for UBS, and we are very happy and proud to have John Morici, Chief Financial Officer from Align Technology, with us. John, thank you so much for coming down, making it slight.

John Morici, Chief Financial Officer, Align Technology: Of course.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Going cross-country these days is not an easy thing, so we really, really do appreciate it. I do not know if you wanted to make any opening comments or you want to get right into it.

John Morici, Chief Financial Officer, Align Technology: No, right into questions is fine.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Okay, sounds good. The third quarter, you highlighted strong growth in EMEA, APAC, LATAM, in the clear aligner volumes in particular. I really want to unpack that a little bit. Is this being driven? There’s a lot of variables that can drive your growth. It could be new doctors that you’re signing up. It can be utilization going higher. It could be new products that you’ve launched. I think you mentioned all three of those, but can we unpack that a little bit and just sort of understand where it’s coming from more? What are you seeing in the individual markets? Because we do a ton of checks in the United States. We can do some checks in Asia and China. We can do some checks in Europe. Some of these markets, it’s really hard for us to get good KPIs.

Any more detail you can provide would be great.

John Morici, Chief Financial Officer, Align Technology: Yeah, when we look at the second quarter to the third quarter, what we saw and what we highlighted at earnings was of our top 10 markets, 9 out of 10, we actually saw a year-over-year improvement going from the second quarter to the third quarter. Very broad from an improvement standpoint. Only Canada was worse on a year-over-year basis in the third quarter compared to the second quarter. We saw good growth, like you said, outside the U.S. It really continues to grow. We’ve seen good growth in Southeast Asia, even China. We saw good growth in Eastern Europe. Even parts of Europe where we’ve had some challenges actually looked better for us into the third quarter. Places that are like Latin America, India, and other places have been really strong growth for us.

Some of it is a combination of things that we’re doing going to market, and I can touch on that. Other things are the various products. We’ve introduced several new products this year, one of them being the palatal expander and also mandibular advancement with the occlusal blocks. We’re seeing good uptake there, and that’s helping us grow as well. Some of that contributes to the teen growth that we saw, up 8% on a year-over-year basis in the third quarter. It was a broad improvement that we’ve seen. In the U.S., obviously the biggest market, we saw that year-over-year get better. There are still challenges there, and we can get into some of the nuances within the market, but I would say broad improvement and really driven by some of the things that we’re doing from a go-to-market standpoint as well as the new products.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Let’s talk about the go-to-market because I think this is where we, in the past, when you were going to market, you had great line of sight on it. You could always fill in the gaps to hit your targets and the like. Is it different now? Are the go-to-markets smaller? It’s just the law of you guys have been doing this for so long. Talk about the opportunity set there in some of these markets. Again, we’re trying to understand, is the growth coming because you’re creating new demand in places where it was not, or is utilization picking up in the same store basis, or is it, again, these new products that you have not sold before that, hey, this is incremental for us?

John Morici, Chief Financial Officer, Align Technology: That’s a good question, Kevin. It is a combination of some of the things that you talked about. In some cases, it is growing in new markets. You want to sell to more doctors. We sold to the most doctors that we have ever sold to ever at 88,000 doctors. In new markets, it is expanding out whether you are selling to GPs or orthodontists, and that contributes to growth. Sell to a new doctor, get those doctors that you have, whether they are new or existing, to do more cases. That is fueled by some of the new products and other things that we have to be able to drive things. In other places, you have to work with the markets that you have.

The key part that we talked about on the script, and we’re seeing more and more, is kind of that retail doctor versus those doctors that are either part of DSOs or are part of taking more of an active approach. That is a good way to differentiate the marketplace that we see right now with doctors. There are doctors that take an active approach to conversion, and then some of the doctors take more of a passive approach. What’s an active approach? An active approach is doctors that are doing local marketing, trying to drive that initial demand to come to their practices. They scan every patient that comes in to be able to show them what their teeth would look like before treatment and what they look like with after treatment. Those are the same doctors that many times are offered a discount.

They’ll try to say, "Look, if you sign up now and go into treatment, we’ll give you $300, $500 off." Usually that last mile that helps out is providing some type of patient financing. Sometimes they do it internally. Sometimes they use an external. In the end, a potential patient’s going to look at what does it actually cost them on a monthly basis. If you string all that together and have that set up in that type of active approach, they’re seeing stronger conversion. That’s exactly what the dental service organizations are doing. They’re taking that approach to drive that activity. They’re seeing double-digit growth. The doctors that are big doctors that we have that take this approach as well, they’re seeing double-digit growth. The doctors that are maybe more passive, waiting for people to come in, not offering discounts and so on, they struggle.

They don’t grow as fast, or they’ll revert from Invisalign to wires and brackets because then they don’t see as much top-line revenue. They don’t see that volume, and they find ways to cut other costs. They’ll cut some of that Invisalign and push to wires and brackets. It’s really that active conversion that’s driving a difference. We’re seeing that more and more, and we want to continue that. We want to then take it to those doctors who have taken more of a passive approach. They’re not part of a DSO or anything else. They’re retail doctors. Those are the majority of doctors that we have. We take them different ways that they can grow, do some co-marketing and other things to better drive traffic. We’ve come up with different products that maybe you don’t have to pay for as many refinements upfront.

You just want to buy the product, buy the comprehensive. We’re giving them ways that they can buy the products, utilize the products we have, drive some of the local marketing and other initiatives that they have to be able to help them with conversion.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Do you, as Align, have the infrastructure to go after those individual passive doctors? Meaning you can do it. Is there a cost benefit? It’s much easier to get a DSO, and they help you with the process, right? They’re there to grow that way, whereas passive, this group, which might be more independent, as you said. What’s the cost benefit? How do you think about the investment and the time to get them to convert and move up? I never really thought about this until you just mentioned it, but it seems like it’s a different sales pitch to a certain extent because it’s on a one-by-one basis. Do you have the infrastructure in place to do that? Is it harder to do that? What’s the return?

John Morici, Chief Financial Officer, Align Technology: It is. We have the sales team. We have a large sales force with marketing to be able to drive this. It’s a difference in terms of the funnel. The funnel of opportunities, you can market at the high level and drive awareness and hope that somebody goes on Google and searches and then ends up on our website and maybe finds a doctor, schedules an appointment, and then even shows up at the doctor. That’s kind of a passive approach. Or we can leverage the resources that we have, both in people as well as money that we spend, and actually help doctors right at that lower level and start with some of that local marketing and advertising, drive that awareness that’s needed there.

You still want to keep some at the high level to keep your brand and other things, other parts of the business where people are aware of, but you want to get closer to those customers, be able to drive that local traffic, be able to help them. Sometimes these doctors who are starting to do more and more cases, they need help with treatment planning. That is what DSOs are good to work with. They have many times this internal treatment planning service that they provide to their doctors to be able to help them take on more and more cases. We will help that as well. Doing things around the product, around that local marketing, doing things to be able to help drive that conversion, we are seeing that play out.

We’re seeing the proof of that when we see the DSOs in terms of what they’re doing. They’re showing us how to do that. You’re right. The resources that we don’t have to provide, they’re helping provide. We’ll provide, obviously, the product and the digitization of orthodontics and so on. We can help with that. They’re a force multiplier. They’re doing a lot more of that to be able to help drive that conversion, and they’re winning in the marketplace.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: You mentioned the 88,000 docs. It’s an all-time high for the company. We can track in some markets, primarily the United States, the number of registered docs. That’s something that’s publicly accessible that we can scrape, for lack of a better term. I’m guessing internally, you know exactly how many doctors out there are registered that can use your product. How has that trended in terms of the numbers that are actually being sold to versus the number that are registered? I ask this question because we can’t see it. You can. I’m just wondering, again, how expansive can you get in terms of the number of docs? How does that grow versus because I know some of these docs are going to do one case a year, right? They don’t really, I don’t want to say they don’t matter, but they’re not driving your business.

How do you think about that trend? I want to go further.

John Morici, Chief Financial Officer, Align Technology: We had a lot of registered doctors, I guess when you look at it in total, coming out of COVID or kind of during COVID, a lot of doctors wanted to digitize. You’re right. Some doctors will revert back to wires and brackets or nothing. Many doctors just do nothing. They’re general dentists, and they essentially know how to treat with Invisalign, but they just do not do a lot. We’re constantly looking at those. I think when you look at our sales force, we have a sales team that sells to orthos and a sales team that sells to GPs, mostly across the globe. You’re constantly working with these doctors that do a lot of cases, and you reach out to other doctors who do not do a lot of cases.

We’ve been able to reach them and re-engage them through selling iTero, now with Lumina, to help them digitize their ecosystem. We’ve done things with new products that we have to re-engage them, and now they can see some of the latest products that we have that can help their portfolio and their practice there. We’ll do other things to help with local marketing to be able to kind of co-market and say, "Okay, how do we re-engage? How do we get more?" In general, you always have doctors that you’re training initially. They’re new, or they were out of the system for a year, and now they come back in through training. You have some that just fall out, and we call that churn. You have new doctors that will die.

The net is we want to be able to grow more new doctors, of course, but we also want to keep those doctors that are, even if they’re doing one case a year, I still want to keep that one doctor because if you can keep them engaged, especially through the digital ecosystem. Maybe that one doctor or that doctor that does one case a year, maybe they don’t even have a scanner that they’re using. How do we get them a scanner? Can they demo one? Can they rent one? Can they lease one if they don’t want to put much money into it? Or they can maybe use a certified pre-owned. Get them that scanner. They’ll do more than one case with the scanner.

If we can, as they start to grow and really start to scan more and more of their patients and so on with some of the tools that we have, we know that they’ll end up doing more cases. It is a scalable model. We’ve been able to build this infrastructure to do this. We sold to 88,000 doctors, but there are 2 million doctors in the world. The vast majority we do not even sell to or have even trained. We know the equation that works for our business, and it comes down to basics. We have to sell to more doctors and get those doctors to do more cases. It sounds like a no-brainer, but that submitter plus utilization equals our volume, and that is how we grow our business.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: We used to try to figure out scanner placements and then try to project the growth going forward based on the number of scanners placed. How do you guys view that? It’s still obviously a vital part of the business, but how do you model your forward demand or your expectations? Is it still based on the number of docs? Is it based on the number of scanners placed? Is there some kind of algorithm? You’re not going to give me the explicit X plus Y equals Z, but how do we, because it’s such a hard company to try to project, right, given all the KPIs that we don’t have and do. The ones that you give us, scanner placements are always a predictor of future growth. It’s been harder to see that because there’s more moving parts in the revenue line now. How should we?

John Morici, Chief Financial Officer, Align Technology: I mean, when you look at the number of doctors that are available, and then how do we reach those doctors with a scanner? We look at we have over 100,000 scanners in the market. That install base continues to grow, fueled most recently by Lumina and the launch of that product. We want to be able to sell to these doctors and have a scanner that is part of their everyday use that they need. Some will use it for mostly restorative. Great. Let them use restorative. Now we can help teach them to say, "Look, maybe move the teeth first before you do restorative." There is a lot of effort around working with these general dentists to get an everyday scanner in that Lumina can provide.

It can help you with your bread and butter, what you do in crowns and implants and so on, but then also working with those doctors to help them move the teeth first. You do not have to shave off as much healthy dentition. You can save that. It adds a little bit of time in treatment time, but it saves the healthy dentition. It helps that doctor, especially when they show the patient, "Here’s what you could do if you just did restorative, and here’s what you do when you have ortho plus restorative," and they can see the difference. Most patients say, "It’s worth the extra cost. It’s worth a little bit more time to save the healthy teeth and be a part of that." I think when you have that scanner there, it just lends itself to that visibility and the views of that.

So it’s getting those scanners in, getting to sell to as many doctors as we can, and then leveraging the benefits that we can bring with Invisalign treatment with those scanners because we know if they have a scanner compared to if they do a PVS impression, they’re going to do more cases. If we put another scanner in there, it’s like a 4x improvement. They will do significantly more. And you say, "Why?" Because they’re scanning every patient. They’re giving themselves an opportunity to be able to show those potential patients what treatment would look like. And once they have that opportunity, even in a more challenging market, if they couple that visualization with the right price and financing, they’re seeing that conversion. And we just need to get more doctors to see that.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: You answered my follow-up question to a certain extent, but of those 88,000 dentists that you have, how many of them have iTero scanners?

John Morici, Chief Financial Officer, Align Technology: Over 90%.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Over 90%. And the ones that do, I’m guessing versus yours, what’s the utilization for those who have one scanner, two scanners versus ones that don’t?

John Morici, Chief Financial Officer, Align Technology: It’s significantly higher for the more than one scanner. If you have more than one scanner, and some doctors have scanners at every chair that they have, so they have three or four chairs, they’ll have a scanner at each, they will drive more because they’re scanning every patient, helping that patient visualize. There’s a lot of technology that we have. There’s a lot of other diagnostic abilities that we’re putting on that scanner so that you can almost get a score of how your dentition is and some of the wear and other characteristics of how things look in your teeth and being able to be able to drive that score in terms of your dentition health as well as what it means from an Invisalign standpoint. It’s very powerful when it’s combined together, and many doctors, especially on the general dentist side, have that figured out.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Again, this is just something that popped into my head, but does it make sense if somebody has one scanner and they’re starting to do cases that you heavily incentivize a second and third scanner into the practice? Meaning does the math, even if you gave it away, I don’t know what the rate.

John Morici, Chief Financial Officer, Align Technology: We don’t give it away, but there’s rental and leasing and other ways or certified pre-owned, and I think that’s added to our portfolio where we have many different ways. If somebody doesn’t want to buy a brand new scanner, they can get a pre-owned. Or if they don’t want to, they want to see if they’re really going to drive that uptake and they want to rent it from us or they want to lease it, we’ll give them those options. So therefore, not much of an expense on a monthly basis, and they could see if they can get one or two more cases. And pretty much in all cases, we know that they’ll drive incremental volume and they’ll want to keep that scanner. They just need to sometimes see it directly.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: I’m just saying the math from your perspective, I have to think renting a scanner, even if it doesn’t incrementally make you a lot of money, the math for the company probably works really well.

John Morici, Chief Financial Officer, Align Technology: I’ll take that trade all the time because that is one where if that scanner is there, it’s going to lead to more Invisalign. We know that we’ll do that. We want the scanner, the systems and services business to stand on its own. And it is a great standalone business, big business for us, great gross margin. So we’re not giving things away, but we’re really being able to provide those digital solutions to those doctors and not only helps them on the day-to-day, in this case, restorative, but it’s also helping them with the orthodontic side.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: I want to switch over a little bit to pricing. And I know you said before you used the term discounting, which whenever you’ve said it, and I know it’s not you discounting. I want to make that clear to everybody. You were saying that dentists are discounting to drive volume. That doesn’t affect your price because you’re not setting that price. I wanted to.

John Morici, Chief Financial Officer, Align Technology: No, and that’s an important point because when we say we are providing product choices to our doctors, and in some cases, those doctors, those choices might be a lower-priced product. And it’s just because that’s the lower-priced product. There’s not an amount of refinements. There’s no other things that are available, so the pricing is just less, but that gives a doctor the ability to then price how he or she wants to in the marketplace. And in those cases where a doctor is offering a discount to potential patients, that’s part of that driving that active conversion.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Understood. It used to be every year we could count on a price increase from Align. Sometimes it would be in July. You’ve done some in January. It’s not something we talk about a lot anymore. It’s not like a topic of conversation, but there’s a narrative out there that there’s competitive pressures greater on you guys. There’s more competitors. There’s Angel Aligner. There’s ClearCorrect. There’s more. Even though some of the DTC guys are gone, there’s more competition. Do you guys still have the ability to price on the Clear Aligner side, at least? Is that a part of the strategy going forward, or is it your mix is changing and that’s really more important? Just broadly speaking.

John Morici, Chief Financial Officer, Align Technology: I would say it’s a combination. I mean, there are certain markets that they have super high inflation and other things that we’ll price that accordingly: Turkey and other places, Brazil. But on an overall basis, we’ll introduce products that give us a better gross margin rate. So when you have products that they might be at a lower ASP, and in many cases, they are. So when we had our three-in-three, which is a comprehensive product with three years of treatment and three refinements, that was introduced three years ago, and now it’s our biggest selling product that we have. And that’s at a very high gross margin rate, but it’s a lower ASP compared to the comprehensive unlimited that it essentially has replaced. So we’ll introduce products that have a very good gross margin rate to be able to help us from an overall margin standpoint.

We think that drives additional cases. When they see some of these lower-priced products, again, not at a lower gross margin rate, it might be less gross profit dollars, but it is able to drive incremental volume and meet our customers’ needs. We will make those trade-offs. You will see some of that coming through from an overall pricing standpoint. We are still the premium pricing in the marketplace. We see competition coming in on the Clear Aligner side. Every time they come in, it is at lower price. We have seen this play before. You mentioned DTCs. They were maybe the first to kind of come and go, and they have gone. Now you see it in other companies. Most of these Clear Aligner companies that come in, they are not making money. They are losing money on a not-margin basis.

And it’s not a surprise because just the pricing isn’t reflective of what this business entails and what’s needed from an overall business standpoint. But I think what you’ll find from us is introducing products that are relevant to our customers, doing it in a way that is very mindful of our gross margin and our gross margin rate. But ultimately, we want to sell to more and more doctors. We want to increase that utilization, kind of the equation that we talked about. And sometimes to be able to do that, you’re going to sell products that maybe they just need a touch-up case. They need five sets of aligners. That might be a $400 or $500 product. It’s okay. It’s an 80% gross margin for us. It just means that you got to sell others as you go through this.

But to be the standard of care, we have to continue that. And in the end, our focus is it’s less about the share shifting that goes on with other Clear Aligners. This is about the fact that 80% of all worldwide cases are still dealt with wires and brackets. Our focus is to drive and go after that market. I want to shift from wires and brackets to Invisalign, whether you’re on the ortho side or the GP side. And we think that what we’re trying to do from a go-to-market standpoint and technology and products and so on will help lead to that.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Why do you think this narrative appeared a handful of quarters ago, a couple of quarters ago, that wires and brackets were taking share back really for the first time, right? We were all trying to we saw it. There’s some data. You guys even referenced it, I think, at one quarter. And it hurt the sentiment around your stock a lot because it became, "Oh, well, wait a minute. Aligners aren’t growing as fast as wires and brackets. Wait a minute. This whole idea is different." Why do you think that happened? Do you think it’s is it continuing? Are you still seeing this? I mean, I think in the third quarter, you said it sort of went back to reverted back to normal. But you talk about now you’re looking back. Why do you think this happened? And where are we?

And how should we model this going forward if we’re modeling the orthodontic market?

John Morici, Chief Financial Officer, Align Technology: I think when you look at again, it goes back to the passive versus active doctors. I think if you are an active, if you’re actively driving conversion, like the DSOs I was talking about or the bigger doctors we have, they’re not reverting back to wires and brackets. In fact, we’re gaining share. They’re doing less wires and brackets and more Invisalign because they’ve digitized their practice. They know that it’s more efficient. It drives more profit to them, and they’re making that approach. I think it’s more of a commentary on those passive, whether they’re orthodontists or general dentists who maybe aren’t actively trying to convert. And so they have a fixed amount of volume that they’re going to do, fixed amount of revenue that they’re going to have.

Because remember, in the US, most orthodontists, they’ll charge the same for wires and brackets and the same for Invisalign. So there’s no end pricing difference to those patients. So if they’re not growing their practice, they’ll revert. They’ll push them back to wires and brackets and say, "Look, I can save some of that cost, that upfront lab bill, and spend $300 or $400 on wires and bracket material compared to $1,200 for us." So you see that happening. And so I think the more that we can be active, pushing activity on our bigger customers, that activity on other customers that we have and be more active about the conversion, they’re going to see the benefits. They’re going to see what we already see with the DSOs at scale. We’re going to see this at the smaller practices, and I think you’ll see less of that reversion.

And especially as the economy improves or at least it doesn’t get worse, I think you see some of that benefit. Even those passive doctors who didn’t really actively try to drive conversion, coming out of COVID, the water rose. Everybody had more time and money. They spent it. And even those doctors who didn’t do as much activity to drive conversion, they still benefited. When the market is tougher and the economy is tougher, those doctors have to do a little bit more effort to be able to drive that conversion. We want to be partners with them to help drive that. Co-market, come up with the right products that help drive that, do things to help them train and provide treatment planning services, do things to create that active conversion.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: That’s helpful. It sounds to me, if I’m just listening to your tone and trying to read the tone, do you think this is not a permanent shift back? We didn’t have an inflection that we’re going to revert back at some point.

John Morici, Chief Financial Officer, Align Technology: You see some that some teens or parents, maybe they think of it as, "Well, it’s kind of a everybody went through braces or something in the past if they were older," and they say, "Okay, my kids should do that." You see some of that. But I think in the end, when you really explain the benefits, especially to parents, to say your treatment time is faster with Invisalign, there’s half the office visits that you need, no emergencies, better comfort, no white spot lesions, all these other things that you go through. And that parent says, "Well, what’s the downside?" Well, you say, "It’s the same price as wires and brackets." If you really go through all the steps and explain the differences, I think people understand it more.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: The same price as wires and brackets used to not be the case, though, right? I mean.

John Morici, Chief Financial Officer, Align Technology: It used to be. It used to be more. Invisalign used to be more. And in some countries, it still is. Yeah.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: It’s just that that narrative is not the same. I think the perception still for investors and people who don’t have kids is that Invisalign costs more. But you’re telling us it doesn’t. Your price hasn’t changed.

John Morici, Chief Financial Officer, Align Technology: No, and for us, yeah. So when you look at that, and that’s where I think as a potential patient and a parent, it’s just a matter of us educating. And that’s what you’ll see. So you’ll see us educating at the high level in terms of the differences or at least the benefits of Invisalign, but then really taking it down to more of the local level to help drive that conversion.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: One more on the market stuff is that the perception is the U.S. is a mature market that’s, I don’t want to say fully penetrated, but as penetrated as a market’s going to get in terms of digital. The growth there is where you’re struggling incrementally. That’s what’s going to happen globally. Hey, the U.S. is a mature market. This is what the demand will look like once the green shoots that you mentioned a year ago here played out. Is that a fair assessment, or is there something specific happening in the U.S. that’s incrementally worse than what it should be? I know you talked about the retail. All the things you’ve talked about here are really what’s happening in the U.S.

But how do you answer that question of, is the mature market, the US, really what the mature market globally will look like at some point in the future?

John Morici, Chief Financial Officer, Align Technology: The U.S. is certainly more mature than the others. We’ve been around almost 30 years, and the U.S. was kind of the starting point. Certainly a lot of doctors, there’s patients that come through and so on. I think what you find, what we’ve seen in the U.S., especially of late, with the higher inflation and interest rates and so on, is much higher than many other places across the globe. In fact, you’ve had deflation in some cases outside the U.S. I think when we go after the market and with products and capabilities on a go-to-market standpoint to help drive that conversion, we’re going to do everything we can to help drive that.

When we look at the improvements in the economy, which will happen, because you have to remember, to that patient, it’s a high price, not much reimbursement, somewhat discretionary type of product, even for teens. And you have to be active to be able to help drive that conversion. But I think in the US, the market opportunity is there. You might have more patients that have used Invisalign in the US, but I think once they do, I think you’d be hard-pressed to have a teenager go through treatment with Invisalign and then be old enough to have a child and then put them back to wires and brackets. I think once you have that experience and you see it firsthand, even as an adult, you would say, "Well, why couldn’t my child have this?

Tell me why they couldn’t." And usually when you go through the reasons, it’ll come down to, will that child wear their aligners? And if that parent can stay and work with that child to make sure that they’re wearing their aligners, and we find that compliance is super high for children to wear their aligners, whether they’re growing children or older teens, if they’re wearing their aligners, their teeth are going to move. And we’re going to get that result. You’re going to get faster results, and you’re going to get less pain and less visits and other things. So I think the US is a good example of how to grow this market, and I think we can further grow this market. Teens is a big focus. We want to grow teens because there’s a huge market opportunity. And that market opportunity leads to faster growth.

Almost every quarter, you’ll see us teens post a faster growth than adults because of that opportunity. But we think, especially with the new products and what we’re trying to go to market, even in the US, we can grow. And we’re seeing it right now. You see DSOs growing double digits. Some DSOs are in the 20% year over year.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: We’ve talked to those guys.

John Morici, Chief Financial Officer, Align Technology: So they’re able to do it. It’s just how active you want to be to be able to drive that conversion.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Fair enough. I got a couple of quick hitters in our last couple of minutes. Just some clarifying numbers questions. The benefit to ASP from the U.K. VAT issue, the VAT issue, your pricing went up, I think, roughly 20% in August, right? So did you see two months of benefit in the third quarter? So we get one month of benefit in the.

John Morici, Chief Financial Officer, Align Technology: You will get a full quarter of benefit in the fourth quarter, and we got about two-thirds of the benefit in the third quarter.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Okay. I just wanted to make sure we had that right. How did some of the products that you launched in teen, you mentioned them before, Mandibular, the palate expander, how did those track versus your expectations? How should we think about that impacting growth going forward? You’ve had some experience now.

John Morici, Chief Financial Officer, Align Technology: Yeah. It adds to our portfolio. So when you think about trying to grow, especially growing patients, many of the new products that we have really get at helping a six-year-old, seven-year-old, eight-year-old who needs her upper palate expanded for those new teeth coming in, permanent teeth coming in. So those products are helping doctors be able to treat in a different way, a way that helps that child’s dentition. Mandibular Advancement with occlusal blocks where some doctors just didn’t like the wings that we had on Mandibular Advancement, but with these blocks, they’re seeing the actual jaw advancement that they need. So I think these products are really designed to fill out the portfolio of products that the doctor needs. That’s why when we introduce products that have shorter treatment times, like this three-year, three AA, or not having unlimited refinements, they don’t need unlimited refinements.

You don’t need to have a child in treatment for five years with unlimited refinements and coming back and forth to get scanned and so on. I think the qualities that we put into our products, whether they’re new products or helping develop improvements to our existing products, are allowing doctors to treat patients faster, more predictable, better results, and adding to the portfolio has given us that opportunity.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: This one’s not an easy one to answer, but I think one thing that’s made investors a little weary is that you’ve said publicly your own visibility into the business is harder now than it used to be. You don’t have as much. It’s not as easy for you to forecast. I understand that. You have a lot more doctors, a lot more markets. The market is more macro than maybe it has been before. How do you get better? When does things crystallize for you such that you can be more confident, more convicted in an outlook? Come February, are you going to be able to tell us we’ve had visibility for six months or nine months, a year, whatever it might be? In the past, maybe it was easier to grow and you had more flexibility around that growth.

Is there something that you need to see and understand to get that? Because I think that’s the one thing that would help a lot of the people here.

John Morici, Chief Financial Officer, Align Technology: No, I think having stability, we talk a lot about what we’re growing off of. Having macro stability certainly helps. And when we had that prior to COVID or even coming right out of COVID, there was more stability. And then you get into some of the economic pressures, inflation, interest rates, and so on, or even tariffs and some of the others. That creates instability, and it becomes more of a challenge because we’re a flow business. We’re a real-time customized product that comes through. And the majority of the patients that our doctors see, they start and finish within the quarter. They start treatment or they get scanned, and then they go into treatment in that quarter, and they weren’t a backlog or anything else from before. But I think for us, it starts with doing what we’re doing on a local market standpoint.

Not every market’s the same. So we’re seeing some that are growing more and more. I think working with GPs and getting them as part of the practice that they have, working more with DSOs because they provide some of that stability. 25% or so of our business is through DSOs nowadays. So doing things to be able to drive some of that stability that we can control, whether it’s new products, selling to more doctors, doing that local marketing and advertising and other things to be able to stimulate demand and ultimately convert that, working with our DSOs and big customers. There’s always going to be some of that retail piece of it that doctors, they might do one or two cases, and does that happen within the quarter or not? It starts to add up.

But there’s a lot that we can do in this marketplace to be able to drive growth into this 5 to 15% volume and revenue growth that we’re trying to be at. If the economy improves a bit in certain places, especially the US, that just will determine how fast or how far into that 5 to 15% we’ll be.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Yeah. Sir, thank you so much. This is super helpful.

John Morici, Chief Financial Officer, Align Technology: Of course. Great. Thank you.

Kevin Caliendo, Healthcare IT Distribution Dental Analyst, UBS: Thank you.

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