Align Technology reported its Q1 2025 results—showing aligner volume growth and foreign exchange headwinds—and provided updated commentary on potential tariff exposure.

Align Technology reported total revenues of $979.3 million for the first quarter of 2025, down 1.6% sequentially and 1.8% year-over-year. The company noted that foreign exchange rates had a negative impact of approximately $21.4 million compared to the prior quarter and $31.1 million compared to the same quarter last year.

Clear Aligner revenues were $796.8 million, a decrease of 2.5% year-over-year, despite a 6.2% increase in case volume. Clear aligner volume totaled 642.3 thousand cases for the quarter, representing a 2.2% sequential increase and reflecting strength in the APAC, EMEA, and North America regions.

READ MORE: Align Technology Q4 Financial Results, Aligner List Price Increase Announced

Teen and Pediatric Growth

Volume for teens and growing patients was a notable contributor, with 225.8 thousand cases in Q1 2025. This represents a 4.5% increase sequentially and a 13.3% increase year-over-year, driven by continued adoption of Invisalign First.

Imaging and CAD/CAM Business

Revenues for the Imaging Systems and CAD/CAM Services segment were $182.4 million in Q1 2025, reflecting a 1.2% increase compared to the same period in 2024.

Tariff Considerations

Align Technology manufactures clear aligners for the U.S. market in Mexico, with additional operations in Poland and China. Products made in Mexico and imported into the United States are compliant with the United States-Mexico-Canada Agreement (USMCA) and are currently exempt from tariffs under the April 2, 2025 Executive Order. However, the company noted that the U.S.–Mexico tariff environment remains fluid and subject to change. Any new tariffs, if implemented, are expected to apply to the transfer prices of goods shipped from Mexico.

Align’s clear aligners made in China are produced exclusively for the Chinese market and are not exported to the United States. The company stated it does not anticipate significant cost impacts from China’s retaliatory tariffs due to mitigation strategies within its supply chain.

Intraoral scanners are primarily manufactured in Israel and shipped to global markets. The company estimated that the current 10% U.S. tariff on Israeli imports could result in an average monthly cost impact of approximately $1 million, which has been factored into its Q2 and full-year 2025 guidance.

Corporate Milestone

During the quarter, Align reached a significant company milestone with its 20 million Invisalign patient “smilestone.” Joe Hogan, Align Technology president and CEO said in a statement that the company will be commemorating the event with a yearlong global celebration. Activities planned throughout 2025 will highlight the impact of Invisalign treatment on patients and practices around the world.

2025 Financial Outlook

For the second quarter of 2025, Align expects worldwide revenues to range from $1.05 billion to $1.07 billion, representing sequential growth. Clear Aligner volume and average selling prices (ASPs) are both expected to increase, driven by favorable foreign exchange at current rates, though partially offset by a continued product mix shift toward non-comprehensive products with lower list prices. Systems and Services revenues are also projected to grow as the company continues to scale the iTero Lumina™ scanner with restorative software.

Align anticipates higher gross margin and operating margin for Q2 2025. Both GAAP and non-GAAP operating margins are expected to improve sequentially by approximately three points.

For the full fiscal year 2025, Align expects Clear Aligner volume to grow in the mid-single digits year-over-year. However, ASPs are projected to decline due to product mix and expansion in emerging markets. Systems and Services revenue is expected to grow faster than Clear Aligner revenue. Overall year-over-year revenue growth is projected to be in the range of 3.5% to 5.5% at current spot rates.

The company expects its fiscal 2025 GAAP operating margin to be approximately two points higher than in 2024, with a non-GAAP operating margin of approximately 22.5%. Capital expenditures for the year are projected to total between $100 million and $150 million, focused on technology upgrades and manufacturing capacity.

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