While Q1 revenue increased year over year, inflation, war, and the pandemic were blamed for Align Technology’s slightly down quarter compared to the end of 2021.
Align Technology reported financial results for the first quarter of 2022, with $973.2 million in revenue, down 5.6% compared to Q4 2021 and up 8.8% year-over-year.
Clear aligner revenues made up $809.7 million of the total, down 0.7% sequentially and up 7.5% year-over-year. Imaging systems and CAD/CAM services revenues were $163.5 million, down 24.2% sequentially and up 15.6% year-over-year.
Clear aligner volume was down 5.1% in Q1 compared to the end of 2021 and up 0.5% year over year. Clear aligner case volume for teens was down 3.6% sequentially and up 6.0% year-over-year.
First quarter operating income was $198.1 million resulting in an operating margin of 20.4%. Net income was $134.3 million, or $1.70 per diluted share. On a non-GAAP basis, Q1 net income was $168.7 million or $2.13 per diluted share.
“Overall, the first quarter proved to be a tougher than expected operating environment globally and we believe our results primarily reflect three factors: the continued impact of COVID-19 waves in every region, a weaker economic environment, waning consumer confidence driven by increasing inflationary pressures and supply chain disruptions, and the military conflict in Ukraine and fallout across Europe,” said Joe Hogan, Align Technology president and chief executive officer.
About half of Align Technology’s business occurs outside the U.S., and Hogan said unfavorable foreign exchange rates also impacted its revenues, margins, and earnings.
Despite these issues, Hogan said that the company was still well-positioned to take advantage of the global aligner market that potentially includes 500 million people.
“We know that COVID lockdowns, weaker consumer confidence, inflationary pressures, and the Russia/Ukraine conflict have created headwinds, but we remain excited and are committed to realizing the enormous opportunity in front of us to lead the evolution of digital orthodontics and comprehensive dentistry,” said Hogan. “We will continue focusing on the relentless execution of our strategic growth drivers while managing investments in the near term to account for the headwinds and uncertainty, and we remain confident in our long-term revenue growth target of 20-30%.”