Align Technology, Inc. ALGN reported first-quarter 2026 non-GAAP earnings of $2.58 per share, which rose 21.1% year over year and beat the Zacks Consensus Estimate by 14.41%. Total revenues of $1.04 billion increased 6.2% from the year-ago quarter and beat the consensus mark by 1.81%.
The results were supported by record Invisalign clear aligner shipments of 685.7 thousand cases, up 6.7% year over year, reflecting double-digit growth in EMEA, APAC and Latin America and continued stability in North America.
Following the earnings announcement yesterday, ALGN shares rose 1.7% in the after-market session.
ALGN’s Clear Aligner Strength Drives Top-Line Growth
Clear Aligner revenues rose 7.4% year over year to $856.0 million, supported by higher volumes and increased average selling prices. Management also attributed the year-over-year increase to favorable foreign exchange, price actions and lower net deferrals, partially offset by higher discounts and a mix shift toward lower-priced countries and products.
Align Technology, Inc. Price, Consensus and EPS Surprise
Align Technology, Inc. price-consensus-eps-surprise-chart | Align Technology, Inc. Quote
On the demand side, shipments to orthodontists and GP dentists increased 7.4% and 5.6% year over year, respectively. By patient cohort, Invisalign adult shipments increased 7.8% year over year, while teen and kid patients increased 4.8%, helped by continued adoption of Invisalign First, the Invisalign Palatal Expander and mandibular advancement with occlusal blocks.
Align Sees Mixed Scanner Seasonality, Solid Year-Over-Year Gain
Imaging Systems and CAD/CAM Services revenues increased 0.9% year over year to $184.1 million. However, the segment declined sequentially as first-quarter capital equipment seasonality weighed on results.
Management also noted that the number of scanners sold to new doctors increased by double digits year over year, and said the installed base of active scanners exceeded 125,000 globally in the quarter. Separately, the company highlighted double-digit year-over-year revenue growth for exocad, reinforcing its strategy to integrate orthodontics and restorative dentistry workflows.
ALGN’s Margins Improve Y/Y, Legal Costs Hit Expenses
First-quarter gross margin expanded 160 basis points (bps) year over year to 70.8%, primarily reflecting operational efficiencies and higher Clear Aligner ASP. The company noted foreign exchange was an unfavorable 0.4-point headwind to gross margin on a year-over-year basis. On a non-GAAP basis, gross margin was 71.8%, also up 160 bps.
Operating expenses increased 8.3% year over year to $594.6 million, driven mainly by legal settlement costs and higher employee compensation. GAAP operating margin improved 20 bps year over year to 13.6%, while non-GAAP operating margin expanded 240 bps to 21.5%, reflecting the benefit of excluding items such as stock-based compensation and legal settlement costs.
ALGN’s Cash Flow Rises, Buybacks Stay in Focus
ALGN ended the quarter with $1.06 billion in cash and cash equivalents, compared with $1.09 billion at the end of 2025. Operating cash flow totaled $151.0 million in the quarter, and free cash flow was $120.3 million after $30.8 million of capital expenditures, which were largely tied to investments in manufacturing capacity and facilities.
On capital return, the company said it completed its prior $200 million repurchase plan between August 2025 and January 2026 and had $800 million remaining under its $1.0 billion authorization as of March 31, 2026. ALGN also announced plans to repurchase up to an additional $200 million of common stock over a six-month period beginning on or about May 1, 2026.
ALGN Reaffirms 2026 View, Sets Q2 Revenue Range
For full-year 2026, Align reaffirmed its outlook for worldwide revenue growth of 3%-4% year over year and Clear Aligner volume growth in the mid-single digits. The Zacks Consensus Estimate for 2026 revenues currently stands at $4.18 billion, projecting 3.5% growth. The company continues to expect GAAP operating margin slightly below 18.0% and a non-GAAP operating margin of about 23.7%, along with capital expenditures of $125 million-$150 million.
For the second quarter of 2026, management expects worldwide revenues of $1.040 billion-$1.060 billion, up about 3%-5% year over year. The Zacks Consensus Estimate for the metric projects 3.8% growth to $1.05 billion. The company expects Clear Aligner volume to increase sequentially and year over year, with Clear Aligner ASP flat both sequentially and year over year, and Systems and Services revenues up sequentially.
Our Take
Align Technology exited the first quarter of 2026 on a solid note, with both earnings and revenues beating the respective estimates. The company posted growth across customer segments and momentum across adult, teen, and growing kid patients. Management also cited continued adoption of iTero Lumina full systems, services revenues and certified pre-owned sales, alongside a mix shift toward lower-priced scanner offerings, including PC-based configurations, leasing and rental units. Expansion of both margins in the quarter is highly promising. However, the seasonality in capital equipment affected the quarter’s Systems and Services revenues.
ALGN’s Zacks Rank and Key Picks
Align Technology currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Globus Medical GMED, Intuitive Surgical ISRG and Phibro Animal Health PAHC.
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2025 adjusted EPS of $1.28, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED has an earnings yield of 4.7% compared to the industry’s negative 1.4% yield. The company beat earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.79%.
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted first-quarter 2026 adjusted EPS of $2.50, exceeding the Zacks Consensus Estimate by 20.2%. Revenues of $2.77 billion topped the Zacks Consensus Estimate by 6.2%.
ISRG has an earnings yield of 2.1% compared to the industry’s negative 0.9% yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.82%.
Phibro Animal Health, carrying a Zacks Rank #2 at present, posted second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million outperformed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.1% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.15%.
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This article originally published on Zacks Investment Research (zacks.com).