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A month has gone by since the last earnings report for Align Technology (ALGN). Shares have lost about 21.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Align Technology due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
ALGN Q4 Earnings Top Estimates, Revenues Miss
Align Technology delivered fourth-quarter 2024 adjusted earnings per share (EPS) of $2.44, up 0.8% from the year-ago level. The reported figure topped the Zacks Consensus Estimate by 0.4%.
GAAP EPS for the quarter was $1.39, reflecting a decline of 15.2% from $1.64 in the comparable period of 2023.
Full-year adjusted EPS was $9.33, reflecting an 8.4% increase from the 2023 level. The figure surpassed the Zacks Consensus Estimate by 0.1%.
ALGN’s Q4 Revenues
The top line increased 4% year over year to $995.2 million but missed the Zacks Consensus Estimate by 0.2%. Revenues were favorably impacted by foreign exchange of approximately $0.9 million.
Full-year revenues totaled $4.00 billion, up 3.5% from the 2023 level. The figure was in line with the Zacks Consensus Estimate.
ALGN’s Segments in Detail
The company has two reportable segments — Clear Aligner, and Imaging Systems and CAD/CAM Services (Systems and Services).
Revenues in the Clear Aligner segment rose 1.6% year over year to $794.3 million.
Clear Aligner revenues had a 0.1% unfavorable foreign exchange impact.
Revenues from Imaging Systems & CAD/CAM Services rose 14.9% to $200.9 million in the reported quarter. The segment, too, witnessed an unfavorable currency impact of 0.1% year over year.
Margins
Gross profit in the quarter was $696.9 million, up 4.1% year over year. The gross margin expanded 5 basis points (bps) year over year to 70% despite an increase of 3.9% in the cost of net revenues.
SG&A expenses increased 5.6% to $425 million, while R&D expenses rose 15.5% to $94.9 million.
Operating income totaled $177.1 million, down 4.2% year over year. The operating margin contracted 153 bps to 17.8%.
Financial Details of ALGN
The company exited the fourth quarter with cash and cash equivalents of $1.04 billion, compared with $937.4 million at the end of the fourth quarter of 2023.
The cumulative net cash provided by operating activities at the end of 2024 was $738.2 million compared with $785.8 million at the end of 2023.
Stock Repurchase
Currently, $225 million is available for repurchases under ALGN’s $1.0 billion Stock Repurchase Program, authorized in January 2023.