Stock Analysis on Net
Stock Analysis on Net

Align Technology Inc. (NASDAQ:ALGN)

$22.49

This company has been moved to the archive! The financial data has not been updated since November 3, 2023.

Common-Size Income Statement
Quarterly Data

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Align Technology Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018 Jun 30, 2018 Mar 31, 2018
Net revenues
Cost of net revenues
Gross profit
Selling, general and administrative
Research and development
Restructuring and other charges
Impairments and other charges (gains), net
Litigation settlement gain
Operating expenses
Income (loss) from operations
Interest income
Other income (expense), net
Interest income and other income (expense), net
Net income (loss) before (provision for) benefit from income taxes
(Provision for) benefit from income taxes
Equity in losses of investee, net of tax
Net income (loss)

Based on: 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).

Cost of Net Revenues
Cost of net revenues as a percentage of net revenues exhibited fluctuations over the periods analyzed. It generally ranged between approximately 24% and 31%, with an unusual spike reaching above 36% during mid-2020, indicating a temporary increase in costs relative to net revenues during that quarter. The latter quarters show a trend toward elevated cost levels close to or exceeding 30%, suggesting some sustained pressure on cost control or changes in cost structure in recent periods.
Gross Profit
Gross profit margins showed a downward trend from just under 75% in early 2018 to levels in the high 60s by the end of the dataset in 2023. Notably, gross profit declined sharply during mid-2020, correlating with the spike in cost of net revenues. There was a brief recovery afterward, but margins consistently decreased from 2022 onward, reflecting increasing cost pressure or pricing challenges impacting profitability at the gross level.
Selling, General and Administrative Expenses (SG&A)
SG&A expenses represented a significant portion of net revenues, generally fluctuating between approximately 42% and 46%. There was an anomalous surge around mid-2020 where SG&A exceeded 70%, indicating potentially one-time expenses or extraordinary charges during that quarter. Excluding this spike, SG&A remained relatively stable but with slight increases noted toward the end of the period analyzed.
Research and Development (R&D)
R&D expenses modestly increased over time, rising from about 6.7% of net revenues in early 2018 to over 9% in the latest quarters. There was a notable jump during mid-2020 coinciding with the SG&A spike, hinting at increased investments or accounting irregularities in that quarter. Overall, the rising R&D proportion may signal continued focus on innovation and product development despite cost pressures.
Operating Expenses and Operating Income
Operating expenses as a percentage of net revenues demonstrated marked volatility with a peak exceeding 84% in mid-2020, reflective of the unusual SG&A and R&D increases. Apart from this outlier, operating expenses mostly ranged between 47% and 56%. Correspondingly, income from operations fluctuated significantly, dropping to negative territory during mid-2020 (-20.72%) but mostly staying positive in the 12% to 26% range otherwise. The data shows recovery following the 2020 dip but with a gradual decline in operating margin from 2022 onward.
Interest Income and Other Income/Expense
Interest income remained relatively low but stable under 1% of net revenues throughout the periods. Other income and expense exhibited more variability, with some negative impacts evident in periods such as early 2018 and mid-2022 to late 2023, suggesting occasional adverse non-operating items. Combined interest and other income/expense showed modest positive or negative swings, generally remaining near zero with a few quarters indicating slight losses or gains.
Net Income Before Taxes and Net Income
Net income before taxes closely followed operating income trends, with a pronounced decline to negative values in mid-2020, matching the operating loss. Another notable anomaly occurred during March 31, 2020, with a reported net income before taxes of 9.68% followed by a massive spike in provision for income taxes, which skewed net income figures dramatically. Net income overall showed considerable volatility with peaks exceeding 20% in most quarters before 2020, a sharp negative in mid-2020, and generally lower and more variable margins thereafter, declining to single-digit percentages by 2023.
Income Tax Provision
The tax provision fluctuated widely, including a strikingly large positive value in March 2020, which is likely related to a tax benefit or adjustment. For most other quarters, the provision ranged between approximately -8% and -4%, exhibiting some variation but no clear trend. The irregularities in tax expense significantly impacted reported net income for certain quarters.
Other Items
Items such as restructuring charges, impairments, and litigation settlements appeared sporadically. Notable are a litigation settlement gain in mid-2019 and impairment charges in late 2018, which affected profitability during those intervals. Restructuring charges emerged only once in early 2023, slightly impacting financial performance in that quarter.
Summary
The overall financial performance reflected several periods of pronounced volatility, especially around mid-2020 which was characterized by elevated costs, increased operating expenses, and an operating loss. Following this, the company demonstrated recovery in gross profit and operating income but with an underlying trend of increasing costs and declining net income margins from 2022 onward. R&D expenses as a part of net revenues have progressively increased, indicating continued investment in innovation. Meanwhile, fluctuations in tax provisions and discrete charges such as impairments and legal settlements intermittently influenced profitability metrics. These patterns suggest a dynamic financial environment with episodic challenges impacting margin stability.