Align Technology, Inc. (NASDAQ:ALGN) Q2 2023 Earnings Call Transcript

Jeffrey Johnson: Thank you.

Joseph Hogan: Thank you, Jeff.

Operator: Thank you. Our next question comes from the line of Jon Block with Stifel. Please go ahead.

Joseph Hogan: Hi, Jon.

Jonathan Block: Good afternoon. Hi, Joe. I’ll start on innovation. And Joe, going into ’23, you called out this year is one of the biggest for Align in terms of innovation when we think about the company’s history. At the end of the prepared remarks, that was really helpful. You laid out a handful of innovations. Where are you with the next wave? And when I say the next wave, any details that you can give with paddle expansion in terms of timing in the U.S., maybe if you can elaborate a little bit on the limited rollout in Canada to date. And is there anything else that we should expect more near term, i.e., maybe next three to 12 months before some of those longer-term aspirations come into play on direct printing? And then I’ll ask my follow-up.

Joseph Hogan: Jon, obviously, the Invisalign Palate Expander has come a long way. You probably get — that we’ve had some four ways into Canada recently and good feedback on our product line. When we look at the investor conference coming up, we’ll obviously give you a much more detailed discussion in the sense of where that product stands, and how we’ll commercialize it. But overall, what I’d tell you, John, we know how to make it. We have a process that makes it. Remember, with our business though, just making it doesn’t mean anything, you’ve got to scale this thing to million. And so that’s what our focus is right now is how we scale, how we roll this out. There’s obviously a lot of regulatory qualifications we have to meet in each area because it’s a new device, too, but I feel good about that.

And Jon, when you look our development, you know this well, you can almost draw a line between the production of product and then the software that we talked about with the software piece. Obviously, IPE represents both of those, right? It’s new software and new kind of treatment planning, but it’s actually a 3D-printed device that we haven’t launched before. So just think about in the scale-up mode, but when we see you on September 6, we’ll have many more details for you.

Jonathan Block: Okay. That’s helpful. And then maybe as my second question, sort of one of those famous two partners. John, to start with you, can you elaborate on the ASP for comprehensive Q-over-Q? I believe you said it was down Q-over-Q, little confused because I think you would have had the full quarter the price increase on the 3×3 and the comprehensive. So if I’ve got that right, maybe if you can tease out why it would have been down Q-over-Q. And then, Joe, the upside for the cases, I’m packing it around 10,000 relative to the implied guide that you gave back for 2Q. I’ve got the U.S. cases essentially in line with our estimate. International seems to have really been the driver of the upside. And maybe to build on Jeff’s question, can you just give some more details where the outperformance was? Was it China? Was it EMEA? Where do you see maybe the better-than-expected results specific to those international regions? Thanks guys.

John Morici: Yes. Just first on the ASP, Jon. Yes, the comprehensive were down slightly, just a reflection of some of the product mix that we had as well as some of the discounts that we have partially offset by price decrease. So nothing out of the ordinary there, we actually saw an increase on a sequential basis for non-comp. But the comprehensive was just more mix.