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

Joseph Hogan: Jon, back to me is — yes, you’re right. I mean, when you look at from a regional standpoint, EMEA and APAC stood out. Really across the board in EMEA, I mean like I mentioned in my script, had Iberia did well. U.K. did well. The Nordic side, we just introduced DSP and different things. We’re excited about those areas, too. So — and then the teen growth there overall across those geographies was good. So I mean, it’s just — I think just good strong performance. And then when you think about the EMEA economy, too, Jon, I mean last year there was a lot of uncertainty with the Ukraine situation that hasn’t gotten any better, but Europeans and the European countries, I think have solidified their economies around that.

And just we’re seeing some improvement from a consumer sentiment standpoint, too. So that’s reflected in our numbers also. On APAC, obviously, China was good year-on-year. Japan actually was very strong for us, too, along with Korea, in different parts of Asia, as I mentioned. So it’s still broadly really good improvements in both of those regions by country and also specifically in that teen segment that I mentioned. So we’re seeing good improvement Jon, from a sequential standpoint.

Shirley Stacy: Next question please.

Operator: Our next question comes from the line of Nathan Rich with Goldman Sachs. Please go ahead.

Nathan Rich: Great, good afternoon. Thanks for the questions. Hey Joe, hey John. I guess, could you maybe just talk about how adult cases performed relative to your expectations, improved slightly, but I think still down a little bit year-over-year. And how are you thinking about the biggest swing factors that could impact revenue in the back half. Does the guidance kind of just reflect a continuation of the environment that you saw in 2Q? And is there any kind of part of the business that you’re watching specifically, either teen versus adult or certain markets that you feel are especially big swing factors in the back half?

John Morici: Yes, I’ll take that one, Nate. This is John. When you look at the commentary that we gave, we saw improving trends as we went into the second quarter. We see that in the results. And our guidance reflects that. It shows up in Q3, and it also gives us the confidence to talk to a guide for the total year. So that’s how we’ve kind of factored things in and looking at the normal metrics in indices that help us with that. As far as adult versus teen, as we said, teen season now. We saw good results in Q2, and we expect that to continue in Q3. As we’ve said, China is a big market, U.S. big market in Q3, and we expect that to continue. And adults important for us, too. We have a lot of capabilities to be able to go to those general dentists and try to work where those adults might be wanting to come into treatment and be able to help provide for them as well as our orthodontists.

So we feel good about the efforts that we have to try to improve both teen and adult as we go through this year.

Nathan Rich: Okay, great. And then just a clarification on the touch-up cases. So — it sounds like that’s pressuring the North America ortho utilization metric. But if you back that out, or kind of include touch up, it would have been up year-over-year. I’d just be curious to get your sense of what portion of those 18,000 touch-up cases would have been cases kind of in your view in the past prior to DSP just so we get a sense of what that shift might look like?