What the changes say
- Align Technology faces heightened competitive, economic, and digital transformation pressures affecting Invisalign and iTero scanner sales.
What changed since the prior 10-K
New
- NewMacroeconomic and External Risks
Global and regional economic conditions have and could in the future materially affect our business, financial condition and results of operations
Macroeconomic weakness and inflation can reduce consumer discretionary spending on elective dental procedures and cause doctors to revert to traditional wires and brackets.
- NewMacroeconomic and External Risks
We are subject to foreign currency exchange fluctuations, which could have a material adverse effect on our financial condition or results of operations
Significant international operations expose revenues and expenses to foreign currency exchange fluctuations despite hedging contracts.
- NewMacroeconomic and External Risks
Geopolitical events, tariffs and trade policies, and military conflicts have and could in the future materially affect our business, financial condition and results of operations
Geopolitical events, military conflicts, and trade policies can disrupt international commerce, manufacturing facilities, and supply chains.
- NewMacroeconomic and External Risks
Natural disasters may adversely impact our business, financial condition and results of operations, as well as those of our customers and consumers, suppliers, contract manufacturers, commercial intermediaries and other business partners
Natural disasters and climate change can damage facilities, disrupt supply chains, and compromise the manufacturing and shipping of Invisalign systems.
- NewBusiness and Industry Risks
Competition in the markets for our products and services is increasing
Rapid digital transformation and competitors incorporating AI could render current products obsolete.
- NewBusiness and Industry Risks
financial resources to develop or acquire new AI technologies and systems in the future and sufficiently meet evolving industry trends and consumer demands
Competition from traditional wires and brackets, new clear aligner market entrants, direct-to-consumer companies, and DSOs can cause price pressure and commoditization.
- NewBusiness and Industry Risks
Our success depends on our ability to quickly and profitably develop, manufacture, market, and obtain and maintain regulatory approvals or clearances of new, improved or refurbished products and services
Success depends on cost-effectively developing and obtaining regulatory approvals or clearances for new products like Invisalign and iTero scanners from agencies such as the FDA.
- NewBusiness and Industry Risks
We may not realize the anticipated benefits of acquisitions, investments or other strategic transactions, and they may require significant management attention, disrupt our business, dilute stockholder value or adversely affect our business, financial condition and results of operations
Acquisitions and investments may fail to achieve desired synergies or bring unexpected liabilities and litigation.
- NewOperational Risks
Our results of operations may be adversely affected if doctors at DSOs, orthodontic service organizations (“OSOs”) or other large group practices reduce, delay, or do not increase their purchasing of our products and services in ways that reduce adoption of our products and services
Consolidation through DSOs and large group practices increases pricing pressure and volume-based discounts that can reduce average selling prices and gross margins.
- NewOperational Risks
We are subject to operating risks, including excess or constrained capacity, operational inefficiencies and pressure on our internal systems, personnel and suppliers, including as a result of our past and any future restructuring efforts, which could adversely affect our results of operations
Production of the Invisalign System and iTero intraoral scanners could be limited by capacity constraints, labor shortages, and third-party vendor dependencies.
- NewOperational Risks
Security breaches, data breaches, cybersecurity attacks, or other cybersecurity incidents could materially adversely impact our operations and patient care, and our reputation, business, financial condition and results of operations could be harmed
Cybersecurity incidents targeting Align or its third-party vendors and small healthcare provider customers could disrupt operations and compromise patient data.
- NewOperational Risks
reputation harmed, any of which could materially affect our business, financial condition and results of operations. The harm of negative publicity, particularly on social media platforms, may be immediate, without affording us an opportunity for redress or correction
Marketing restrictions on medical devices and changes to mobile operating systems like Android and iOS can degrade ad targeting and increase customer acquisition costs.
- NewLegal, Regulatory and Compliance Risks
We are subject to various laws relating to privacy, data protection, data governance and cybersecurity, and face risks related to the data we collect, process, and share
Dropped
- DroppedMacroeconomic and External Risks
rates have and could in the future reduce consumers’ disposable income, which could cause a decrease in discretionary spending for our products
Inflation reduces consumers' disposable income and discretionary spending.
- DroppedMacroeconomic and External Risks
Our business, financial condition and results of operations could be impacted by geopolitical events, tariffs, trade and international disputes, wars, military actions and terrorism, or major public health crises
Geopolitical events, tariffs, and trade disputes impact business.
- DroppedBusiness and Industry Risks
Our success depends on our ability to successfully develop, introduce, achieve market acceptance of, and manage new or improved products and services
- DroppedBusiness and Industry Risks
We may invest in or acquire other businesses, products, technologies or other assets which may require significant management attention, disrupt our business, dilute stockholder value or adversely affect our business, financial condition and results of operations
- DroppedOperational Risks
We are subject to operating risks, including excess or constrained capacity and operational inefficiencies, which could adversely affect our results of operations
Success depends on developing and managing new products and services.
- DroppedLegal, Regulatory and Compliance Risks
criminal prosecution. Delays or failures to obtain or maintain regulatory approvals, clearances or to comply with regulatory requirements may materially adversely affect our domestic or international operations, and adversely impact our business
Business investments and acquisitions may require significant management attention.
Reworded
- 78% rewrittenOperational Risks
If we cannot attract, motivate, train or retain personnel, it will be difficult to achieve our strategic priorities, which could materially adversely affect our business, financial condition and results of operations
Expanded to explicitly warn that losing executive management, research and development, or sales personnel will impede strategic objectives amid intense industry digital transformation.
Was: Our success depends on our personnel. If we cannot attract, motivate, train or retain personnel, it will be difficult to achieve our strategic priorities, which could materially adversely affect our business, financial condition and results of operations
- 75% rewrittenOperational Risks
We depend on our marketing activities to deepen our market penetration and raise awareness of our brands, products, and services, which may prove unsuccessful or may become less effective or more costly to maintain in the long term
Added specific risks regarding competition from a growing number of competitor advertising campaigns and maintaining appeal among teen and adult markets.
- 71% rewrittenLegal, Regulatory and Compliance Risks
We are subject to antitrust and competition regulations, litigation and enforcement that may result in fines, penalties, restrictions on our business practices, and product, services or operational changes which could materially impact our business, financial condition and results of operations
Clarified that antitrust investigations and regulations could result in fines, foregone mergers or acquisitions, and limits on customer benefits.
- 69% rewrittenLegal, Regulatory and Compliance Risks
AI and machine learning technologies in our products, services and IT systems may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business
Added specific risks that flawed AI algorithms or biased training data could lead to false information, competitive harm, and regulatory penalties.
Was: We have been incorporating and continue to work to further incorporate AI technologies into our products, services and IT systems. Implementation of AI and machine learning technologies may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business
- 66% rewrittenBusiness and Industry Risks
Our net revenues are primarily dependent on sales of the Invisalign System and iTero intraoral scanners. Of the two, we expect the Invisalign System to continue to represent the majority of our net revenues and remain critical to our success
Added inflation, promotions, discounts, and customer rebate programs as factors directly impacting average selling prices for Invisalign and iTero scanners.
Was: Our net revenues are primarily dependent on sales of the Invisalign System and iTero intraoral scanners. Of the two, we expect the Invisalign System to continue to represent the majority of our net revenues, making sales of it critical to our success
- 56% rewrittenFinancial, Tax and Accounting Risks
We are required to annually assess our internal control over financial reporting and any adverse results from such assessment may result in a loss of investor confidence in our financial reports and adversely affect our stock price
Expanded to note that establishing and maintaining internal controls requires significant resources, increased costs, and risks delaying financial reports.
- 50% rewrittenLegal, Regulatory and Compliance Risks
Failure to obtain or maintain approvals or comply with regulations and government actions regarding our products or services or those of our suppliers could materially harm our sales, result in substantial penalties and fines, interrupt our supply chain and cause harm to our reputation
Updated regulatory compliance scope to include commercial intermediaries alongside healthcare provider customers and suppliers.
Was: Failure to obtain or maintain approvals or comply with regulations regarding our products or services or those of our suppliers could materially harm our sales, result in substantial penalties and fines, interrupt our supply chain and cause harm to our reputation
- 48% rewrittenOperational Risks
Our quarterly and annual results of operations have and will continue to fluctuate in the future, and we may not accurately predict the timing and amount of customer demand and our revenues, costs, and expenditures
Refined operating results fluctuation factors to include changes in standalone selling price allocations under sales contracts.
Was: Our operating results have and will continue to fluctuate in the future, which makes predicting the timing and amount of customer demand and our revenues, costs, and expenditures difficult
- 45% rewrittenFinancial, Tax and Accounting Risks
If our goodwill, finite-lived intangible or long-lived assets become impaired, we may be required to record material charges to income
Was: If our goodwill, intangible or long-lived assets become impaired, we may be required to record material charges to income
- 42% rewrittenBusiness and Industry Risks
Demand for our products and services may not increase or may decrease for many reasons, including resistance to the innovative and business-model-disruptive nature of some of our products and services
Was: Demand for our products and services may not increase or may decrease for many reasons, including resistance to the innovative and business-model-disruptive nature of some of our products and services, which could have a material impact on our business, financial condition and results of operations
- 39% rewrittenFinancial, Tax and Accounting Risks
New tax laws and practices, changes to existing tax laws and practices, or disputes regarding the positions we take regarding tax laws, could negatively affect our provision for income taxes as well as our ongoing operations
- 39% rewrittenRisks Related to Ownership of our Common Stock
Historically, the market price for our common stock has been volatile
- 34% rewrittenOperational Risks
We contract with commercial intermediaries to distribute a portion of the importation, marketing and sales of our products and services, which exposes us to risks to our sales, operations and reputation, including the risk these intermediaries do not comply with applicable laws or our internal procedures
Was: We use distributors for a portion of the importation, marketing and sales of our products and services, which exposes us to risks to our sales, operations and reputation, including the risk these distributors do not comply with applicable laws or our internal procedures
- 32% rewrittenLegal, Regulatory and Compliance Risks
Litigation regarding our IP rights, rights claimed by third parties or IP litigation by any vendors on whose products or services we rely for our products and services may impact our ability to grow our business and adversely impact our reputation and results of operations
- 31% rewrittenRisks Related to Ownership of our Common Stock
We may not continue repurchasing our common stock and any repurchases may not achieve our desired objectives
Was: We cannot guarantee that we will continue to repurchase our common stock in the future, and any repurchases we may make may not achieve our desired objectives
- 28% rewrittenLegal, Regulatory and Compliance Risks
Our success depends in part on our ability to maintain existing IP rights and obtain, maintain and enforce further IP protections for our products. Our inability to do so could harm our competitive position
- 27% rewrittenOperational Risks
Products in our Systems and Services segment, such as our iTero intraoral scanners, are subject to software and hardware risks that, if improperly managed, could have a material adverse impact on our business and financial results
- 25% rewrittenOperational Risks
Issues with IT system and software integration, implementation, updates, and upgrades, or third-party software have previously and could again in the future disrupt our operations
Was: Our IT systems are critical to our business. Issues with IT system and software integration, implementation, updates, and upgrades, or third-party software have previously and could again in the future disrupt our operations and have a material impact on our business, our reputation, and operating results
- 23% rewrittenFinancial, Tax and Accounting Risks
Our effective tax rate may vary significantly from period to period, which could result in volatility of our operating results and adversely affect our financial results
All 36 risk factors
Headings as the filing states them, in filing order.
Macroeconomic and External Risks
- 01Global and regional economic conditions have and could in the future materially affect our business, financial condition and results of operationsNew
- 02We are subject to foreign currency exchange fluctuations, which could have a material adverse effect on our financial condition or results of operationsNew
- 03Geopolitical events, tariffs and trade policies, and military conflicts have and could in the future materially affect our business, financial condition and results of operationsNew
- 04Natural disasters may adversely impact our business, financial condition and results of operations, as well as those of our customers and consumers, suppliers, contract manufacturers, commercial intermediaries and other business partnersNew
Business and Industry Risks
- 05Demand for our products and services may not increase or may decrease for many reasons, including resistance to the innovative and business-model-disruptive nature of some of our products and services42% rewritten
- 06Our net revenues are primarily dependent on sales of the Invisalign System and iTero intraoral scanners. Of the two, we expect the Invisalign System to continue to represent the majority of our net revenues and remain critical to our success66% rewritten
- 07Competition in the markets for our products and services is increasingNew
- 08financial resources to develop or acquire new AI technologies and systems in the future and sufficiently meet evolving industry trends and consumer demandsNew
- 09Our success depends on our ability to quickly and profitably develop, manufacture, market, and obtain and maintain regulatory approvals or clearances of new, improved or refurbished products and servicesNew
- 10We may not realize the anticipated benefits of acquisitions, investments or other strategic transactions, and they may require significant management attention, disrupt our business, dilute stockholder value or adversely affect our business, financial condition and results of operationsNew
Operational Risks
- 11Our quarterly and annual results of operations have and will continue to fluctuate in the future, and we may not accurately predict the timing and amount of customer demand and our revenues, costs, and expenditures48% rewritten
- 12Our results of operations may be adversely affected if doctors at DSOs, orthodontic service organizations (“OSOs”) or other large group practices reduce, delay, or do not increase their purchasing of our products and services in ways that reduce adoption of our products and servicesNew
- 13We are subject to operating risks, including excess or constrained capacity, operational inefficiencies and pressure on our internal systems, personnel and suppliers, including as a result of our past and any future restructuring efforts, which could adversely affect our results of operationsNew
- 14Security breaches, data breaches, cybersecurity attacks, or other cybersecurity incidents could materially adversely impact our operations and patient care, and our reputation, business, financial condition and results of operations could be harmedNew
- 15Issues with IT system and software integration, implementation, updates, and upgrades, or third-party software have previously and could again in the future disrupt our operations25% rewritten
- 16Products in our Systems and Services segment, such as our iTero intraoral scanners, are subject to software and hardware risks that, if improperly managed, could have a material adverse impact on our business and financial results27% rewritten
- 17We are highly dependent on third-party suppliers, some of whom are sole source suppliers, for certain key machines, components and materials, and our business, financial condition and results of operations could be materially adversely affected if supply is restricted or ends or the price materially increases
- 18We contract with commercial intermediaries to distribute a portion of the importation, marketing and sales of our products and services, which exposes us to risks to our sales, operations and reputation, including the risk these intermediaries do not comply with applicable laws or our internal procedures34% rewritten
- 19A disruption in the operations of a primary freight carrier, higher shipping costs or shipping delays could disrupt our supply chain and impact our operating and financial results
- 20If we cannot attract, motivate, train or retain personnel, it will be difficult to achieve our strategic priorities, which could materially adversely affect our business, financial condition and results of operations78% rewritten
- 21We depend on our marketing activities to deepen our market penetration and raise awareness of our brands, products, and services, which may prove unsuccessful or may become less effective or more costly to maintain in the long term75% rewritten
- 22reputation harmed, any of which could materially affect our business, financial condition and results of operations. The harm of negative publicity, particularly on social media platforms, may be immediate, without affording us an opportunity for redress or correctionNew
Legal, Regulatory and Compliance Risks
- 23We are subject to antitrust and competition regulations, litigation and enforcement that may result in fines, penalties, restrictions on our business practices, and product, services or operational changes which could materially impact our business, financial condition and results of operations71% rewritten
- 24Failure to obtain or maintain approvals or comply with regulations and government actions regarding our products or services or those of our suppliers could materially harm our sales, result in substantial penalties and fines, interrupt our supply chain and cause harm to our reputation50% rewritten
- 25We are subject to various laws relating to privacy, data protection, data governance and cybersecurity, and face risks related to the data we collect, process, and shareNew
- 26AI and machine learning technologies in our products, services and IT systems may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business69% rewritten
- 27Our success depends in part on our ability to maintain existing IP rights and obtain, maintain and enforce further IP protections for our products. Our inability to do so could harm our competitive position28% rewritten
- 28Litigation regarding our IP rights, rights claimed by third parties or IP litigation by any vendors on whose products or services we rely for our products and services may impact our ability to grow our business and adversely impact our reputation and results of operations32% rewritten
Financial, Tax and Accounting Risks
- 29If our goodwill, finite-lived intangible or long-lived assets become impaired, we may be required to record material charges to income45% rewritten
- 30Changes in, or interpretations of, accounting rules and regulations, could result in unfavorable accounting charges
- 31We are required to annually assess our internal control over financial reporting and any adverse results from such assessment may result in a loss of investor confidence in our financial reports and adversely affect our stock price56% rewritten
- 32Our effective tax rate may vary significantly from period to period, which could result in volatility of our operating results and adversely affect our financial results23% rewritten
- 33New tax laws and practices, changes to existing tax laws and practices, or disputes regarding the positions we take regarding tax laws, could negatively affect our provision for income taxes as well as our ongoing operations39% rewritten
Risks Related to Ownership of our Common Stock
- 34Historically, the market price for our common stock has been volatile39% rewritten
- 35We may not continue repurchasing our common stock and any repurchases may not achieve our desired objectives31% rewritten
- 36Future sales of significant amounts of our common stock may depress our stock price
Other Align Technology 10-Ks
- FY2024 10-K risk factors29 risks
Revenue concentration on Invisalign and iTero scanners leaves the company exposed to adoption rates and competitive resistance.
Filed Feb 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.