Align Technology Inc. (NASDAQ:ALGN) Q3 2020 Earnings Conference Call - Final Transcript

Oct 21, 2020 • 04:30 pm ET


Align Technology Inc. (NASDAQ:ALGN) Q3 2020 Earnings Conference Call - Final Transcript


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Joseph M. Hogan

got back to work treating existing and new patients.

Q3 revenues for clear aligners were $621 million, up 20% year-over-year. And Imaging Systems and CAD/CAM Services were $113.4 million, up 20% year-over-year. Q3 Invisalign shipments were a record of 496,000 cases, up 28.7% versus prior year and up 124% versus prior quarter, reflecting strong recovery across all regions.

During the quarter, we saw increased demand for new cases as restrictions eased and doctors ramped up their practices. This is in contrast to Q2 where doctor's primary focus was to maintain continuity of patient care for their existing patients through additional aligner shipments and replacement aligners. John mentioned this in his comments last quarter and we'll touch on it again today.

For the quarter, we shipped Invisalign cases to a record 70,000 doctors, of which 5,800 were first-time customers, reflecting increased doctor activity as practices have reopened. We've also trained approximately 6,500 new doctors in Q3, including 3,200 international doctors, reflecting increased doctor engagement through our online virtual education courses, summits and forums.

Across the business, we believe there are several factors contributing to our strong performance, starting with pent-up demand. Many of our doctors indicate that they are making good progress in working the backlog of patients from office shutdowns. Pent-up disposable income remains a key factor as consumers focus on feel good investments, while many other quality of life options are low.

In our new normal, there are far fewer trips abroad, fewer flights, less money spent on gas, dry cleaning, etc. More people can afford to allocate that spending to Invisalign treatment, especially when they're working remotely and critiquing themselves on camera so much of the time. That's the Zoom effect we've heard about across multiple sectors.

As we look at our customer channels, we feel the strategy to dedicate sales representatives by specialty alignment is bearing fruit, particularly in the GP Dental segment. Sales reps were able to partner with a wider range of providers within their designated specialty during the downturn and assess mindset and specific needs during the recovery and tailor plans to thrive beyond COVID.

A digital mindset has been key and we believe this is the largest influence in the ortho market and the one we've been laying the foundation for over the last several years. For many doctors, they are still down from normal years in terms of overall production and weekly patient flow. But they have prioritized Invisalign clear aligners as their preferred modality expanded to the first age group and leverage programs that help to make the transition from analog to digital treatment. We see this both in teen and adult treatment growing with the same provider increased use of iTero scanners, our virtual care, our high overlap of bracket buyback switch.

As part of our recovery programs, we offer doctors two programs, either switch their braces in patients into Invisalign treatment by buying their wires and brackets or just buyback their existing inventory. We took out the equivalent of