Align Technology has reported its second-quarter earnings and revenue, surpassing Wall Street estimates and demonstrating robust demand for clear teeth aligners, particularly among younger individuals.

Align, the maker of the Invisalign System used for teeth straightening, revealed earnings of $2.22 per share for the second quarter, generating $1 billion in revenue. Analysts surveyed by FactSet had projected earnings of $2.03 per share on revenue of $991.3 million.

In the previous year, Align recorded earnings of $1.82 per share, accompanied by $943.1 million in revenue.

The company specializes in providing patients with an alternative to traditional metal braces through its clear teeth aligners. During its earnings call, Align disclosed that it has capitalized on social media influencers found on platforms such as TikTok, Youtube, Instagram, and Snapchat to expand its reach to a wider audience of young individuals. This strategy aims to market teeth aligners that are unnoticeable in school photos.

Operating expenses for the quarter totaled $541.7 million, marking an 8.5% increase compared to the previous year, primarily due to heightened consumer marketing expenditures. However, gross margins improved slightly from 70% to 71.2% when compared to last year.

Reaccelerating Growth Expected for Align Technology

"We believe reaccelerating growth is tied to adult willingness to spend on clear aligners and orthos’ willingness to digitize and convert more teen cases to clear aligners; both of which are tied to macro conditions," stated analyst Brandon Vazquez in a research note.

Align Technology, the company behind the innovative clear aligners, has reported robust consumer demand, especially from teenagers and younger patients, despite the challenges posed by high inflation and rising interest rates.

"Although the macroeconomic environment remains uncertain, improvements in the operating environment and positive consumer demand signals are influencing our outlook," commented Chief Financial Officer John Morici.

Projected 2023 revenue for Align Technology ranges between $3.97 billion to $3.99 billion, slightly higher than the FactSet estimation of $3.95 billion.

Following the announcement, Align's stock experienced an impressive surge, with an 18% increase to reach $400 per share. If the stock maintains these levels by market close, it will mark the highest close since April 2022. Notably, Align Technology has already witnessed a staggering 90% surge in its stock value this year.

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