Align Technology stock sheds 5% on weak Q4 revenue outlook

Align Technology, Inc., the medical device company, saw its shares drop by 5% in after-hours trading following the release of its fiscal third quarter results for 2026. The company's adjusted earnings per share of $2.80 surpassed the consensus estimate of $2.78, while revenue of $1.02 billion slightly exceeded expectations of $1.01 billion.

However, the fourth quarter guidance of $1.00-$1.02 billion was lower than the analysts' consensus estimate of $1.05 billion. Align anticipates total revenue for fiscal 2026 to be between $4.11 and $4.13 billion, which is below the $4.15 billion consensus. The company's Clear Aligner revenues rose by 4.2% year-over-year to $839.3 million, with a 6.6% YoY increase in volume to 690,600 cases.

Imaging Systems and CAD/CAM Services revenue, however, fell by 7.6% year-over-year to $175.5 million. Despite the slightly weaker fourth quarter guidance, Align's adjusted operating margin of 24.4% not only met expectations but also improved by 0.5 percentage points year-over-year. CEO Joe Hogan declared that the company delivered solid results for the quarter, with Q3 revenues and Clear Aligner volumes aligning with the company's outlook.

Additionally, for the first time in six quarters, orthodontist shipments in North America increased year-over-year, and DSO shipments saw double-digit growth. CFO John Morici attributed the results to navigating a challenging market environment, as demand in the dental and orthodontic industries continued to be impacted by a softer market for discretionary healthcare spending and capital equipment investments.

The company repurchased around 627,300 shares during the quarter and aims to acquire up to $300 million in shares during the fourth quarter.