Company: ALGN
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001097149-25-000079
Chunk: 178

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 178
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 discounting strategies. For CAD/CAM services, we estimate the SSP of each element, including the initial software license and maintenance and support, using data such as historical prices.

38 

Recent Accounting Pronouncements

See Note 1 “Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of business, we are exposed to interest rate, foreign currency exchange and inflation risks that could impact our financial position and results of operations. In addition, we are subject to the broad market risk that is created by the global market disruptions and uncertainties resulting from macroeconomic challenges, geopolitical events, trade and other international disputes, including various military conflicts and consumer confidence. Further discussion on these risks may be found in Part II, Item 1A “Risk Factors.”

Interest Rate Risk

Changes in interest rates could impact our anticipated interest income earned on our cash and cash equivalents balance. As of September 30, 2025, we are not exposed to interest rate risk on our unsecured revolving line of credit. An immediate 10% change in interest rates would not have a material adverse impact on our future operating results and cash flows. As of September 30, 2025, we had no short term or long-term marketable securities. 

We have not historically used derivative financial instruments to manage our exposure to changes in interest rates.

Foreign Currency Exchange Rate Risk

As a result of our international operations, our financial performance has been affected by fluctuations in foreign currency exchange rates and economic conditions in global markets. There is no assurance that exchange rate fluctuations will not adversely impact our results of operations or financial position in the future; however, generally we conduct sales in the local currencies of the countries in which we operate, which provides a degree of natural hedging as most subsidiaries’ also incur their operating expenses in those same currencies. 

To further reduce the short-term impact of foreign exchange rate fluctuations on certain assets and liabilities, we enter into foreign currency forward contracts in markets where we have meaningful exposure, primarily involving the Euro, British Pound, Chinese Yuan, Polish Zloty and Canadian Dollar. These contracts, which are not designated as hedging instruments, typically have original maturities of one month and are marked to market through earnings each reporting period. The gains and losses from these forward contracts are intended to offset the gains and losses in the underlying foreign currency denominated monetary assets and liabilities. We do