Company: ALGN
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001097149-25-000034
Chunk: 61

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 61
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 Segments and Geographical Information

Segment InformationWe report segment information based on the management approach. The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, for decision making and performance assessment as the basis for determining our reportable segments. We group our operations into two reportable segments; Clear Aligner segment and Imaging Systems and CAD/CAM services (“Systems and Services”) segment, which are based on our predominant product lines.Our CODM uses gross profit and income from operations to assess each reportable segments performance, by reviewing each measure against internal forecasts and historical performance. Our CODM may also benchmark each segments performance against our competitors and external expectations.Summarized financial information by reportable segment is as follows (in thousands):  Three Months EndedMarch 31,20252024Net revenuesClear Aligner$796,843 $817,251 Systems and Services182,419 180,180 Total net revenues$979,262 $997,431 Cost of net revenues1Clear Aligner$234,754 $238,105 Systems and Services64,400 61,510 Total cost of goods sold$299,154 $299,615 Gross profitClear Aligner$562,089 $579,146 Systems and Services118,019 118,670 Total gross profit$680,108 $697,816 Other Segment expensesClear Aligner$301,865 $292,908 Systems and Services59,556 68,977 Unallocated corporate expenses187,587 181,796 Total operating expenses$549,008 $543,681 Segment income from operationsClear Aligner$260,224 $286,238 Systems and Services58,463 49,693 Total segment income from operations$318,687 $335,931 1    Management has identified cost of net revenues as a significant expense for our Clear Aligner and Systems and Services reportable segments.Other segment expenses typically include employee related costs, marketing and advertising costs and depreciation and amortization expense incurred by various functions including selling, marketing, general and administrative and research and development. Our CODM does not regularly receive these operating expenses at the reportable segment level. Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment. Certain operating expenses are not directly attributable to a reportable segment and must be allocated. Each