v3.25.1
Segments and Geographical Information
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segments and Geographical Information Segments and Geographical Information
Segment Information

We 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 Ended
March 31,
20252024
Net revenues
Clear Aligner$796,843 $817,251 
Systems and Services182,419 180,180 
Total net revenues$979,262 $997,431 
Cost of net revenues1
Clear Aligner
$234,754 $238,105 
Systems and Services
64,400 61,510 
Total cost of goods sold
$299,154 $299,615 
Gross profit
Clear Aligner$562,089 $579,146 
Systems and Services118,019 118,670 
Total gross profit$680,108 $697,816 
Other Segment expenses
Clear Aligner
$301,865 $292,908 
Systems and Services
59,556 68,977 
Unallocated corporate expenses
187,587 181,796 
Total operating expenses
$549,008 $543,681 
Segment income from operations
Clear 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 allocation is measured differently based on the nature of the cost being allocated. Certain other operating expense are not specifically allocated to segment income from operations and generally include various corporate expenses such as stock-based compensation and costs related to information technology (“IT”), facilities, human resources, accounting and finance, legal and regulatory, other separately managed general and administrative costs outside the reportable segments and restructuring costs.
The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes (in thousands):
 Three Months Ended
March 31,
20252024
Total segment income from operations$318,687 $335,931 
Unallocated corporate expenses(187,587)(181,796)
Total income from operations131,100 154,135 
Interest income5,316 4,392 
Other income (expense), net4,026 (141)
Net income before provision for income taxes$140,442 $158,386 

The following table includes certain non-cash expenses for each reportable segment (in thousands):
 Three Months Ended
March 31,
20252024
Stock-based compensation
Clear Aligner$5,818 $3,764 
Systems and Services403 359 
Unallocated corporate expenses38,776 34,665 
Total stock-based compensation$44,997 $38,788 
Depreciation and amortization
Clear Aligner
$18,904 $14,433 
Systems and Services
8,469 6,838 
Unallocated corporate expenses
11,775 11,675 
Total depreciation and amortization$39,148 $32,946 

Our CODM does not regularly review total assets at the reportable segment level; however, we have provided geographical information related to our long-lived assets below.

Geographical Information

Net revenues are presented below by geographic area (in thousands):
 Three Months Ended
March 31,
 20252024
Net revenues 1:
U.S. $423,318 $432,101 
Switzerland224,132 251,758 
Other International 331,812 313,572 
Total net revenues$979,262 $997,431 
1 Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities.
Long-lived assets, which includes Property, plant and equipment, net and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):
 March 31,
2025		December 31,
2024
Long-lived assets 1:
Switzerland$568,693 $571,628 
U.S. 203,140 207,689 
Other International606,193 605,193 
Total long-lived assets$1,378,026 $1,384,510 
1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.