v3.26.1
Segments and Geographical Information
 3 Months Ended
Mar. 31, 2026
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 segment's performance, by reviewing each measure against internal forecasts and historical performance. Our CODM may also benchmark each segment's performance against our competitors and external expectations.
Summarized financial information by reportable segment is as follows (in thousands):
 Three Months Ended
March 31,
20262025
Net revenues
Clear Aligner$856,024 $796,843 
Systems and Services184,063 182,419 
Total net revenues$1,040,087 $979,262 
Cost of net revenues1
Clear Aligner
$243,155 $234,754 
Systems and Services
60,345 64,400 
Total cost of net revenues
$303,500 $299,154 
Gross profit
Clear Aligner$612,869 $562,089 
Systems and Services123,718 118,019 
Total gross profit$736,587 $680,108 
Other Segment expenses
Clear Aligner
$305,070 $301,865 
Systems and Services
57,642 59,556 
Unallocated corporate expenses
231,920 187,587 
Total operating expenses
$594,632 $549,008 
Segment income from operations
Clear Aligner$307,799 $260,224 
Systems and Services66,076 58,463 
Total segment income from operations
$373,875 $318,687 
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 expenses 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 income taxes (in thousands):
 Three Months Ended
March 31,
20262025
Total segment income from operations$373,875 $318,687 
Unallocated corporate expenses(231,920)(187,587)
Total income from operations141,955 131,100 
Interest income3,911 5,316 
Other income (expense), net3,020 4,026 
Net income before provision for income taxes$148,886 $140,442 

The following table includes certain non-cash expenses for each reportable segment (in thousands):
 Three Months Ended
March 31,
20262025
Stock-based compensation
Clear Aligner$5,949 $5,818 
Systems and Services377 403 
Unallocated corporate expenses34,598 38,776 
Total stock-based compensation$40,924 $44,997 
Depreciation and amortization
Clear Aligner1
$37,638 $18,904 
Systems and Services
10,534 8,469 
Unallocated corporate expenses
8,376 11,775 
Total depreciation and amortization$56,548 $39,148 
1 Includes $15.6 million of accelerated depreciation as disclosed in Note 1 “Summary of Significant Accounting Policies."

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,
 20262025
Net revenues 1:
U.S. $404,488 $423,318 
Switzerland245,148 224,132 
Other International 390,451 331,812 
Total net revenues$1,040,087 $979,262 
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,
2026		December 31,
2025
Long-lived assets 1:
Switzerland$480,698 $493,584 
U.S. 197,753 200,343 
Other International539,864 545,848 
Total long-lived assets$1,218,315 $1,239,775 
1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.