ALGN · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

ALIGN TECHNOLOGY INC · 2026-08-05 · Importance 25 · Surprise 32 · No source text

Total gross margin increased to 71.7% in the second quarter of 2026 from 69.9% in the prior-year quarter, and to 71.3% for the first six months from 69.7%. Clear Aligner gross margin rose to 71.4% in the quarter and 71.5% year to date, supported by higher average selling prices, operational efficiencies and the roll-off of accelerated depreciation. Systems and Services gross margin increased to 73.3% in the quarter and 70.3% year to date, primarily from tariff refunds and operational efficiencies, partly offset by lower average selling prices.

Key facts

• In Q2 2026, gross profit was $757.4 million and gross margin was 71.7% compared to $708.1 million and 69.9% in the prior year period. source
• Clear Aligner gross profit for the three months ended June 30, 2026: $621.5 million and gross margin 71.4% versus $563.8 million and 70.1% prior year. source
• Systems and Services gross profit for the three months ended June 30, 2026: $135.9 million and gross margin 73.3% versus $144.3 million and 69.4% prior year. source
• Company stated that for the three and six months ended June 30, 2026, gross margin percentage increased primarily due to tariff refunds, roll-off of accelerated depreciation and higher clear aligner ASPs. source
• For the three and six months ended June 30, 2026, gross margin increases were partially attributable to roll-off of accelerated depreciation and operational efficiencies but partially offset by higher freight costs (Clear Aligner) and lower ASPs (Systems and Services). source

Impact estimates