ALGN · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

ALIGN TECHNOLOGY INC · 2026-11-04 · Importance 43 · Surprise 32

Consolidated gross margin increased to 68.7% in the third quarter of 2026 from 64.2% a year earlier, and to 70.4% for the first nine months from 67.9%. Third-quarter gross profit rose $58.3 million to $697.5 million as cost of revenue declined $39.2 million to $317.3 million. Management attributed the improvement to operational efficiencies, tariff refunds, and the roll-off of accelerated depreciation, partly offset by lower average selling prices. Clear Aligner quarterly gross margin rose to 69.3% from 64.9%, while Systems and Services gross margin rose to 66.2% from 61.3%.

Key facts

• Align’s Q3 2026 gross-margin percentage increased year over year primarily due to operational efficiencies, tariff refunds and the roll-off of accelerated depreciation, partly offset by lower average selling prices. source
• Align’s gross-margin percentage for the first nine months of 2026 increased year over year primarily due to operational efficiencies and tariff refunds, partly offset by lower Clear Aligner average selling prices. source
• Align’s Clear Aligner gross margin increased in Q3 2026 primarily due to operational efficiencies and the roll-off of accelerated depreciation, partly offset by restructuring charges and lower average selling prices. source
• Align’s Systems and Services gross margin increased in Q3 2026 primarily due to lower cost of net revenues from restructuring expenses, operational efficiencies and tariff refunds, partly offset by lower average selling prices and foreign exchange. source
• Align’s nine-month 2026 Systems and Services gross margin increased primarily due to operational efficiencies, tariff refunds and foreign exchange, partly offset by lower average selling prices. source