Name: Align Technology Inc. (NASDAQ:ALGN) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Align Technology Inc., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net revenues	3,734,635)	3,952,584)	2,471,941)	2,406,796)	1,966,492)
Cost of net revenues	(1,100,860)	(1,017,229)	(708,706)	(662,899)	(518,625)
Gross profit	2,633,775)	2,935,355)	1,763,235)	1,743,897)	1,447,867)
Selling, general and administrative	(1,674,469)	(1,708,640)	(1,200,757)	(1,072,053)	(852,404)
Research and development	(305,258)	(250,315)	(175,307)	(157,361)	(128,899)
Restructuring and other charges	(11,453)	—)	—)	—)	—)
Impairments and other charges (gains), net	—)	—)	—)	(22,990)	—)
Litigation settlement gain	—)	—)	—)	51,000)	—)
Operating expenses	(1,991,180)	(1,958,955)	(1,376,064)	(1,201,404)	(981,303)
Income from operations	642,595)	976,400)	387,171)	542,493)	466,564)
Interest income	5,367)	3,103)	3,125)	12,482)	8,576)
Other income (expense), net	(48,905)	32,920)	(11,347)	7,676)	(8,489)
Interest income and other income (expense), net	(43,538)	36,023)	(8,222)	20,158)	87)
Net income before (provision for) benefit from income taxes	599,057)	1,012,423)	378,949)	562,651)	466,651)
(Provision for) benefit from income taxes	(237,484)	(240,403)	1,396,939)	(112,347)	(57,723)
Equity in losses of investee, net of tax	—)	—)	—)	(7,528)	(8,693)
Net income	361,573)	772,020)	1,775,888)	442,776)	400,235)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Net revenues exhibited a consistent growth trajectory from 2018 through 2021, rising from $1.97 billion to a peak of $3.95 billion. However, a reversal occurred in 2022, with revenues declining to $3.73 billion. Gross profit followed a similar trend, peaking in 2021 at $2.94 billion before decreasing to $2.63 billion in 2022. The cost of net revenues increased steadily over the period, with a notable increase in 2022 despite the dip in total revenue, suggesting a compression in gross margins during the final year of the analysis.

Operating Expense Trends: Selling, general and administrative (SG&A) expenses grew significantly from $852 million in 2018 to $1.67 billion in 2022. Research and development (R&D) spending showed a continuous upward trend, increasing every year from $129 million in 2018 to $305 million in 2022, representing a substantial long-term commitment to product innovation.
Operational Profitability: Income from operations demonstrated significant volatility. While operational income grew from 2018 to 2019, it dipped in 2020 to $387 million before surging to a period high of $976 million in 2021. By 2022, operational income retracted to $642 million, correlating with the decrease in net revenues and the continued rise in R&D expenditure.
Net Income and Tax Impacts: Net income figures were heavily influenced by non-operational items. A significant anomaly is observed in 2020, where net income spiked to $1.78 billion despite a decline in operating income; this was driven by a substantial tax benefit of approximately $1.4 billion. Excluding this tax event, net income showed a peak in 2021 at $772 million before falling to $361 million in 2022.
Non-Operating Items: Interest income and other net income/expenses fluctuated throughout the period. A notable litigation settlement gain of $51 million was recorded in 2019. In 2022, the company experienced a significant negative swing in other income (expense), net, amounting to a loss of $48.9 million, which contributed to the overall reduction in pre-tax income.

Overall, the financial data indicates a period of rapid expansion peaking in 2021, followed by a correction in 2022 characterized by lower revenues and higher operating costs. The bottom-line performance was significantly distorted in 2020 by tax-related benefits rather than operational efficiency.

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