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•the storage, transmission and disclosure of ~~Contents~~medical information and healthcare records;

•prohibitions against the offer, payment or receipt of remuneration to induce referrals to entities providing healthcare services or goods or to induce the order, purchase or recommendation of our products; and

•the marketing and advertising of our products.

The sourcing and availability of metals that may be used in the manufacture of, or contained in, our products may be affected by laws and regulations in the U.S. or internationally regarding the use of minerals obtained from certain regions of the world like the Democratic Republic of Congo and adjoining countries. These laws and regulations may decrease the number of suppliers capable of supplying our needs for certain metals, thereby negatively affecting our ability to manufacture products in sufficient quantities or at competitive prices. We may furthermore suffer financial and reputational harm if customers require, and we are unable to deliver, certification that our products are conflict free. Regardless, compliance with these laws and regulations will require time and effort by our personnel and others and we will incur additional costs.

If we or any vendors on whose products or services we rely for our products and services infringe the patents or IP rights of other parties or are subject to a patent infringement claim, our ability to grow our business may be severely limited.

Extensive litigation over patents and other IP rights is common in the medical device, optical scanner, 3D printing and other technologies and industries on which our products and services are based. We have been sued for infringement of third party’s patents in the past and we are currently defending patent infringement suits and other legal claims. In addition, we periodically receive letters from third parties drawing our attention to their patent rights. While we do not believe we infringe upon any valid and enforceable rights that have been brought to our attention, there may be other more pertinent rights of which we are presently unaware. The defense and prosecution of IP suits, interference proceedings and related legal and administrative proceedings could result in substantial expense to us and significant diversion of effort by our technical and management personnel. An adverse determination in any legal proceeding to which we may become a party could subject us to significant liabilities, exclusion orders or injunctions that may prevent or limit our rights to sell or import our products in one or more countries. An adverse determination of this nature could require us to seek licenses from third parties. Licenses may not be available on commercially reasonable terms or at all, in which event, our business would be materially adversely affected.

We maintain single supply relationships for certain key machines and materials, and our business and operating results could be harmed if supply is restricted or ends or the price of raw materials used in our manufacturing process increases.

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We are highly dependent on manufacturers of specialized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our intraoral scanners. We maintain single supply relationships for many of these machines and materials. In particular, our CT scanning and stereolithography equipment used in our aligner manufacturing and many of the critical components for the optics of our scanners are provided by single suppliers. We purchase the vast majority of our resin and polymer, the primary raw materials used in our manufacturing process for clear aligners, from a single source. Moreover, we rely on a third-party manufacturer to supply key sub-assemblies for our iTero Element scanner. If these or other suppliers encounter financial, operating or other difficulties, are unable to hire or maintain personnel, cannot timely obtain supplies, are unable to maintain manufacturing standards or controls, fail to timely deliver materials, parts or components, or if our relationship or the terms by which we contract with any of them changes, we may be unable to quickly establish or qualify replacement sources of supply and could face production interruptions, delays and inefficiencies. Finding substitute manufacturers may be expensive, time-consuming or impossible and could result in a significant interruption in the supply of one or more products, including our intraoral scanners, causing us to lose revenues and suffer damage to our customer relationships. In addition, technology changes by our vendors could disrupt access to required manufacturing capacity or require expensive, time consuming development efforts to adapt and integrate new equipment or processes. Our growth may exceed the capacity of one or more of these manufacturers to produce the needed equipment and materials in sufficient quantities to support our growth. Conversely, in order to secure supplies for production of products, we sometimes enter into non-cancelable minimum purchase commitments with vendors, which could impact our ability to adjust our inventory to reflect declining market demands. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges and our profitability may suffer. In the event of technology changes, delivery delays, or shortages of or increases in price for these items, our business and growth prospects may be harmed.

We primarily rely on our direct sales force to sell our products, and any failure to train and maintain our key sales force personnel could harm our business.

Our ability to sell our products and generate revenues primarily depends upon the success of our direct sales force within our Americas and International markets. We do not have any long-term employment contracts with our direct sales force and the loss of the services of key personnel or groups of employees may harm our business. In order to provide more comprehensive sales and service coverage and pursue growth opportunities, we continue to increase the size of our sales force domestically and internationally. Moreover, as we focus on market penetration, we have segregated sales personnel to focus on specific markets such as orthodontists and GPs. It can take up to twelve months or more to train sales representatives to successfully market and sell our products and for them to establish strong customer relationships. If we are unable to expand our sales force, retain our key sales personnel or quickly replace them with individuals of equivalent technical expertise and qualifications, if we are unable to successfully instill technical expertise in new and existing sales representatives, if we fail to establish and maintain strong relationships with our customers, or if our efforts at specializing our selling techniques prove unsuccessful or not cost-effective, our net revenues and our ability to maintain market share could be materially harmed.

We use distributors for a portion of the importation, marketing and sales efforts related to our products and services, which exposes us to risks that may be harmful to our sales and operations.

In addition to our direct sales force, we have and expect to continue to use distributors to import, market, sell, service and support our products. Our agreements with these distributors are generally non-exclusive and terminable by either party with little notice. If any of these relationships are terminated and alternative distributors are not quickly found and trained in the use, marketing, sales and support of our products and services, our revenues and ability to sell or service our products in markets key to our growth and expansion could be adversely affected. These distributors may also choose to sell alternative or competing products or services.In addition, we may be held responsible for the actions of these distributors and their employees and agents for compliance with laws and regulations, including competition, bribery and corruption, and medical device and services marketing and sales activities. A distributor may also affect our ability to effectively market our products in certain foreign countries or regulatory jurisdictions if it holds the regulatory authorization in such countries or within such regions and causes, by action or inaction, the suspension of such marketing authorization or sanctions for non-compliance. It may be difficult, expensive, and time-consuming for us to re-establish market access or regulatory compliance in such cases.

Our business exposes us to potential liability for the quality and safety of our products and services, how we advertise and market those products and services and how and to whom we sell them, and we may incur substantial expenses or be found liable for substantial damages or penalties if we are subject to claims or litigation.

Our products and services involve an inherent risk of claims concerning their design, manufacture, safety and performance, how they are marketed and advertised in a complex framework of highly regulated domestic and international

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laws and regulations, how we package, bundle or sell them to customers who may be private individuals or companies or public entities such as hospitals and clinics and how we train and support doctors, their staffs and patients who administer or use our products. Moreover, consumer products and services are routinely subject to claims of false, deceptive or misleading advertising, consumer fraud and unfair business practices. Additionally, we may be held liable if any product we develop or manufacture or services we offer or perform causes injury or is otherwise found unhealthy or unsuitable. Even if our products are safe, if they are promoted for use or used in unintended or unexpected ways or for which we have not obtained clearance or approvals (“off-label” usage), we may be investigated, fined or have our products or services enjoined or clearances rescinded by administrative agencies or we may be required to defend ourselves in litigation. Although we intend to continue to maintain insurance for product liability, business practices and other types of activities we make or offer, coverage may not be available on acceptable terms, if at all, and may not be sufficient against potential liabilities. Any claim for product liability, sales, advertising and business practices, regardless of its merit or eventual outcome, could result in significant legal defense costs and damage our reputation, increase our expenses and diverting management’s attention away from the operation of our business.

We are subject to risks associated with our strategic investments. Impairments in the value of our investments could negatively impact our financial results.

We have and expect to continue to make investments in research and technology that we deem promising, primarily through privately held companies, for strategic reasons and to support key business initiatives, and we may not realize a return on our strategic investments. Of the companies in which we invest, they may generate net losses and the market for their products, services or technologies may be slow to develop, if at all. Furthermore, valuations of privately held companies are inherently complex due to the lack of readily available market data. If we determine that our investments have declined in value, we may be required to record impairments which could be material and could have an adverse impact on our financial results.

General Risk Factors

We rely on highly skilled personnel and, if we fail to attract, motivate or retain personnel, or if our growth harms our corporate culture, it may be more difficult to grow effectively and pursue our strategic priorities.

To be successful, we must effectively manage our growth which depends on our ability to identify, hire, develop, motivate, and retain personnel throughout our organization. We are highly dependent on the talent and effort of highly skilled employees, including orthodontists and production technicians in our treatment planning facilities and employees in our clinical engineering, technology development, manufacturing, sales, and management teams. The loss of the services provided by these employees may significantly delay or prevent the achievement of our development and business objectives and could harm our business.

Moreover, competition for qualified employees in our industry is intense, and our employees are targeted by other employers. Our compensation and benefit arrangements, such as our equity award programs and telecommuting policies, may not always be successful in attracting new employees and retaining and motivating our existing employees. Furthermore, other internal and external factors can impact our ability to hire and retain talent, including insufficient advancement or career opportunities and restrictive immigration policy and regulatory changes.

Additionally, are committed to a corporate culture that focuses on values emphasizing agility, customer and accountability. We believe this culture fosters an environment of integrity, innovation, creativity, and teamwork but we have also experienced in the past and expect to experience in the future, difficulties attracting and retaining employees that meet the qualifications, experience, compliance mindset and values we expect. If we are unable to attract and retain personnel that meet our selection criteria or we relax our standards in order to meet the demands of our growth or if our growth is not managed effectively, our corporate culture, ability to achieve our strategic objectives, and our compliance with obligations under our internal controls and other requirements may be harmed.

Business disruptions could seriously harm our financial condition.

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other global locations create ClinCheck treatment plans using sophisticated computer software. In addition, certain of our customer facing operations are located in Costa Rica. Our aligner molds and finished aligners are fabricated in Mexico and China. Both locations in Costa Rica and Mexico as well as others are in earthquake zones and may be subject to other natural disasters. If there is a major earthquake or any other natural disaster in a region where one of these facilities is located, our ability to create ClinCheck treatment plans, respond to customer inquiries or manufacture and ship our aligners could be compromised which could result in our customers experiencing significant delays receiving their aligners and a decrease in service levels for a period of time. Moreover, a significant portion of our research and development activities are located in California, which suffers from earthquakes, periodic droughts, and wildfires affecting the health and safety of our employees. Any such business interruptions could materially and adversely affect our business, financial condition and results of operations.

Changes in, or interpretations of, accounting rules and regulations, could result in unfavorable accounting charges.

We prepare our consolidated financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the SEC and various bodies formed to interpret and create appropriate accounting policies. A change in these policies or in the way these policies are interpreted by us or regulators can have a significant effect on our reported results and may even retroactively affect previously reported transactions.

We are required to annually assess our internal control over financial reporting and any adverse results from such assessment may result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

We ~~have implemented and~~ routinely assess, update and refine our internal control over financial reporting for its effectiveness. Pursuant to the Sarbanes-Oxley Act of 2002 and ~~the~~ rules and regulations promulgated by the SEC, we are required to furnish in our Form 10-K a report by our management regarding the effectiveness of our internal control over financial reporting. The report includes, among other things, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. Our internal controls may become inadequate because of changes in conditions including changes in personnel, updates and upgrades to existing software including our ERP software system, changes in accounting standards or interpretations of existing standards, and, as a result, the degree of compliance of our internal control over financial reporting with the existing policies or procedures may become ineffective. Establishing, testing and maintaining an effective system of internal control over financial reporting requires significant resources and time commitments on the part of our management and our finance staff, may require additional staffing and infrastructure investments and increases our costs of doing business. If we are unable to assert that our internal control over financial reporting is effective in any future period (or if our auditors are unable to express an opinion on the effectiveness of our internal controls or conclude that our internal controls are ineffective), the timely filing of our financial reports could be delayed or we could be required to restate past reports, and cause us to lose investor confidence in the accuracy and completeness of our financial reports in the future, which could have an adverse effect on our stock price.

~~If we lose our key personnel or are unable to attract and retain key personnel, we may be unable to pursue business opportunities or develop our products.~~

We are ~~highly dependent on the key employees~~exposed to fluctuations in our clinical engineering, technology development, sales, training and marketing personnel and management teams. The loss of the services provided by those individuals may significantly delay or prevent the achievement of our product development and other business objectives and could harm our business. Our future success will also depend on our ability to identify, recruit, train and retain additional qualified personnel, including orthodontists and production technicians in our treatment planning facilities. Few orthodontists are accustomed to working in a manufacturing environment since they are generally trained to work in private practices, universities and other research institutions. Thus, we may be unable to attract and retain personnel with the advanced qualifications necessary for the further development of our business. Furthermore, we may not be successful in retaining our key personnel or their services. If we are unable to attract and retain key personnel, our business could be materially harmed.

~~If we infringe the patents or IP rights of other parties or are subject to a patent infringement claim, our ability to grow our business may be severely limited.~~

Extensive litigation over patents and other IP rights is common in the medical device industry. We have been sued for infringement of third party’s patents in the past and we may be the subject of patent or other litigation in the future. We periodically receive letters from third parties drawing our attention to their patent rights. While we do not believe we infringe upon any valid and enforceable rights that have been brought to our attention, there may be other more pertinent rights of which we are presently unaware. The defense and prosecution of IP suits, interference proceedings and related legal and administrative proceedings could result in substantial expense to us and significant diversion of effort by our technical and management personnel. An adverse determination of any litigation or interference proceeding to which we may become a party could subject us to significant liabilities. An adverse determination of this nature could also put our patents at risk of being invalidated or interpreted narrowly or require us to seek licenses from third parties. Licenses may not be available on commercially reasonable terms or at all, in which event, our business would be materially adversely affected.

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We are highly dependent on manufacturers of specialized scanning equipment, rapid prototyping machines, resin and other advanced materials, as well as the optics, electronic and other mechanical components of our intraoral scanners. We maintain single supply relationships for many of these machines and materials technologies. In particular, our CT scanning and stereolithography equipment used in our aligner manufacturing and many of the critical components for the optics of our scanners are provided by single suppliers. We are also committed to purchasing the vast majority of our resin and polymer, the primary raw materials used in our manufacturing process for clear aligners, from a single source. If these or other suppliers encounter financial, operating or other difficulties or if our relationship with them changes, we may be unable to quickly establish or qualify replacement sources of supply and could face production interruptions, delays and inefficiencies. In addition, technology changes by our vendors could disrupt access to required manufacturing capacity or require expensive, time consuming development efforts to adapt and integrate new equipment or processes. Our growth may exceed the capacity of one or more of these manufacturers to produce the needed equipment and materials in sufficient quantities to support our growth. Conversely, in order to secure supplies for production of products, we sometimes enter into non-cancelable minimum purchase commitments with vendors,currency exchange rates, which could impact our ability to adjust our inventory to reflect declining market demands. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges and our profitability may suffer. In the event of technology changes, delivery delays, or shortages of or increases in price for these items, our business and growth prospects may be harmed.

We depend on a single contract manufacturer and supplier of parts used in our iTero scanner and any disruption in this relationship may cause us to fail to meet the demands of our customers and damage our customer relationships.

We rely on a third-party manufacturer to supply key sub-assemblies for our iTero Element scanner. If this manufacturer fails to deliver its components, if we lose its services or if we fail to negotiate or maintain acceptable terms, we may be unable to timely deliver our products and our business may be harmed. Furthermore, any difficulties encountered by this manufacturer with respect to obtaining supplies, hiring personnel and maintaining acceptable manufacturing standards, controls, procedures and policies could disrupt our ability to timely deliver our products. Finding a substitute manufacturer may be expensive, time-consuming or impossible and could result in a significant interruption in the supply of our intraoral scanning products. Any failure by our contract manufacturer that results in delays in our fulfillment of customer orders may cause us to lose revenues and suffer damage to our customer relationships.

~~We primarily rely on our direct sales force to sell our products, and any failure to train and maintain our key sales force personnel could harm our business.~~

Our ability to sell our products and generate revenues primarily depends upon our direct sales force within our Americas and International markets. We do not have any long-term employment contracts with our direct sales force and the loss of the services of key personnel may harm our business. In order to provide more comprehensive sales and service coverage, we have increased the size of our sales force to pursue growth opportunities within and outside of our existing geographic markets. Moreover, as we focus on market penetration, we have begun to segregate sales personnel to focus on specific markets such as orthodontists and GPs. It can take up to twelve months or more to train sales representatives to successfully market and sell our products and for them to establish strong customer relationships. As a result, if we are unable to retain our key sales personnel or quickly replace them with individuals of equivalent technical expertise and qualifications, if we are unable to successfully instill technical expertise in new and existing sales representatives, if we fail to establish and maintain strong relationships with our customers, or if our efforts at specializing our selling techniques prove unsuccessful or not cost-effective, our net revenues and our ability to maintain market share could be materially harmed. In addition, due to our large and fragmented customer base, we may not be able to provide all of our customers with product support immediately upon the launch of a new product. As a result, adoption of new products by our customers may be slower than anticipated and our ability to grow market share and increase our net revenues may be harmed.

~~As compliance with healthcare regulations becomes more costly and difficult for us or our customers, we may be unable to grow our business.~~

Participants in the healthcare industry are subject to extensive and frequently changing regulations under numerous federal, state, local and foreign laws administered by various governmental entities, some of which are, and others of which may be, applicable to our business.

Furthermore, our healthcare provider customers are also subject to a wide variety of laws and regulations that could affect the nature and scope of their relationships with us. The healthcare market itself is highly regulated and subject to changing political, economic and regulatory influences. Regulations implemented pursuant to the Health Insurance Portability and Accountability Act (“HIPAA”), including regulations affecting the security and privacy of patient healthcare information held by healthcare providers and their business associates may require us to make significant and unplanned enhancements of software applications or services, result in delays or cancellations of orders, or result in the revocation of endorsement of our

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products and services by healthcare participants. The effect of HIPAA and newly enforced regulations on our business is difficult to predict, and there can be no assurance that we will adequately address the business risks created by HIPAA and its implementation or that we will be able to take advantage of any resulting business opportunities.

~~Extensive and changing government regulation of the healthcare industry may be expensive to comply with and exposes us to the risk of substantial government penalties.~~

~~In addition to medical device laws and regulations, numerous foreign, state and federal healthcare-related laws regulate our business, covering areas such as:~~

•~~storage, transmission and disclosure of medical information and healthcare records;~~

•~~the marketing and advertising of our products.~~

Complying with these laws and regulations could be expensive and time-consuming and could increase our operating costs or reduce or eliminate certain of our sales and marketing activities or our revenues.

~~Our business exposes us to potential product liability claims, and we may incur substantial expenses if we are subject to product liability claims or litigation.~~

Medical devices involve an inherent risk of product liability claims and associated adverse publicity. We may be held liable if any product we develop or any product that uses or incorporates any of our technologies causes injury or is otherwise found unhealthy or unsuitable. Although we intend to continue to maintain product liability insurance, adequate insurance may not be available on acceptable terms, if at all, and may not provide sufficient coverage against potential liabilities. A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs and damage our reputation. These costs would have the effect of increasing our expenses and diverting management’s attention away from the operation of our business and could harm our business.

~~Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.~~

Our global operations may be disrupted by natural or human induced disasters including, earthquakes, tsunamis, floods, drought, hurricanes, typhoons, wildfires, extreme weather conditions, power shortages, telecommunications failures, materials scarcity and price volatility, and medical epidemics or health pandemics. For instance, the COVID-19 pandemic has materially harmed our sales and business operations, the operations of our customers and the global economy overall. Climate change may increase both the frequency and severity of natural disasters and, consequently, risks to our operations and growth. The occurrence of business disruptions could harm our growth and expansion, result in significant losses, seriously harm our revenue, profitability and financial condition, adverselynegatively affect our competitive position, increase our costs and expenses, and require substantial expenditures and recovery time in order to fully resume operations. Our digital dental modeling is primarily processed in our facility located in San Jose, Costa Rica. The operations team in Costa Rica creates ClinCheck treatment plans using sophisticated computer software. In addition, our customer facing operations are located in Costa Rica. Our aligner molds and finished aligners are fabricated in Juarez, Mexico and, we have and are building additional facilities in China. Both locations in Costa Rica and Mexico are in earthquake zones and may be subject to other natural disasters. If there is a major earthquake or any other natural disaster in a region where one of these facilities is located, our ability to create ClinCheck treatment plans, respond to customer inquiries or manufacture and ship our aligners could be compromised which could result in our customers experiencing significant delays receiving their aligners and a decrease in service levels for a period of time. Moreover, our corporate headquarters and a portion of our research and development activities are located in California, which suffers from earthquakes, periodic droughts, and wildfires affecting the health and safety of our employees. Any such business interruptions could materially and adversely affect our business, financial condition and results of operations.

~~Changes~~Although the U.S. dollar is our reporting currency, a growing portion of our net revenues and net income are generated in ~~or interpretations~~foreign currencies. Net revenues and net income generated by subsidiaries operating outside of ~~accounting rules~~the U.S. are translated into U.S. dollars using constantly fluctuating, often substantially, exchange rates. As a result, negative movements in exchange rates against the U.S. dollar have and ~~regulations, could result~~may increasingly adversely affect our net revenues and net income in ~~unfavorable accounting charges.~~

~~We prepare~~ our consolidated financial ~~statements~~statements. We enter into currency forward contract transactions in ~~conformity with U.S. GAAP. These principles are subject~~an effort to ~~interpretation by the SEC~~cover some of our exposure to currency fluctuations but there is no assurance these transactions will fully or effectively hedge our exposure to currency fluctuations, and, ~~various bodies formed to interpret and create appropriate accounting policies. A change in~~under certain circumstances, these ~~policies or in the way these policies are interpreted by us or regulators can~~transactions could have ~~a significant~~an adverse effect on our ~~reported results and may even retroactively affect previously reported transactions.~~financial condition.

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If we fail to manage our exposure to global financial and securities market risk successfully, our operating results and financial statements could be materially impacted.

The primary objective of our investment activities is to preserve principal. To achieve this objective, a majority of our marketable investments are investment grade, liquid, fixed-income securities and money market instruments denominated in U.S. dollars. If the carrying value of ~~our investments~~an investment exceeds the fair value, and the decline in fair value is deemed to be other-than-temporary, we ~~will be~~are required to write down the value of ~~our investments,~~the investment, which could materially harm our results of operations and financial condition. Moreover, the performance of certain securities in our investment portfolio correlates with the credit condition of the U.S. financial sector. In an unstable credit or economic environment, ~~such as what we are currently experiencing in connection with the COVID-19 pandemic,~~ it ~~becomes~~is necessary to assess the

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value of our investments more frequently and we might incur significant realized, unrealized or impairment losses associated with these investments.

If our goodwill or long-lived assets become impaired, we may be required to record a significant charge to earnings.

Under GAAP, we review our goodwill and long-lived asset group for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Additionally, goodwill is required to be tested for impairment at least annually. The qualitative and quantitative analysis used to test goodwill are dependent upon various assumptions and reflect management’s best estimates. Changes in certain assumptions including revenue growth rates, discount rates, earnings multiples and future cash flows may cause a change in circumstances indicating that the carrying value of goodwill or the asset group may be impaired ~~but~~and assessing these assumptions and predicting and forecasting future events can be ~~materially more difficult in rapidly changing and unprecedented economic circumstances such as those we are experiencing with the COVID-19 pandemic.~~difficult. Large acquisitions, such as our ~~recent~~ acquisition of exocad in 2020, require ~~ongoing~~periodic fair value assessments of goodwill and purchased assets to determine if they have become impaired. Consequently, we may be required to record a significant charge to earnings in the financial statements during the period in which any impairment of goodwill or long-lived asset group ~~are~~is determined.

~~We may experience unexpected issues and expenses associated with our corporate structure reorganization, including the relocation of our EMEA regional headquarters to Switzerland.~~

We reorganized our corporate structure and intercompany relationships in January 2020 in an effort to more closely align our international business activities and to achieve financial and operational efficiencies. The implementation of this reorganization plan included the move of our EMEA regional headquarters from the Netherlands to Switzerland which has been time-consuming and costly, may be disruptive to our business, and may not be more efficient or effective in the future. This relocation is accompanied by a number of risks and uncertainties that may affect our results of operations and statement of cash flows, including:

•~~failure to retain key employees who possess specific knowledge or expertise and upon whom we are depending upon for the timely and successful transition;~~

•~~difficulties in hiring employees in Switzerland with the necessary skills and expertise; and~~

•~~increased costs due to transition of the operations to Switzerland along with higher costs of doing business in Switzerland.~~

~~If any of these risks materialize in the future, our operating results, statement of operations and cash flows may be adversely affected.~~

Our effective tax rate may vary significantly from period to period.

Various internal and external factors may have favorable or unfavorable effects on our future effective tax rate. These factors include, but are not limited to, changes in global economic environment, changes in legal entity structure ~~and/~~or activities performed within our entities, changes in tax laws, regulations and/or rates, new or changes to accounting pronouncements, changing interpretations of existing tax laws or regulations, changes in the relative proportions of revenues and income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates, changes in overall levels of pretax earnings, the future levels of tax benefits of stock-based compensation, settlement of income tax audits and non-deductible goodwill impairments. For example, our effective tax rate varied significantly in ~~our~~the first quarter of fiscal 2020 due to the relocation of our EMEA regional headquarters from the Netherlands to ~~Switzerland effective January 1, 2020.~~Switzerland. Our effective tax rate is also dependent in part on forecasts of full year results ~~and could~~which can vary ~~materially with the impact of the COVID-19 outbreak to the global economic environment.~~materially. Furthermore, we may continue to experience significant variation in our effective tax rate related to excess tax benefits on stock-based compensation, particularly in the first quarter of each year when the majority of our equity awards vest.

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~~Changes~~New tax laws, or changes in existing tax laws or tax rulings or the way they are applied to our business could negatively impact our income tax provision and net ~~income.~~income or subject us to new or greater tax burdens that may harm our sales or results of operations.

As a U.S. multinational corporation, we are subject to changing tax laws both within and outside of the U.S. Changes in tax laws or tax rulings, or changes in interpretations of existing tax laws, could affect our income tax provision and net income or require us to change the manner in which we operate our business. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in Europe, as well as a number of other countries and organizations, have recently proposed or recommended changes to existing tax laws or have enacted new laws. For example, the Organization for Economic Cooperation and Development (“OECD”) has been working on a “Base Erosion and Profit Shifting Project,” which is focused on a number of issues, including the shifting of profits between affiliated entities in different tax jurisdictions. The OECD has issued and is expected to continue to issue, guidelines and proposals that may change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business.

WeMoreover, the application of indirect taxes (such as sales and use tax (“SUT”), value-added tax (“VAT”), goods and services tax (“GST”), and other indirect taxes) to our operations is complex and evolving. U.S. states, local and foreign taxing jurisdictions have differing rules and regulations governing differing types of taxes, and these rules and regulations are subject to ~~risks~~varying interpretations that may change over time. We collect and remit SUT, VAT, GST and other taxes in many jurisdictions and we are routinely subject to audits. The positions we take regarding taxes as well as the amounts we collect or remit may be challenged and we may be liable for failing to collect or remit all or any portion of taxes deemed owed or the taxes could exceed our estimates. We may also be subject to audits in U.S. states, local and foreign jurisdictions for which we have not accrued tax liabilities. One or more U.S. states or countries may seek to impose incremental or new sales, use, or other tax collection obligations on us or may determine that such taxes should have but have not been paid by us. The application of existing, new, or future tax laws, and results of audits, whether in the U.S. or internationally, could harm our business. Furthermore there have been and will continue to be substantial ongoing costs associated with ~~our strategic investments. Impairments~~complying with the various tax requirements in the ~~value of our investments and unsecured promissory note could negatively impact our financial results.~~numerous markets in which we conduct or will conduct business.

We have ~~invested~~ in ~~privately held companies for strategic reasons~~the past and ~~to support key business initiatives, and we~~ may ~~not realize a return on our strategic investments. Many of such companies generate net losses and~~again in the market for their products, services or technologies may be slow to develop. Further, valuations of privately held companies are inherently complex due to the lack of readily available market data. If we determine that our investments have experienced a decline in value or our unsecured promissory note with SmileDirectClub is determined to be uncollectible, which may be more likely as a result of the COVID-19 pandemic, particularly if its impact to global and domestic economies is sustained and widespread or any recovery is slow, we may be required to record impairments which could be material and could have an adverse impact on our financial results.

~~We may~~future acquire other businesses, products or technologies ~~in the future~~ which could require significant management attention, disrupt our business, dilute ~~shareholder~~stockholder value and adversely affect our results of operations.

~~In order to remain competitive or achieve long-term business objectives,~~

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Periodically, we may acquire, or make investments in, complementary companies, products or ~~technologies.~~technologies like our acquisition of exocad in 2020. Alternatively, we may ~~not~~ be ~~able~~unable to find suitable acquisition targets in the future, and we may not be able to complete acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals or desired synergies, and any acquisitions we complete could be viewed negatively by our customers, securities analysts and investors. ~~In addition, if~~Additionally, as an organization we do not have a history of significant acquisitions or integrating their operations and cultures with our own. If we fail to successfully integrate any acquisitions or the technologies acquired, our revenue and results of operations could be adversely affected or we may inherit or fail to uncover material issues of the acquired company or assets, including litigation or ongoing investigations, accounting irregularities or improprieties, failure to comply with regulations, governmental orders or decrees, and IT security and privacy compliance ~~issues when we integrate acquired products and systems.~~issues. Any integration process may require significant time and resources and we may not successfully evaluate or utilize the acquired technology, or we may fail to retain key personnel, or accurately forecast the financial impact of an acquired ~~business, including accounting charges.~~business. We may have to pay cash, incur debt or issue equity securities to pay for ~~any~~an acquisition, ~~any of~~ which could adversely affect our liquidity, financial condition or the value of our common stock. The sale of equity or issuance of debt to finance any acquisition could result in dilution to our ~~shareholders.~~stockholders. The occurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede our ability to manage our operations.

Moreover, opposition to one of more acquisitions could lead to negative ratings by analysts or investors, give rise to objections by one or more stockholders or result in ~~shareholder~~stockholder activism, any of which could harm our stock price. Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill or the recording of stock-based compensation.

~~Risks Related to our Common Stock~~

Historically, the market price for our common stock has been volatile.

The market price of our common stock ~~could be~~is subject to wide price fluctuations in response to various factors, many of which are beyond our control. The factors include:

•the impact on global and regional economies as a result of the COVID-19 pandemic;

•quarterly variations in our results of operations and liquidity or changes in our forecasts and guidance;

•changes in recommendations by the investment community or ~~in their estimates of our net revenues or operating results;~~

•speculation in the press or investment community ~~concerning~~regarding estimates of our ~~business and~~net revenues, operating results ~~of operations;~~or other performance indicators;

•announcements by us or our competitors or new market ~~entrants;~~

•entrants, including strategic actions, ~~by us or our competitors, such as~~ management changes, and material transactions or acquisitions;

~~Table~~•technical factors in the public trading markets for our stock that may produce price movements that may or may not comport with macro, industry or company-specific fundamentals, including, without limitation, the sentiment of ~~Contents~~retail investors (including as it may be expressed on financial trading and other social media sites), the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock, fractional share trading, and other technical trading factors or strategies;

•announcements regarding stock repurchases, sales of our common stock, credit agreements and debt issuances;

•announcements of technological innovations, new, additional or ~~new~~revised programs, business models, products or product offerings by us, our customers or competitors;

•key decisions in pending ~~litigation~~litigation;

•sales of stock by us, our officers or directors; and

•general economic market conditions.

In addition, the stock market in general, and the market for technology and medical device companies, in particular, have experienced extreme price and volume fluctuations that ~~have~~are often ~~been~~ unrelated to or disproportionate to the operating performance of those companies. These broad market and industry factors may include market expectations of, or actual changes in, monetary policies that have the goal of easing or tightening interest rates such as the federal funds rate in the U.S. and austerity measures of governments intended to control budget deficits. Historically, our stock has fluctuated materially based on broad economic and industry factors unrelated to our actual performance and future changes in monetary policies, austerity, and other market factors may seriously harm the market price of our common stock, regardless of our operating performance. Historically, class action litigation is often brought against an issuing company following periods of volatility in the market price of its securities and we have not been excepted from such litigation.

We cannot guarantee we will ~~continue to~~ repurchase our common stock again in the future, and any repurchases may not achieve our objectives.

We have a history of recurring stock repurchase programs intended to return capital to our investors. Although repurchases were suspended in 2020 primarily as a result of uncertainties regarding the pandemic, we ended the suspension in the second quarter of 2021 with two accelerated stock repurchase programs in the aggregate amount of $200 million which also

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included the announcement of a $1 billion stock repurchase authorization by our Board of Directors. Any ~~authorization~~further authorizations or continuance of ~~our share~~existing stock repurchase programs is contingent on a variety of factors, including our financial condition, results of operations, business requirements, and our ~~board~~Board of ~~directors'~~Directors' continuing determination that ~~share~~stock repurchases are in the best interests of our stockholders and in compliance with all applicable laws and agreements. There is no assurance that we will continue ~~to repurchase~~repurchasing our common stock in the future, consistent with historical levels or at all, or that our stock repurchase programs will have a beneficial impact on our stock price.

Future sales of significant amounts of our common stock may depress our stock price.

A large percentage of our outstanding common stock is currently owned by a small number of significant stockholders. These stockholders have sold in the past, and may sell in the future, large amounts of common stock over relatively short periods of time. Sales of substantial amounts of our common stock in the public market by ~~our~~ existing stockholders may adversely affect the market price of our common ~~stock. Such sales could create public~~stock by creating the perception of difficulties or problems with our business ~~and~~that may depress our stock price.

Increased scrutiny of our environmental, social or governance responsibilities have and will likely continue to result in additional costs and risks, and may adversely impact our reputation, employee retention, and willingness of customers and suppliers to do business with us.

Investor advocacy groups, institutional investors, investment funds, proxy advisory services, stockholders, and customers are increasingly focused on environmental, social and governance ("ESG") practices of companies. Additionally, public interest and legislative pressure related to public companies’ ESG practices continues to grow. If our ESG practices fail to meet regulatory requirements or investor or other industry stakeholders' evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency and employing ESG strategies in our operations, our brand, reputation and employee retention may be negatively impacted and customers and suppliers may be unwilling to do business with us. In addition, as we work to align our ESG practices with industry standards, we have expanded and, in the future, will likely continue to expand our disclosures in these areas. We also expect to incur additional costs and require additional resources to monitor, report, and comply with our various ESG practices. If we fail to adopt ESG standards or practices as quickly as stakeholders desire, report on our ESG efforts or practices accurately, or satisfy the expectations of stakeholders, our reputation, business, financial performance and growth may be adversely impacted.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

~~There were no~~

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table summarizes the stock ~~repurchases during~~repurchase activity for the three months ended June 30, ~~2020. As of June 30, 2020,~~2021:


Period	Total Number of Shares Repurchased	Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares that May Yet Be Repurchased Under the Programs(1)
April 1, 2021 through April 30, 2021	—	$	—	—	$	100,000,000
May 1, 2021 through May 31, 2021	277,314	$	576.96	277,314	$	900,000,000
June 1, 2021 through June 30, 2021	—	$	—	—	$	—
Total	277,314			277,314

(1) Stock Repurchase Programs:

◦May 2018 Repurchase Program. In April 2021, we ~~have~~entered into an accelerated stock repurchase agreement ("ASR") to repurchase $100.0 million ~~available for repurchase under the $600.0~~of our common stock, completing our May 2018 Repurchase Program. We paid $100.0 million ~~repurchase program authorized by~~on May 3, 2021 and received an initial delivery of approximately 0.1 million shares based on current market price of $595.53, which were retired.

◦May 2021 Repurchase Program. In May 2021, we announced that our Board of Directors inhad authorized a plan to repurchase up to $1.0 billion of our common stock. In the same period, we entered into an ASR to repurchase $100.0 million of our common stock. We paid $100.0 million on May ~~2018 (Refer~~18, 2021 and received an initial delivery of approximately 0.1 million shares based on current market price of $559.52, which were retired. Subsequent to the second quarter, on July 30, 2021, we entered into an ASR to repurchase $75.0 million of our common stock. We paid $75.0 million on August 2, 2021 and received an initial delivery of approximately 0.1 million shares based on current market prices. The final number of shares to be repurchased will be based on our volume-weighted average stock price under the terms of the ASR, less an agreed upon discount.

See Note ~~12 “Common~~9 “Common Stock Repurchase ~~Programs”~~ Programs” of the Notes to Condensed Consolidated Financial Statements for details on ~~our stock~~the repurchase ~~program).~~programs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS

(a) Exhibits:

Exhibit

Number

Description

Filing

Date

Exhibit

Number

Filed
herewith

3.02

Amended and Restated Bylaws of Align Technology, Inc.

10.1

Fixed Dollar Accelerated Share Repurchase Confirmation between Goldman Sachs & Co. LLC and Align Technol ogy, Inc. dated April 30, 2021

10.2

Fixed Dollar Accelerated Share Repurchase Confirmation between Goldman Sachs & Co. LLC and Align Tech nology, Inc. dated May 17, 2021

31.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1†

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

† ~~Furnished herewith~~The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

6054

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	ALIGN TECHNOLOGY, INC.

~~July 31, 2020~~August 4, 2021	By:	/s/ JOSEPH M. HOGAN
		Joseph M. Hogan President and Chief Executive Officer

	By:	/s/ JOHN F. MORICI
		John F. Morici Chief Financial Officer and Senior Vice President, Global Finance

6155


Delaware			94-3267295
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value	ALGN	The NASDAQ Stock Market LLC
		(NASDAQ Global Market)



PART I	FINANCIAL INFORMATION	3
ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED):	3
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	3
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	4
	CONDENSED CONSOLIDATED BALANCE SHEETS	5
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	6
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	8
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2823
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4132
ITEM 4.	CONTROLS AND PROCEDURES	4232
PART II	OTHER INFORMATION	4233
ITEM 1.	LEGAL PROCEEDINGS	4233
ITEM 1A.	RISK FACTORS	4233
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	5953
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	5953
ITEM 4.	MINE SAFETY DISCLOSURES	5953
ITEM 5.	OTHER INFORMATION	5953
ITEM 6.	EXHIBITS	6054
SIGNATURES			6155


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net revenues	Net revenues	$	352,314	$	600,697	$	903,277	$	1,149,668	Net revenues	$	1,010,808	$	352,314	$	1,905,579	$	903,277

Cost of net revenues	Cost of net revenues	127,986		168,408		284,593		315,283		Cost of net revenues	252,270		127,986		469,943		284,593

Gross profit	Gross profit	224,328		432,289		618,684		834,385		Gross profit	758,538		224,328		1,435,636		618,684
Operating expenses:	Operating expenses:									Operating expenses:
Selling, general and administrative	Selling, general and administrative	256,967		267,948		539,873		515,058		Selling, general and administrative	431,921		256,967		829,036		539,873

Research and development	Research and development	40,361		38,851		81,893		76,354		Research and development	57,715		40,361		112,252		81,893
Impairments and other charges		—		—		—		29,782
Litigation settlement gain		—		(51,000)		—		(51,000)
Total operating expenses	Total operating expenses	297,328		255,799		621,766		570,194		Total operating expenses	489,636		297,328		941,288		621,766
Income (loss) from operations	Income (loss) from operations	(73,000)		176,490		(3,082)		264,191		Income (loss) from operations	268,902		(73,000)		494,348		(3,082)
Interest income and other income (expense), net:	Interest income and other income (expense), net:									Interest income and other income (expense), net:
Interest income	Interest income	473		3,465		2,459		6,098		Interest income	383		473		2,026		2,459
Other income (expense), net	Other income (expense), net	(966)		13,892		(19,515)		8,146		Other income (expense), net	(483)		(966)		34,049		(19,515)
Total interest income and other income (expense), net	Total interest income and other income (expense), net	(493)		17,357		(17,056)		14,244		Total interest income and other income (expense), net	(100)		(493)		36,075		(17,056)
Net income (loss) before provision for (benefit from) income taxes and equity in losses of investee		(73,493)		193,847		(20,138)		278,435
Net income (loss) before provision for (benefit from) income taxes										Net income (loss) before provision for (benefit from) income taxes	268,802		(73,493)		530,423		(20,138)
Provision for (benefit from) income taxes	Provision for (benefit from) income taxes	(32,891)		43,121		(1,497,667)		51,917		Provision for (benefit from) income taxes	69,088		(32,891)		130,333		(1,497,667)
Equity in losses of investee, net of tax		—		3,584		—		7,528
Net income (loss)	Net income (loss)	$	(40,602)	$	147,142	$	1,477,529	$	218,990	Net income (loss)	$	199,714	$	(40,602)	$	400,090	$	1,477,529

Net income (loss) per share:	Net income (loss) per share:									Net income (loss) per share:
Basic	Basic	$	(0.52)	$	1.84	$	18.78	$	2.74	Basic	$	2.53	$	(0.52)	$	5.06	$	18.78
Diluted	Diluted	$	(0.52)	$	1.83	$	18.70	$	2.71	Diluted	$	2.51	$	(0.52)	$	5.02	$	18.70
Shares used in computing net income (loss) per share:	Shares used in computing net income (loss) per share:									Shares used in computing net income (loss) per share:
Basic	Basic	78,769		79,943		78,681		79,901		Basic	79,008		78,769		79,004		78,681
Diluted	Diluted	78,769		80,590		79,016		80,665		Diluted	79,638		78,769		79,737		79,016


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Net income (loss)	$	(40,602)	$	147,142	$	1,477,529	$	218,990
Change in foreign currency translation adjustment, net of tax	9,294		213		9,983		622
Change in unrealized gains (losses) on investments, net of tax	—		192		(194)		276
Other comprehensive income	9,294		405		9,789		898
Comprehensive income (loss)	$	(31,308)	$	147,547	$	1,487,318	$	219,888


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		June 30, 2020		December 31, 2019			June 30, 2021		December 31, 2020
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	404,359	$	550,425	Cash and cash equivalents	$	1,086,357	$	960,843
Marketable securities, short-term		—		318,202
Accounts receivable, net of allowance for doubtful accounts of $17,099 and $6,756, respectively		473,314		550,291

Accounts receivable, net of allowance for doubtful accounts of $9,427 and $10,239, respectively						Accounts receivable, net of allowance for doubtful accounts of $9,427 and $10,239, respectively	808,079		657,704
Inventories	Inventories	131,276		112,051		Inventories	178,751		139,237
Prepaid expenses and other current assets	Prepaid expenses and other current assets	140,295		102,450		Prepaid expenses and other current assets	158,638		91,754

Total current assets	Total current assets	1,149,244		1,633,419		Total current assets	2,231,825		1,849,538

Property, plant and equipment, net	Property, plant and equipment, net	668,951		631,730		Property, plant and equipment, net	960,852		734,721
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	68,578		56,244		Operating lease right-of-use assets, net	93,425		82,553

Goodwill and intangible assets, net		543,211		75,692
Goodwill						Goodwill	432,179		444,817
Intangible assets, net						Intangible assets, net	117,721		130,072
Deferred tax assets	Deferred tax assets	1,568,293		64,007		Deferred tax assets	1,512,285		1,552,831
Other assets	Other assets	27,580		39,610		Other assets	47,281		35,151
Total assets	Total assets	$	4,025,857	$	2,500,702	Total assets	$	5,395,568	$	4,829,683

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	94,987	$	87,250	Accounts payable	$	225,079	$	142,132
Accrued liabilities	Accrued liabilities	244,774		319,958		Accrued liabilities	495,572		405,582
Deferred revenues	Deferred revenues	601,831		563,762		Deferred revenues	975,930		777,887
Total current liabilities	Total current liabilities	941,592		970,970		Total current liabilities	1,696,581		1,325,601
Income tax payable	Income tax payable	115,257		102,794		Income tax payable	113,306		105,748
Operating lease liabilities	Operating lease liabilities	50,619		43,463		Operating lease liabilities	74,184		64,445
Other long-term liabilities	Other long-term liabilities	73,344		37,306		Other long-term liabilities	127,087		100,024
Total liabilities	Total liabilities	1,180,812		1,154,533		Total liabilities	2,011,158		1,595,818
Commitments and contingencies (Notes 9 and 10)
Commitments and contingencies (Notes 6 and 7)						Commitments and contingencies (Notes 6 and 7)	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $0.0001 par value (5,000 shares authorized; NaN issued)	Preferred stock, $0.0001 par value (5,000 shares authorized; NaN issued)	—		—		Preferred stock, $0.0001 par value (5,000 shares authorized; NaN issued)	0		0
Common stock, $0.0001 par value (200,000 shares authorized; 78,781 and 78,433 issued and outstanding, respectively)		8		8
Common stock, $0.0001 par value (200,000 shares authorized; 78,948 and 78,860 issued and outstanding, respectively)						Common stock, $0.0001 par value (200,000 shares authorized; 78,948 and 78,860 issued and outstanding, respectively)	8		8
Additional paid-in capital	Additional paid-in capital	918,495		906,937		Additional paid-in capital	895,831		974,556
Accumulated other comprehensive income (loss), net	Accumulated other comprehensive income (loss), net	9,101		(688)		Accumulated other comprehensive income (loss), net	29,616		43,501
Retained earnings	Retained earnings	1,917,441		439,912		Retained earnings	2,458,955		2,215,800
Total stockholders’ equity	Total stockholders’ equity	2,845,045		1,346,169		Total stockholders’ equity	3,384,410		3,233,865
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,025,857	$	2,500,702	Total liabilities and stockholders’ equity	$	5,395,568	$	4,829,683


		Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings				Total				Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Three Months Ended June 30, 2020		Shares	Amount
Balance as of March 31, 2020		78,759	$	8	$	895,131							$	(193)			$	1,958,043		$	2,852,989
Net loss		—	—		—		—		(40,602)		(40,602)
Three Months Ended June 30, 2021													Three Months Ended June 30, 2021			Shares			Amount			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Balance as of March 31, 2021													Balance as of March 31, 2021			79,136			$	8
Net income													Net income			—			—			—		—		199,714		199,714

Net change in foreign currency translation adjustment	Net change in foreign currency translation adjustment	—	—		—		9,294		—		9,294		Net change in foreign currency translation adjustment			—			—			—		586		—		586
Issuance of common stock relating to employee equity compensation plans	Issuance of common stock relating to employee equity compensation plans	22	—		—		—		—		—		Issuance of common stock relating to employee equity compensation plans			89			—			—		—		—		—
Tax withholdings related to net share settlements of equity awards	Tax withholdings related to net share settlements of equity awards	—	—		(1,643)		—		—		(1,643)		Tax withholdings related to net share settlements of equity awards			—			—			(38,321)		—		—		(38,321)

Common stock repurchased and retired													Common stock repurchased and retired			(277)			—			(3,065)		—		(156,935)		(160,000)
Equity forward contract related to accelerated stock repurchase													Equity forward contract related to accelerated stock repurchase			—			—			(40,000)		—		—		(40,000)
Stock-based compensation	Stock-based compensation	—	—		25,007		—		—		25,007		Stock-based compensation			—			—			28,855		—		—		28,855
Balance as of June 30, 2020		78,781	$	8	$	918,495	$	9,101	$	1,917,441	$	2,845,045
Balance as of June 30, 2021													Balance as of June 30, 2021			78,948			$	8		$	895,831	$	29,616	$	2,458,955	$	3,384,410


		Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings				Total				Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Six Months Ended June 30, 2020		Shares	Amount
Balance as of December 31, 2019		78,433	$	8	$	906,937							$	(688)			$	439,912		$	1,346,169
Six Months Ended June 30, 2021													Six Months Ended June 30, 2021			Shares			Amount			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss), Net		Retained Earnings		Total
Balance as of December 31, 2020													Balance as of December 31, 2020			78,860			$	8
Net income	Net income	—	—		—		—		1,477,529		1,477,529		Net income			—			—			��		—		400,090		400,090
Net change in unrealized gains (losses) from investments	Net change in unrealized gains (losses) from investments	—	—		—		(194)		—		(194)		Net change in unrealized gains (losses) from investments			—			—			—		(20)		—		(20)
Net change in foreign currency translation adjustment	Net change in foreign currency translation adjustment	—	—		—		9,983		—		9,983		Net change in foreign currency translation adjustment			—			—			—		(13,865)		—		(13,865)
Issuance of common stock relating to employee equity compensation plans	Issuance of common stock relating to employee equity compensation plans	348	—		10,662		—		—		10,662		Issuance of common stock relating to employee equity compensation plans			365			—			13,133		—		—		13,133
Tax withholdings related to net share settlements of equity awards	Tax withholdings related to net share settlements of equity awards	—	—		(47,038)		—		—		(47,038)		Tax withholdings related to net share settlements of equity awards			—			—			(104,889)		—		—		(104,889)

Common stock repurchased and retired													Common stock repurchased and retired			(277)			—			(3,065)		—		(156,935)		(160,000)
Equity forward contract related to accelerated stock repurchase													Equity forward contract related to accelerated stock repurchase			—			—			(40,000)		—		—		(40,000)
Stock-based compensation	Stock-based compensation	—	—		47,934		—		—		47,934		Stock-based compensation			—			—			56,096		—		—		56,096
Balance as of June 30, 2020		78,781	$	8	$	918,495	$	9,101	$	1,917,441	$	2,845,045
Balance as of June 30, 2021													Balance as of June 30, 2021			78,948			$	8		$	895,831	$	29,616	$	2,458,955	$	3,384,410


December 31, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate bonds	$	210,891	$	142	$	(27)	$	211,006
U.S. government treasury bonds	70,587		65		(2)		70,650
U.S. government agency bonds	22,085		17		(1)		22,101
Commercial paper	14,426		—		—		14,426
Certificates of deposit	19		—		—		19
Total marketable securities, short-term	$	318,008	$	224	$	(30)	$	318,202


Description	Description	Balance as of June 30, 2020		Level 1		Level 2		Level 3		Description	Balance as of June 30, 2021		Level 1		Level 2
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	149,230	$	149,230	$	—	$	—	Money market funds	$	531,207	$	531,207	$	0

Prepaid expenses and other current assets:	Prepaid expenses and other current assets:									Prepaid expenses and other current assets:
Israeli funds	Israeli funds	3,291		—		3,291		—		Israeli funds	3,999		0		3,999

Current unsecured promissory note		21,246		—		—		21,246

		$	173,767	$	149,230	$	3,291	$	21,246
											$	535,206	$	531,207	$	3,999


	June 30, 2020		December 31, 2019
Tax related receivables	$	72,481	$	41,252
Prepaid software and maintenance	21,543		7,128
Current promissory note ¹	21,314		25,005
Others	24,957		29,065

Total prepaid expenses and other current assets	$	140,295	$	102,450


~~Cash paid to exocad stockholders~~	$	~~412,287~~
~~Cash paid to settle exocad's bank debt~~	~~17,691~~
~~Total purchase consideration paid~~	$	~~429,978~~


~~Goodwill~~	$	~~344,238~~
~~Identified intangible assets~~	~~118,700~~
~~Cash and cash equivalents~~	~~9,190~~
~~Deferred tax liabilities~~	~~(35,419)~~
~~Other assets (liabilities), net~~	~~(6,731)~~
~~Total~~	$	~~429,978~~


	Clear Aligner		Systems and Services		Total
Balance as of December 31, 2019	$	63,924	$	—	$	63,924
Additions from exocad acquisition¹	43,500		300,738		344,238
Adjustments²	574		6,800		7,374
Balance as of June 30, 2020	$	107,998	$	307,538	$	415,536


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of June 30, 2020		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of June 30, 2020
Trademarks and tradenames	10	$	16,900	$	(2,514)	$	(4,179)	$	10,207
Existing technology	10	99,600		(5,936)		(4,328)		89,336
Customer relationships	11	55,000		(19,348)		(10,751)		24,901
Other ¹	5	15,314		(12,083)		—		3,231
Total intangible assets ²		$	186,814	$	(39,881)	$	(19,258)	$	127,675


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2019		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of December 31, 2019
Trademarks	15	$	7,100	$	(2,045)	$	(4,179)	$	876
Existing technology	13	12,600		(5,831)		(4,328)		2,441
Customer relationships	11	33,500		(18,405)		(10,751)		4,344
Reacquired rights	3	7,500		(7,059)		—		441
Patents	8	6,796		(3,165)		—		3,631
Other	2	618		(583)		—		35
Total intangible assets		$	68,114	$	(37,088)	$	(19,258)	$	11,768


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of June 30, 2021		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of June 30, 2021
Existing technology	10	$	99,400	$	(17,351)	$	(4,328)	$	77,721
Customer relationships	11	55,000		(23,885)		(10,751)		20,364
Trademarks and tradenames	10	16,600		(3,702)		(4,179)		8,719
Patents and other	8	6,610		(4,192)		0		2,418
		$	177,610	$	(49,130)	$	(19,258)	109,222
Foreign currency translation								8,499
Total intangible assets								$	117,721


	Weighted Average Amortization Period (in years)	Fair Value
Intangible assets subject to amortization:
Existing technology	10	$	87,000
Customer relationships	10	21,500
Tradenames	7	9,800
Intangible assets not subject to amortization:
In-process Research and Development ("IPR&D")		400
Total intangible assets		$	118,700


	Weighted Average Amortization Period (in years)	Gross Carrying Amount as of December 31, 2020		Accumulated Amortization		Accumulated Impairment Loss		Net Carrying Value as of December 31, 2020
Existing technology	10	$	99,400	$	(12,719)	$	(4,328)	$	82,353
Customer relationships	11	55,000		(21,879)		(10,751)		22,370
Trademarks and tradenames	10	16,600		(2,934)		(4,179)		9,487
Patents and other	8	6,610		(3,785)		0		2,825
		177,610		(41,317)		(19,258)		117,035
Foreign currency translation								13,037
Total intangible assets								$	130,072


Fiscal Year Ending December 31,	Fiscal Year Ending December 31,	Amortization		Fiscal Year Ending December 31,	Amortization
Remainder of 2020		$	8,178
2021		15,899
Remainder of 2021				Remainder of 2021	$	7,809
2022	2022	14,642		2022	14,366
2023	2023	14,022		2023	13,745
2024	2024	13,081		2024	12,805
2025				2025	12,428
Thereafter	Thereafter	61,853		Thereafter	48,069
Total	Total	$	127,675	Total	$	109,222


		Number of Shares Underlying RSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)			Number of Shares Underlying RSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2019		696	$	190.60
Unvested as of December 31, 2020								Unvested as of December 31, 2020	632	$	243.55
Granted	Granted	289	264.97					Granted	158	597.20
Vested and released	Vested and released	(288)	149.86					Vested and released	(241)	214.71
Forfeited	Forfeited	(22)	231.28					Forfeited	(24)	333.07
Unvested as of June 30, 2020		675	$	238.47	1.6	$	185,207
Unvested as of June 30, 2021								Unvested as of June 30, 2021	525	$	358.92	1.6	$	320,663


		Number of Shares Underlying MSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)			Number of Shares Underlying MSUs (in thousands)	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2019		244	$	331.35
Unvested as of December 31, 2020								Unvested as of December 31, 2020	227	$	430.50
Granted	Granted	156	242.04					Granted	177	658.02
Vested and released	Vested and released	(173)	120.39					Vested and released	(230)	513.73

Unvested as of June 30, 2020		227	$	430.50	1.6	$	62,365
Unvested as of June 30, 2021								Unvested as of June 30, 2021	174	$	551.57	1.5	$	106,374


				Initial Share Delivery
Effective Date	Repurchase Program	Amount Paid (in millions)		Initial Shares Delivered	Price Per Share		Value Of Shares As A Percent Of Contract Value
April 30, 2021	May 2018 Repurchase Program	$	100.0	134,334	$	595.53	80	%
May 17, 2021	May 2021 Repurchase Program	$	100.0	142,980	$	559.52	80	%


	Three Months Ended June 30,								Six Months Ended June 30,
Region	2020	2019	Net Change	% Change		2020	2019	Net Change	% Change
Americas	101.0	212.7	(111.7)	(52.5)	%	314.5	425.9	(111.4)	(26.2)	%
International	120.9	165.8	(44.9)	(27.1)	%	266.8	312.0	(45.2)	(14.5)	%
Total case volume	221.9	378.5	(156.6)	(41.4)	%	581.3	737.9	(156.6)	(21.2)	%