Align Technology, Inc. 2010 Annual Report

1 Welcome to the next generation of Align dear fellow shareholders Technology and Invisalign. It’s not coming soon 2010 was another year of – it’s happening right now. progress and growth for Align Technology, and I’m very Align has always set the bar for what “next pleased with our performance a significant differentiator generation” means in our industry. In 1997 and execution. We had many for us from any competitor. On the international front, we we made “next gen” a reality by creating significant accomplishments, including the launch of added a third international the market for invisible orthodontics with the Invisalign G3, the most distributor to cover the smaller introduction of the Invisalign system. Since significant set of innovations countries in the Europe, then, we’ve expanded and led that market and new features in Align’s Middle East, and Africa (EMEA) region and received through a continuous stream of innovation in history. We continued to gain regulatory approval for our products and the way we market them. share in the very important teen orthodontic segment commercial launch in China, In 2010 we made “next generation” a reality and expect to build on this which is on track for the again with the launch of Invisalign G3, the early success, especially with second half of 2011. As a result most significant set of product improvements the launch of Invisalign G3 of good execution, higher volume and more tightly and new features in Align’s history. features that make it easier to treat complex cases. managed spending, the launch But we’re not just setting the bar high with of innovative new products, We continued to build and focused marketing our products – we’re creating a next generation consumer awareness and campaigns, we had strong company. One with an increasingly global demand for Invisalign through revenue growth and achieved presence, a fresh, contemporary brand an integrated consumer record operating margins. marketing platform, which is that addresses the clinical and lifestyle needs We’re optimistic about the of consumers of all ages, and new technology recent trends in patient flow and partnerships to create more value and the continuing evolution and open new markets for our customers and shareholders. We’re also at the forefront of a trend toward digitally enabled dentistry that is truly bringing Total Revenue OPERATING MARGIN CASE SHIPMENTS next generation options to doctors and $ Millions (*non-GAAP) % (*non-GAAP) Thousands their patients. Adoption of the Invisalign * * system and this growing trend in the industry are converging to make what we do a more mainstream and integrated part of dental and orthodontic practices. And that’s exactly * where we want to be.

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2 1 Over the next decade, intra-oral scanners will become widely used in dental practices, with Each of these priorities third-party sources such as iData Research, Inc.* represents opportunities for us to gain a greater share suggesting that compound annual growth rates of our existing customers’ will exceed 20 percent over the next five years. of the dental industry. The practices and to expand the market opportunity and value size of our customer base. proposition for Invisalign are But an even bigger, new tremendous, and we remain opportunity involves a focused on our strategy to different type of expansion — During 2010 we began working What truly distinguishes us is drive adoption worldwide. one that can help us drive on a strategic relationship not just the ability to envision The key to our success — in greater adoption and gain with Cadent, Inc., an early the future, but our ability the year past and in the year entry into new markets. leader in digital imaging and to achieve it. The last few ahead — is our commitment intra-oral scanning, to develop technologies will provide us years we’ve worked hard to The dental industry is evolving to and execution of our core Invisalign applications to run with a significant opportunity accelerate our ability to deliver more rapidly than ever before, strategic initiatives: on Cadent scanners. In March to create growth and to on innovation, and as a result, with digital imaging, diagnosis, 2011, we announced our continue to build value we’re making “next gen” a • Accelerate product treatment, and integrated intent to acquire Cadent as for our customers and our reality today — for our company innovation and clinical practice management tools a strategic investment in our shareholders by: and for our customers. becoming an increasingly effectiveness; long-term growth. important part of modern • Driving incremental 2010 REVENUE BY CHANNEL It’s a great time to be part • Enhance the customer dental, orthodontic, and other Cadent has expertise in growth of Invisalign through of Align Technology. experience; specialist practices. We call orthodontics and restorative interoperability with Cadent Our opportunities and • Increase effectiveness of this the “digitization” of the dentistry that is complementary scanners and by using Cadent advantages are greater than consumer demand creation; dental industry, and believe to Align, including capabilities intra-oral scanning systems ever before. I look forward it provides an opportunity for in digital impressions for as a platform for chair-side to another year of exciting • Drive international growth Invisalign to become more fabrication of crown and applications for Invisalign progress, and to sharing the and expansion. integrated into day-to-day bridge, veneers, implants, treatment and other dental next generation of our growth In 2011 we’ll continue this practice. We believe intra-oral and other procedures, as well and orthodontic procedures; with our shareholders. n N.A. GP DENTISTS scanning systems in particular, as a range of products and focused execution with • Accelerating adoption of n N.A. ORTHODONTISTS more product innovation with their strategic position services that their customers n INTERNATIONAL intra-oral scanning in dental to deliver great clinical at the treatment chair, provide love. Like Align, they also n NON-CASE practices through Align’s a platform for delivering have expertise in advanced outcomes; the launch of global sales and marketing valuable chair-side treatment digital modeling and software Invisalign G3 internationally reach and our large installed tools and improving the overall development, as well as the in Q2; and expansion customer base; 2010 REVENUE BY PRODUCT into important new markets, experience for patients. drive and agility to quickly specifically China in the develop and deliver innovative • Providing an entry into the Over the next decade, Thomas M. Prescott second half of the year solutions to customers. restorative market, where intra-oral scanners will become President and and — through distributor we believe our combined widely used in dental practices, The integration of Align’s Chief Executive Officer partners — Turkey, Russia, companies can offer valuable with third-party sources and Cadent’s combined and other attractive country and innovative solutions in such as iData Research, Inc.* capabilities, markets, and markets by year-end. In the future. suggesting that compound addition, we’ll increase annual growth rates will “Next gen now” is an apt manufacturing capacity in n Invisalign FULL exceed 20 percent over the theme for this year’s report for n our Juarez fabrication Invisalign TEEN next five years. shareholders. Align has always n Invisalign EXPRESS facility to meet the demand set the bar for innovation n Invisalign ASSIST of future initiatives and and progress in our industry. n NON-CASE international growth.

* iData Research, Inc., 2009 2 3 Next generation dental practices use digital tools to enable more efficient treatment for doctors and a better experience for patients. The growing trend toward digitally enabled practices plays to Align’s strengths, such as a significant online brand presence, 3D treatment planning, and online patient databases — just to name a few.

patient practice diagnosis + engagement management clinical records From a dental practice’s Align’s social media Open systems allow prac- The Invisalign Doctor Increasingly, dental records With 3D models website to their Facebook and online presence tices to integrate patient Site serves as an online are digital — from x-rays to taken from PVS page, online marketing and help drive patients to databases, accounting patient database and 3D intra-oral scans that impressions, digital social media help connect dental practices. systems, and scheduling consolidates all of a replace dental molds and treatment files, and doctors with prospective software for a more efficient practice’s Invisalign impressions — enabling real- records from more patients, while text, email, and paperless approach treatment information, time evaluation, instant online than 1.5 million and social media provide a to practice management. appointment schedul- information exchange, and patients, the Invisalign new way to communicate ing, and digital records digital records storage. system is based on appointment and treatment in one location. digital records. updates and word-of- mouth referrals.

treatment planning clinical lab + management collaboration interface In a digitally enabled practice, Doctors routinely A digitally enabled practice ClinCheck treatment The use of intra-oral scans Interoperability with doctors bring treatment share ClinCheck makes it easier for doctors plans are shared and other 3D images results Cadent intra-oral planning chair-side to discuss treatment setups to collaborate on treatment, between doctors who in more precise records and scanners will allow and decide on treatment chair-side; with Cadent whether it’s an orthodontist and are collaborating on quicker turnaround time Invisalign doctors to options for the patient, such intra-oral scanners, cosmetic dentist sharing intra- treatment, and Align’s when working with labs and submit intra-oral as comparing an Invisalign applications for oral scans for a smile makeover, robust professional manufacturers for fabrication of scans instead of PVS patient’s ClinCheck 3D Invisalign and other a younger dentist getting a education website implants and veneers, aligners, impressions for treatment plan to his or her procedures will second opinion from a mentor, provides peer-to- bracket templates, and more. Invisalign treatment — current progress. be available at the or associate doctors doing a peer online education more efficient treatment chair in consult together via Skype. webcasts, blogs, and for the doctor, more the future. podcasts for easily comfortable for accessible case the patient. studies and more.

5 practice with over $2 billion in cumulative sales and more Our Evolution growth. In 2010, the number than 1.5 million patients Creates New of teenagers starting treatment treated in 65 countries. Opportunities with Invisalign products was We’re always looking for 58, 450, up 27 percent from In 1997, Align revolutionized new ways to create and 2009. With Invisalign Teen®, a orthodontic treatment by drive growth. We entered product designed specifically creating the market for 2011 with specific initiatives for teen orthodontic needs, invisible orthodontics, and in mind that will propel and comprehensive marketing since then we’ve worked Align forward to the next that targets teens and their to bring forward-thinking generation: greater entry parents, we have the right products, technology, and into teen orthodontic combination to help us brands to our customers case starts, international gain a greater share of this and their patients. We think expansion, and emerging important segment. constantly about what our trends in dentistry that play doctors need clinically and to Align’s core competencies. Bringing next generation about the impact of new products to new markets technology and evolving TOTAL TEENAGE SHIPMENTS around the world consumer lifestyles on their Thousands Our international business practices and the way they has been growing rapidly for treat their patients. That eye several years and now makes toward the future has paid up a quarter of our total off — today, with the help of revenues. Over the next our orthodontist and dentist three to five years, we expect customers, we lead the international growth to market in clear aligner therapy continue to outpace growth in North America and ultimately WORLDWIDE INVISALIGN account for one-third of our UNIT SHARE business. To support that 2.6 million annual case starts growth, we are investing applicable to Invisalign more in international growth and expansion through a combination of direct sales in Europe (UK, Germany, France, Teens truly are the next Spain, and Italy), Japan, and gen of Invisalign patients soon China, as well as A key element of our strategy distributor partners for Asia-

company is to gain share of the overall Pacific, Latin America, and teenage orthodontic segment, EMEA. By the end of 2011, we n TEENS as measured by the total expect to have new doctors n ADULTS number of teenagers using any n INVISALIGN ADULTS trained and prescribing Invisalign product. Teenagers, n INVISALIGN TEENS Invisalign in Turkey, Russia, International expansion is age 19 and under, represent Saudi Arabia, United Arab bringing Invisalign to more 76 percent of applicable Emirates, Chile, and Peru. countries and a wider range annual orthodontic case starts of patients than ever before. worldwide, and are one of our biggest opportunities for

7 goods and services, with an scanning and digital solutions increasing awareness of dental for restorative dentistry and INTERNATIONAL REVENUE in completely digital form, health and its impact on orthodontics. The acquisition $ Millions including digital records personal appearance. There of Cadent positions Align align + such as x-rays and photos, as are more than 50,000 general Guangzhou. With a focused, strategically as digital well as the treatment plans cadent dentists in China and nearly gradual direct sales strategy, scanning becomes more of themselves. The only records In March 2011, Align announced 500,000 orthodontic case China provides us with strong a day-to-day part of dental we still receive in a physical its intent to acquire Cadent, a starts each year — with case growth potential for the future. and orthodontic practices. form are PVS impressions — starts growing approximately With Cadent, Align will be company that has emerged as which we then turn into a 30 percent annually. Despite Evolution of the dental able to provide the chair-side an early leader in the intra-oral digital 3D model. So in a way, that strong growth, there is industry creates new system for use with Invisalign scanning technology that will the industry at large is now still up to a year waiting list opportunities and restorative treatment. become a common part of dental getting on board with us. to get orthodontic treatment. Just as Align continues to The acquisition will also allow practices over the next five years. grow and evolve, so does the Doctors in China are ready For example, intra-oral Align to help accelerate Like Align, Cadent has strong dental industry. Today, the for new technology and an scanning is an emerging the adoption of intra-oral 3D software development capabili- trend is toward greater use of esthetic option for treating technology that promises scanning in dental practices, ties and expertise in orthodontics. digital tools in the practice. the complex Class II and Class to have a substantial impact and provides a greater entry They lead the industry in digital More and more practices are III cases that are common in on the future of dentistry. into the market for restorative optics and powderless scanning, In 2010, the international embracing digital solutions that country. It enables the doctor to dentistry. We believe when and their technology overall is at team enhanced the direct for integrated practice instantaneously create a combined, the companies the forefront of the industry trend sales organization with a After gaining regulatory management, digital tools precise 3D image of the can offer greater value approval in 2010, the launch toward digitization. Through our new managing director for for diagnosis and treatment patient’s teeth using a hand- together and continue to work together on interoperability, Europe and expanded sales of Invisalign in China is on planning, new imaging held digital scanner inside the set the bar high with unique track for the second half of we recognized a strategic opportu- coverage in targeted markets. modalities such as digital mouth, instead of creating a and innovative digital nity to combine each company’s We made incremental 2011. We are currently working x-rays and intra-oral scanning physical impression or mold. solutions for our customers. with key opinion leaders market-leading technology to bring investments in consumer that replace physical x-rays Not only does interoperability innovative digital treatment tools and professional marketing and university faculty to Over the last few years, Align and impressions, and digitally with intra-oral scanners gain clinical acceptance and has worked with leading chair-side, and to help increase activity in preparation for enabled treatment options provide a digital replacement adoption of intra-oral scanning. the international launch of build a support base prior to manufacturers of intra-oral for orthodontics and for messy and sometimes commercial launch. Our initial scanning systems to evaluate Cadent has areas of expertise that Invisalign G3 and the new restorative dentistry. inaccurate physical dental are complementary to Align, such Invisalign branding. The focus will be on large public and establish interoperability This increasingly widespread impressions, it provides an as orthodontics and restorative successful international launch hospitals and the increasing between their scanners and use of digital tools and opportunity for Align to bring dentistry, including capabilities in of Invisalign G3 in 2011 is number of private clinics in the Invisalign system. One of solutions in dental practices valuable Invisalign treatment digital records storage and especially important given four key cities: Shanghai, those companies is Cadent. provides an opportunity for tools chair-side in the dental digital impressions, and scanning the complexity of cases in Beijing, Shenzhen, and In 2011 Align will achieve Invisalign to become more practice. With a 3D image of software for fabrication of crown international markets and interoperability with Cadent’s integrated with other day-to- the patient’s teeth available and bridge, veneers, implants, the Invisalign G3 features 2010 INTERNATIONAL REVENUE iOC and iTero scanners, day procedures in the practice. instantaneously, doctors can and other restorative procedures. designed to address those DIRECT VS. INDIRECT % allowing doctors to submit After all, digitally enabled assess the case and begin complex treatment issues. Cadent intra-oral scans The intersection of our combined Invisalign treatment planning dentistry is at the heart of in place of impressions for markets and technologies will Outside of Europe, our chair-side, rather than waiting what we do — with an installed Invisalign treatment. provide us with a significant biggest opportunity lies for physical models to be base of more than 55,000 opportunity to create leverage with China, thanks in part to converted into digital data. users, we’re one of the largest and growth and to build value for an emerging middle class providers of digitally enabled In March 2011, Align our customers and shareholders. with increasing discretionary treatment. Over 70 percent announced its intent to income. China is now the of current incoming Invisalign acquire Cadent Holdings, Inc., n DIRECT third largest market for luxury cases are transmitted to us n INDIRECT an early leader in intra-oral

8 9 Next Gen Treatment with Invisalign

Until recently, Invisalign was considered a first generation Invisalign Full plus additional The Invisalign system may evolve product. During Align’s features designed to meet and change, but our commitment earlier years, we focused teen treatment needs; to product quality never does. on understanding how Invisalign Assist® with built-in We’re confident about the quality the aligners could work, case support and guidance of our materials and our manufac- maximizing manufacturing for newly trained doctors; turing processes. Invisalign aligners efficiencies, and getting the and Vivera® retainers for post- are made of a USP Class VI best possible performance treatment retention. medical-grade, high molecular from the core product. After weight, proprietary, polyurethane all, it was the first iteration Many things have helped drive resin. Polyurethanes are on the of digitally enabled, mass- and shape this evolution of the FDA list of approved materials that customized aligners — ever. Invisalign system, including: are routinely used for implantable But over the last few years devices, such as stent coatings and we’ve moved beyond the • Clinical and customer cochlear implants. first generation of the Invisalign research — over the last three system to one that incorporates years we’ve invested more Once the aligners are formed, we shape-engineered aligners, time in customer research laser-cut them for precision, biomechanical principles, to ensure that what we’re machine-buff and polish them for intuitive software, and much delivering is what customers patient comfort, disinfect them for more to address specific actually want and need; safety, and package them using a clinical needs and treatment system that creates minimal waste. • Day-to-day clinical use and approaches. We routinely test our processes adoption as doctors push and environmental factors to ensure the treatment envelope and system The current generation of that we’re delivering the best Invisalign includes versions for do more with the product; possible products to our doctors almost every patient: Invisalign • A world-class professional and their patients. Full, our foundation product, education program that used to treat a broad range Align has manufactured more than offers an extensive curriculum of malocclusions; Invisalign 70 million custom aligners for over of live and online training, Express (North America) or 1.5 million patients to date, and including 24/7 access to Invisalign Lite (International) we are proud to have a 96 percent Invisalign educational content for minor crowding/spacing satisfaction rate among treated via the award-winning at a lower cost; Invisalign patients. We never lose sight of Aligntechinstitute.com and Teen, with all the features of the fact that we are manufacturing iTunes-accessible podcasts; unique Class II medical devices for • Continuous product every patient — and patient safety innovation, as we strive to is our top priority. help deliver great clinical outcomes with maximum Next generation practices predictability and efficiency. use digital tools to bring diagnosis and treatment planning chair-side.

11 Next generation features with Invisalign G3 Integration with intra- In 2010, Align delivered the oral scanning systems biggest and most exciting Intra-oral scanning is an group of new features and • A significantly improved best-in-class scanning systems emerging technology that product innovations since Invisalign Doctor Site that to accelerate development promises to have substantial the initial launch of Invisalign. consolidates patient records of chair-side case assessment impact on the future of Invisalign G3 builds on and treatment tasks into one and treatment planning tools dentistry. Its main advantage features introduced to the efficient and easy-to-use site. Because doctors want to for Invisalign treatment and is that it enables the doctor Invisalign product line in late choose the digital imaging other mainstream dental and to instantaneously create a 3D ™ The innovations in Invisalign 2009, such as SmartForce system that is best for their orthodontic procedures. image of the patient’s teeth features — attachments and G3 really get at the heart of practice, Align favors an using a handheld digital image features that are engineered what doctors have been asking open systems approach scanner inside the mouth. into the shape of the aligner for from Invisalign treatment: to interoperability. We will Compared to the mess, dis- to deliver the forces needed to technology and tools that continue to work with leading comfort, and subjective nature achieve specific, predictable are designed to expand the manufacturers of intra-oral of taking physical impressions, tooth movements. The clinical scope of Invisalign, scanning systems to evaluate intra-oral scans are more innovations packaged as deliver greater predictability their systems for future use efficient and precise and more Invisalign G3 and rolled out across most clinical situations, with Invisalign treatment. comfortable for patients. across the product line are and make treatment planning Align has defined a robust more efficient. designed to deliver even In March 2011, Align validation process for scan better clinical results, with: quality and accuracy to ensure While Invisalign G3 was a announced its intent to acquire Cadent Holdings, Inc., a specific scanning technology • Precision Cuts aligner tremendous leap forward in an early leader in intra-oral can successfully replace and software features that Invisalign functionality, we’re scanning. Align and Cadent physical PVS impressions make it easier to use elastics already working on the next have worked together for currently used in Invisalign with challenging Class II and generation of Invisalign. some time on interoperability, case submissions. Class III treatment; Building on the success of Invisalign G3, the next and in 2011 doctors will be Bringing diagnosis and ABOVE: Cadent has a portfolio of • SmartForce attachment wave of innovation will focus able to submit digital scans treatment planning to best-in-class products and services and aligner features designed on bringing even greater from Cadent scanners in the treatment chair for restorative dentistry and to increase predictability of predictability to specific types place of PVS impressions for Interoperability with intra- orthodontics, including the iTero certain tooth movements; Invisalign treatment — ushering of treatment. By enhancing and iOC intra-oral scanners. TOP: Precision Cuts aligner and oral scanning systems and and expanding aligner in a new era of efficiency software features make it easier • A more intuitive user Align’s acquisition of Cadent features such as SmartForce and comfort for Invisalign to use elastics with challenging interface and drag-and-drop will bring another benefit to features and optimized and their patients. Class II and Class III treatment. features for ClinCheck 3.0 Invisalign practices by giving attachments, we can combine MIDDLE: SmartForce attachment to enable more efficient Align a dedicated digital or “package” solutions for and aligner features are designed treatment planning and better scanning platform for chair- common tooth movements to increase predictability of communication with Align; side treatment applications. certain tooth movements. that apply to specific clinical We believe we can increase BOTTOM: The Invisalign Doctor conditions, such as the move- efficiency of case evaluation Site with drag-and-drop features ments necessary for closing and Invisalign treatment consolidates patient records diastemas (the gap between planning to the treatment and treatment tasks into one a patient’s front teeth). chair — it’s also a great way to efficient and easy-to-use site. engage patients more fully in their treatment process. Align plans to leverage Cadent’s

12 13 Next Gen Marketing leaders. In 2010, we kicked to Today’s Consumers off our Mom Advisory Board and Invisalign Teen brand Align was the first company in ambassadors to document orthodontics to leverage the including an emphasis on their kids’ treatment process power of direct-to-consumer in-depth consumer research online and through social marketing, creating the first which allows us to market media, and to help educate brand of orthodontic appliance smarter and faster. We’re able other moms about Invisalign that patients know and ask for to get more insight into what Teen treatment. In January by name. As our company has consumers want to know 2011, we launched a new evolved, so have consumers — about Invisalign and therefore online community for moms nothing is as “next gen” as influence them more effectively. called MomsOnBraces.org, our prospective patients. which will serve as a premier Today’s consumers are better Our goals in consumer destination for moms informed, more empowered, marketing are to extend our researching braces and teeth and highly engaged in their leadership in clear aligner straightening for their children, healthcare options. They therapy with adults, increase along with print and TV ads research treatment options awareness and motivation specifically focused on moms before they visit their with teens and their parents, of treatment-age kids. doctor. And while traditional and continue expansion of marketing vehicles such as the clear aligner category Consumer Marketing Mix print and TV advertising help overall. In 2010, we continued build awareness, prospective building awareness and patients are doing their real demand through an integrated research online, in blogs, consumer marketing and via YouTube. Word-of- platform of traditional media, mouth patient experiences including a new Invisalign have gone viral, being shared Teen commercial; PR and through Facebook, Twitter, event marketing, such as our and YouTube video journals. sponsorship of Fox’s Teen Nowhere is this more Choice Awards; and digital noticeable than with today’s and social media with YouTube teenagers — living active lives, and Facebook contests. fashion and trend focused, Across all platforms, the tech savvy, informed, and influ- ultimate call to action is to n PR/EVENT ential in purchasing decisions. drive informed, enthusiastic n DIGITAL/SEARCH/SOCIAL patients to experienced n TV/PRINT Align is uniquely positioned Invisalign providers so that in dentistry and orthodontics they have the best possible ABOVE: Align continues to to address the way consumers treatment experience. evolve its mix of consumer absorb information where marketing media to increase they work and play. We’re

consumer Mom knows best focus and effectiveness. reaching potential patients Moms of teenage patients Teens are the ultimate next through next generation have emerged as one of the generation consumers — online, marketing strategies, most influential groups for trend-savvy, and well informed about their purchasing decisions. consumer marketing — they are this generation’s opinion

14 15 Financial Highlights Executive Team Board of Directors Shareholder Information (in thousands, except per share data) 2010 2009 2008 Thomas M. Prescott David E. Collins Online Annual Report, Statement of Operations Director, President, and Former Vice Chairman Form 10-K, Proxy Chief Executive Officer Johnson & Johnson You can find our online Annual Report, Total net revenues $ 387,126 $ 312,333 $ 303,976 Form 10-K, and Proxy at: Kenneth B. Arola Joseph Lacob Gross profit 303,417 233,492 225,126 http://investor.aligntech.com Vice President, Finance and Partner Total operating expenses 200,683 267,504 209,612 Chief Financial Officer Kleiner Perkins Investor Relations Profit (loss) from operations 102,734 (34,012) 15,514 Caufield & Byers For additional information about Align, Dana Cambra Net profit (loss) $ 74,253 $ (31,269) $ 79,987 additional copies of this Annual Report, Vice President, Research & C. Raymond Larkin, Jr. SEC filings, or other financial informa- Net profit (loss) per fully diluted share $ 0.95 $ (0.45) $ 1.18 Development and Chairman of the Board tion, please contact: Shares used in computing net profit (loss) Information Technology Align Technology, Inc. Investor Relations per diluted share 78,080 69,094 68,064 Principal Dan S. Ellis Align Technology, Inc. Group Outcome L.L.C. Reconciliation of GAAP to Non-GAAP Net Revenues Vice President, North 2560 Orchard Parkway American Sales George J. Morrow San Jose, CA 95131 Net revenues $ 387,126 $ 312,333 $ 303,967 Former Executive Vice 408-470-1000 Roger E. George Teen deferred revenue release (14,298) - - President, Global Commer- [email protected] Vice President, Legal and Non-GAAP net revenues $ 372,828 $ 312,333 $ 303,967 cial Operations http://investor.aligntech.com Corporate Affairs General Amgen Inc. Reconciliation of GAAP to Non-GAAP Gross Profit Counsel and Corporate Corporate Headquarters Secretary David C. Nagel, Ph.D. Align Technology, Inc. GAAP gross profit $ 303,417 $ 233,492 $ 225,126 Former President and 2560 Orchard Parkway Len M. Hedge Teen deferred revenue release (14,298) - - Chief Executive Officer San Jose, CA 95131 Senior Vice President, PalmSource 408-470-1000 Ormco royalties 827 6,165 - Business Operations www.aligntech.com Non-GAAP gross profit $ 289,946 $ 239,657 $ 25,126 Thomas M. Prescott Sheila Tan www.invisalign.com Director, President, and Reconciliation of GAAP to Non-GAAP Vice President, Marketing www.aligntechinstitute.com Chief Executive Officer and Chief Marketing Officer operating Expenses Align Technology, Inc. Transfer Agent Richard Twomey Computershare Investor Services GAAP operating expenses $ 200,683 $ 267,504 $ 209,612 Greg J. Santora Vice President, P.O. Box 43023 Litigation settlement (4,549) (69,673) - Former Chief Financial International Providence, RI 02940-3023 Insurance settlement 8,666 - - Officer Shareholder Inquiries: 781-575-2879 Emory M. Wright Shopping.com Restructuring - (1,319) (6,231) www.computershare.com Vice President, Operations Non-GAAP operating expenses $ 204,800 $ 196,512 $ 203,381 Warren S. Thaler Independent Registered Public President Reconciliation of GAAP to Non-GAAP Accounting Firm Gund Investment PricewaterhouseCoopers L.L.P. Profit from Operations Corporation Ten Almaden Blvd., Suite 1600 GAAP profit (loss) from operations $ 102,734 $ (34,012) $ 15,514 San Jose, CA 95113 Forward-Looking Statement: This Annual Report contains forward-looking Teen deferred revenue release (14,298) - - Outside Legal Counsel statements, including statements regarding Align’s ability to achieve Ormco royalties 827 6,165 - international growth and expansion into new markets, the expected Wilson Sonsini Goodrich & Rosati P.C. Litigation settlement 4,549 69,673 - growth trends and opportunities in existing markets and market segments, 650 Page Mill Road Align’s ability to enhance or expand the features of its existing products, Palo Alto, CA 94304 Insurance settlement (8,666) - - the industry trend of digital tools and solutions becoming more widely Restructuring - 1,319 6,231 used in dental practices, the anticipated benefits in relation to Align’s Annual Meeting acquisition of Cadent Holdings, Inc., including Align’s ability to achieve Align Technology, Inc. Non-GAAP profit from operations $ 85,146 $ 43,145 $ 21,745 interoperability with intra-oral scanning systems, drive adoption of intra-oral scanning, and gain entry into the market for restorative dentistry. 2560 Orchard Parkway Reconciliation of GAAP to Non-GAAP Net Profit Expectations about future events or results are based upon information San Jose, CA 95131 GAAP net profit (loss) $ 74,253 $ (31,269) $ 79,987 available to Align as of the date hereof. Readers are cautioned that these Thursday, May 19, 2011 forward-looking statements are only predictions and are subject to risks, 10:00 a.m. Pacific Time Teen deferred revenue release (14,298) - - uncertainties and assumptions that are difficult to predict. As a result, Ormco royalties 827 6,165 - actual results may differ materially and adversely from those expressed in any forward-looking statement. Factors that might cause such a difference Litigation settlement 4,549 69,673 - include, but are not limited to, difficulties predicting customer and Insurance settlement (8,666) - - consumer purchasing behavior, the possibility that the development and release of new products does not proceed in accordance with the Restructuring - 1,319 6,231 anticipated timeline, the possibility that the market for the sale of these Release of tax valuation allowance - - (64,608) new products may not develop as expected, the risks relating to Align’s ability to sustain or increase profitability or revenue growth in future Tax effect on non-GAAP adjustments 5,631 (16,818) (129) periods while controlling expenses, continued customer demand for Non-GAAP net profit $ 62,296 $ 29,070 $ 21,481 Invisalign and new products, changes in consumer spending habits as a result of, among other things, prevailing economic conditions, levels of Non-GAAP net profit per fully diluted share $ 0.80 $ 0.41 $ 0.32 employment, salaries and wages and consumer confidence, the timing of Shares used in computing non-GAAP case submissions from our doctors within a quarter, acceptance of Invisalign by consumers and dental professionals, Align’s third-party net profit per diluted share 78,080 70,602 68,064 manufacturing processes and personnel, foreign operational, political and other risks relating to Align’s international manufacturing operations, Balance Sheet Align’s ability to protect its intellectual property rights, competition from manufacturers of traditional braces and new competitors, Align’s ability to Cash, cash equivalents, and marketable securities $ 312,368 $ 186,465 $ 110,166 develop and successfully introduce new products and product Working capital 295,637 180,056 117,335 enhancements, and the loss of key personnel. These and other risks are detailed from time to time in Align’s periodic reports filed with the Total assets 476,943 355,240 279,341 Securities and Exchange Commission, including, but not limited to, its Total long-term liabilities 6,222 961 229 Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which was filed with the Securities and Exchange Commission on February Stockholders’ equity $ 377,747 $ 273,036 $ 218,540 24, 2011. Align undertakes no obligation to revise or update publicly any forward-looking statements for any reason. 16 17 2560 Orchard Parkway San Jose, California 95131

www.invisalign.com

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