Ladies and
gentlemen, please welcome Shirley Stacy, VP, Corporate Communications and Investor Relations.
Good morning. Good morning, everyone. Thank you. Thanks for joining us today. We appreciate you taking the time to spend a few hours with us going through, we think, a really great story.
Before we kick things off, I've got a couple of housekeeping items to take care of. And I want to just be clear that the presentation today and the Q and A sessions are being audio webcast for your enjoyment at our investor website, investoralliantech.com. Presentation soft copies will be posted on our website after today's meeting. And if you need any assistance, please, the registration desk where you checked in this morning, our team there is happy to help you or if you come to the back of the room, one of us can also assist you. The facilities for the event today are in the back of the room as well.
And each of you should have 2 or 3 Wi Fi cards on your tables if you're looking to access the Internet, the password and the Internet, the log on is on your tables right in front of you.
Before we start, I mean,
I also want to remind you that the presentations today will include forward looking statements and we want to steer you towards our filings the Securities and Exchange Commission, our most recent Form 10 ks and 10 Q. And we obviously want to make sure that any of the forward looking statements that we made, obviously, there's no update to that. So please be aware of all of our forward looking statements. And I'm going to actually cover very quickly, not in a lot of detail, but we've got a jam packed agenda for you today. As you can see, we've got 10 of our executive team presenting, but we've also got the entire team here in the back of the room.
And I want to make sure that you can see there's a couple of breaks and lunch opportunities for you to spend a little bit more time talking to the management team. Also have some really great subject matter experts in the room in our Invisalign pop up store. So please during the breaks and during the lunch take an opportunity and also take an opportunity to get your teeth scanned at the Invisalign pop up store. And I also then just want to remind you very quickly at each of the breaks there will be a brief Q and A session, so you have an opportunity to ask questions in between the presentations. And then again at the end of the session today there will be the entire team available to ask any questions.
And with that, I'm going to actually turn it over to the MC for the day, our General Counsel, Roger George.
Pretty quiet in here. Welcome, everybody. I will add my welcome to Shirley's on behalf of my colleagues on the executive team, our Board of Directors and everybody at the company, we're delighted you're here.
If you followed us for
a while, you may know that I'm the longest serving executive here. And I know where all the bodies are buried, and I know how to bury them. So that's why I'm the MC today instead of presenting anything substantive. When I joined the company 16 years ago, we had exactly 3 analysts who followed us. And Analyst Day was something that we would do at a Starbucks and we would use gift cards because we couldn't afford any other way of doing it and we had to beg people to come.
So for me, it's very gratifying to see everybody here. At that time, we were pretty much insolvent. Our annual revenue was about $70,000,000 We were losing money hand over fist. Our market cap was $235,000,000
at the end of
2,002. So, it's a lot more exciting to be talking today about where we're going based on where we've come. When I joined, we had a new CEO and his name was Tom Prescott and he got to the company and he started looking around and he realized that it was a mess and he needed to find a good lawyer And he couldn't find one, so he hired me. And together we've been on this journey. When Tom decided to retire, he gave us the best retirement gift that he possibly could have given us.
He convinced Joe Hogan to come and join our little popcorn stand after running companies with tens of 1,000,000,000 of dollars of revenue. It's always a dangerous thing to introduce your boss on a webcast. But it's my honor and my privilege to introduce to you guys Joe Hogan, who's going to kick off our session today. Again, thanks for coming.
I'm not so sure about the honor and the privilege part, okay? But I'm really happy to be here. It's been it will be 3 years in June, and we've accomplished a lot. We've really been excited for this day. 2 years ago, we gave you a look at the company and said we this is where we thought it was going.
We'll give you an update today. We've met almost all of those goals and we're going to paint a picture of what this future looks like and a business that really align is driven. So see the entire teams here today and we'll each present and hopefully you'll get to see the enthusiasm and passion we have for the future of the business. So we've got a great platform for growth. So this chart is one of it's a revenue chart from we're at this for 21 years now.
It's really hard to believe. I heard someone call us a 21 year old startup
at one point in time.
But if you look at this path, it's basically the line is revenue line. You can see there's 3 key areas here, products that we've basically developed, milestones we have in the
sense of the size of the business overall,
and also the number of patients that we've done over time. You can see how that curve is really since basically the $500,000,000 mark has really gone dramatically and then another spike here in the last few years. Now when you look at that, I think you can see it's a story of revenue, it is a story of growth, but that is a torturous path. And as competition comes in this marketplace, I think you all have to consider that and think about it, right? There are more mistakes in that line than successes.
No one's ever done what we have done, producing over 400,000,000 unique parts since we've been together. No one's ever this is a prototype business before.
No one's ever done that.
And along the way there's a lot of bones, there's a lot of learnings and it's inside this company that we've been able to do that. And we really rely on that from a structural standpoint to scale this business to meet a demand pattern that we're so excited about. It's way outside of the demand pattern we've described before of just orthodontic cases and I'll get into that. So in a lot of ways, we think we're just hitting our stride after 21 years. So since we met in 2016, here's what we've done.
We've grown the business 72%. Our Taro installed base, this is really important, is up 3.5% and it's just so much better to have a digital front end on your system and we'll hit that hard. Operating income, we produced $600,000,000 of operating income. Invisalign cases really approaching almost $2,000,000 1,600,000 dollars and another close to $40,000 docs trained all around the world to do this. Another important metric too is when we stood here in 2016, our ratio of international domestic was seventy-thirty and now it's sixty-forty.
It's 60 North America and it's 40 overseas, but that's not because North America hasn't been growing well. Chris and his team have been doing extremely well. It's our overseas businesses EMEA and APAC have really been driving a tremendous amount of growth. So a lot of accomplishments in a 2 year period. I didn't ask for any musical accompaniments in this.
So sorry. So we have conversions going on between demand, technology and capability. I want to talk about demand for a second. Demand is the most important component that we deal with, right?
So someone said the other
day that smiles were never so visible as they are today. And it's a really simple statement, but it's true when you think about it. I was on the Golden Gate Bridge the other day, I had a friend in town, they never saw a Golden Gate Bridge before. You almost have to wear a hard hat from all the selfie sticks that are there, right? People taking pictures of themselves, they're just everywhere.
So never before have people had such everybody has a camera in their pocket. Every so many people were tied to social media. And so straight teeth are really at a premium now as people want to look their best and look these are headshots going on. These aren't scenery shots. So the focus on a smile and having straight teeth has never been more than before.
Now our business model, it's been founded out of necessity of balancing consumer a consumer brand and driving consumer need and pairing that together with providers and with doctors. That's our business model. We're staying with that. That's basically what we do. But you really have to move between those two poles in order to make this business work.
Drive the consumer brand, get it as close to consumers as you possibly can, get those consumers in the docks that can take care of those pieces along the way. That demand piece is extremely strong. We'll paint a picture in a sense of where we think this is going to go globally over the next several years. From a technology standpoint, I think you all know that we stick every year 100 of 1,000,000 of dollars into technology to expand our capabilities to do this. So we at a point in time now, we're about 70%.
We feel in general the orthodontic cases out there that we can address with Invisalign soon to be 80% and 85% with some inventions Jelco will talk about later on. So the whole excuse is you walk into a doctor and a doctor says, oh, you don't qualify for Invisalign, that's becoming more and more untrue every day that goes by. So technology is really a good place to service the demand. And last piece is capability, which is about scale. Can you really scale to meet the demand that's going on?
You saw the growth we've had the last 2 years that puts pressure across this entire value chain of the business, whether it's the clinical side, the clinical support side, whether it's on the manufacturing side, salespeople, just throughout the business, it's an incredible amount of pressure. We've been able to keep up with this demand. They hired terrific people now. With the success of Align and notoriety of the business, we can go out in the marketplace and we find terrific talent now that we could never touch before when you look back 3 years ago. So you take all these three things and drive them together and what do you have?
You have market expansion. What's going on in a dramatic way? You see it in our numbers. You see it in what our forecasting is as we raise guidance. I'll just walk you through this.
So this really creates room for a vision, right? And our vision is not the 12,000 orthodontic case starts that we have a 9% to 10% penetration rate in today. Our technology is geared to doing that. But our business about 100 of millions of patients out there that want to have their teeth straightened. About the 5% of the population that's been treated with orthodontics kind of procedures in the past, it's really the top end of society that's really been driven.
This is 100 of millions of people that want to have their teeth straightened, can't have their teeth straightened. And that's the kind of vision we have around this business. It's an expansive not just that 12,000,000 case starts, but the people out there that have malinclusions, fancy word for crooked teeth, the one having strength at some point in time.
When you look at that, those are 12,000,000 case starts that we have annual
cases a year.
When you break that out, you get about $4,000,000 in APAC, dollars 4,000,000 in Americas,
dollars 4,000,000 in EMEA, general.
Again, 9% to 10% utilization or penetration rate into there and but a technical capability now to do 70%, soon
to be 80% to 85%.
But the real story here is not that. The real story is that when you take a look at 70% to 75% of the people in society today have amount of inclusion of some type that should be addressed either aesthetically or should be addressed clinically in some way to stay their dentition for the lifetime. And that's our vision. And there's no other company in the world, no other company in the world that can address that like Align can address it. With our combination of consumer awareness and being able to drive consumer demand and understanding and bringing that home from a standpoint of scaling, from a critical standpoint and a manufacturing standpoint to really meet that demand.
There's no one. Stop bragging about
it or whatever it goes back to
that 21 year old line of all the mistakes they've made over the years to be able to get to this point. We really know what that is. We really know how to do it. So when you think about competitive aspects, we're built for doctors and consumers. You're going to hear that time in and time out today.
That's our business model. That's how we work these things. The clarity of those two pieces and
how we work them are really important
in our business strategy. We have 100% digital approach. There's no other company in the world that has a digital front end. You can see that out there today with our store, with Itero and what it does and marrying that together with 3 d printing business on the back end, a completely touchless order entry system be able to produce 100 of thousands of unique parts a day. If you go back in time, remember this the stereo lithography was used back in the plastics businesses back in the 1990s.
They were used for prototypes. It's a prototype business.
It's just basically you made one off the
stuff, right? Like hundreds of thousands of unique parts a day and that knowledge internally and Emery will talk about it, the knowledge we have, you can't go to 3 d systems today and tell them to set up a 3 d printing line like a line has. They don't know how to do it. They can deliver the machines, they don't have the internal knowledge to be able to do what we do. We had to understand that.
We had to take the time to learn it and to drive that. Unraveled experience in that sense and then the global scale and you see how we're moving more and more globally to get clinical capability outside of the country now in China, also in Spain, also in Germany. We'll move as assets from a global standpoint as close to customers that we can when it makes economic sense and we can establish a better footprint there
competitively. So look, we say
it's built for doctors and consumers. When you look at our traditional business like Orthos, orthodontic business, I call it a B2B2C business, right, our business to a doctor's business and then C is the consumer piece. And now with
the classic doc locator piece where people would
be interested in Invisalign, access doc locator, throw in your ZIP code, the top doctors that might have Invisalign in that area that you'd be directed to that piece. We still do that. We drive that part hard all over the world. But we also from a general practitioner standpoint too with general dentistry, it's cultivating new channels. And I think we trivialize GPs sometimes in a way that we shouldn't, right?
GPs want to straighten teeth. They just don't want to do it as their orthodontist, but they want us to be able to work within their workflow, which is a restorative workflow is where the majority of their business is.
And so more and more you'll
see us specifically focused on GPs
from a technical standpoint, having a product that works in their workflow, it has to be a digital. It has to be a digital system in order for it to fit that way and you'll hear more about that today. But those are both B2B2C aspects. Now when you go to what we've done recently with Smile Concierge where we actually contact the patient directly, We have a dialogue with that patient as far as what their needs are. We direct them to a doc that we think can provide them with the best experience and the highest chance of getting Invisalign in that sense.
So that becomes a B2C2B business, right, us to the consumer and then taking that consumer by the hand and walking into that business. And talking to
the consumer when they're done
to make sure they had the experience that they really wanted and the doctor provided what was needed in some way. I mean we've delivered 1,000,000 of dollars of business
to our customers through this concierge service that they
can count and understand and we'll hit Jen here will talk Jen's here will talk about the Invisalign store is just carrying through on this B2C2P business. Remember this business model in stores is this is not a retail store. We're not selling Invisalign in this store. What we do is we scan customers, we tell them what the opportunity is in a sense of the signature smile or deluxe smile. And if they're interested, we take that and we move them to a doctor where they can have a physical scan or a physical understanding in a doctor's office and examination and then they can order those aligners at that point in time.
But this is again driving more consumer awareness, driving more consumer demand. We have 2 stores right now and we have 2 more coming up on the East Coast or short. 21 years, 100 percent digital approach. And I
want to stand back from
the slide for a second and just tell you, I've had as Roger indicated, I've had I've been fortunate in my career, I've had a lot of different businesses, hundreds of P and Ls in my life, right? I've never seen a business like this in my life, ever. It's truly a digital business. Everything you read about in the book say about disruptive technology and artificial intelligence and machine learning and 3 d printing and all that stuff, we do that. We don't just talk about it, we do that.
The product that we
have in the marketplace, like when we get to 1 week where there's a lot
of just mining
our 1 week wear, there's a lot of just mining our databases of 5,500,000 patients and figuring out if 1 week wear really works. Machine mining to understand how does a tooth really erupt in a team, how big is it going to be, how is it going to play so we can have our aligners and design our aligners to compensate for that eruption of that tooth at that point in time? Emery will show you some great indicator of machine learning in a sense on a manufacturing floor. All the 3 d printing to an extent that no other company in the world has ever 3 d printed parts like this with this kind of efficiency before. So all those things that I think a lot of companies aspire to, this has been survival for us.
This has been a necessity for us, not a dream in the future of what we're able to do in some way. And we harbor that talent inside of Align.
So, look, let me take you on
a journey just really quick, okay? And this is how this whole thing works. And I'd say pretend it's a journey, you start with iTero and Invisalign outcome simulator, which basically you saw out there, you get an
impression, you can get a
digital impression. And then the outcome similar to tell you how your teeth look now and how they'll move to be in a perfect position, right? So this is basically anytime you go on a journey, you're basically going to say, here's my destination, you're kind of going to map the location. And that's what Itero does along with our outcome simulator. Secondly, you got to pick your mode of transportation.
How are you going to get there, right? And that's what our smart systems do, SmartTrax, SmartForce, Smart Stage. Each one of those SmartTrax are material patented in 2013, uniquely designed to move teeth in an orthodontic manner. And I think from a patentability standpoint and a proprietary standpoint, you can't overlook that. Secondly, SmartForce are attachments and features, but not just any attachments, where those attachments go, exactly what the shape of those attachments are.
And then lastly, Smart Stage program tooth movement. And we say not displacement, not saying the tooth is here and it should be there, but actually understanding where you're going to move that tooth to. That's what this does and that's again 21 years of experience to be able to figure that out. So that's basically the boat of transportation you use. Conject Pro is a GPS.
And what that basically does is it says, here's where we are today, here's where the teeth are. And then when you do program tracking through iTero, when you go back in to see your doc, the doc will say, look, your teeth are tracking, you're on track, you're on path to complete your journey or you're not. Scan again, another set of aligners to make it work. But that's a GPS system and it all ends up in aligners and retainers and expanders in the end. And better outcomes, more predictable outcomes in a sense.
That's the digital ecosystem we've been talking about for years. And you're going to hear various parts of this value chain today that we work on from a technical standpoint, adding more and more perfection on what we can do to reach that demand.
So our global scale is really important. This is
where Apexico had a shift, I think
it was, I don't know, May something, I remember the
date we took it off, it
was like May 5 this year or
some type. Remember, this is huge. Again, we're doing hundreds of thousands of unique parts in here every day. And you have to remember too that when you walk through this thing too that, that digital printing business that we have, the 3 d printing business is a lot of it is us. It's what we've done.
It's what we know how to do. It's not the magic, it's not in the equipment. It's in the manufacturing execution systems code that really makes that operable in some way. This is our global scale chart. Emory will give you more detail on this.
But basically what this says is we're moving out of work. We're taking some kind of capacity. Whereas Mexico, we're moving it to China, right outside of Chengdu. We're just over there last week into Xiangh, China. We already had treatment planning up in place there, great treatment planning facility in Chengdu that we saw last week, wonderful training center for customers who are taking full advantage of that Julie will get into in some way.
But you can see 103 countries, 136,000 trained docs, sales and marketing professionals of over 100,000 and manufacturing CADCAM Designers of 4th 100. It's truly scale.
And we're going to move that scale
closer and closer to customers, so they can have a better experience and a faster kind of a lead time with us. So, when you think about the advantage of LINE and how LINE competes, I mean, obviously, it's a brand advantage, a lot of people know. There's doctor advantage in the sense of the largest network of trained docs we have. You can go down through this piece, 5.1 5,500,000 patients moving to 6,000,000 here shortly, operational advantages, all those things are moats around our business from a competitive standpoint. I believe what we told you back in 2016, what we thought about competition coming in with 10 year old technology was pretty much confirmed by the AAO in May.
It's basically what we saw. At prices that I think frankly surprised a lot of people but not us. This is very expensive to do and that was reflected in our competitors' pricing too. So basically our competition has come out with the product that we had and the system we had 10 years ago. And they're going to have a ways to go.
We're not negating the competition. I live paranoid every day, but they pretty much showed us what we thought we would see and there was some comfort in that and that we weren't surprised. So look, our strategic compares
to this business have been
for the last 3 years international expansion, number 1 orthodontic utilization or penetration, number 2 patient demand and conversion, you have seen that in GP Dentistry and refer. We basically have kept these, it works so well from a strategic standpoint, we just get better and better in So look, this is a unique opportunity and it's really enormous. And as you leave here today, just think it's balancing a company that has a good brand and has good contact with consumers and drive it with a technical capability and a market capability that's really unrivaled in the world. Let me leave you with a quick story and it happened last week and it's something that I want you to appreciate in this business that I get to think sometimes we lose as a team. I saw it in China last week and 2 wonderful women came to interview me from the business times in China and also the government agency.
And we're talking about Invisalign and our investment in Chengdu and Ziyang. We're going through the whole thing. And I could tell that one of the ladies was confused. So I realized
that she didn't really know what we
were talking about in the sense of how we move teeth. And I took we had a liner and I took an aligner out of my briefcase and put it in front of her. And she said, translated from Chinese to
English, she said, that, that, that moves
teeth. She said like what?
Yes, that does that.
And she said, that's magic. It's magic. It is. I think we often forget that The people that don't really you look at that piece of plastic, it's hard to believe all the sophistication, everything it can do because so many people have been fixated that only metal can move your teeth. You need something that rigid and hard to do it.
And I think as the world is going to open up to really understand this, that's what drives that demand pattern we're talking about.
With that, I'll turn it over to Raff.
He's in charge of Marketing and Business Development, and he'll give you more details on it. Thank you.
Thank you, Joe. So
my job over the next few minutes is just to start going a little bit deeper into some of the points that Joe spoke about and really talk about that unique moment that is ahead of us where 21 years of experience, a very unique end to end digital workflow and a tremendous brand appeal already converging to bring new experiences to doctors, customers and to the patients. I'm going to start going into a little bit deeper into these points before Gerhard will come on and talk to you about the technology that is behind this dream that Joe has spoken about of bringing clear aligner therapy to much, much broader group of patients beyond the 12,000,000. But let's not forget about the 12,000,000. As we keep telling you, we've got about 10 percent share. And our job is to keep taking share of that marketplace, and we'd show you how we're going to do that with innovation and brand and demand generation.
But really, the key for us is how do we go out and try to take clear eyeotherapy to the 300,000,000 people around the world that we believe have crooked teeth, people who really need to change their smile and may not have access to it, may not know about it or may not be able to afford it. And that's really the key for us is to try to marry a technology and a brand appeal into trying to bring more of these people to an orthodontist or GP practice to get treated. So we keep talking about those 21 years. 21 years of experience count for a lot. During the 21 years, we really shaped the industry like nobody else has ever done through our technology and through our brand appeal.
We brought 5,500,000 patients to Adoptus, 5,500,000 patients over 21 years. That's pretty remarkable for a company like us, still in the startup mode of the pharmacy with just plastic. Our brand is the most known and renowned brand in the marketplace with 80% awareness in the U. S, a little bit less outside, but it's a very well known brand with a lot of appeal. And really what underlines all of this is the 5G's fully digitized system.
From the scanner all the way to 3 d printing, we can offer a fully digitized workflow, which I'll try to explain to you why it's important in today's world where digital is winning. So we've got 3 really unique foundation that creates the success that we've experienced in the past but also allows us to think very positively about the future. And the first one is around the product. The product is very appealing to consumers. It's transparent.
Nobody knows you're wearing it. It works fast. It's available pretty quickly. You don't have to go to the doctor so often. So from an appeal perspective, patients love Invisalign and they tell us that.
The second part, as I talked to you about, is our technical and clinical proficiency. Let's not forget that in many ways, we are setting the standards for clinical outcomes today. We're setting the standards for what is good clinical outcome with plastic. And then the third one, of course, is that when you take all that apart, when you peel that those ideas apart, in the end, it's a very financially viable product offering for everybody on the value chain. We wouldn't be here today if this product moved teeth, but nobody was making money out of it.
So we need those are really the 3 foundations. So it all starts really with creating demand, creating awareness on the marketplace with 100 of 1,000,000 of dollars that we investing that we have invested over the years in advertising. As I said before, we brought 5,500,000 patients to our doctors' practices. That actually creates 100 and 100 of 1,000,000 of dollars of production revenue for our customers on a yearly basis. Now we started many years ago by advertising.
We changed our approach to the market in 2017 with our Made to Move campaign. That's really a way for us to start connecting patients to their smiles. As Joe said, there's a lot of changes around us in terms of how people see themselves. And LaterMove is really designed to bring patients and doctors together closer to their future selves. Back in 2017, we also started to invest a lot more in teenagers.
We know teens is a large part of our future opportunity for growth. And over the years, it really didn't go after the Teams in a sustained way. We started that in 'seventeen and again in 2018 with heavy investments, especially in the United States, but also outside the U. S. And we're reaching them in a way that is very different to what we do with adults.
We reach them through their peers, through bloggers, through media like Autonomous TV that really creates the sense of they are in control of the future. We're not going to force a treatment on them. They're going to listen to their peers, not to people like us. So the good news is when we look at all this, 2 years ago, we talked to you about a €10,000,000 orthogonality market that is available to us. Now we're talking to you about $12,000,000 And this $12,000,000 is really down to our investment in geographical expansion, is down to the investment we made in brand, but also in the innovation, in expanding the applicability of Invisalign to more and more cases, 70% now, and we keep on expanding that market.
So now we are going up to $12,000,000 as the I would say the traditional orthodontic market. So really, it all comes down in the end to what to our fully digitized end to end digital workflow. And I want to talk to you about a couple of things. It starts with ITIL. And ITIL is more than just an impression.
It's more than just replacing physical impression by deteriorating pressure. It's also a diagnostic tool. It's also an analysis tool with iosim and time lapse. So it's much more than that. When you talk about CleanCheck, and some of you may have been at AAO, have heard about some of our competitive treatment planning software.
ClinCheck is not just a CAD software. ClinCheck is a very intelligent software that uses machine learning and that understands how to do proper staging. It also gives the doctor the control that they need to be able to go do treatment. So when we look at this, we believe we are 1 in all the categories that we today compete into, 1 by many, many years. We could argue that our first mover advantage of 21 years is probably still quite real today.
Now Align is also a company, as you know, that innovates. We talk about innovation all the time. It's in our DNA. About a few weeks ago, we actually announced the release in the marketplace of 5 new products. Most companies, I would imagine, will be very happy with just one new product launch a year.
For us, that's not enough. We're doing 5 in space of a month. Most of them are going to be launching on July 1. And I just want to go through a few of them. The first one is manual advancement.
We launched that last year, but we're really starting to see the real impact of it this year, notably in Europe and Asia, and we'll be launching that in the U. S. Later on this year. The mandibular advancement feature is really significant from a treatment perspective but also in terms of what plastic can do. That's not just new teeth, it also creates collateral changes.
I can assure you that 21 years ago, even 5 years ago, not many people thought that anybody could achieve this type of outcome with plastic. The second one is Invisalign First. Invisalign First is our 1st dedicated product that targets specifically kids from the age of 7 to 9 years old. That represents 25% of the teen market today, 25% of the market that we've never really tried to compete into. And it follows a strategy that we stated many times about expanding the applicability of Invisalign.
The third one is Invisalign Go specifically designed for GPs. We launched that in Europe last year and we're going to be expanding the the clinical scope of invisalangor and changing the entire CleanCheck workflow to be very specific to the needs of GPs and to talk to GPs language. We're doing a lot of work on VIVA too. Retention is actually a big business for us. And we're improving VIVA very regularly to bring new features to it.
Items. We launched Element back in May 2015, exactly 3 years ago. We brought to the market 2 new products that Yuval will talk to you in more details a little later. So we believe we're 21 years ahead, and we have that 1st clear mover advantage. We set the standard for clinical efficacy, for digital workflow, for brand appeal.
Those of you who were at AO probably saw that. Our competitors are trying to somehow confuse the marketplace by coming in at separate parts of our value chain. You have to remember that to be able to obtain the results we have, you have to have that whole entire technology ready and integrated, something that our competitors don't have today. So despite all this, we keep scratching our heads regularly as an executive team to say how on earth after all this innovation, all this the 21 years do we still have 10% market share? And actually, we look at this in a very positive way for us.
It's great. It means we still have 90% of the existing market to go after. And we also have 300,000,000 of patients to go after. So when we look at growth and our potential for growth, we feel very excited. The key though is how do we get after these 300,000,000 patients, which we never went after before.
And I just want to share with you a couple of statistics. The first one really is that 3 in 4 people out there around the world, you can look around you if you want, 3 in 4 people actually need teeth straightening of some sore. And the majority of people don't have access to that treatment or don't know about it or don't know the need to have that treatment. So what we need to do is change that dynamic. And the second important dynamic is only 1 in 5 people who go to the dentist and get a treatment proposal from the dentist actually accept that treatment.
We have a huge issue here of people not accepting treatment. If we can change that dynamic to consumers accepting treatment more readily, we believe we can really go after those 300,000,000 patients. So how are we going to do that? Well, we're going to try to combine our technology, the digital technology with other societies changing today. And Joe started referring to you about that a little bit a few minutes ago.
Now really this idea of that digital evolution, people are looking, we are looking at the millennials, the Gen Zs are shopping and behaving differently today than they did 2 years ago and 5 years ago. It all has to be mobile. It all has to be convenient. People want to be able to have access to whatever they want to buy now, not tomorrow, they want it now. And they want a different experience.
As a brand, we have to adapt to that. And we believe that technology allows us to be able to do that and nobody else in the market out there. So the really important one is the smiles on display, the Snapchat, people taking selfies. They want to look good. And they look at their teeth a lot more than they used to in the past.
Everything needs to be instantaneous. I want to have access to my treatment now. I don't want to wait 3 months. I want it tomorrow. I want it tomorrow because I do, and that's it.
That's my choice. So let's take the example of Jessica. Jessica is going to be graduating in 4 months. And for a number of months, years, she'd be looking at a smile and she thinks, smile is okay, but she'd like to be able to have a better smile. And she goes on our website, it's Sunday evening, she goes on our website, she takes a picture of a teeth, she sends it to us and within a few minutes, she gets back a picture that shows her what she could look like with a new smile.
It's not a fake picture. It's her with a real teeth that our machine learning in the background will have redesigned and reset for her to look different. On the website, she goes on Doc Croqueta, and we have doctors that are lined up waiting for her the morning after not far from her house to be for an appointment. The morning after she goes to that doctor, she gets scanned. It takes about 2 minutes.
For those of you who want to try it, you can do it here. It takes 2 minutes to get scanned. That scan gets sent to us. Within a couple of minutes, we have automated data that comes to us, comes back to the doctor with multiple treatment options. So the doctor was Jessica is sitting on a chair, the doctor and Jessica can see different options for treatment.
Does she want a short treatment? Does she want an ideal treatment? What does she want? They can decide together. We're giving her and the doctor the choice of what they're going to do.
We're putting her in charge of the future. They decide on the treatment. The treatment gets sent to us a few days later. The alliance come back. Jessica wears them for 7 days at a time, no more 14 days, 1 week, and she's ready for graduation.
She's happy. She's happy. The doctor is happy because they have created a connection. And together, they really own that treatment. Now that vision in the most part is pretty real today.
It's very unique and there's a lot of technology behind it to allow us to have that vision. And Jelco will talk to you about some of the that's behind it. We also offer choice. Joe talked about the concierge program, the stores. As a consumer, I may not want to go on Doc Locator to find a doctor.
I may want to go to a scan. I may want to talk to somebody that knows about it and I want to pick up the phone. This is what we're offering our consumers today. We're offering them choice. We're also offering relevance to the GPs.
We've done a lot of innovation for orthodontists and we continue to do so with Invisalign first. We're also adapting our product to the need of the GPs, talking their language, being very relevant to them Today dentists are looking to do comprehensive dentistry. They're looking to include Invisalign as part of a broader treatment. And our software allows them to do so. Look, our vision and the vision that Joe set out, which is to really bring Clear Aligner to the masses, is really based on this idea that seeing is believing.
We're trying to bring patients closer and connected to the future self and using the doctors and the patients together to do that. And we really believe that as a company because of our technology, we're really the only ones who can get from 1 to doctor and the patient at the chairside to look at the treatment potential, to visualize them and say, yes, I'm going to take get treatment. I understand what I'm going to look like. And yes, Doctor. Atresu, that you're going to give me the best result possible.
So going from 1 in 5 to 5 in 5 to get up to those 300,000,000 people. So to conclude my presentation this morning, I think we really are on the edge of a unique new chapter, if you wish, in the line technology. For 21 years, we developed technology that helped our orthodontists treat more and more patients, more and more complex, and we brought a lot of patients to their practices. We're also adapting our product to fit with the GPs, what they're looking to do. They're looking to do better dentistry.
They're also looking for new revenue and we believe that with our new solutions we can do that. But I think more importantly with our technology we're converging in creating appeal and desire for our consumers. So the consumers have 300,000,000 people to come to us and to our customers and add some more in design.
So on that note, Jalco is going to come on
stage to talk in a lot more details about the technology that's behind us. Thank you. It feels a lot less than 2 years since last time we were here together, more like 2 months. But really what happened in last 2 years, it's more or less of the same for us in R and D. We continue to work hard on creating digital solutions and trying to maintain our leadership.
And we remain committed to clear aligner therapy with our mission to make it a standard of care. So 2 years ago, I showed you this slide. And in last 24 months, we just did a lot more of that, invested almost $190,000,000 in last 24 months in R and D, added close to 300 patents to our portfolio and treated successfully another 1,500,000 patients all around the world. Our core competencies, we just keep growing And we added some more. As digital leaders, without web, mobile and cloud, technology is our core competencies, we can provide digital solutions to our doctors.
Information security, I know it sounds trivial, but really important for us that we can be the best trusted partner to our doctors and our patients. And of course, over the course of last 24 months, a lot of new product releases. Our investments are accelerating. Our output, I believe, is accelerating and the clinical confidence among our doctors is accelerating as well based on pretty much a long history of clinical innovation. I don't think any company can claim to have that.
And I can tell you we are committed to continuing on this path as much as we can. So for us, after all these innovations, we used to try to explain to doctors that you can indeed move teeth to plastic.
This is
no longer the case. We have proven that. For us, it's really about digital to analog approach. Today, many doctors can use Invisalign and treat patients more successfully than with braces. Many doctors choose Invisalign over braces.
Many doctors actually don't want to do some treatments with braces. We have more work to do, but we are definitely very, very capable clients as far as orthodontic treatments. Let me give you example. Open BiTE, this is when you have a gap upfront. Many of our doctors are choosing only Invisalign to treat open bile.
I can give you many, many quotes from many, many doctors. And the reason is very simple because we have the ability for a vertical control there. We can do this anterior extrusion and posterior intrusion and close that bite. Especially in the posterior, you probably can't see the arrows, but changes in the height of your teeth in the back actually mean 3x more upfront. And the problem with archwires is that actually you can get unwanted, which only makes your open bite even worse.
This is just an example I can give you many more. Again, there is a lot of work we are doing to make sure we have the best appliance for all treatments, but a lot of areas we have far exceeded the capabilities of traditional braces. So again, for us, it really is about digital versus analog. We've been at it for 21 years now, and we continue to do so. And I don't need to tell you that the world around us is before.
Technology leaps used to take decades of years to make. Now we see them in months, in weeks. And for those who don't recognize that, who don't get on it, it's getting harder and harder. It's a train that's accelerating and it's going faster and faster. So our job is to help our doctors make that transition.
And we see actually that a lot of doctors recognize that. They are digitizing their patents. They're moving patient data into patient management systems. The imaging equipment is all about digital data capture. They have more and more computers and mobile devices in their practice, which gives them a pretty good digital platform.
Pretty much every single step in a practice can be improved or connected through digital technology. And furthermore, our doctors also recognize that their patients are also consumers. And those consumers know what they need and they want to get it. So doctors need to give them an experience that they get as consumers pretty much anywhere else. And only digital can make that happen.
So what does it mean to us in R
and D? Very simple. It's about building the best digital orthodontic system. In the most simplistic way, it has 4 main areas: digital patient data, digital analysis and diagnosis, digital treatment planning and digital organ compliance. Digital patient data is all about patient data being digital form.
It can be a patient information, their personal information, treatment information, scans or anything else in digital form. Once you have additional patient data, we can provide a lot of applications help doctors better understand and assess patient needs and decide on the treatment options. Then we give them digital treatment planning tool like ClinCheck to finally define desired treatment outcomes and how to get there. And finally, with digital appliances, we give them those perfect force systems to make that happen. So let me take you through them in more detail.
As far as digital orthodontic patient data, there is no better source than the intraoral scanner. I think Atero is the best one, just my opinion. But take a look at this chart. You've seen that, but it is phenomenal. Just over 2 years, the acceleration of digitally submitted Invisalign treatments is phenomenal.
In international, that means almost 100% growth in 2 years. And it's just a matter of time when these charts come together close to 100%. There's no question that every practice in the future will have a scanner, probably more of them, and that the patient is going to be scanned at every appointment. It is a very small investment for a doctor to get such a valuable information about their patients. More information they have, better off they are.
And that's why we continue to heavily invest in iTero development to drive that adoption and utilization of scanners. And Yuval is going to talk more about it. Mobile photo uploader is another utility to help doctors quickly and easily acquire more patient data. With a mobile app, you can take photos and upload them to the cloud in a matter of minutes. Change our analysis diagnosis.
It's simple and means for us to provide doctor with more high quality data about their patients. You see here a lot of numbers, but this is the data that doctor gets based on the patient data. And this is the data that you cannot process in your head very, very easily.
And of course, we also gave doctors a
lot of analytic applications like in midline outcome simulator, progress assessments, ITER time lapse for them to better attend patient needs and also to better communicate with those patients. Digital treatment plan. This is the core And this is where ClinCheck comes to power, the most sophisticated orthodontic treatment plan software. 20 years of development, a lot of biomechanics, a lot of 3 d modeling, data analytics, machine learning. Very, very complex on the inside, and we try to make it as powerful and as simple to use on the outside.
So I want to give you a little example. Doctors use ClinCheck to achieve perfect clinical outcomes for each patient based on their clinical treatment preference. 2 doctors are probably going to treat the same patient in
2 different ways. So when we
give these ClinCheck to doctors, we have to make sure we address patient needs and we also understand how doctors want to get this outcome. So very often, doctors try different things because you cannot be sure what is what. So for us to give them multiple options at the same time, it's very powerful. These options can be clinical. Let's say you do IPR or attachments or extraction versus no extraction to resolve severe crowding Or those options can be actually based on patient preference on the treatment outcomes, how much they want to what are their chief concerns and how much they want to see fixed.
So let me give
you example. And I'm not going to be too clinical. I'll give you example that there are multiple treatment outcomes based on the level of complexity of those outcomes and how much the patient might want to have working with a doctor. So this is the initial. You can probably hardly see this, but I'll try to explain what you're seeing here.
So let's say that the first treatment option is a pretty good one, which addresses a patient concern On the anterior alignment. So the outcome aligns these teeth, they look pretty good. We don't address too much in the back. So it's a pretty good outcome, and a lot of patients will be happy with this. Another option can be sorry, something that's better than that.
It's more alignment. You see the device opens up more and there is better alignment in the posterior. And there could be the best ones, which is ideal if you wish, perfect, look at this nice arch, expanded, perfect alignment. So the doctor and the patient can have a very good understanding of what's possible. They can make
a choice. The best choice
is probably the best choice to choose. But for whatever reason, treatment duration, complexity, any preferences, you can choose something else. So this is what we can give to doctors and to the patients. And they can make their choice. The important thing is that good, better and best, they are still excellent treatment.
As much amount of movement you see, these movements are good, predictable, healthy. They have to be stable outcomes, which is very, very important. I don't want to talk about competition. I don't want to sound arrogant. From what I see so far, our competition, they still have ways to go before they can do good treatments well at best.
So Invisalign Go for GPs who want to introduce clear aligner therapy into their thriving comprehensive practices, this is what it does. Doctors can choose filters and get those options instantaneous. Before, they would send instructions to the technician, wait and it comes. Now. They can get different options, very simple ones for GPs, IPR, attachments and things like that.
That's very, very powerful tool. I can't emphasize enough how much technology is behind those clinchecks. They look very simple. When you take a scan of teeth, we see these teeth in thousands of triangles and points. No eyes can see that.
When we measure 2 teeth, 2 adjacent teeth, it's hundreds of thousands of measurements and operations to understand just 2 teeth together. Every clincheck has more, has tens of millions, literally tens of millions of measurements and operations in that treatment. It's absolutely not possible for any brain, for any doctor as trained to make those calculations. And we do those things to help doctors leverage their clinical expertise and experience even better. There are better doctors with this than without.
It. And finally, digital orthodontic appliances. This is the essence of what we do. No matter what you do on the digital side, if the appliance doesn't work, it doesn't matter. Appliances like are like medicine.
The doctor diagnoses the issue, the disease, prescribes the treatment and then you get your pills. And if they don't work, nothing matters. Not all aligners are made equal. With SmartForce, SmartTrax and Smart Stage, we give you the best medicine the doctor can ask for. As Joe and Ross said, our plan is to provide a comprehensive suite of Invisalign products for all orthodontic treatments and patients of all ages.
We are doing well on the far right, and we are moving into the left to younger and younger patients. With multiple advancements, we are going into this same segment for Class II correction. And again, I can emphasize that this is SmartTrak, a soft plastic that applies gentle forces on your peat. And we figure out how to make a design so that this small appliance, soft plastic can move your jaw, can do skeletal movements at the same time while moving the teeth as well. The reason I first goes to even younger patients.
So far, extremely strong results and feedback from doctors. They have options to stage the movements. We use machine learning to predict the eruption of the teeth,
very, very powerful solution.
This is for the dental arch expansion. If the child needs a more expansion and a palatal expansion, then it's about replacing this appliance. Don't get me wrong, this works. But this requires a parent to go with a wrench inside a child's mouth, 6, 7 year old, and find its little screw and turn it a full rotation to expand its wire by quarter millimeter. 2 years ago, I showed you the prototype of what we had in mind because this was the best we could do at that time, same process as thermoforming as we use for the aligners.
I'm happy to tell you that we've come along on this one. And this is how the plant is going to look. It's directly fabricated, our first Invisalign product directly fabricated, with which we can get a full control of dimensions to provide perfect and accurate forces for every stage, for every patient, for every arch form, every palate. So it looks like this. You basically get a series of expanders, the same way you get a series of aligners.
Doctor is going to define a treatment in ClinCheck, and the patient will change one every single day or a doctor prescribed. It's usually a quarter millimeter per stage. It can be anything the doctor prescribes. So compare this to that massive piece of wire permanently fixed into child's mouth. And here is how it's going to look.
So as you put
each expander, half quarter millimeter wider, you expanded the pallet. And each expander is designed in mind with how the pallet changes, the angles and the dimensions to apply perfect forces. Okay. Brad talked about seeing is believing. We as consumers, we know what we want, we want to see it before we buy.
So we are making sure that we can provide that proof. So as Raj said, imagine this, the guy takes a selfie and not within 2 minutes, few minutes, within less than a minute, get this, a very nice simulation of their smile with better teeth. Guidance like this might want a smile simulation He's
going to need a little
bit more work, but he too can get within half a minute, something like this. Now to do this, we need to do a lot more than just an orthodontic movement. He's going to need some implants here. And that's why what we'll give to doctors the ability to plan orthodontic movements to alignment in conjunction with those implants with
the rest of the work.
There is another angle. We actually need 6 implants. Another thing, to do this tooth movement and plan the space, this is very hard with braces. Face management with Invisalign is much more accurate and much more easier to achieve. Okay.
One more patient. I showed you the whole face because he's from research and development team. A pretty good looking fella, but he could use help with his smile. So if we were to visualize his smile after orthodontic treatment, he would get this. It's a pretty good improvement, but it could be better.
With restorative work, after ortho, he can get this. Actually, his wife saw that and he said, Honey, I love you, but I love you even more this way on the right. Let me zoom it in so you can see the difference. Going from initial to final without doing ortho, it's not good dentistry because you want to align these teeth so that your restoration can be minimally invasive. If you don't do this, you have to grind these teeth in order to put restorations on.
And grinding teeth, taking healthy tooth mask away is not good healthy procedure. So that's why you're going to see more and more comprehensive, interdisciplinary procedures in dentistry like this. Okay? Remove these teeth so they can be in a perfect place to complete the restorative procedure. This is healthy dentistry.
This is the future.
And patients pretty soon will know very well that they need to get the ortho, they need to get these teeth aligned so they can last longer before they get the restoration. I'm pretty sure that in the future, most of the restorative procedures will start with the ortho, retool alignment. And actually most a lot of the ortho procedures will finish with restorations because you can get this even better smile. And that's why we are building a comprehensive orthodontics system because doctors will be able to do that extremely well with a comprehensive end to end solution. And if we do that, then our dream to make clear aligner therapy internal care can be reality.
We're going to give doctors high quality care, enhanced of trained doctors, available and accessible by the masses. Thank you very much.
Good morning. My name is Ubal Shaked, and I run the ITARO business for Align. I joined the company a year ago. Prior to that, it was 20 years with the medical device companies, mainly with GE. That's the 4th business I'm running and by far the most excitement for me.
So I tell you is
the way I see it, it's really the gate for Align's vision. And it is the gate in 2 ways. The gate for digital workflow. End to end digital workflow starts with a scan. And the fact that we are developing Akero and Visa Integrated guarantee the best customer experience with our combined solution.
And the other area is
the gate into comprehensive dentistry, comprehensive digital dentistry. I try to provide comprehensive solution across restorative diagnostics and of course Invisalign. And when our customers add Invisalign in their end, they are the best enabler for Invisalign. Our vision is ready to scan every patient at every visit everywhere in the world. And this trend is already happening.
The adoption of our technology is growing rapidly. We've been growing from $45,000,000 3 years ago to more than $200,000,000 this year. And there are two reasons for that in my mind. One is the technology is proven, it's fast, it's accurate, it's easy to use. So now anyone can take a scan very fast.
And the other is that our customers see the value way beyond digital impression. But they can grow their practice within Invisalign, they could be more efficient and consistent and they can create stickiness for their practice. Let's hear from one of our customers about their experience.
So my name is Doctor. Lamtonai and I'm a general dental practitioner for Manchester, a practice specializing in cosmetic restorative dentistry, and I have a keen interest in cosmetic organometry practice
as well.
We're digital around and we need to be part of that system now. And looking at the different scanners in the market, the Itero was perfect for us with the Invisalign outcome simulator. So for me, in practice, patient communication is essential. It's the cornerstone of dentistry
really. So if
the patient understands what's happening, it's much easier for us to do our jobs and you get much more success. So with the Itero, the visualization that you get for the patient means the uptake of treatment is much higher, but also their understanding is much more advanced than what it was before. But now every single patient sees their therapist first and has a full scan done before actually seeing them and do the examination next. We've had to integrate a second scanner now because we bought half a scanner and then a month later we realized it was so successful and we're scanning every patient that we needed the second one so that I could actually do the restorative work that I needed to do as well as the first scan being used to scan the patients for the orthodontics scenario.
So in our Envisalign customers, as ITERO, they grow their practice. It's proven that ITERO LIP study looked at more than 1900 clinics
around the world and the
result is that the return of investment for Iterative is less than 1 year. And this is consistent in year 2. That's the most powerful solution and evidence I've seen in my career. And how does it work? So the in recent outcome simulator is available only on iTero.
And the way it works is that the patient being scanned and within minutes, the doctor can visualize with the patient how that looks like today and how they're going to look like in the future. Now we know that our customers are studying in the chair side. So having this visualization tool, simplify the patient communication and increase churn acceptance for Invisalign.
And then with teams like time lapse,
they can visualize with their patients how much their teeth moved since their last visit. But time goes much beyond Invisalign. That's a tool that helps our customer diagnose gum recession, tooth wear, tooth movements and much more. Let me give you an example. Every time I go to my dentist, they tell me I have gum recession.
And honestly, I just ignore it because I think nothing changed and I don't see it. But if my dentist had this time lapse and they showed me how things are evolving with my teeth, how they deteriorate And what might happen if I don't do something about that, iHeart will take action. And iHeart will want to go back to this clinic because they are these tools and they have my data. And just to complete the comprehensive offering, iTER is a robust restorative scanner. It can support all the restorative procedures like crowns, bridges, implants with a proven accuracy and speed.
We have more than 7,000 restorative scanners in the installed base. We have more than 2,700,000 scans and we have more than 3,000 labs in our network. So to bring it all together, the value of iTero is way beyond initial impression. It is about 60 seconds data acquisition that help our customer grow their practice by increasing treatment acceptance. It's about providing efficiency and consistency across all the restorative procedures.
And it's about provide superb customer experience for their patients and create stickiness for their clinic. And this is what really drives adoption. It's a proven technology and a significant value for our customers. So when you look at our installed base, our installed base is growing rapidly both in the Ortho and the GP. Obviously, that's an asset we're going to leverage for our services business and for future technology upgrades we're going to bring.
And when you look at the utilization, it's growing faster. And the more points of services are going to move from paying every patient every time, we see that growing even faster. And that's a lot of data we have in our cloud. And together with our machine learnings, we are going to continue to bring innovation to the market. So I'd like to focus now on 3 key growth drivers for our business: our portfolio, our sales coverage and then our international expansion.
To hear from me, Raph and Jerico, We just introduced 2 new team members to our Element portfolio. We launched that in AEO and got a lot of excitement. Our customer loved the power and speed of Element 2, the enhanced screen and then with the patient with a large screen. They love their mobility now that they have battery and they can really move it around in their clinic. And they love their ergonomic and clean design of the product.
And then Flex is all about transportability. So it's great multiple practices and they can carry that with them from one practice to the other. It's also great for some customers that can use it as a second unit, so they keep the element in their primary clinic and carry that to the other clinics. And when we look at the future, we're going to continue and enhance our scanners portfolio so we can address the different needs in the different segments and different markets. And with the goal to have a scanner at every chair, we're going to have a multiple treatment plans on ATR minutes after the scan.
So we're going to continue to enhance patient acceptance treating patient acceptance. We're going to continue to innovate with visualization and diagnostics with 2DAC time lapse and we continue to enhance our restorative workflow across the world so our patients can do more with less. When you look at our coverage, we have a direct and indirect channel and then we have Itero sales specialists that support both. The majority of our sales going through our direct channel and where we leverage a significant sales force of Align, all of them are set in a tier to the auto GP and DSOs and they really help our customer make the most out of our technology and really grow their practice. And this direct access, together with our unique training offering, services and customer support is a unique asset for us and it's a key needle for our rapid adoption.
And then in order to deepen our access into the GP, we've been working with selected partners around the world and we're going to continue to expand our partnership with labs, with distributors and other partners to execute on our strategy. So when you look at expansion, we've been growing in North America for many years. In the last 3 years, we see rapid growth in North America and see a lot of opportunity, and Latin America. So EMEA, we attribute the business in the APAC and Latin America. So EMEA, we've tripled the business in the last 2 years.
APAC, we started from almost nothing to be the same size or similar size to EMEA this year. And Latin America, we just started in Brazil and see great momentum
there. If you look
at the 3 strategic countries we've penetrated in the last 10 months, what's common to all of them is that we are investing fast, we get immediate results and we're just scratching the surface in terms of the opportunity we have in front of us. So Japan and Brazil, we launched ITERO. We got immediate results, good momentum for it. China, we just started. China is very strategic for us.
We're going to localize our capabilities there, including manufacturing, training, customer support, and we expect a great momentum in China. So to summarize, we are in this unique moment where we've proven the volume of our products and services. Rapid adoption is happening and we are just scratching the surface. We are still less than 20% penetrated into the Invisalign customer base. Overall intraoral scanner is less than 10% penetrated into the GP market.
And as our service grow, we see a lot of opportunity in our services business. So I'm super excited about this opportunity and looking forward to continued journey to spend every patient at every visit everywhere in the world. Thank you. So again, I'm going to invite Jo, Ralph, Angelico up to the stage for Q and A. Is that correct?
Actually, thank you all. We're going to skip this Q and A, do it at lunch and have a quick break. I know that you guys have been sitting here for a little bit, maybe just get up and stretch your legs, Jordan for a cup of quick coffee and then we'll get back in about 5, 10 minutes.
Ladies and gentlemen, please take your seats
and our program is about to begin.
Good morning again everybody. How many people went and got scanned just now? Awesome. Awesome.
I see
a lot of smiles. That's what we're all about here. So it's my time to introduce to you our 4 commercial leaders and they represent our regions the direct to consumer channel. It's going to be Simon Beard, who is EMEA. And Simon told me
to say that it's an
order of importance and that's why he's first. But now I don't owe him the money anymore.
And then we're going to
hear from Julie Tay, who is the executive who runs the Asia Pacific region. You're then going to hear from Chris Pucko, who is our executive who runs the Americas Poll TO Poll.
And then you're going to
hear from Jennifer Olson, who is the creator and the owner of Invisalign stores, the direct to consumer channel, example
of which is in
the other room. So I'm going to turn it over now to Simon.
Thanks, Roger. Good morning. It's a pleasure to be here to talk about the EMEA region. I want to start by really talking about position in the EMEA region. It's pretty diverse, quite complex, but there's enormous opportunity as referenced earlier in the presentation.
Think about the EMEA region really. If you compare it to other regions, we don't have colossal economies like China or the U. S, but we do have a large number of medium term medium sized opportunities that we're looking to focus on as a group. There are over 4,000,000 patients or 4,000,000 procedures done across the region. We have less than 10%.
And in team, we have less than 2% of the volume share. So we have dramatically underpenetrated that. But what really excites us, what gets us out of bed every morning is the huge opportunity, the underserved need of the consumers across the EMEA region. And because of certain rules around advertising to consumers in many markets, our primary focus is partnering with doctors to really untap that opportunity.
So just to give you
a shape, and really this shape defines our commercial strategy in the EMEA region is that we have an expansion group of markets. So they're essentially the new markets outside of the EU and we have a separate division that really focuses on those fast growing really start up countries for us. We then have quite a large orthodontic business and sales force and they focus really on driving the under penetration that we have on the teen side of the market. And then more recently, we've been developing the GP side of our business, which we see as the way, the gateway to this vast adult population that exists within the EMEA region. So last year, the team performed pretty well.
We grew around 38%. We doubled our installed base for Itero. And actually, Spain became our 3rd largest market globally. That's become a real benchmark for us within the region. And we increased our share of worldwide revenue.
Just some kind of details around that. So that acceleration in growth came from a combination of our expansion markets, our GP business, but also improvements in our team growth. So for the first time last year, we actually grew our teen business quicker than our adult business after we really focused on that more in the second half of the year. And then you can see that we've got improvements or impressive improvements in our utilization rate with ortho. Clearly, still far behind our North America business, but we're really starting to see some trajectory there.
And then our GP utilization dropped because we really went a lot wider and I'll explain more about that later. So last time I presented at the investor meeting a couple of years ago here in New York, we kind of laid out some of the plans and the focus for the business moving forward. We talked about our desire to become a bigger part of the Alliant family. We also wanted to really rapidly refine and improve our go to market model with a specific focus on GP. We saw that as a really important part of our strategy.
And then the expansion opportunity, the vast number of countries and populations that we were currently underserving. So whilst we haven't got a perfect scorecard over the last 2 years, I think the team has done a wonderful job. We've definitely accelerated our revenue growth and we've opened up a number of new markets and brought significant operational infrastructure closer to the customer. And one of the biggest changes that I'll talk about is the way that we're structuring our business around the orthodontist and the general dentist. As you know, the world of an orthodontist and general dentist is very different, yes?
Whilst they see patients, they have a very different focus, a very different workflow, a very different cadence. So we've actually in several markets now entirely split our organization. We have separate leadership teams driving specific clinical, marketing, customer care and sales people so that we can really understand those needs. And those needs are very different. So in the EMEA region, the orthodontist depends on referral of patients and they focus purely on treating mallet solutions.
Their workload is primarily team and they treat complex cases and really depend on that for their living. Whereas with GPs, we see this as really as the gateway to the consumer. They have hundreds if not thousands of patients walking through their doors every single day and many of them who would benefit from teeth straining. So the way that we define our proposition to the GP to make it efficient, profitable and successful, it requires a different approach. And that's why we've entirely split our organization so that our teams on the ground think purely about those customer needs on a day to day basis.
So Joe laid out our strategic priorities. And what I want
to do is really take you through
those and see how in the EMEA region we're actually executing against those priorities. So start with international expansion. Since we last met, we opened operationally, we opened an order acquisition site in the Netherlands. Last year, we opened our 1st treatment planning center in Europe, in Germany to serve the German speaking markets, the DAC, which is Germany, Austria, Switzerland. And then later this year, we'll open a treatment plant in a center in our largest market in Spain.
Since we acquired Dental Couture last year, who controlled most of the countries outside of Europe, we started to rapidly expand our business. So we have we've moved into direct operations in UAE, Saudi Arabia, which is a critical market for us and more recently Turkey. And we have plans to expand further into Russia and into Israel. What I would say as well though is whilst we're expanding and invest in those markets, we continue to invest in our European business. Like I said, we're less than 10% penetrated.
So there's still huge opportunity there. So it's not all about expansion. It's also about how we expand our existing business. So just to give you a flavor of that, we actually prioritize 10 markets. We serve 44 countries in EMEA and we're direct in 27.
But we prioritize 10 as the biggest opportunities. So in Europe, the top 5 are Iberia or Spain, where we do a fantastic job year on year. We've seen progress in France and U. K. We're actually expecting the U.
K. Business to boom now that we've got an American member of the Royal Family who has good teeth and dental hygiene. But our real geographic focus in Europe is around Germany and Italy. These are huge orthodontic markets. And whilst we've improved in the last few years, there's a massive runway for improvement there.
And then moving to our expansion markets, the top 5 countries are in the Netherlands, which is a huge volume of orthodontic procedures. We're very active in Poland. Our CE business has been very successful. And then we're focused on Turkey, Saudi and Russia. So these markets, we've got huge expectations around how fast they're going to grow.
We're driving that growth aggressively. And just think about these, they're huge populations. And the consumers here have the wealth, they're connected and they have the same desires as people in Europe and North America. They want a beautiful smile. It's no different.
Moving on to the orthodontist channel. We're pretty relentless in how we're driving the orthodontists. They're our most important customer, they're our biggest customer, and they're very important to our business going forward. One of the big changes for us or big opportunities has been the launch of mandibular advancement. We're now the largest region for this product, and we're accelerating its usage.
But one of the most exciting things that we found is that customers who use MA actually grow their team practice 6 times quicker. So that product has been a really big game changer for us. Now we're excited about Invisalign First that Raf and Jelco talked about. We'll launch that in July. We see a big opportunity for that.
But it's not just about product as well. In each market with different reimbursement programs and different approaches, we've had to define specific go to market strategies, whether that's looking at commercial teams terms or looking at specific training and mentoring. So many of you will be familiar with TFM. We've kind of created the son of TFM, which is called 360. So we have a specific program on how we can support doctors move the bulk of their practice towards teen and that's a very different proposition to move in adults.
Now GP, as I said earlier, we've made some fairly bold moves in the last 18 months and we see this huge potential within GP by really defining specific organizations that look after this customer group. GPs are sophisticated doctors, they have busy practices. And so developing Invisalign Go has really helped us approach this customer group in a very different way. So we're very focused on segmenting the 600,000 GPs that exist across the EMEA region. And with that segmentation, we either can approach customers around the Invisalign Go product, which I'll explain more about in a moment, or they can work with our existing full product, or they can start with 1 and move to the other.
But I think the critical thing here is that we started off quite conservatively in Germany less than 2 years ago. We continue to develop both the product, the system that supports our product, which is absolutely fundamental, but also our go to market strategy. And we now have achieved over 11,000 cases. So we're starting to see that business really accelerate. In our Invisalign Go, we're about to bring a new update, as the guys mentioned earlier, which is going to offer multiple treatment plannings, but also a wider choice and opportunity for GPs.
But it's all about making the system intuitive, automated, efficient, but also ensuring that the doctors have the freedom to do what they need to do for the patient, whether that's simple teeth straightening or a pre restorative procedure. And a lot of this technology is connected to ELEMENTS. So whether it's Element, Element 2 or Flex, this is a key enabler for our GP business. Now one of the things we don't often talk about or don't talk about quite as regularly as some of the other regions is our consumer strategy. So how do we connect with consumers?
The one thing that you'll be aware of is that due to the regulations and legal landscape within many European markets, we're restricted and it's very different in different countries. In certain countries, we cannot actually advertise to consumers or doctors aren't allowed to advertise as well. It's quite prohibitive. In other cases, it can be more open than that. And we have to adapt and adjust our strategy to do that.
So it doesn't stop us necessarily, but we have to do things differently. So some of the things that we're investing in this year, digital first is a big focus for us. So we last year we connected with over 2,500,000 consumers across EMEA. That is accelerating this year. We're seeing our finder provider with doc locator also accelerating.
We're also investing heavily in an influencer program. So we've just started that in March where we've got 50 influencers across 8 markets and they were already connected with over 130,000 consumers. So there are different ways that we can achieve the same way, same thing, but it is important to our growth going forward. One of the things we actually have just invested in and it keeps up yesterday in the U. K.
We've copied the North American concierge, Smile Concierge model. So we've taken exactly what Chris and the team have done. We've planted it in London. And so we'll find over the next few weeks how successful that's going to be. But the early signs, I.
E, one day look very, very promising. So look, EMEA region, as I indicated at the beginning, has got huge growth potential for Align, both for Invisalign and Iterium. I think the team are really passionate and excited about that opportunity. Whilst we have to modify our approach across different countries, think we've got the right focus now geographically, but also from a channel perspective, we're really excited about how we can partner with our doctors to really bring more patients to their practice, but also enable them with the technology we're introducing to treat more patients. Going forward, we'll continue to invest in some of the models around direct to consumer, but also in the new products that we're bringing, particularly around team, the new solutions for GPs and anything we need within the expansion market.
So thank you for your time. I'm now going to hand over to Julie Tay, who will take you through the APAC region and specifically talking with China. So Julie, over to you. Thank you.
Thank you, Simon. Thank
you. So good morning, everyone. I'm Julie, And I'm going to take you to Asia Pacific, the fastest growing region in the Alaya world. So you heard Joe and Rob talking about the 4,000,000 patients that we serve, the 100,000,000 consumers out there. I think we can do more than this in a sense in Asia Pacific.
And today, I'm really excited to share with you what we've done over the past couple of years since we last met and what the next few years is going to look like. 2016, 2 years ago, we put out some really pretty aggressive goals for ourselves. We say in 4 years by 2020, we're going to do this. And I stand here and I'm very proud to say that the team has made tremendous progress on every single one of this. Actually, we're 2 years ahead in most cases.
China is the 2 largest market in the Align War. We've made massive investments so that we can really become the indispensable partner to the doctors we serve. I'm going to talk a little bit about this as we move along. Now if you look at Asia, it's huge geography, extremely diverse. No one single currency, there's no one single market that's even similar.
90% of our business comes from core markets and there's tremendous opportunity for us to do even more. Now if you take that one step down, 2017 is a record year for us, 53% growth in volume. We've trained more than 5,000 new Invisalign doctors in excess of that and continue to drive utilization. If you look at this, I just want to bring your attention to teens while we continue to grow the adult segment. Look at the growth in teens, seventy 5% growth in 2017 over 2016, and a lot of that has to do with mandibular advancement that we launched last year.
And with the complexity of cases in Asia Pacific, comprehensive remains the bulk of our business. I'm going to take you further down and really look at by markets. This is our core business. And if you look at it, even Hong Kong, 7,000,000 people, 60%, 70% penetration, we continue to grow at 23%. Same story for emerging markets.
Look at that. In India, in excess of 150%, we just entered India about slightly less than 2 years ago. So we continue to make progress. I want to pause here and say it's all good when you look at 2017. But remember, Asia Pacific is a very young organization.
We really just started bringing the whole region together in 2013. And I want to show you how did we perform over the past 4 years. In terms of shipment, we doubled the business in China every single year. And even in a very mature traditional business that we have in Japan, we're in Japan for the 12 years this year, right, direct. Look at that, 45% CAGR growth over 4 years.
I don't think there are many medical device companies that deliver this kind of growth consistently across every single market. So tremendous opportunity, the team has done really, really well. Now 2 years ago, I also talked about this program called TFM. You heard Simon talking about it. I want to bring you back to this with since branded as IPO.
Last year alone, we put 6,000 doctors on this program. This is really for the advantaged tier programs, the lower tier programs. You're talking about bringing 30 doctors coming together, put a team, work with them for 3 months, understand their needs and help them to achieve a higher tier. Amazing growth. 37% of our 2017 growth comes from just this program alone, and we continue to see a sustained momentum from these doctors.
What we do, it's beyond the product. It's actually going out there and really working with the doctors very specifically on what they need. So we have training for them, obviously, master class, study class. We also train their clinic staff on how do they communicate with patients, take questions, explain to patient their whole Invisalign treatment. We help them to host open days, the concept of bringing the patients into the clinic so that they can see what they would like, ask questions and it's an education session for those patients.
Now you heard about the 4 strategic pillars from Joe, Ralph. I'm not going to go through those 4 pillars, but what I really want to do is to give you a sense of how do we take each of those strategic pillars or strategic directions and execute it in a manner that is relevant to the market. I'm going to give you specific examples. Geographic expansion, I'm going to talk about China. Education, I'm going to give you a feel of what we do for Asia Pacific.
Consumer, when we talk about Australia specifically, it's the closest market to North America. Innovation, I will give you an example using Japan. And then with all the investments that's going in, we're going to talk about the whole customer experience for the doctors and what are we trying to achieve here. So let's take China, our 2nd largest market now. For autos, we are in Tier 1 and Tier 2 cities.
The whole idea now is really to help them to go after teams with mandibular advancement. We're going deep. Non autos were looking at GP Specialties aggressively grow them, giving them the right product that makes sense for the market, IGO 26. We're going to go into Tier 3 and beyond are really becoming relevant to this group of GP specialty. And we're going to do that restorative relevance using Itero.
So that brings me to the Itero launch that we just did in China, massive. We launched this to 1200 doctors in Hangzhou, China. But what's important is now Align in China is the 1st and only company that can truly create a full digital workflow for our doctors. So this is going to be messy for us. And you heard Yuva talk about the rapid acceleration of how we're going to localize that.
I'm going to show you a couple of the pictures on the Itero in China. So this is huge for us, newly launched just last month. Geographic expansion, we currently are in almost 100 cities in China, and we continue to push beyond Tier 3. We're going to Tier 4 and Tier 5 cities. Lots to do, lots of potential and we're very clear how we're going to go about in China.
If you take it a step, I think you've heard about this, you know that we have set up the 1st treatment planning center in Chengdu, the first outside of Costa Rica. But what's really meaningful is doctors in China can now the same language at the same time zone, but they can come to the treat center and really have a conversation talking about their the product that they want, talking about their treatment philosophy and having the very meaningful engagement. And that's what we would say enhancing that entire doctor experience when they use Invisalign. One of the big challenges we have is how do we train thousands of doctors across Asia Pacific in a manner that's sustainable, that they can continue to go out and do cases. Now we're seeing this whole training program.
We're really excited about it because it's modular. It's online. It's offline. The doctors can do the training and the pace at day 1. But what's most important is including this hands on component into this whole training program.
And what do I mean by hands on? This is the first training center that we've established in Chengdu. A doctor can come in, get hands on, learn to do how do I do an attachment? How would I want to do an IPR? You can do it all at the training center.
You can sit with the 3 technician, learn how to do clean check in a language that you are familiar with. And of course, we have the iTero. How do you use an iTero? How would you scan? How would you communicate to your patient?
We have it all in this training center. Now moving on, this is Joe. It was just in Chengdu, Siyang is about 100 kilometers away from Chengdu. We were there last week and visiting the first manufacturing site outside of Orest, I believe now, in China. We're going to manufacture both the clear aligners and iTRO.
And you see here the very first iTRO that's been assembled in the Ziyang facility. We're excited. I'll move on to Japan. And talk about the innovation that matters. Very complex cases that they see.
We launched MediVuer Advancement. We're going to launch Phase 1 this year, but it moves beyond just product. The request has been look at the packaging.
We've looked at
the packaging that we have. We've sized it down. We've mixed things that is relevant to the market that we participate in. The other feedback is we need to be able to serve each of the different segments, the autos and the GP autos. And with that, we're going to split the team and create relevant digital workflow for each of those segments.
Now I'm going to move to Australia. And I mentioned it's a market that's closest to North America, a market that we can go full swing in terms of consumer marketing. Last year, we started a technology campaign. This year beginning of this year, we'll work on a campaign with mom. The whole focus is really to drive teens.
And we've seen very, very encouraging results. I want to spend just a couple of minutes talking about iTero. We're probably the last region to launch iTero with China, we're now complete as in every single major markets in Asia has an iTero. You heard about Singh is believing, but it goes more than that. With the outcome simulator, the doctors are now able to explain to the patient what the outcome looks like.
But more importantly for the patient, it's no longer that glui stuff that's in your mouth, that whole patient experience is now down to 2 minutes. Some of you have tried that. It's a game changer. It's different for us. Now iTero is available in every single market and we're ramping up our presence.
When you look at the innovation that Joico talked about, the infrastructure that we have built over the last few years, the resources that we have moved into Asia Pacific, what does the next 3 years look like? We feel very good about it. We believe momentum will increase. China will become a very strong number 2. We're going to add a 3rd Asian market to top 5 globally.
At least 70% of the submissions are going to come from iTero. Half of the volume will be made in Asia, and we're going to continue and we're committed to be an indispensable partner
to the doctors who use our product.
Before I go off stage, I'm going to share with you a video. It's an Asian campaign that we've just launched, gives you a sense of how we are bringing things closer to Asia. And we're going to you're going to get a you're the 1st to get a sneak preview of this because we're launching this at the Asia Pacific Summit next week. It is the largest summit that we have ever hosted, 1100 doctors from across Asia Pacific will come, and That will be next week. So enjoy the video.
And once the video end, you will have Chris coming up to talk about the Americas. Thank you very much.
Hi, good morning.
How are you? I'm excited to present to you the Americas strategy, at least update you, but I want to also say 7th presentation here, largest market, I want you all to just look ahead, pay a little attention because I know that can happen. We do this quite often. But let's start off with the Americas opportunity, the marketplace, right? We've been in business for quite a while.
You've heard Joe and Ralph talk about the 12,000,000 current patients that are being treated out there in the globe and we represent about 4,000,000 of those. The vast majority of those are in teen. Now, if
you think about our penetration
in the Americas, primarily North America, we're at about 30% in adults, single digits in teens, with that a blended average of about 15%, right? And then you take that and you put it up against our product and how well it works. And at 70%, I'd say that's even conservative. If you start to add on the new products that we're introducing, it goes beyond that. You get a real sense of how big the North America or the Americas market really still is.
Now when you widen that and you look at the total available market that we know is at least 100,000,000 patients out there, it's not a big opportunity. It is an enormous opportunity. And I think you would agree with that. From a geographical perspective, our business is still primarily in North America at 98%, 2% is in the expansion territories of Latin America. Now we find this extremely exciting because you're taking the most tenured business and you're partnering it with a brand new huge opportunity and the synergies that happen there are going to produce amazing results.
Our orthodontic partners, our Dental partners, they continue to gain share in our marketplace. It's 60% now. That's while our general dentist partners continue to grow and they're at 40%. We had a strong year last year in teen. So teen represents 27% now of our patient mix.
Last year was a record year for us in so many ways, 25% growth. We retain 63% of the worldwide volume. And I appreciate my peers in Simon and Julie, but we intend on maintaining our share of the world. So, we look forward to driving that. We trained 6,000 plus new Invisalign doctors.
And this is a really important stat and it's a remarkable one. Our North American orthodontists have a utilization rate of 39 cases. That is the highest in the globe. When you look at the metrics, you see increases across the board, right? Increases in volume, increases in utilization, teenager and adult on the patient basis both increased.
Now what I would call on the balance side of this equation mix, comprehensive and non comprehensive, both in both areas. It's really good to see growth and balance in this and that is exciting for us to have performed that way. You've heard this a lot. I won't spend a lot of time on it. Orthodontists are specialists, right?
They are extensively trained in treating orthodontic procedures. You know that. So it's no surprise their utilization rates are higher. General dentists are skilled at what they do. They primarily will do restorative procedures.
And it's no surprise though that some do more orthodontics, but most do not. They do some orthodontics. So it's no surprise to see the utilization rates there be lower. But the point is what you've heard before, it's about a customized approach to these unique lead different doctors and practices. The landscape looks like this.
It's 10,000 orthodontists, 150,000 general dentists and DSOs, the consolidations that are going on within DSOs right now, especially in North America are happening fast. They represent between 20% 20 2% of all dentistry being done today and they continue to expand. Just take a look at the trend here and how the market is trending. You have top elite DSOs. I'd say they're getting past 60 accounts right now.
But these are large dental service organizations. They're growing. They're looking at consolidation, but they also have the infrastructure to invest in digital, right? They invest in specialty, just inserting a specialty into that practice is not insignificant. And they have the ability to do that.
They obviously leverage their buying power.
But I think one of
the things that's really important to think about and the industry is thinking about is that university doctors there's a demographic shift that's happened and graduates coming out at least half of them are seeking jobs within dental service organizations. The mid market is thousands of accounts. Now these are fast growing. They're really in a consolidation mode. They're really looking for leverage.
There's a lot of acquisition going on. They're really focused on driving top line for that reason, right? They have less infrastructure, less ability to insert specialty, but they do build their ortho business in our case through consolidation. Then you get down to the solo practice, the single practice, they're under enormous pressure right now. First, what's sitting above them are the dental service organizations, but also payer pressures.
So those are actually on the decline in the market. If you look at the metrics from a channel perspective, again, you see a great story, increases across the board, both in orthodontic and GP. On the utilization side, a really great story, you get to that 38.5 cases per orthodontist, but do not overlook the general dentist. That half a case across a wide body of a number of general dentists has a very good impact, positive impact. If you go down below, you see between the teen and adult, remarkable growth for orthodontists at 40%, yet still drove the full the adult population and the same thing in general dentistry.
So growth all around. As I said on the balance side of this on mix, the comprehensive and non comprehensive really grew in the orthodontic space, especially in the GP space as well, but that was a controlled planned expansion into the light and lower aligner cases. From a DSO perspective, while DSOs are primarily general dentists, it's great to see that our orthodontic doctor partners grew actually 46% against the general dentist growing 33%. But still you can see the impact that's had on the business in growing the top line.
So you're all familiar with how we
look at our strategies. I'm going to start with international expansion as it relates to and I like it, Roger, our
pole to pole market. I hadn't
thought about that, but that's fantastic. Latin America, very, very big opportunity. We went direct in Q2 of last year. We are very excited about what we have been able to accomplish there with 110% growth. And that and please keep in mind that's coming from a zero start and getting started.
So we're very excited about what the team has done down there so far. There is much more to come though out of this market. And the ways we're going to do that are first about doctor activation. So training new doctors and getting new doctors on board is critical. We have many, many, many training programs going on as we speak and they are at full capacity.
The energy is exciting. The doctors are very excited and fully on board. But it's not enough just to bring doctors on. You have to get their utilization up. Otherwise, that's the end of the story.
And we spend a lot of time and effort with clinical training around utilization. And that effort, again, many courses, many doctors in attendance, Those 2 go hand in hand, new doctors, increasing utilization. That's a big focus for us getting started. Another key focus for us, you all understand the value of our brand. It's no different in Latin America.
We've begun to establish our brand down there. We've had some pretty good results with the investments we've made so far. Things like our Made to Move website just kicking off here in early 2018 has already received over 500,000 visits. Our digital campaigns, our online campaigns have already made over 100,000,000 impressions
in that market.
Now just like training and utilization go together, creating demand and then driving it through the conversion are important. So we've also installed a consumer conversion team down there. And that team is primarily just getting started, but they've already processed thousands of leads and they've sent hundreds of scheduled hundreds of patients into our orthodontic partners practices. So very excited about the future there. You've heard
a lot about iTero. ITero
was launched in Q1 of this year into Brazil with spectacular success, was very well received. The orders that we took and the momentum that we gained, it almost instantly was very exciting. We look for great things out of what Itero is going to do in that market and also in that market. So we'll update you as we move along. Just going north now, Canada is a little bit of a different expansion story.
Canada was a part of our business for 20 years as a North American business. So really to drive focus, we invested in that business to separate that business and created a team up there that can do that. They're really working hard on personalizing their business to the Canadian market, which is really important. And it's not only to the marketplace, but the results that they've driven with that have been 31%. And we know that there's a lot more to come, but the team has done a fantastic job kicking off so far.
The doctor response has been incredibly positive. Both orthodontists and general dentists are being, I would say, serviced in a more customized manner. Our programming has been customized more to for that market and how they think even take all the way just to Montreal about French speaking, right? So these are really important things for those doctors to continue to grow. I think a really good example about how positive it's been with these investments is around mandibular advancement and what that team did with teen last year, which was 44% growth.
And again, we're just getting started there, but exciting things to come. You saw on Yuval's slide scanners everywhere, and it is the truth. Scanners are critical to that business. We just launched Element 2 and Flex into that market And they were extremely well received. And the team is actually very excited about that, more placements.
I think
you guys know the story now, more utilization, better patient experience and so on. The last piece I'll tell you about Canada is that we for the first time in 21 years invested in a Canadian consumer program, which was really important. Again, it's a customized approach to that. And so far, we've learned a lot and the successes have been great. Just like in every other market, though, you can't drive demand without converting it.
So we also have a consumer conversion team there. Now that team is located in Raleigh, but is dedicated to Canada and it has already produced some incredible results. So overall, we're very excited about these 2 early starts, and we'll keep you updated as we get together here going forward. I want to turn a bit to our orthodontic partners and how do we drive utilization and partner with these doctors. 75% of the business in an orthodontic practice is teen.
It's our largest opportunity. We have spent a lot of energy over the last year and a half or so partnering with our orthodontists to drive team. And together, we have really created quite a momentum. I think you can see by the charts what has happened in the market. And I do point out Q3 because that's the quarter that most teens will go into treatment.
So therefore, the volume is high. But the doctors are very excited about that. We've had some great results and we continue to build on that success. I think just like the balance that I talked about with creating demand and closing or training and then learning more, the programs I'm showing you here are really more progressive programs so doctors can increase their utilization. These are doctors who are currently doing Invisalign in these examples, but they want to do more.
They want to do more team, Invisalign orthodontic master's edge program, series of meetings over a period of time. These are great learning environments that provide support around them for a period of time and the results have been remarkable. Invisalign Pro or Eye Pro as you saw was the original TFM. A great example here of a 90 day program, we surround the doctor with clinical training, sales, customer support for a period of 90 days with a dedicated set of meetings and learnings. Orthodontists who went through this program in Q1 grew 52%.
So you get a sense of the impact of these programs and why they're so important. That's important to us, but I have to say it's probably even more important to the doctors because they have a patient at the end of all this and they want to make sure that the outcomes are right and it's a really important part as you really push through and become better partners. I said Ipro I'm sorry, iTero everywhere. Here's another great example of the power of iTero. This is eye pro doctors and as they go through the program, these are all orthodontists, those who have a scanner do 4.5 or 4 to 5 times more cases than those who do not.
And that's everywhere. Everywhere there's a scanner, increase in utilization, increase in patient satisfaction, increase in production, it's throughout our business. In orthodontics and in dentistry in general, universities are a very important focus for us and we do a lot with our partner universities and there are also a lot of them. This is another really important aspect for both our orthodontic and general dentist doctors. They understand the needs and they have a lot of regard for the universities and they definitely appreciate the support.
Last year alone, we invested almost $15,000,000 in universities and that spend has gone up for 2018. We're very excited about doing that and what it means to the community and to our future overall.
When we
talk about GP, I want to
talk about treat and refer, right, treating and or referring to an orthodontic partner. And you've heard a lot about that. And I just talked about the differences between the general dentist and the orthodontist. And it's pretty straightforward. General dentists, they are busy, right?
They are specialists at what they do every day. And they need to really some will do a lot of cases in orthodontics, but most do some cases. And therefore, we have to really streamline that and help them integrate that into their practice. And that's what Invisalign Go does. It is a product designed to address those needs, right?
It has a simulator, it gives you visualization. It guides you along the way. It helps you simplify the choice
to treat or refer.
But the best part about it is it helps support you with either decision. And that integration is important in a general dentist practice and we're excited about this product as we go forward. But if you're talking general dentistry, you have to talk restored. They go hand in hand. And our roots in iTero are actually in restorative scanner.
The production power that that scanner has, especially in a general dentist hands are critical. Every 100 procedures that are presented today to a patient, only 20 are accepted. So you can imagine if you can increase that to 25, what a difference that would make to your practice. If you multiply that in a dental service organization, you can imagine what that means to your top line. This is the reason why many DSOs are rapidly acquiring scanners and implementing them.
That's not because it's a scanner. It is an end to end solution.
It's an
open network, right? We have an expansive lab network, which is critical for our general dentists. We have a lot of strategic partners partnerships with with them. And as I said, the DSOs are an important part of that. DSOs are a force within our business right now and they really appreciate our partnership.
We do not just sell them a product. We don't just give them a discount. We partner with them and we drive top line with them. We do it in the ways you see here and they greatly appreciate that. The major DSOs really partner with us and they really do appreciate the type of services and top line growth that we can bring to them.
Last year, patient demand and conversion was integral to our success. And I really want to start off by talking a little bit about the Made to Move campaign. You've heard about
it from others.
And for us, the Made to Move campaign spans across from seniors to adults to millennials to teens to Gen Zs. It is a brand that stretches and it has longevity, right, across generations. Now you've heard a lot about the campaign. I want to focus on one thing that I think you really like to see, which is about teenagers and taking the behavior from I need orthodontics or I want braces over to I want Invisalign. And that's a significant shift from what the business has been.
There's no better example of that than our awesomeness TV series that we did last year.
And you have to think about it
this way. We are now speaking to teens in teen where teens go to listen. That's a really important thing concept to understand and we did it in these ways. We told the stories of talent and teens who were made to move and we did it around some very specific topics, filmmaking, sports, music, science, tech, dance. This was original content that was widely viewed and very accepted well accepted 42,500,000 minutes were viewed of this original content.
It was a campaign that really helped to drive a lot of teenagers into our orthodontic partners practices mostly GPs as well, but mostly orthodontic partner practices and it really helped to make a difference. There's one thing that gets in the way with the team and that's the parents, those of you who are parents, especially moms in our business. And moms have questions and I think you should. Our orthodontists didn't sit idle. They jumped in.
They created at least 17 videos really answering mom's biggest question to really close that gap and help that teen over the hurdle that now is very excited from the campaigns that they just witnessed. We had 2,500,000 views in the 1st 6 months of that launch. So it's very, very exciting. Now I've talked a lot about creating demand and closing demand into conversion. And I'm going to show you here a little bit about how we go and do that.
Of course, the demand generation creates the
I want Invisalign concept, but then we have to nurture that and get that across to an Invisalign treating doctor. There is no better vehicle that we have than this consumer call center right now where consumers are on the line. And I tell you, I listen to these calls, there's relationships being developed. It's not just a call and can you help me. It's a very emotional decision.
There's also another byproduct of this is a safe zone to go if you're interested in getting treatment. It's a different level of commitment
to go into a doctor's office because
now you're really you're in. With this, they call, we help them walk through and then we schedule them with our partnership practices. And we do a lot of that, a lot of that. Our doctors love this. We do not just sell a product.
I know a lot's been made about competition. I have a high regard for competition. And I humbly say though, we go beyond that. We go beyond that. We are a practice growth engine.
We have the most innovative products. We have the best training. We have the best programming. And we are the only vendor. We just left the AAO.
We are the only vendor that drives patients to their practice to help them grow. We are committed to that long term doctor relationship. So just in summary, I'd say we're very excited about the expansion opportunities that I described. They're critical to our long term success. You heard this all day today, channel segmentation, channel segmentation, channel segmentation.
I think that we've done a good job at training dentists specifically to do orthodontics. Now we are turning to help general dentists do dentistry. There's a big difference. So we're customizing that approach and that's key. Driving more teams and getting more teams to say I want Invisalign, we will continue to press on that lever and our doctors greatly appreciate that.
As I said, GP is important, but we have to fit their model, okay? They're busy. They are really talented at what they do. So to insert orthodontics in there has to be done right and it has to be done well and that's what we're doing. And last, I'll say that we are going to continue to press on the brand lever.
We're going to continue to drive patients
to these
practices and continue to build our partnerships with our doctors. Concierge and even the store, another safe place to go if you're interested consumer where you can then be nurtured and then go into a doctor's office for treatment. So with that, I'm going to thank you for your time and I'm going to leave you with this video. I can't overemphasize the teen market what I mean by we talk to teens, like teens, where teens want to listen. And this video, I think, really summarizes all of that.
And you'll see in this video as you watch it that it answers specific questions along the way that a team can help, let's say, talk to mom or maybe have on their own about their lifestyle.
So thank you, and please play the video.
Invisalign aligner. Are you ready? Changing the game with a brand new style. You go to your doctor for a 3 d can see that your teeth are reclining. You only need to check up every few weeks.
Who cares about your average when you'll keep the all flee? I got the softbox. She was
Good morning. I just told Emory that
I've always wanted a walk
up song. I just didn't know it was going to be an Invisalign teen rap song. So for those of you who I haven't met yet, my name is Jennifer Olson. I'm excited to be here today to talk to you about our doctor direct to consumer channel. And by now, you've seen this slide.
And you've heard a little bit about the products and the technology and now from our regional leaders on go to market strategies for how we plan to achieve this market. But what I get to talk to you about is actually something that we've been doing for 20 years. And that is our commitment on what Joe was talking about on this B2C2B of building brand awareness, what Chris just talked about, finding consumers and driving them into our doctors' practices. And today specifically, I'll talk about the Invisalign store and how that's just one more iteration of this direct to consumer marketing that we've been doing for 20 years. But before we get to the store, I thought we'd talk about what's changed a little bit.
So this is my 16th year at Invisalign going into. And what has changed have been dynamics outside of Invisalign on consumers. And with the on demand generation, I know we talk a lot about millennials and how they want speed, convenience and accessibility, there's also been a shift even in the parents of our teenagers going into practices. And so now in the United States, 2018 statistics show that 61% of families have 2 working parents and I can raise my hand saying I'm one of them. And the demand that places on families is that consumers will still take the time to take their teenagers in and their kids into the doctor, but they may not want to invest to time themselves or make the time in their schedules to invest for themselves.
And so as we talk about that $300,000,000 in our direct to consumer efforts, what the Invisalign store is trying to do is to take this to the masses. But these themes of speed, convenience and accessibility have not been locked by others. And it seems that every week a new true and this is B2C, not B2C2B, a true B2C aligner company is bringing on the market every day and here are just some names of those that have come on the scene in the last 2 years to try to take advantage of these new consumer dynamics. Now of note, the one you probably are most familiar with is SmileDirectClub, of which we are their sole outside supplier of their aligners, it's not Invisalign. As you know, it's an EX30 product, straight line, no attachments.
And additionally, we have a 19% equity investment in them. Now as we talk about the stores and transparency when we did our Q1 earnings, we talked about how SCC has alleged that our Invisalign store pilot program constitutes a breach of our non compete in our agreement with them. We disagree. We will defend ourselves and intend to continue our Invisalign store pilot. And so the Invisalign pilot store, as we mentioned, is really bringing consumers to us, helping educate them, providing a brand experience and then directly connecting them to a doctor's office for a physical exam and then disbursement of aligners on a schedule that the doctor works out with the consumer.
So let's talk about retail in general before we talk about the Invisalign store. So I bet you guys all have your computers open if you type in retail is dead. You'll probably get about 100 hits about how brick and mortar is going by the wayside, but that's really not the trend. It's really a shift. And the shift is going toward experiences.
So it's less about visual merchandising and product announcements. It's more about the experience, understanding about the shift in consumer behavior and focusing on that experience to the end result, be it a good or service, and we're no different. So if you walked outside of our pilot store in San Francisco and walked up and down the street, you would see several examples, which I've noticed here. You have Casper, a way of just getting mattress, right? You've got the Warby Parkers.
You have the Starbucks Reserve, right? So it's no longer just about the order ahead. It's about the experience of a premium coffee. And you also have things like One Medical who are embracing this shift in consumer behavior and bringing experiences to life in a brick and mortar establishment. And that's what we're doing with our Invisalign stores.
So the first two stores are in the Bay Area. Our first one is in San Francisco on Union Street. It's a street based location, and that was opened around mid November. And our second pilot location was opened in Valleyfair Mall, which is right near our corporate office in San Jose, and that opened in February. And we've announced 2 additional stores that will open this summer.
1 is in King of Prussia, Pennsylvania and the King of Prussia Mall and the second one is in Bethesda, Maryland in the Montgomery Mall. Let's talk a little bit about the experience. Really, when we set out to design the store, we wanted it to be, no pun intended, but clear So you could walk by and see that it's Invisalign, we have prominent branded experiences, we have digital technology that allow consumers to come in and interact with to see smiles like theirs and to talk about what is the digital scan. We take it for granted that people know what that means. And when you tell them we're going to scan them, you kind of see the sphere in their eyes.
So we talk about how it's just taking thousands of pictures a second. We talk about smiles like yours. And for those of you that have been in the booth, you've seen that we showed social media posts of other consumers who have gone through treatment and how their experience may have been. We try to answer their top questions about costs, length of treatment and truly the one that we've heard or at least I've heard from 15 years now, am I a candidate? And we try to show this to them and I'll talk about that in a second.
We have a pretty great team. Hopefully, you've been able to meet some of them today. We have certified dental to do the actual scanning of the consumers. And again, it's really supposed to be a nonthreatening environment. And I'm sure this won't come as a surprise, as I said, of taking this to the masses.
These consumers were not coming in looking to find a doctor. If consumers thought about Invisalign at some point, really never took action, never really made that appointment, maybe just wanted to know more. In Valleyfair, I was talking to one of you earlier saying they were maybe coming in to return a T shirt and all of sudden see Invisalign and they're diverted and they find themselves with us and they weren't intending on doing that. So the environment that we try to provide for them as a brand experience is not obligatory. The scan is complementary.
They're not on the hook and we just try to answer their questions and get them some ideas of what their treatment could look like. And in that, if they choose to be scanned, then we let me have you run through this today, it's about a 3 minute scan. Our dental assistants are pretty quick with it, and they can preview their new smile. This is not Invisalign outcome simulator. This is some proprietary software that we use, and we show them 2 outcomes.
And it goes back to what Jelco was talking about earlier. There's a limited treatment. Really, it's like your selfie smile, right? It's the social sticks, we're not really moving the back teeth and or you can visualize in a side by side the deluxe smile, which is more comprehensive treatment. Should a consumer after their scan and their visual choose to move forward, we help them find a doctor.
We ask them, how would you like to work with your doctor? You want somebody near your work, near your home? And based on a zip code search of our Invisalign networked doctors for their pilot locations, we help them find somebody near there that would be convenient to them. And then of course, cost always comes up. And so we do have an arrangement with LendingPoint.
And through the store, they can actually consumers can go on to LendingPoint and get preapproved for a loan. Now we have these 2 treatment options. So let me just walk through the differences of these 2. The signature smile is again that social stick selfie smile, okay. It's really the teeth from about canine to canine.
It includes up to 14 aligner sets, and we do have a price to the consumer of $24.99 an agreed upon price with our network doctors on the back end. The Invisalign Deluxe Smile does not have a cost associated with it because we don't know the complexity of the case, and this is really where we rely on our doctor partners to work with the consumers on that fee. So, the doctor sets their fee to the consumer for the deluxe smile. So early learning, so I've been asked a lot today. So tell me how is it going.
We're 6 months in. And so we thought we'd share with you just a couple of things that we're starting to see in the stores. Now the primary walk in traffic, it's female 67% of the time and the average age is 32. Now this is pretty consistent with what we see from our other consumer marketing activities of those that respond, fill out smile assessments, go on the website. But here's I think what's interesting and we're going to talk a little bit about the power of visualization here.
I was taking some polls this morning about how often some of you thought people chose signature over deluxe, and I heard, oh, I bet signature is 80% of the time, I heard 90%, seventy 5%, it's actually 51%. And of the cases that we've shipped coming from the store, 71%, and again, this is early as 6 months in, but these are deluxe cases. So what is this starting to show us? I think it goes back to what GELCO was talking about. Consumers want options.
Invisalign is the only one that gives them the options from whether you want the lifestyle that fits your lifestyle of a lower end treatment or something that's shorter or you're going for a graduation as in the case that Ralph showed on Jessica or if you want full bite correction. And when consumers can see the option side by side, most, Then
when
Then when they go into their doctors' offices, the doctor sits down, talks to them about their treatment option, talks to them about why they may have wanted to get into treatment and then helps them get into a treatment. So 71% of the time, again, in this early pilot, the percent of cases shipped are deluxe. And I think one of the most encouraging statistics so far is that if they sit down in the chair and get a scan, 80% of the time, they elect to move forward to find a doctor. So our biggest challenge is to get them to sit and if we can get them to sit and show them, again, this just shows the power of that visualization. This is their teeth and their mouth moving and they can see the difference of what their teeth could look like either in a limited with 14 aligners or full correction.
I think probably one of the most beneficial learnings we've had has been partnering with our doctors in this new initiative. For those of you who are at the AAO in May and just couple of weeks ago, Doctor. David Boshkin has been one of our pilot doctors for both stores. And he was in the booth talking about his experience as a pilot doctor. And what he was saying and one of the things I haven't shared with you yet is that of the appointments that we have 70% of those appointments take place when our doctors are usually closed.
So this is for after business hours. Again, this hits right on the themes of convenience and for us meeting people where they shopping, dining on their way to yoga, they weren't intending to get into this line and yet they happen to stop by the store. And so what David Boshkin was talking about is how we're kind of an extension of his practice. So we're scanning these consumers, we take their photos, when the 80% of them opt in to find a doctor, we help them find a doctor. And by the time David gets into his office the next morning, he has some consumers that are waiting.
And then we worked with our concierge team and his treatment coordinator, Nicole,
to get them scheduled as
quick as possible because these are consumers, not patients. These are consumers who weren't thinking about it, who made a decision, and it's up to us to work with our doctors to get them in and to get their questions answered as quickly as possible. So I appreciate partners like Dave.
We have a number of them in the
pilot, but I really love that he said essentially that Invisalign has become an extension of his practice when he's not working. So how's the pilot going? It's really a learning curve. This retail is new to Invisalign. It's new to our company.
We're building in core capabilities in a number of our functions. We leveraged experts. So when we first decided to go towards this strategy, one of the first things we did is looked at their landscape of retail and said, okay, what's who are companies that are doing it well in a disruptive manner of changing a brand experience to get to a service or product. And two names still coming up, it was Tesla, right, and Apple. And the common thread in both of those is a man named George Blankenship.
And so I gave George a call, thought we'd have lunch for an hour. 3 hours later, he signed on as a consultant of ours and has really helped shape this strategy. And what he's done for us is not only from the design aspect, but he was able to bring partners to us as
well that are experts
in this space and everything from real estate to design to construction, etcetera. And so we've been able to leverage his 30 years of expertise in this think one of
the biggest learnings also and
what I what we've
been working on in this think one of the biggest learnings also and what I what we've been working on in this pilot is just how important this back end experience is for our doctors as it is just as important for the front end consumer experience in the store. And so through this pilot, what we've done is relied on our doctors to provide us feedback on how we can streamline this, how we can transfer consumers faster, how we can help to get them more qualified, and they've given us tons of feedback. In addition, we survey our consumers quite frequently that are leaving the store. We've had third party research. They help us inform what we should do next even from a design perspective.
And I
think
where
And I think where we could have done a better job is telling them what this is and isn't. And when we went out to market with the store, there was a lot of misperceptions that this was really a B2C initiative and that we were cutting out the doctor and it couldn't be further from the truth. And so we have to do a better job of telling that story. I think a lot of people told that story at our absence. This is not SmileDirectClub.
Our doctors are firmly in the center of this. A consumer cannot get started without a physical visit to the doctor's office for an oral health check as well as fitting in the aligners. And so that relationship is crucial to this. That is not a B2C, and we need to do a better job of helping them understand that. So that's a lot of the reason why we put the pop up booth in at the AAO, which is to invite our doctors to come in, do a little bit of myth busting, answer their questions and any of their concerns.
And I promise you, we'll do a better job and have a commitment to doing that as we move forward. So next steps, we talked about the 2 stores that will open up this summer. Going to continue to connect these interested consumers, essentially bring Invisalign to the masses, catch consumers where they're eating, shopping, dining, yoga ing, maybe if they're at an Analyst Day and have a little extra time on their hands during breaks and get them into treatment. And so with that, I would encourage you if you have time, I want to say I was really surprised. I have so many good sports in this room to sit down, go through the whole process.
Our store team is here to answer your questions. I'm never a salesperson at heart. So look, if you want to get forward go forward with treatment, we have doctors here in New York that will be part of the store pilot that will be happy to get you some aligners, okay? So with that, I just want to thank you for your time. Thank you for taking the interest in visiting the store.
And that will conclude this part of the morning. Going to dismiss to lunch and then we'll be back in the afternoon for more. Thank you guys very much.
Good afternoon, everybody. Hope you enjoyed lunch as much as I did, but the challenge with meetings like this when you work for a dental company is that you don't get to brush your teeth after you eat and I'm feeling really guilty about that. So we're heading into the final stretch here and you're going to have 2 presenters this afternoon. The first one is Emery Wright, who has been with the company over 18 years and has been on this wild ride with from the beginning really. And he's going to talk to you about operations globally.
And then you're going to hear from John Marici, who's going to Johnny Dollar is going to come up here and that cleanup and tell the financial story. Then what we're going to do is have the entire executive team come up on this little stage for Q and A. So I hope you're looking forward to all of that and I will turn it over now to Emery Wright. Thank you.
Good afternoon. It's always a pleasure to go right after lunch. I'm going to see if I could talk to somebody about getting moved up in
the agenda.
You've heard this morning really the whole gamut of Align's kind of capabilities from our the enormous market opportunity we have as well as the scanner or technology and all the way through the power of the stores that Jen just finished up a bit ago. What I want to talk to you a little bit about is really how our innovation and manufacturing technology, our know how and the scale that we've developed over the past 21 years has really created a competitive advantage for Align now and into the future. But before I do that, I wanted to talk I wanted to remind those of you who've been close to us over the years and maybe point out to the people who are maybe a little newer, how hard it is to do what we do. It seems super simple. You look at the aligner, it's a small piece of plastic, doesn't seem like there's much to it.
But there's an incredible amount of complexity that goes into making cost making that product cost effectively 100 of 1000 of parts. The complexity kind of is 2 fold, 1 on the manufacturing side and then 1 on the, call it, the business model side. And on the manufacturing side, we make 350,000 plus parts every day in our factory. Every one of them is different. There's no the 2 of them are the same.
They're very small. They weigh less than an ounce. They're virtually invisible. They all look the same, but they're not the same. They're organic shapes.
So if you think about manufacturing technology and how do you process these parts, how do you track the parts in the process, How do you ensure kind of consistent quality, because you can't plug it in and test it, you can't measure it, because every single one of them
is different. So there's a
lot of complexities there that nobody has really had to solve until we came along. So that's one. The second one is on the business model. So think about our model is it's not it's on demand. And it's on demand for a customer base that has kind of a normal weekly business cycle, if you will, if you take the whole globe together.
And then they also have a very kind of predetermined lead time that they expect from us. So to be able to manage capacity in that environment without getting too ahead of yourself and without getting behind is creates a challenge certainly created a challenge in the early days. So we've been able to solve all these problems and along the way found new opportunities for us to do with really out of necessity. There's you can't go and buy equipment off the shelf that can produce aligners. You can't go to somebody in the industry and say, Hey, tell me how to do this.
We had to invent it all ourselves. And so over the years, as we've invented and learned, we've built up quite a bit of capacity. It really solved problems that the industry experts couldn't solve or really that
they didn't even know there was
a problem. So because of this kind of our 21 years of know how and capability that we're able to develop and produce the highest quality aligners on the market. Our capability, we're able to reproduce patient anatomy and reproduce. We make aligners within 100 microns, which to put that in perspective, it's about the width of a human hair. So we're kind of that good.
And because of those capabilities, we're able to make the most comfortable aligners. We're able to make the best fitting aligners, which then drives our ability to drive shorter treatment times. So that's certainly one of the advantages we have. When you think about technology that goes into the manufacturing process, really the foundational technology that made this all possible was 3 d printing. And there's a lot of 3 d printing is a pretty exciting industry, we've talked a lot about.
But really we're pioneers in that industry in that we took what largely still today a prototyping technology, which people will run their machine 2 or 3 times a day, they might make a couple parts at a time. But we've taken it from prototyping to mass customized production and no one else has done that. We run our equipment I still remember I still remember when I started back in 2000, we were having conversations along the way with some of these providers and we were giving our cost targets and our kind of build time targets and things of that nature and the inventors of 3 d printing told us it was not possible. And so through our experience and really kind of a little bit of we're not going to take we're not going to be told we can't do something, we went and figured it out. Today, we're the largest user of 3 d printing in the world, but we're not just the largest, we're also the most effective.
We have build times that are about 10 to 20 times faster than others in the space. We use 40x to 50x less material than others in the space. And we have a cost that's about 10x lower than anyone else in the space. We really leverage that cost advantage to help drive more investment in innovation in the business, whether it's in manufacturing innovation, whether it's on the product side with JELCO's team, etcetera, really again driving advantage for us. Because of our kind of mastery of 3 d printing, kind of foundational technology, we've been able to really evolve that technology and create the biggest mass customized manufacturing process on the planet.
We continue to innovate beyond where others are in the industry. And one of those kind of future innovations is direct printing of aligners. So I think most people know, but you might not know, we print a mold and then we form a piece of plastic over the mold. That's kind of the current technology, if you will. Taking that mold part out, the half of the process out and just direct printing aligners is kind of a logical natural next step, but something that's not possible today.
There's a lot of information out there. You talk to you might talk to some of the providers of the technology, you might talk to labs or customers. They will say how I'm printing aligners in my office or in my lab. And it's really not true. They're printing molds and forming aligners over those molds.
The reason why is there's the kind of 3 fundamental problems or call them hurdles that you have to get over in order to print direct print and aligner. So one is you need a material that has the right mechanical properties to be able to move teeth effectively. You need a material that is clear and then you need a material that is biocompatible, meaning you put it in the mouth. And there's materials out there that have one of those three components, but no material that has all three of those components. And so once you kind of get past that obstacle and the unique material properties are required to move teeth directly with a printed product, you need to find a manufacturing kind of a piece of hardware, a printer that can actually print that material.
Based on our experience, we believe that the material properties are going to be such that the current commercially available printers will not be adequate to won't be able to handle that material. So you're going to need to have a new platform that's developed on the market. And then the third, I think, which is less discussed, it's something that I think it's I personally think it's kind of the additive manufacturing dirty little secret is post processing. There's a significant amount of post processing that happens after you print a part, you need to remove, you need to finish that part, essentially polish it, surface finish most parts. We have a fairly automated post processing system right now, but the other technologies out there don't.
They're very manual. They're very labor intensive. And so that you'll have to solve that problem too. So there's we continue to invest heavily in this area. We're very close to industry as well as experts in material science in the academic arena.
And based on our competency in this space, we believe we're best positioned to kind of crack the code on direct printing of aligners. So a lot more to come on that in the future. So we've had a 21 year first mover advantage. We've been in it for the long haul. We are in it for the long haul.
We consider this kind of a marathon, not a sprint. Competition, others are going to come in and they're going to use 3 d printing, they're going to use CADCAM technologies to kind of start playing the game, the game of making aligners. But there's a pretty significant difference between kind of playing in the game and mastering the game, and we're certainly the masters of this game. For those of you in the audience that run, I like to think of it as using analogy of the run-in the marathon, if there a difference between qualifying for the Boston Marathon and winning the Boston Marathon. So that's kind of how I for me I keep it in my head.
But 3 d printing and CADCAM technology is really only part of the equation. Joe could talk a little bit about this. It's you have to really know how to move teeth with plastic in order to really be able to treat the wide range of cases out there. Based on our database of over 5,500,000 patients and all of our experience, we've been able through Jelco's team and our technologists, we've been able to figure out what's the right material, what's the right physical feature that we build into the aligners in the manufacturing process such that we can move teeth effectively with plastic. So really the combination of 3 d printing, CADCAM technology, the manufacturing automation that we have that you've seen in the video and some of you have actually been in the factory and seen, and really understanding how to move teeth all integrated into this end to end digital ecosystem we talk about is really what creates a significant competitive mode around our business.
So the end to end system is impressive. It's something that we spent a lot
of time today talking about and it's something that's kind of tangible. You can see it. But really something that's equally impressive is what I kind of call the central nervous system behind that or the back end. And it's the amount of data processing that we need to go through in order to make every single aligner, make every single treatment plan, Jelco talked about some of this thing, 2,000,000 complications per aligner, 10,000,000 measurements per treatment plan. We have to integrate enterprise systems and databases.
All of this data has to be accessed real time. The system kind of learns from itself. No one has a system like that in industry. It's something that would again we had to create internally and we know that our competitors would love to get it. We hear from our suppliers all the time, people really want to learn how to do what you guys do with the management of your data and the integration of that through your entire value chain.
And in order for us to build a system like that, this end to end ecosystem, it's really required the accumulation of skill sets in a wide variety of disciplines. And from machine learning, which is a big one, 3 d software development, you got IT, you got CAD designers, kind of more standard manufacturing engineering. You've got the clinical. We have a huge clinical component to our business. You really don't see I haven't really realized how unique it was, being on the inside sometimes you take some of these things for granted, how unique it is to have deep experience in all those diverse skill sets under one roof working together to drive a business forward.
And I had the opportunity to sit in at a Stanford Business School session that was where they used Align as a case study. And the topic was really around adaptive business models in the age of digital industrial transformation. And one of the things that they've talked about or they identified, we certainly didn't tee them off, was how hard it is and how unique it is to have all these skill sets together and be able to leverage that. Most businesses have 1 or 2 maybe adjacent skill sets that but that's about it. That's their core competency.
So over the years, we've amassed tens of thousands of years of experience in all these diverse disciplines that have gone in to creating this know how that's helped develop our technology, certainly on the manufacturing side, absolutely, and our capabilities and really helped us solve some problems that the industry's experts could that they couldn't solve. And so I want to give you just an example one small example of that, one of those kind of problems. And it's around OCR, which is stands for optical character recognition. So in order to track the hundreds of thousands of parts we have in our factory every day, we mark a unique identifier on each part. All these parts look the same.
They're all clear. They're all small. So imagine trying to figure out which part is which if you don't mark it with the number. Essentially, it's in a human readable format such that employees can read these things, patients can read them, doctors can read them and they know which aligner goes in what sequence. But if we relied on humans to read these things in the factory, hundreds of thousands of times a day to keep track of them and sequence them and move them through the process, there would be huge opportunity for Aehr.
It's just that would be kind of a non starter. So we went to the experts in industry on optical character recognition and asked them to help us develop a vision system that can read these parts, read this human readable number automatically. Human readable is more complicated for a system to read. If you had a 2 d barcode or barcodes, those are pretty simple. So this is a hard problem to solve just out of the gate.
But given that the aligner is clear and that we print on a very uneven surface, We print on 1 of the molars, which is like printing on a mountain almost. It's very hard for a vision system to read that. And so they came in and helped us out and based on where they could take it, they were able to get us to about a 60% success rate, but that's as far as it went. They essentially said, uncle, we can't go any further.
This is as good as we
can do. And so we turned to our machine learning team within the business and they mulled around the problem for a while
and really thought about as you get a
huge database of cases that we've made and millions of liners we've made for these cases and then we have a picture of every single liner that we make that shows the laser marking. So why don't we use that to teach this vision system how to read those parts? So they took hundreds of thousands of samples through hundreds of iterations, essentially, I don't know, you call them class sessions to teach this vision system how to actually read that part, read it accurately.
And they were able to take our read rate
from 60% to 98%, which is pretty phenomenal given our application. But it's not 100%. They also had to teach it how to identify when it can't read something, right? So it has to pick out the bad parts. And then it also has to be able to be very robust that when it reads a part, it has to be the right number.
It can't be you can't mistake a 5 for a 6, you can't mistake 3 for a 9 or it has to be accurate. And so they were able to do that using machine learning in our database of cases, which is great. It's just an example of a problem that the experts in the industry couldn't solve. And based on our kind of our I think our database and experience and our skill sets, we are able to actually move forward move past that move past the industry.
So in addition to some of
the technical skill sets we have, engineering, machine learning, software development, there is a fairly extensive amount of clinical experience and treatment planning experience that goes into our product. This is what we do in Costa Rica, what we've done there for years. And early on, I learned how complicated orthodontics is. It's kind of a marriage a complex marriage between kind of art and science. And the joke that orthodontists will tell you or at least they told me is you have 5 orthodontists in a room and they're all evaluating one treatment, you'll get 10 opinions.
And it's because every orthodontist or every doctor has a different philosophy on how to treat, every patient has a different chief concern, They're interested in something different. There's different norms that they essentially studied or they believe in. And they have their own preferences, their own little preferences that
are important.
But to kind of manage all that complexity doing millions of cases a year requires you to put that kind of orthodontic smarts into the software. And that's what we've started to do over the past few years is really to integrate that into the software, use our 100,000,000 of treatment plans that we've done over the years, the thousands of treatment planning years of experience we've had to get that into the software to a point that kind of becomes the engine that Joe talked about that drives our ability to do these multiple treatment plans, good, better, best, is really kind of taking this to the next level. So we talk about to bring mass customized manufacturing of 100 of 1000 of liners every day to 100 of 1000 of doctors around the globe requires this fully integrated and digital manufacturing system ecosystem and a ton of automation that we have in our factory.
But for those that had the opportunity to see what we do
in the factory and we talk about this, there's still a high degree of labor in the process, right? It's not labor free, although as I mentioned earlier, I think Joe mentioned it, our digital workflow, the data flow through our process is all manual. We don't have to manual process data, but actually physically making the aligners, there's a lot of manual work that goes on there. And so to put that in perspective, we are we have competitors that are in the market. They're making aligners, doing treatment plans.
We saw some new entrants in AAO. We believe they are coming in the market 10 plus years ago from a technology perspective. So they're very far behind. And if they had to try to make aligners at the scale in which we make them, they would need 3 to 4 times the number of people that we have in our process. So that
just kind of puts in perspective where we are from a scale. So the kind of the last piece of scale
I want to touch on here is really around kind of the footprint, selling to 100 of 1000 of doctors across the globe it requires you to have a footprint in that in the region, in the country. The commercial leaders, Raph, Julie and Chris all talked about or not Raph, sorry, Simon, Julie and Chris all talked about the commercial footprint we have in all of our main markets and our expansion markets. We've
talked a bit
in the past about the operational footprint we're putting in the markets. We've started treatment planning in Chengdu, China. We're working on fabrication in China, as we mentioned before, the second half of this year. We've got order acquisition in Amsterdam that Simon talked about, treatment planning in Cologne, treatment planning in Spain the second half of the year, significant presence on the border between the U. S.
And Mexico, our Costa Rica operations. So we kind of cover the regions well. And as an example of kind of how that helps us relative to some of the other smaller players is one example is if you think about the complexity of selling to 100 countries around the globe, every country has their own regulatory requirements, their own customs regulations and they change frequently, especially for a product like ours, it's a custom Class II medical device. Many countries don't have a categorization for that. They don't know how to treat it.
And so they kind of one day they treat it this way and another day they treat it another way.
And so without that presence
on the ground, that knowledge on the ground, your supply chain gets substantially disrupted for 90 days, 180 days and
that just doesn't that's a great way
to completely throw off your growth in a region. So we're set up from a commercial footprint and operational footprint to kind of best support our customers globally. To summarize, so we've from the beginning, we've pushed our technology and the industry essentially beyond what many thought possible. We continue to do that through our state of the art manufacturing technology and integration of all that technology in this digital ecosystem, the know how we've accumulated over the years, the scale at which we operate, and we're capable of delivering 100 of millions of aligners to 100 of thousands of customers across the globe. And we'll continue to invest in our technology such that it will continue to elevate our product quality.
It will continue to drive efficiency in our process and shorten delivery times. The capabilities of focus and investment here, we believe we're best positioned to essentially take this technology to the 300,000,000 consumers around the globe. But before I hand it over to John, our CFO, I want to tell a short story that I just heard this morning one of our colleagues, David Lopes, who works with us. He was at a conference, I think it was a conference, and he met a guy from Lawrence Livermore Lab, which is one of the top research institutes probably in the nation. And they were talking
and he found out that David
worked for a line and the guy like went crazy and was trying to negotiate a factory tour. He really want to learn about our technology and how we make product. And it really kind of struck me odd. And I don't know why again it's probably I've been here for so long, I take some of these things for granted, but that someone from the one of the best research institutes, some of the smartest people on the planet wants to get inside a line to kind of learn how we use technology, how we manufacture things.
I just thought that was
kind of an interesting story. So that's it for me. Thanks a lot for your time. And here's John to show you the financials.
Thank you, Ann Marie. John Marici, I am thrilled to be here and I get to take you through some of the finances. Really, we've seen 9 presentations. And during my presentations, I'm going to try to stitch all this together and give you a view of what this all means financially. Starting with more of a historical view, we'll talk a little bit about the investment allocation that we use, long term business model, some of that was updated as you probably saw this morning and then a quick summary and then we'll get into Q and A after that.
So when you look at our financial results and having been at the company just under a couple of years, you kind of have to take a step back and say, wow, this is an amazing company growth for what we see now, a 21 year old company. To see that in a couple of years, revenue growth of 1.7x, growing 32% a year, tremendous growth. I'll get into some of the specifics. Earnings per share showing here on a reported basis 1 point 6 times over this time. It's really 2x when you factor in some of the tax changes.
So revenue growth is translating to EPS and it's translating in a way that with some of the profitability that we have on a margin basis, we're seeing that leverage come through. We're using cash, some of
our cash. We'll talk I'll talk
a little bit about where we'll use it and why. But from a free cash flow standpoint, we're investing back into business. Some of the things you saw with Emory in terms of some of the investments that we're making from manufacturing standpoint, treatment planning and so on, we'll talk a little bit more about that. And then you can see the tremendous growth that we've seen in market cap. It's a reflection of the growth that we talked about that we've seen all day in terms of the revenue growth, growing in a profitable way, being able to drive that to an accretive basis.
And then the future growth that we're talking about, what we're expecting to do in the future really driving that market cap improvement. So when you think about the revenue by segment, just starting from a top line basis, we're growing at least over this time period from 2015 to 2017, 32% on a CAGR basis across the company. We're seeing great growth from a clear aligner standpoint, up 28% on a year over year basis. But really and what you saw throughout these presentations is just a digital workflow, Itero being a key part of our overall business, growing on a 90% basis year over year and going from 5% of our business from a revenue standpoint to 11% in 2017. And that is really an engine that we have from a growth standpoint, being able to have that digital workflow.
We know that once we have not only get great revenue from our scanner business, but we know once that scanner is installed, we saw a lot of different ways that we could see additional aligner growth and it really drives that aligner growth. So very positive to see this type of growth. When you look at it by on a more regional basis and really what I wanted to highlight on this is, you've seen kind of at the outset 2 years ago, 70% of our business was domestic, 30% international. Now it's shifted to sixty-forty. And really what you're seeing and I think it was very evident when you saw some of the regions like EMEA APAC just the growth that we're seeing in those areas.
China is a great example, 100% growth on a year over year basis. And if I had to step back to think about
just 2
years ago, China wasn't in our top five and now it's the number 2 largest market and growing at this very, very large rate. And it's growing in a way that when we get into the gross margins, we're growing in areas that are more complicated cases that helps us from a mix standpoint. They're higher ASPs. So unlike some of the traditional med tech and so on, we're outside the U. S, maybe you don't have as profitable as business.
This is the opposite way. So we see good growth internationally, helps us from a mix standpoint and helps us from a margin standpoint. So when you look at gross margin and you can see where we're getting the benefits essentially over these 3 years or so flat from a margin standpoint. But there's dynamics that are underneath it. We'd see as we talked about the international mix that helps us from a margin rate standpoint, higher list prices, higher mix, very complicated cases.
We're getting that scale and leverage in certain places. And so you could see that as we have more and more product going through, Emery talked about 350,000 units being produced in
a day. You start to
get some of those leverages from a manufacturing standpoint. Going the opposite way and but being able to balance, we have scanner mix as we have more and more scanner because this is an overall gross margin look. Scanner gross margin is lower, it's closer to 60%. So that hurts us from an overall gross margin standpoint. Product complexity, we're taking on those more and more complicated cases.
There's additional aligners, there's refinements, there's other parts of the product that we have to support and there's some cost to that. And we also are expanding and you saw a large part of that from Joe's presentation all the way to most recent with Emory, we're expanding our footprint. We're in different regions, different locations, soon to have manufacturing in China, treatment planning in other places, there's some cost offset to that. Through all that, we know how to grow in a way that is maintaining profitability. I mean gross margins, given the expansion that we have and increase in our footprint, we're happy to keep this within the range that we've seen.
When we look at the investment allocation 3 years, I'll
kind of
summarize it this way and I'll get into the various pieces here between the R and D and the go to market kind of the OpEx side and then the CapEx and share repurchase. Our number one priority and it continues to be our priority is to invest in our business. That is where we see the biggest growth opportunity. About 2 thirds of the investment that we have will go on a P and L basis and I'll get into the R and D and the OpEx. A large part of what you saw today in terms of some of the investments we're making about a third of that investment that we have will go to supporting the operations in CapEx spending and then excess cash go into the share repurchase we announced today, additional share repurchase, but with the mindset that excess cash goes to our shareholders.
So when we look at R and D, Joico's presentation, you can see the innovations that we have to increase the applicability and the opportunity for 2 sides of it. 1 is the appliance, the innovation in the appliance to make that clear aligner more capable to treat these more complicated cases. So things that you're seeing with mandibular advancement showed the palate expansion, products that are going to increase the ability for us to take on these more and more complicated cases. Treatment planning is another key piece of it. We want to make something that provides those doctors the tools to be able to treat whether it's a complicated case or a simple case and to be able to have that flexibility and that ease to be able to really integrate that treatment planning into their overall practice.
And that's a real goal for us. Because the end result of what we want is better clinical results and increasing that doctor confidence and that's something that all these investments are going to. And we've been historically in the 6.5% to 7% of revenue. We don't target that specifically and say this is the percent that we have. We're looking at the investment opportunities, looking at what is going to drive additional profitability, what's going to drive additional growth to our company and investing in products and technology that get us to that.
When we think about the
go to market investments and really seeing from the regions and some of the presentation from Raph and so on, We're trying to get in this case the spend that we have in some cases we're just trying to get coverage. We want to be able to have that coverage in certain countries where we might have had a distributor and now we're going direct or we might have been in a Tier 2 city and now we're going to a Tier 3 city. So some of it's just going broad and trying to get into the marketplace. In other cases where we've been there for a while in U. S.
Or Western Europe, it's training those doctors, teaching those doctors how to do maybe more complicated cases, trying mandibular advancements so that we can get at more and more of those teen cases. But doing things from a sales standpoint to get coverage and go deep where needed, We're continuing to invest like we have, like you've seen in several other presentations around the marketing, making sure people understand what is real and what is not about our product, making sure that teenagers who are a really great growth opportunity for us from a segment standpoint understand what our products can do, dispelling some of the myths that might be out there, whether they're from a doctor or from a parent and being able to try to grow. In teenage, for example, just from just a return on investment, I mean, we know that 75% of the cases are teen and it's up to us to be able to reach those teenagers and be able to make sure that they ask for our product by name in many cases. But this is one where it's investing in our sales team, going as broad and as deep as needed and being able to in regions that make sense have the marketing that works.
Some cases we can't advertise as much in a certain region. We'll find other ways to be able to make things work. In other cases like in the U. S, we can advertise and continue as we have.
When you look at our operating margin
and kind of take all those pieces together, if we
look to where we were
in 2015 to 2017, added 170 basis points or so from a margin standpoint, we've been able to grow. You saw our gross margin essentially flat. We've been able to grow and grow in a profitable way. We're getting some leverage in terms of some of the R and D and the G and A, which is good, where it makes sense. We are continuing to invest and we have over this period from a sales and marketing standpoint going into regions where we haven't been before, going into regions where we had a distributor and now we're going direct.
There's a certain amount of cost that goes into that, but we feel that that leverage that you get from going direct and being in those marketplaces pays off. And when you think it's all the way down the line and take its earnings per share, we're getting the revenue growth that's translating back. We're getting high quality earnings per share growth. Almost all of our EPS growth is related to business improvements. And like I said, if you take out took out some of that the tax impact on a more normalized basis, we're seeing the 2x improvement from 15 to 17 on an EPS basis.
So that revenue growth is translating to EPS, that profitability that we saw in the previous page is translating to earnings growth and that's something that makes the company very healthy.
When we think about
the other pieces of our investment allocation, dollars 320,000,000 of CapEx, it's to support our global expansion. It's in many cases factory driven where we had to add capacity. You saw with Emery's slides and some of the volumes that we see in the various regions, we're adding capacity to support that volume increase and that's a piece of it. We're doing it in a way that's going to be the most productive and the most efficient way as we start to expand out. And in this case, in the future, we're outside of Mexico, we'll be in China.
The treatment planning outside of Costa Rica to the regions, we think that gives us a tremendous volume opportunity, a tremendous sales opportunity or so of revenue. Once you get past that initial factory that you or so of revenue. Once you get past that initial factory that you put in or some of that initial CapEx on a more normal basis, you're adding different capacity for to support your growth. And then share repurchase, over the last 3 years or so, we bought back 3 point 4,000,000 shares. We have $100,000,000 left under the 2016 repurchase that will get used the remaining part of this year.
And then we announced today the
$600,000,000 authorization. It's really over a 3
year period. Think $100,000,000 authorization. It's really over a 3 year period, think about that started in 2019. But again, it's investing in our business, taking the additional cash that we have and being able to try to put it back to our shareholders. So when you look at our cash flow and our cash balances that we have, you can see the CFOA coming from the business ramping up dramatically in 2017.
You can see we're spending from a CapEx standpoint and that's some of the new facilities and other investments that we've made. But from a free cash flow standpoint, being able to be able to support that from our overall business. You can also see too from a cash balance standpoint despite the investments, despite the growth that we've had being able to increase from a cash standpoint. This will give us some flexibility now that the tax changes have happened where we can this is a year end number, but for 2017, we can look at repatriating and doing some things to give us some flexibility in terms of what we're going to use for the U. S.
It's great coming from my standpoint to be at a company where not having debt, not being levered in a way that we've got to support that debt. We can really focus on investing back in the business and that's very positive for us. So when you look at it and you look at the pieces that are delivering shareholder value, we're looking at growing top line. Growing top line is investing in our brand. You saw a lot of that with RAF and the marketing that's going on.
Expanding our go to market activities, you saw it with the various region leaders
terms of
how we're going to market. Every market, I hope you get a sense for even the countries within, there's different strategies and different ways that you go about it. You can't one size doesn't fit all. The investments we make in the various countries, some are at their early stages. We're going to invest more to get that infrastructure in, whereas others you don't have to invest as much and you can make those trade offs.
But it really goes country by country, region by region as part of our overall global expansion. We're going to continue to invest in innovation. This is the lifeblood of our company around product, clinical efficacy, using this to expand the TAM. We talked about the 12,000,000 orthodontic case starts and how we want to be a part of that. Investing in iTero, you saw from Yuval and really throughout the presentations on the digital workflow, how that's so important upfront to have that a part of our process and the uplift that that drives not only with the volume that we see in iTero, but the utilization that comes from the clear aligners afterwards.
And then new technologies, there's pallet expansion, there's new technologies, 3 d printing, other technologies that we want to be a part of. We want to be a leader in this space. So there's a certain amount of research that goes into this to be able to support this innovation, which I hope you also get a sense for is the consistent earnings that we're trying to drive. We're diversifying within our space being much more global sixty-forty now growing in places like China and others that have tremendous growth opportunities, doing it in a way where we can support and balance the growth opportunities that we have with the profitability. We want to grow, but we want to grow in a profitable way and something that adds to our bottom line.
And then finishing with the capital allocation, we want to continue to invest and we are going to continue to invest to fund growth. We're going to invest in new business models that make sense that give a return for that investment similar to what we saw with the stores and new ideas ultimately
to try
to turn those consumers into patients via doctor and those are investments that we want to continue to make. And then the excess cash that we have through stock buybacks to be able to return that back to our shareholders. So with that, the highlight of this page and really just trying to give you kind of a view of our 3 to 5 year financial model targets and the highlight for this presentation that you saw from earlier releases is really the top one. And when we think about our revenue year over year growth, the previous long term growth model was 15% to 25%. We've upped it to 20% to 30%.
What that is, is a reflection to the fact that we feel that the market that is available and when we look at the capability of our product at 70 plus percent and yet we're 10% market share. We look at that as a tremendous growth opportunity where it's up to us to be able to execute and be able to grow into that market and gain market share. We talked a lot about that 300,000,000 or so consumers that are out there being able to access them, being able to get them into our product line and be able to get them to be aware of our product and turn those that awareness and those potential consumers into patients through a doctor. So we feel that this is up to us to execute for all the different things that you saw earlier today to be able to get this to that 20% to 30%. No change to gross margin, op expense, op margin and free cash flow.
We think that we can operate within these parameters as we go forward in the next 3 to 5 years. Talked a little bit about the $600,000,000 that's just kind of the authorization. Like I said, it's we've done some of that $300,000,000 back from 2016, dollars 100,000,000 more to go this year than the new authorization, the $600,000,000 starts in 2019. $100,000,000 starts in 2019. In summary, when we look at what we're trying to drive, we are accelerating our long term business model.
That's the 20% to 30% that we're talking about. We feel that based on the dramatic market opportunity that still exists, our capability in that marketplace and the execution that we know we can drive, we can accelerate our long term business model and continue to grow in that 20% to 30%. It's about having balanced investments to drive the top line growth, while maintaining the profitability. We want to grow. We want to grow on a profitable basis.
We want to be able to always be flat to slightly up from a margin standpoint. That's the philosophy that we have. That's the approach we take when we're investing back in the business. And ultimately, that should be able to return back to shareholders. Excess cash, profitability that we have that as we're not investing in the business, whether it's on an OpEx or a CapEx basis, taking that cash and investing it and giving it back to our shareholders, we're committed for that.
And through all this, we feel we're well positioned to deliver for you the shareholders to continue the value creation that we started. So with that,
I guess this
is what Joe started with and I guess I'll end with is our unique opportunity is enormous. We have a huge opportunity as a business to continue to grow in the space we've had. We've seen tremendous growth over the last couple of years. It's a 21 year old company that's gone through its history. We look at our opportunity and think that it's bigger than it ever has been.
And we're excited to be a part of it. So thank you for attending this. And from that, I think we're going to go to Q and A. So thank you.
All right. We'll get started, John. John Kreger? Okay. Okay.
Hey, Steve.
Hey, Jeff. How are you doing? Steve Bushell, Morgan Stanley. Just a couple of little curiosities I have.
1, John, I wonder if you
could spend a minute or 2 on where you might see opportunities to optimize the tax rate given some of the changes we've seen in the last couple of years? And then Joe, one technical point, one technology point that I'm always curious about your thoughts on is treatment accelerators. It seems like this year we might get some clinical data that could validate some of the acceleration technology out there. Are we any closer to the point where we could think about taking the case even faster with an adjunctive technology? Thanks.
I'll start with the tax piece of it. We had made some tax changes a couple of years ago and we saw some tax benefits from that and moving our intellectual property and kind of how that was going to flow through in TRANZACT. We saw that kind of the pre Trump tax changes and saw some benefit there. We're making some changes to optimize the current environment for tax. So it's one where given the U.
S. Company, we ideally wouldn't want to don't want to be above 21% and want to do things to be able to minimize that going forward. So that will be something that this year we've talked to being in the upper teens. That's something that as we make some changes, we would like to hold in that range as well.
Hey, Steve, on the acceleration piece, I'd break it up, there's 3 categories of acceleration. You have PROPEL, which is invasive, drive cytokine levels to move teeth faster. You've got Exelident and you have BioLux where you use infrared to excite mitochondria to move. I'd say, look, I think we know clinically that PROPEL works. It's just how many people want to have holes drilled inside of their gums in order to accelerate their teeth is it's an invasive kind of a technique.
Acceleration piece either on BioLux and Acelident both, Acelident is vibrational and BioLux is light.
I think that really meant something back when
we were doing 2 week wear times. Now we're down to 7 I'm sorry, 7 day wear times 1 week. Accelerating it to 5 days, we're not quite sure that that makes a whole lot of sense or would be something that would attract consumers more than just the 1 week wear. So I mean, we obviously and Kjellco can talk about this. We do
a lot of work to
try to figure out the acceleration piece. We have a lot of data on it. We're much more Q7, 7 day wear time.
Yes. I agree with you, Joe. I mean, I'm an engineer. I look for data. Right now, there isn't a whole lot of compelling to tell you that there is a lot more room for improvement from 7 days that are also price conscious and make sense from the overall treatment experience.
So I think it was more exciting when it was 2 weeks and maybe some of these accelerators claim to be faster in Invisalign because Invisalign was fast to start with. So I don't know, this is less of a big topic for us at the moment.
So for the skeptical orthodontists, I think there's maybe a third of them that are not big Invisalign fans at this point. What would you sort of summarize to be where you've got clear clinical superiority over wires and brackets
from your point of view?
I you have to listen, I'm
a business guy, John. I'll turn I'll just say I think we have some real clear areas where we as far as speed and consistency, but I'll give one to JELCO and RAF. And go ahead, JELCO, where's the clinical superiority overall?
We continue to invest a lot
of money in research and development. And for us, applicability and predictability of our appliances is 1st and foremost. I can tell you that in every single malocclusion and every single movement, we beat braces. I'm not going to tell you that. I think we are doing much better than some doctors would like to make it look and there are a lot of doctors that are very successful treating all patients with our clients.
There are
areas, as I mentioned, where we are definitely have clinically proven that we can have a better control of the tooth movement and better outcomes. So I think there is a subjective level to that and there is objective. And I can just tell you, we're going to continue to look for every single opportunity to make clear aligner therapy equal or superior to those braces.
From my perspective, I think it just makes sense for the patients to have clear aligner therapy as opposed to wires and brackets. I think we see that all the time. And there's already any more reasons clinically not
to do clear aligners.
What I can understand from an orthodontist perspective though is that integrating Invisalign into their practice for them to do analog and digital can be complicated. So, for those doctors, I think we need to do a better job at helping them integrating Invisalign. And I think if we do that, we see that adoption growing much faster. But I think from a pure clinical and a consumer desire perspective, I'm really struggling to understand why we would do wires and brackets anymore. But maybe for Class III because we can't do those with Invisalign.
But outside of that, I'm struggling. There's other reasons which are more economical and workflow related that we need to work. And if I could just
add, when you look at quality of life and for example, periodontal health, there is absolutely no comparison. So if you really look at holistically comparing clear line of therapy removal plans with fixed braces, there is plenty of elements to our favor.
Hey, guys. Jon Block with Stifel. So I'll try to
throw in 2 or 2 and change.
I guess the first one is, seems to be a
big focus today on the $10,000,000 to $12,000,000 TAM, Joe, sort of going to the $300,000,000 TAM that you mentioned. I guess the first question is, can you get there effectively with the $2,500 price point with what you see today? And the other sort of part B to that would be, how do you better spread the word to your customers that you are going B to C, back to B? And talking to a lot of your customers, there just seems to be that confusion and throwing you into SmileDirectClub. So what can you do to better spread the word there?
And Joc, I'll go back to you for 1.
I agree that doesn't seem to make
a big difference to go from
7 days to 5. But what about on the R and D side? Do you need to consistently exert force? Because how about something about wearing these for 12 or 14 hours at night, that would be a lifestyle change. Can you still get the tooth moving?
Thanks, guys.
John, we've got a jump for you here. John, you know as well as anybody there's a big pricey elasticity curve in this business that hasn't been played well. So the mom orthodontist does the case for $6,000 to $8,000 that's going to keep in that 5% population kind of a range. I mean, we've seen with StyleDirectClub $1800 $2,000 it pull in a lot of patients that are interested in orthodontic care just for anterior teeth in the work that's sold. I felt I could tell you how much of that $300,000,000 we can access and where they fall around that pre elasticity line.
We need more data points to understand. But we certainly know that that $2,000 $2,500 one for simple straightening of those interior teeth is a sweet spot in the marketplace. We see that with our stores. We actually see it with SmileDirectClub. Your comment about how we get that information out to her store, we in her store discussion, we just have to do a better job of explaining to doctors that B2C2B model, I teed up in the morning.
This is a doctor office centered model. We're recruiting these patients to do that. But remember in the end, a lot of orthodontists just don't trust us. It's like we know what these guys are going to do. They're going to screw us at some point in time and that's not our business model.
Our business model has always been doc based. We believe in it, whether it's on a GP base or it's on an orthodontist base. And we genuinely are out there with these stores and with Concierge is educating consumers and walking those consumers into a doctor so they can build their practice. That's been our business model and that's what we're approaching. We just have to do a better job as you indicated of getting that information out to the doctors.
And I think they're going to have more time to be comfortable that that's what we're doing and experience it. Jay can tell you that the doctors that were most skeptical in California and San Jose and also San Francisco when we first started, we're very skeptical We're now on board with the program because they've seen how it works and they're seeing more patient flow through in that sense. So broadly, I think we get more stores out there too. That message will come across more.
On the acceleration side, I didn't mean to make
a judgment on hydroxylator devices work or not. We look for data and I leave it to those companies to prove their efficacy. What I meant to say is the difference between 2 weeks and 1 week is much bigger than 7 days 5 days. And then it's there are other things you have to do to make that. But there are a lot of doctors that are currently changing Invisalign aligners
with their patients for less
than 7 days, 5 days even less. So it's really up to doctor how to do that.
Now we do look at what it takes
to move teeth consistently and how fast we can do that. And also, can we
do it with fewer hours in a day? More hours you
wear it, better off it is because as you move teeth, if
you don't apply these pores, they're going
to tend to go back at least. There is some elastic part of that. So but we do look at is it 22 hours, is it 18 hours? And yes, we're also looking at options whether it's just a nightly wear. So you're asking a good question.
We have that in mind. We are looking
at these things and we'll let you know as soon as we have concluded answers.
And Shirley is our big test bottle in a nighttime wear. You can ask Shirley how to come.
Just quickly on sort of
you've highlighted several global or diverse global drivers across your business from an international perspective. Can you break down what higher long term growth assumptions imply from an underlying growth across North America versus international? And then also what's your game plan internationally for your retail offering? How far can that potentially reach? And can you speak maybe a little bit about that true conversion I think you spoke about the conversion rate at retail to the practitioner, but not necessarily to actual sales?
Thanks. Matt,
I could start with the overall and if you want to
get into the consumer piece.
But as we look at our long term growth model and we factor in just as do with any forecast factor in a lot of this different considerations. We are seeing this dramatic increase internationally for the various reasons that we said where just from the adoption standpoint, it's lower on the curve or we haven't had iTero as part of the business like we have, say, in Brazil now or in China. And that lends to that future growth. So we that in. But it's one where for us when you're single digit market share and especially in teens pretty much everywhere, we know that we can when it's 75% of the orthodontic cases, we know that we can continue to grow in this space when it can treat when we know we can treat 60% to 80% of the cases, let's just say, that's something that we know we can grow and continue to drive.
So it's the international, it's the utilization that we have. We'll factor all those in terms of where we're at and that gets rolled into our long term model.
And then as far as the question on international stores, right now we have the 4 pilot stores in the United States and they're truly a pilot. And I was mentioning with some of you on the break, we're iterating on that pilot. There's things that you'll see in one that you won't see in another. And so really our commitment is to this pilot to continue learning through it. And then
if there is success and
we determine that at some point, we'll consider future investment. But for now, there's just a 4.
Thanks. Bob Jones, Goldman Sachs. You talked about the Asia Pac TAM of about $4,000,000 but I
was hoping maybe you could talk a little
bit about the penetration in Asia Pac today and more specifically China given just the size of that opportunity and the time you guys spent highlighting that opportunity. And then as we think about China, the growth CAGR you guys highlighted 100% over the
last 4 years. How should we be
thinking about the growth potential there, especially in light of the fact that you're just recently bringing Itero to that market?
So we see tremendous growth. Again, I'd like to take everybody back to we just launched China about 7 years ago. We're really just scratching the surface. And we're currently in Tier 1, Tier 2 cities going to Tier 3. Aitero is going to land a different uplift altogether because we're going to have that available where doctors are going to be able to submit cases much faster.
And at the end of the day, the growth is tremendous. I mean, in terms of penetration, it is still in its single digit. If you look at the opportunities that we present, the numbers that Ralph look at, 4 in 5 patient wants the product in a sense. So yes.
Bob, I just got to caution you see when you ask a question like that to Julie, she's afraid I'll take her numbers up and what she said. Her nickname is a sandbagger here on staff.
So you know, you're seeing very cautious there.
Robbie Misra from Berenberg. Joe, you
talked about demand pattern being way outside orthodontic cases. But if we think about the just that orthodontic market, how are you guys viewing your that core want to be promoting our product and a little bit less on onboarding new guys? And how does the store pilot and the Smile Concierge fit into that? If I'm a new orthodontist starting a business, how do I where does the Align kind of focus come to me? And then secondly, with the we're all thinking about what we're doing with these 3 to
5 year outlook that you
guys provided us. Just from a cadence perspective,
law of
large numbers coming in, you're 30% plus this year.
Should we
think of that as kind of like 30%, 30%, 30% or 25, 25, 25 evenly throughout the year? Help us out with a little bit of cadence there. Thank you.
I think on the I'll let Chris talk about North America and how we pick our orthodontists, right Chris?
D. Moriarty:] Yes. I'd say that it's a lot about interest,
honestly. We
cover every orthodontist at every level. We've got programming. We've got a lot of support at every level. And if their interest is to do more, I showed you 3 programs specifically that
help that happen. If it's entry, and
I just want to get involved and I haven't gotten involved, we'll support that too. So it's really more a matter of building out our support structure based on the interest we see we're playing on all levels. But we do like to see interest and we do like to see growth because there is a lot to do. So we're not choosing a level. I think they're more choosing us and we're doing a lot to show that as we move the industry along and we start to really show what they're number 1.
And this is from the AAO's own surveys, not ours.
So the number one thing an orthodontist wants are more patients. And we are the only ones who bring more patients along with the top products. So we also like to see them
as they get as Joe said
they get more comfortable with what we're doing. They understand this is really driving patients into their practice. I think
we'll even see more of that.
Chris has taught me also that this is there's 2 parts of the cells, the clinical cell with an ortho to convince them as Jalco indicated that equivalents or superiority of Invisalign in some cases. The other one is a business equation. Those orthos have to they're going to run a digital process differently, they're doing an analog process. And that's a big commitment, a big change. And we're ready to embrace when they want to make that change.
But putting 1 foot in analog and 1 foot in digital and thinking you're going to get productivity doesn't work. And so it's really clear in the sense of who really wants to step forward with a predominantly digital piece is going to have to change the workflow. We're prepared to help and explain how that works also.
In terms of the range just to kind of get in how we're thinking, look, we look at all the opportunities that we have. The under penetration that we have, the capability that we have to be able to grow within the marketplace. And that's 20% to 30% growth, that's how we're thinking as a company. That's how when we invest and we think about where do we want to put that extra dollar into the business where we can get that return, we're thinking in the 20% to 30% growth range. And that's how we would look at it over the long term.
Richard Water from Leerink Partners. Two questions.
Maybe the first one for Joe. You've been reluctant in the
past to answer the question, are we after when are we going to hit the inflection point for teens? You look at all the slides that you put up across regions, teen is accelerating nicely and the momentum is picking up into 'seventeen and so far into the Q1 of 'eighteen. And you're also talking about what mandibular has done in the regions that you've launched it in and how it's actually really accelerated team there and mandibular is shortly coming in North America. So I guess are you ready to call the inflection point for teen and if not how far are we in?
And then I have
a follow-up for John.
I'd say no, I'm not ready to call it. I'd say when we don't have to push as hard, in other words, we don't have to spend as much money as we're spending to catch teens' attention and to push our orthodontists to do more teens. That's when we know when there's more pull than push, we'll know where that inflection point. We still got a lot of push going on. You can see the OpEx that John in his charts in the sense of what we're spending in order to do that.
I mean, that's $1,000,000,000 of OpEx a year, a significant amount of that is around whether some R and D piece to allow docs to be more comfortable with it, but a big part of it too is to educate consumers and educate docs what's going on. So we can't call it yet. These are the most protected customers. They're not even customers, they're patients. They walk into that practice as a patient and they know they can do those patients in wires and brackets and if they're more comfortable in that business model, that's what they're going to keep doing.
And it's our responsibility to keep educating consumers and working with doctors so they're more comfortable with on both sides. But when we feel the pull, just see it happen, we'll announce it. But we're not there yet. We can tell, right, John? And we know.
That's helpful. And then, John, with respect to the Long Range
Plan operating margins, the range you provided there, I'm sure there are some of your businesses, particularly APAC or some of the international regions where you're getting better pricing or higher ASPs, you're probably either at the upper end or even maybe north of that long range total company plan.
Can you just tell us kind
of where some of your kind of best regional margins are and what those levels are as a proxy?
Yes. In
certain regions, like you said, higher ASPs. But in some of those, we're also spending a lot to get the coverage where we're spending the OpEx around some of the sales coverage or where we can market. It makes sense. Other places where we've been for a while and we pretty much have that coverage, In some cases, we could be above 30% op margin related to that. So it really just depends on kind of the how long we've been in the market, what kind of the dynamics are going on within the market.
But we look at it region by region, look at that return on investment, what's happening there, what we can do to drive that return. And that's why really we kept the 25% to 30% as our long term model consistent because that's the philosophy that we have. We want to be able to grow, but but we want to be able to grow in that profitable way and it varies by region like you said.
Thanks, Joe. Jeff Johnson with Baird. Joe, maybe I could just take your pulse on a couple secular issues here, if I could.
And Emery, maybe start with you. Just how
far away do you think we are on 3 d printing in the factory and 3 d printing clear aligners in the office? I'm assuming those two time periods might be a little bit different. But regardless of Emory's answer there, I guess, my question for you, Joe, is when I look at in office fabrication of clear aligners, you have to do the 3 d printing, you have to do the suck down, you have to maybe laser etch it or polish the edges. Does that even register on your list of concerns of things you might have to fight someday? Or is that such a labor intensive in office process that it's not even something you think you're going to have to deal with?
And to say that
we just ignore Jeff wouldn't
be right. I mean we look at it. It's
to me in a digital model, if
an ortho really wants to do a digital model, throwing a bunch of people in the back office to print and trim and you ever see one of these MakerBots? My kid has one, he's studying for his PhD, he's got it in my garage in Montana. It's a pain in the ass, right? You guys are throwing your money upfront in the sense of marketing your product line, making sure that you have kind of demand. And so that's a digital format.
It doesn't make sense to me. But there's 10,000 orthos out there. Everybody kind of has a game and we know that they're looking at and like Emery said, they're pretty molds today. They're vacuum forming EX30 or some kind of polyester over top of that and use it in some way. They're just trying to compensate for 5 aligners or less, 10 aligners or less, whatever.
I mean, we know there's several ways we can go after that, but the idea that we're going to get have printers in an office and this is something that doesn't make sense to me. Can we be more efficient in the sense of pipe aligners or less in trying to help our customers out? I think so. As far as your question on when will be the next 3 d truly 3 d printed aligner. I think JELCO is so much more qualified to answer that question than me.
We obviously track this and we work this very closely. And we have several programs and we have vectors in the sense of how this could be done, if it could be done. But the answer to your question is years. It's not imminent, okay? It's a lot of work in this.
And we don't have enough time
to explain it
in detail. But, Jocco, do
you have just some thoughts, I'm sure, how you
deal with
it? I don't want to predict. It's not possible to do it today. As Emery said, current technologies have limitations that prevent you from doing it. We have to find the chemistry formulations, we have to find the process.
And we have a
pretty high bar
with SmartTrak. So, it is going to happen for sure. I can tell you we are investing a lot of money in figuring it out. I hope we're going
to be
the first one to do it. But whoever says they can do it today, they're not telling the truth and I don't anticipate this anytime soon.
Maybe one other secular kind of item. We're starting to hear some others talk about disaggregating kind of the treatment planning in the aligner manufacturing then where maybe if dentist wants to design the case in office and then tape her aligner and they could send it even to a couple of different labs, whatever lab they want to to send it to, things like that. Same question, I mean, is that a viable model? Is that a model that at all concerns you or that you would see as a real competitive threat anytime down the road?
Jeff, I think there's going to be a low end of this market that we've talked about before in these kinds of sessions, and that's 15 aligners or less. And this is where companies that don't have the capabilities of Align have, they're going to have to play in that segment. So it's going to there's going to be a scrum in that marketplace to a certain extent. I don't want to necessarily blur the Invisalign brand name down that rat hole if it becomes that in some way. Labs want to make it, people want to do it in the back office or whatever.
But we'll be competitive in that segment, but we'll we want to make sure that we continue our
the value offering that we have, which
you understand our digital front end, back end, SmartTrak, smart force stage, all the systems that we have, and not just get caught in the price game in that sense too. So we're going to watch out really closely, but we're not afraid to compete.
But I want to make sure
that we compete with our capabilities and it just doesn't become a black hole in price in that engine. I
hope that helps.
Hi, it's Steve Valiquette from Barclays. This was touched on a little bit, but we heard some of the new competitors at AAO talk about really as a primary marketing message, the ability for practitioners to do hybrid treatments using both traditional braces and clear aligners on an individual patient?
Hopefully, you heard that question. But basically, my question about that is can you
address that marketing angle from those competitors?
It seem to be a
primary marketing angle to practitioners. But also just curious, does that further speak to the limited capabilities of some of those competitor clear aligners as well? Thanks.
First, Raffi?
Without understanding the question too well, I'm sorry. You're referring to back to what, Chyme?
No, this had to do with the hybrid treatments using both clear aligners and traditional braces on a single individual patient. Without naming the competitors, it seemed like some of the more larger competitors really focused on that in their presentations at AAO to practitioners as their main marketing pitch, if you will. So I'm curious if you're in response
to that.
I think if you stand
from their
tech at 3 ms or whatever, you don't have experience in clear aligners like we have, you're going to try to leverage your wires and brackets business. So the idea of a combo, I think as they try to ramp up in this business, makes some sense for them. For us, it never has and never will. We feel right, Ralph, we can handle that.
I was going to say, I think the reason they're doing that is because they can't offer the full treatment yet. They're trying to get to a complex treatment to be able to answer the orthodontist question when a care line is actually can't treat complex cases, so they do a digitalization first. I think for us, we have no need to do a combo treatment. Our product can pretty much cover every single malocclusions out there, every complexity. So it will be a step back, especially in digital practice that we're trying to build today.
So it's a no for us.
I might add one other
thing also is that they're in
a wire and bracket business. So there could
be something in that too that we got to promote both.
I would just add those are the people that years ago said you can't move teeth in plastic at all. So they can't say that now and they want to say that it's better to move it
in combination and it's just a
matter of time and you're going to have to ask yourself why do you need anything but plastics. So combat treatment is not going to be
ultimately more efficient. Maybe there are some movements today you can
do successfully. But long term, it's like will the cars be electric or gas or a combo. It's our call, but to all of us to make. But I think it's just
a path that they have to go through. And right now, they're probably
a lot more comfortable keeping their core competency with wires and adding plastic
to it. Just one other point, I think
I tried to say it this morning that is a lot of confusion being created on the marketplace today because those competitors are coming. So big part of our job over the next few months is going to and maybe you guys can help us as well is really to diffuse this confusion by reiterating the standards that we're setting on clinical efficacy and the digital workflow and all the stuff that we talked about today. There's confusion and we just need to take care of that with our communication.
Laurie, I think this is very important question. So, certainly, if
you look at also focused smart track versus the old material, with all the advancements in digital treatment planning, we couldn't get those outcomes, the 4 systems without the Smart Track
as a material. So there is always a combination of what kind of material you have, what are your biomechanical capabilities, what is your treatment planning, how good it is. So as you
see this evolution to better and better materials, better
and better treatment planning, you will see plastic winning over fixed braces.
I agree with him. I just hope to finish off that question,
I just hope that someday we're thinking about patients first. What would a patient rather have? You'd rather have wires and brackets in your mouth than 70% white spot lesions and permanent dentition damage that happens in 70% of the cases or not eat food you want to eat, not or would you rather just do this with I hope that, that really comes into the discussion is what you would want.
And then if
you're educated enough and we help to educate you as much as we can what the options are. I think in the end, let's hope that it becomes a patient centered world and a patient centered decision.
We're going to take maybe 2 more questions.
Hi, Elizabeth Anderson from Evercore ISI.
Could you
talk a little bit more about
the restorative opportunity and how you see that sort of layering in additional utilization growth on the GP side?
I have 2 restorative zealots here. So I don't know who to go to, Zielkor or Raph.
Yes, we can talk to you guys if
you want. We do that a lot with We do deals on the page and We call Davidson Butthead in the company, you know that? No, go on.
I truly think this is the future. And
you can straighten my teeth as much as you want.
It still has some chips. And with little restoration, noninvasive, composite additive, I'm going to have a much better smile. So I truly think that very few restorations are better without tooth alignment. And I think many, many orthodontic treatments will have better outcomes if you had restoration. So going with comprehensive interdisciplinary treatment is the future, right?
And I think the consumers and patients will get to learn about it more and more and they will demand that.
So I would expect in the
future the treatments will be comprehensive and that's why our strategic focus and investment on providing the tools to doctors to plan the best outcomes. So it's not how does Ortho see this patient, how does GP, it's what this patient needs and what the best outcomes are. So I think this is the future. I show you that. And then when you add visualization and being able to show it to the consumer, to the patients so they can understand what their options are, make the
choice that is going to be the norm. I agree with him. It's already happening today. This is not a new concept. Align, Bridge and Bone has been around for a long time.
We're just trying to make it simpler for people to do. Doctors do it today. But in these Align really doing a clear aligner for space management, all these things we spoke about makes so much sense. It's just that the way we've been approaching GPs up to now has been to try to get them to do orthodontics. We're changing that to try to make them to do better dentistry.
So messaging and tools are changing to that. There's 1,500,000,000 GPs around the world. There's a lot of GPs out there who are doing it today. All the high end GPs are doing it today already. And I'm sorry, and when
we work with doctors, GPs and orthos, when we show them those tools, our ideas, they all like it. There's not a single GP that said, doesn't make sense and there's not a single ortho that said, I don't want these tools to us. And they work together.
They really do work together.
So for us to bring them closer together and put the patient in the
center and provide the best options in a comprehensive digital orthodontic system, I think it makes perfect sense. Hey, Shri, come here. But these two people didn't present today,
okay?
But they're really important to align. Sri runs Senior Vice President of our IT for IT is so buried within everything that you saw today. It's the most sophisticated IT networking into engineering that I've ever seen in my life. And Sheree has been with us how many
years? 15. 15 years.
And she reminds us of it every day, okay? And she knows a lot. Now Stuart, Senior Vice President of HR, you can imagine with all the growth we've had going on in the business and recruiting, he's been phenomenal since he's joined us and bringing incredible talent on. And from Wales, so we put up with his football analogies, but I just wanted you to see these guys they didn't present today, but don't think in any way they don't have an incredible importance for the company.
So before we
wrap up, I wanted to just remind everyone that our Invisalign store pilot pop up is still available. If anyone didn't get a chance to be scanned, please feel free to go back there. The team will be on-site as long as you need them. And Joe, do you have any closing comments?
I feel good about today. I hope
you did too. I think the obviously having the Invisalign store back there that maybe you could experience it and see what we talk about here and feel the realization of it. But I'll just end the way I started today. We have this whole convergence of demand and technology and capability to deliver. We have a new vision, an overall vision of bringing orthodontics to the masses.
I hope you can feel the truth to that. And that from a competitive standpoint, hopefully, we've represented your questions and where we stand today. But I think there's any company in the world that can take advantage of that demand equation and opportunity that's out there today is straightened teeth and that's our goal. I hope you'll walk away with that feeling and continued trust in our ability to deliver. Thanks for attending and we'll certainly be in contact.