All right. Good morning, everyone. Thanks again for joining on our, on our virtual dental day. We're on our second, and another very exciting presentation that we're having today, or fireside chat rather, with Align Technology. This is a company that William Blair has a long history with and, excited to have them here, given that this is... If I was looking across my coverage list, I'd say one of the best, most durable growth opportunities, within our coverage list and also an impressive P&L with good profitability, and opportunities for kind of expansion going forward. I'm excited to have John Morici, CFO and EVP Global Finance, and Raj Pudipeddi. Please correct me if I'm wrong, Raj, on that pronunciation, which I think I am.
Chief Product and Marketing Officer, EVP and Managing Director, Asia Pacific. Let's just kind of dive into it, and maybe we'll start at a high level. You know, for those that are newer to the story, it's interesting because you guys have been in the market for, I think, over 20 years now, but yet there's a lot of opportunities still for you and markets that are under-penetrated. Maybe just lay the groundwork for us in this chat. What are your kind of opportunities and what levels of penetration are we at today, so we can kind of understand the growth trajectory from here?
Yeah, it's a good question, Brandon. I'll start and then Raj, add any color to it. When you think of the opportunity that we have, like you said, we've been around now just over 25 years. As a company, we've developed products and innovations over that time period that helped us and helped our doctors be able to work on more and more complicated cases. We started out really as maybe going towards more adults in the simpler cases when we first started the company. Through innovation and investments, we've invested probably over a billion and a half dollars over our 25 years.
We'll spend, you know, $300 million this year in development and research to make sure that we can continue to have the best products available for our customers, our doctors. Over that time, we've given them the ability with doctors who have some experience with us and can treat these more complicated cases. We have some doctors that they can treat 100% of their caseload with our products. We feel that, you know, an experienced doctor should be able to do 85%-90% of all the cases that he or she sees, you know, from a product standpoint, to be able to treat those more and more complicated cases.
When we look at the opportunity that we have, you know, we think of it in terms of there's approximately 21 million orthodontic case starts every year. 75% of those are teen. When we look at those 21 million orthodontic case starts, say, 20% of those or so are done with clear aligners. We make up the majority share of those clear aligners. Even with that, we've got the most technical, highly advanced products that move teeth in a predictable and reliable way through digital orthodontics. Yet, you know, less than 20% is being done with clear aligners and even less than that from with Invisalign.
We think we have a huge opportunity just in the orthodontic case starts with our technology to be able to help dentists and orthodontists move teeth digitally and provide that digital orthodontics with the products that we have. Then if you look at just the general dentistry that goes on, where you and I might be in that office chair a couple times a year, where you might have minor movement or you just have put off having your teeth aligned over those periods, we've been able to provide more of a seamless workflow for those general dentists to be able to make this a part of what they do. Majority of what those dentists might do, say 95% of what they might do, would not be orthodontics.
We can help provide them the digital dentistry, the digital orthodontics that they need, because much of what those general dentists are doing is restorative. We can help them move teeth in a way to help preserve healthy teeth and be able to find a way so that you provide the orthodontic movement, and then you can also finish, and those doctors can finish from a restorative standpoint. You know, been around for 25+ years, but it feels like we're just getting started in terms of the opportunity. It fundamentally comes down to the products and the innovation that we've had over this time period to be able to give doctors confidence to move teeth.
Got it. That's great. The next one may be to set the ground for us of like where we are today, right? That's higher level. Let's go a little granular. Talk to us a little bit about the Q1 results you guys reported a little bit a couple weeks ago. Maybe I'll lump in another question there of subsequent to the Q1 results. You know, we've got another macro updates like consumer confidence, things like that. Talk to us about maybe put it in context of how those subsequent updates maybe impact your thoughts coming out of Q1, how we can think about that on a go-forward basis.
Yeah, I would look at our Q1 results and say, look, we met our commitments and what we talked about from a guidance standpoint. You know, we talked about that there'd be some, you know, sequential decrease that we saw, in particular, what we thought was gonna happen in China. We saw China actually performing better than what we had expected. You know, they've opened up the economy much more, allowed people to go about. It caused a lot of COVID and other impacts that we saw at the end of the fourth quarter into the 1st quarter. After you got past that, China has become much more of a stable environment than we've seen. That's what's happened in other places as well.
We talked a lot about Q1 being more stable and just a better environment to operate in. We've gone a couple years, three years or so with this instability, with COVID and some of the macro impacts that we've had around inflation and interest rates and as you mentioned, consumer sentiment, that is, I would say, better than the lows that we saw especially during COVID. It's still not where we'd like it to be. We'd like it to see improve. You know, the takeaway from Q1, Brandon, is it was a more stable environment, and with that stability, we were able to execute. We were able to do things in a way that...
You know, we introduced a price increase, you know, that reflected some of the investments that I talked about earlier, but it's just a reflection of some of the inflation that we've had. We were able to operate in a way that, you know, provided more profitability. We talked about how that's very important for us when we, when we talked to the total year. We talked about that 20% non-GAAP operating margin, and that was key. We delivered on that in Q1. With all that, it provided us, you know, continued, you know, ability to be able to look at Q2 and say, "Okay, this is the guidance that we expect in Q2, given the environment that we're in." Like I said, it's not great having higher inflation.
It's not great having some of that consumer sentiment that we have, but it doesn't feel like it's getting worse. From that standpoint, we say it's more stable. Look, you know, what I said at the outset about our opportunity, we're in a vastly under-penetrated market. We know that down the line, digital dentistry, digital orthodontics will prevail. It's a matter of time as we work through that. It's just that, you know, short term, you have some of these, you know, macro things that are on people's minds. We felt good about Q1 and delivering what we did. We put that into our guide for Q2, and, you know, we'll evaluate and update as we go forward.
Great. Yeah. We, we had an expert call from China this morning who actually described the situation there pretty similar, where things are better but still well below pre-COVID levels. Kind of hard to see. I think for what it's worth, he had described it as there's a lot of vacationing going on, a lot of pent-up demand to go on vacation, and so it's kind of taking a little bit of wind out of the sails in the near term for kind of a dental recovery. The overlying trends are pretty strong for the long term, right? That, that makes sense. Well, you know, a follow-up question to that topic.
You know, when you're talking about you previously gave this Q2 guide, can you talk about what was kind of baked in for China in that Q2 guide? Did you kinda leave some room for some noise in China, or any kind of commentary you can give around what you were expecting there?
Yeah. I think, you know, from China. Well, as we do with all of our, you know, forecasts that we have, you know, China's a piece of it. Obviously, all the other pieces are, that's what forms our opinion to come up with what we expect from a guided standpoint. You know, China, we've noted was improving as it went through the quarter, just because you had so much of it locked down from people being sick from end of last year into this year. Then we started to see some of that recover. You know, we look at that as, you know, as an overall basis. We expect some sequential improvement as you get from, you know, Q1 - Q2 given those conditions that we have.
As you get into China, you start to get into more of the teen season at the end of the second quarter and certainly into the third quarter, where there's a lot of teenagers that will go into treatment. So that's factored in to our overall guidance in terms of what we expect from China, I'll let Raj add any color on what you see in China.
Sure. Brandon, I think you said you had an expert call who said, you know, things are starting to get better, but, you know, kind of folks are still kind of vacationing, trying to kind of come back to normal life. Look, I'll take us back to January when, you know, December and January when the opening was pretty chaotic. None of us knew kind of where we would net out to, you know. Since then, to John's point, we've seen, you know, some stabilization, some improvement as it has come through. I think the reason why we are, you know, optimistic about China in the long term, Brandon, as you've said, is it's a really big market. We've got, if you just think about our footprint there, we've got a manufacturing facility, we've got a treatment planning facility.
On top of all of that, we've launched a whole portfolio of products recently just for the China market, including Invisalign Adult, you know, Invisalign Standard, that gives doctors so many more options to treat patients. The last thing I'd add is, what's unique to China and many countries in Asia is, you know, kind of lots of crowding of teeth because, you know, kind of the jaws are small. Our recently launched CBCT, which is cone-beam computed tomography, significantly helps treatment planning because it's integrated and doctors can see roots before they can do the planning. All in all, I'd say the long-term story for us continues to be very optimistic and China is a strategic market for us.
Okay, great. I think I'll ask you, Raj, a follow-up on that in a second, but I just wanna remind everyone, 'cause this is the second session now, I forgot, if you have questions, you can throw them in the Q&A. I'm kind of getting them in live, and so I'll incorporate them as we go through as well. Feel free to throw questions in there anyone listening in. Raj, you know, I'll stick on China for just a second. There's so much else to talk about, but it's interesting 'cause we spoke to an expert this morning, like I was saying. One of the one of his kind of pushbacks on clear aligners in general, not just Align, was that they're just more expensive than wires and brackets.
My sense maybe, and tell me if I'm wrong, is it's an earlier market and so that's kind of a friction point that they're still working through. Clearly in other developed markets we've worked through that. How do you guys tackle that in a market like China, where it's more expensive to the dentist to do a clear aligner, and how do you get them to kinda grow their volume over time?
It's a great question. I would say that first, look, aligner awareness in China in Tier 1 and Tier 2 cities is pretty high. Consumers and potential patients know about aligners. Second thing, even though wires and brackets are cheaper in China, parents, especially moms, know that Invisalign is the best product brand. For Chinese parents, they actually want to provide the best they can for their children. If you think about the long term, we think the potential for aligners and growing aligners is actually very significant. You said it well, you know, it's in a slightly earlier stage than when you compare it to, let's say, the United States, especially as you go to Tier 3 and Tier 4 cities. We continue to kind of market to consumers, potential patients, but also to doctors.
To consumers and patients, we talk about how aligners are really predictable and can be done without changes to lifestyle. To doctors, we talk about how applicable we are, like 90% of the cases can be treated with Invisalign, how predictable we are, and frankly, we are faster in many cases than braces without the pain of emergency visits. The message is resonating well. The way I look at it is, you know, once we get out of this current, you know, difficult macroeconomic situation globally and they come out of COVID, in the long term, I think China continues to be an important and strategic market. I think it's no different than, for example, the United States, where we develop the market with marketing, both to doctors and, and potential patients, and also launch relevant innovation to drive the product.
Okay, great. Yeah, that makes sense. We'll, we'll kinda look forward to for some more China updates. Two kinda quick ones that we're getting in the Q&A here. I'm trying to think how to, you know, in an appropriate setting here, what you can say. You know, we have heard this morning, we had heard that there could be another COVID wave within China. I guess maybe the way that we could discuss that is, was there anything kind of contemplated like that within the Q2 guide?
We are not, we don't look at that specifically on COVID. That was, you know, part of what we've had, you know, at least for the last three years around COVID. You know, we find it a challenge to predict or understand kind of what the implications could be, but we're not at that level of, you know, detail from a forecast standpoint. You know, I guess COVID can, you know. It's still out there. It's, you know, you hear less and less about it, and it disrupts less and less than it has, but I haven't contemplated that in the guide.
Okay. There's kinda like two others here, just in general, on consumer confidence, how things are trending. To what degree, Remind us what kind of like indicators you guys are looking at internally as you look at the rest of the year. This primarily, of course, probably impacts your adult business, but, how should we kind of contextualize some of the macro updates we've gotten since the Q1 call on how they might impact your business?
I think, you know, consumer confidence is a good indicator of kinda. That factors in a lot of things that are going on in people's minds, you know? They, you know, consumer confidence factors in concerns they might have in inflation. It might factor in concerns that they might have on their own job that they have, their finances as a family and how they're spending money, what they're spending money on and so on. I like it from that standpoint. Not, not to compare across like what the U.S. has versus U.K. versus, you know, China and so on.
You look at those indices and say, "Okay, what's the trending within that environment that they're looking at?" In the U.S., as an example, we'll use Michigan Consumer Confidence Index to understand kinda what's happening from a trend standpoint. I would say broadly, you know, look, there's changes that happen, you know, at different rates within other countries, but broadly what you see is it's not getting worse. It's trending either to neutral to slightly better, at least as we look at some of these indices now. There's uncertainty in the marketplace.
I mean, in the U.S., you know, you hear a lot now as with kind of the countdown to the debt, you know, raising the debt and so on, and that rattles some people in terms of their own personal finances and what it might mean for the stock market and so on. You see the same thing happening with banks. People don't like to hear this uncertainty about, "Is this bank gonna fail? What does it mean for my money? What does it mean for, you know, how I wanna live and operate?" That all factors in to what people want. I think, Brandon, what you'll take it back to is, look, you know, every product, every product that somebody sells, is discretionary at some point. Orthodontics at some point is discretionary.
Maybe less so from a teen standpoint, but still discretionary, but less so. At that standpoint is you're a six-year-old, seven-year-old, and your permanent teeth are coming in or you're losing teeth, and you wanna be able to create space with Invisalign First and some of the products that we have, there's a certain window that you have to be able to provide that product to be able to create that space. Same thing for a product that we have called Mandibular Advancement, which is, you know, provides your orthodontic care, but also aligns your jaw so that your jaw is properly positioned. It's at a certain point in time that that's really useful for a child, or in that case, an early teen, to be able to have that procedure done.
You know, and in many cases, you know, during the summer when people are out of school, that's just the right time for them to go into treatment as a teenager. Your parents have saved up for it, and they wanna go into treatment. What I'm getting at is that's less discretionary. What we see is there's people look at their own kind of their finances, how stable they are in terms of what's going on with the macroeconomy, and they make decisions based on that. I would say overall, and kind of what we talked about in Q1, you know, it varies country by country, but it seemed more stable. It seemed like it wasn't getting worse.
Where we saw, if you went back to those indices a year ago, it was just, we just didn't know how far things were gonna, you know, how bad things might get, and I think it came up in what consumers were spending on. They, they pulled back on all spending. A lot of the money that they were spending on other things now were going to food and fuel and everything else. I think that stability has improved. Not great yet. It's not a great environment, and there's still uncertainty, by all means. The further we go along in getting some of these unknowns understood, like the debt, that we...
Negotiations that we have, some of the other factors that, you know, having more bank stability, maybe not raising interest rates as much, or maybe being more stable on that, I think that'll put the confidence back into people, they'll spend as they want to. I think the point on as we head into teen season, maybe a little bit, you know, less discretionary. We see our doctors certainly are busy with teenage cases. I think, you know, we wanna be that, you know, orthodontic appliance of choice. We wanna be the ones to be able to help provide those doctors with a product to be able to take on those cases.
Okay. Great. All right. I think, a lot that has been said already on kinda like near term and attempting to forecast, the impossible right now, the macroeconomy. Let's maybe focus a little bit. There's a lot of other topics to kinda try to get to here. The first, 'cause I don't wanna forget this, and it's, very topical today, can we just spend a couple minutes talking about how you guys today are utilizing artificial intelligence within your platform? I believe you already have a couple of commercial products using AI. What are they? Can you maybe talk about like how difficult it is to build those things and what kind of a competitive moat it offers you guys as well?
Good. Let me take that. Look, we have a platform that we call Align Digital Platform that engages a potential patient, a consumer or potential patient, all the way from getting to know about Invisalign to maintaining their beautiful smile even after Invisalign. The starting point really is connect. Our learning is that when a consumer gets interested in Invisalign, he or she wants to see how their smile could look if they used Invisalign. So we have an AI-driven tool called SmileView, which we've integrated in our app, where if the consumer can just take a photograph, the consumer can see his or her transformed smile in front of her. Right? This is just the 1st application of AI. I think, Brandon, you said this well. We have AI and ML integrated end to end.
Let's say this potential consumer gets interested, comes to the office to get a scan. On the scanner, our iTero scanner, we show an Invisalign Outcome Simulator, which is essentially a simulation of the transformation of the person's smile, but which is clinically valid. The doc can then and there show to the consumer, "Hey, look, here is how your smile can look after transformation." We are building on top of that very soon. Later this year, we are launching a product where it's not just a still visual, you can actually see a video of the potential patient, right? Let's say the potential patient decides to become a patient, and then the doctor has to plan. We've now developed templates that once a doctor sends a scan, gets a treatment plan which is very, very close to what he or she wants to do, right?
From a preferences standpoint. The multiple weeks of going back and forth with the technician, those days are gone. Now, the doctor gets a plan which is much more closer to what he or she wants. Then they can actually change the plan in front of them and see the changes in two minutes. We call it the Live Update. Brandon, you asked how difficult it is. It takes almost 1 billion computations to get the Live Update done and a treatment plan in front of the doctor. After the plan stage, then it goes to treat, where, you know, we have literally world-class manufacturing with multiple AI-led systems, visual scanners built in to enable us to manufacture almost 1 million aligners a day.
Followed by now the patient is starting to use Invisalign. Wants to stay on top of it, wants to track progress. Takes photographs, sends back to the doctor. AI lets us identify only the photographs that are actually off track. Right? Just an example to say end-to-end, we have AI and ML completely integrated. We've been at it for well over a decade, right? If you just look at some of the key components of planning and manufacturing, we built a competitive mode, I'd say, for well over a decade with many of the innovations. The important part is it's only accelerating now, Brandon, right? 60,000 doctors use our Invisalign Practice App actively every month. 350,000 patients actually use that app every month.
All the digital nurturing, you know, that you hear companies talk about happens automatically in our, you know, in our ecosystem, in our Digital Platform. In essence, I would tell you that every part of the consumer and the patient journey and the doctor journey we've mapped out and leverage AI to reduce the friction and increase conversion.
to add, Brandon, it's just...
Yeah.
What Raj talked about is those are investments that we've been making for a number of years. Really, even when we talk about the COVID era that we're in, you know, a few years ago, we were still making investments in what Raj is talking about, Live Update and CBCT and some of these other breakthroughs, 'cause we're so close to getting this. We knew the benefits it would be able to provide to our doctors and ultimately their patients. We continued to make these investments and continued to improve our products and processes so that we'd put it in the hands of our doctors. That's continued all through COVID, and we knew that we had to do this because this is the way to be able to scale.
This is the way to able to use the intelligence that's there, that's available there on the 15 million + patients and be able to provide that technology to the doctors. Now, as a way that, Raj described, being able to almost personalize some of that treatment plan for those doctors so that they can move teeth in a predictable way that is how they're used to moving teeth. It's very customized to how they wanna move things, and that's so powerful. It's so powerful nowadays to be able to help provide that and get doctors to be able to move teeth in a predictable way and saving time on their side, plus also now seeing some of the productivity benefits on our side, where it doesn't have to...
What Raj was talking about with Live Update, it used to take, you know, sometimes weeks back and forth between making adjustments and so on that the doctor wanted, and we'd have to put it in, and the technicians would have to make the changes, and so on. Now what they're talking about can happen in minutes. In many cases, what used to take days or weeks is down to hours or minutes. That's much more productive for doctors to be able to help them, you know, integrate this into their workflow. It's certainly a productivity benefit for us.
I'm not sure, this might fall in between you, John, and Raj, who's gonna answer this one. In my years in med tech, I've never been able to get a great answer on it. Do you sell it, the AI, or do you package it and include it and give it away with the hopes that it drives utilization of clear aligners, essentially? The question basically, do you turn into like a SaaS model, or do you package it and drive utilization with it, giving it included in the cost of the aligners?
I'll start with that, and then Raj Pudipeddi, you fill in as needed. I would say it's both, Brandon. I mean, you're gonna have some things that are just part of our treatment planning, and it's just productivity. You do some things where it's Live Update. We've provided things that provide, you know, a better visualization, a better movement in terms of productivity, where that doctor gets a case and it's pretty close. Then you give him or her 2D, 3D controls, and it can kinda tweak it and get it to what it needs to be. I think maybe that's part of how you go to market and is part of our product.
There might be some unique parts of this that you say, "Look, these are added, you know, benefits as we think about some of the virtual care, as we think about some of the other models that we can have, where we're working with doctors to you know, help provide them maybe some subscription models that they can provide to their patients or some of the fulfillment around that, or using some of our AI and intelligence to help doctors become more, you know, productive and so on. There might be things that we think about as more of a SaaS model or, maybe there's some type of subscription model where for those types of services, maybe the more premium services, doctors pay more or, you know, pay for this separately.
Maybe it's based on the volumes that they do. You give those benefits to doctors who do a lot of volume with us 'cause they've really helped digitize their practice, and we wanna continue that journey with them. Maybe that's a part of a reward for them using our products more and more. I think it'll vary, but I do like the idea that it gives us a lot of flexibility. We can keep it in the products that we have. We can pull it out and add a more of a premium or some type of subscription or some type of SaaS model. Nevertheless, the technology is gonna give us a lot of flexibility.
Great.
I agree, John.
Yeah, did you wanna add anything, Raj? Go ahead.
Think about this as in our portfolio, we already have products which are both, right? Which are examples of both. Take exocad. exocad, you know, which is the lab-side CAD/CAM software, we sell that to users, right? There are licenses that we sell in exocad that users actually pay for to be able to use the software. Virtual Care, we've kind of bundled it right now with our products and kind of patients use it and doctors use it. To John's point, we have both sets of examples in our portfolio. I think, you know, the way to kind of the way we look at it is how do we actually best drive utilization and experience of both the doctors and the patients? Depending on the life stage and maturity of the technology, we take a call one or the other.
Okay, great. So in part you mentioned the remote monitoring, maybe we'll use that as a segue to talk a little bit about the teen market. You know, John, you were mentioning earlier it's a little bit of a less discretionary market, a little more clinical need. It's, it's an interesting market to me because the adoption rate I think is much lower than adults. I'll lump a couple questions here into one, which is basically like what is it about the teen market that has made adoption so much lower than adults? In your view, what are kind of the catalysts or what are the reasons that the incremental teen market share is gonna come on in the next couple of years?
You know, any specific things you can point to, whether it's DSP, remote monitoring, the palate expander, any of those things, just talk about some of that.
That's a good question. You know, I look at teen, Brandon, as our biggest, our biggest challenge and our biggest opportunity in front of us. Like you said, I think you look at teen versus adult, I think adults get to a point as you get into your 20s, 30s, 40s, whatever, and you say, "Look, I'm not gonna go get braces. I need my teeth straightened, but I'm gonna make a choice to get it done, and I'm gonna get it done with Invisalign." That's why we saw the adoption higher. It's just been in the market longer, I think from an adult standpoint to be like that. That's why pretty much everywhere, the adult market as a percentage of cases that are being done is higher for clear aligners and for Invisalign.
We see that. I think when you get to the teen side, I think earlier on, at least how we viewed it is, look, it was product. We needed to have products that could move teeth in a predictable and reliable way and really address the needs for those doctors. As an example, before Invisalign First, we didn't have a product that reached down into the six, seven, eight, nine-year-olds who needed their expansion, some of the arch expansion that that provides. It doesn't do the full palate expansion, but it expands enough and it provides enough so that as those permanent teeth come in, there's space for them to come in. We didn't have a product like that before a few years ago.
We're working on a what we call the Invisalign Palatal Expander, which as we test now in Canada and go through the FDA approval process, what we're finding with that is it provides the upper palate expansion where it actually moves the upper palate and, you know, creates that break there that expands that upper palate, where 10%, 15% of teenagers who are gonna go into treatment, they need what we would call phase one treatment. They need that expansion as permanent teeth are coming in. It's a product that's 3D printed, customized for that child, and, you know, the mom will pop that in, and it will slowly expand. The next day you pop another one in, slowly expands, and over a month time period, you've created that space.
Right now there's a more or less a torture device that's needed for this, which is put that metal plate in, the mom or dad has to crank that open, very painful. It provides what needs to happen, but it's not as user-friendly and as patient friendly as what we can provide. We're testing this now and hope to have more on a scale basis as we go into next year. It's a brand new market for us. What that does, and I think the key point that highlights, Brandon, is that's product to be able to really give those doctors confidence that they can treat their six-year-old all the way to the 16 or 17-year-old teen and be able to move teeth and think about that digital orthodontic as what we can provide.
Some of it's product, some of it's just doctors being able to make sure that they understand. We talked about earlier in China, but it applies everywhere. The business equation, you know, 'cause many of those orthodontics or orthodontists are doing digital plus analog in their same practice. They might treat 25% of their patients, those teen patients with Invisalign, but 75% of them with wires and brackets. It comes down to their own economics. It comes down to what they're confident in doing and how they're treating cases and the complexity of those cases. We see that as when maybe times aren't as busy for those orthodontics, orthodontists, they might end up wanting to keep patients in wires and brackets because they have the time to be able to do that.
You see them moving kind of within, you know, kind of the digital and analog way, and that's what. Now, when we have doctors who are 75% of their cases are Invisalign, those doctors have made a digital commitment. They're providing digital orthodontic care for their patients. There's less about, you know, kinda the, you know, as times change and so on, they stick to that because they've digitized their practice. We look at it as a huge opportunity for us. It starts with products. It's also about training and educating doctors to be able to take on some of these difficult cases.
What we do as we go to market is provide, you know, advertising to be able to advertise to those children, the kids, advertise to their parents to let them know that, you know, we can help them, orthodontics move teeth faster, more predictable, less patient visits, less hygiene problems, allow them to play sports and instruments or go out on dates or whatever they're doing, live their life with, you know, with Invisalign, letting them know that. Also making sure that the doctors have that incentive as well. Some of the work that we've done with what we called last year teen packs, that's gonna continue this year. Think of that as virtual inventory. Doctors sign up for a certain amount of cases that they're gonna do over that next year.
Those teen cases, it's a specific product that they can pull from. As they commit to those cases, they get a better price. That better price allows them to think about, you know, using that product more and more for their patients. Then you factor in to that with what we call our digital Doctor Subscription Program, DSP, which allows doctors again to kind of commit to a certain amount of aligners that they wanna buy from us. Many times, they're using this for retention, and that allows them to finish the case that they want on those teen cases and move them the right way with some of these teen packs that we have.
They could finish, you know, and finalize things with the DSP if they have to do additional refinements. More importantly for the DSP, they're gonna use this for retention. When we think of DSP coupled with that, it really helps give doctors confidence that they can move these teenage cases through, get them done the right way, and really leave them as patients for life. You get their beautiful smile, you get, your parents have paid for all this, you wanna be able to protect the teeth, you don't want them to move and so on. Our orthodontists are embracing that more and more. It's a huge opportunity for us. It's what I talked at the outset.
I mean, when you think of $21 million orthodontic case starts, let's say $16 million of them are teen. From a market standpoint, less than 10% of those are done with Invisalign, we're the majority of that, or even clear aligners. That means 90%+ let's just say 90% of those cases are done with wires and brackets. That's the big opportunity for us.
I'll build up what John said, right? He talked about portfolio, he talked about advertising, go-to-market. I tell you, I'll expand on one piece, which is training, right? Look, we train between 15 and 20,000 doctors every year. The importance of this is in the fact that when we segment for doctors, orthodontists and GPs separately, when five groups, you know, call them like a new, occasional, engaged, active, and expert. When we move a doctor who's not, you know, using a lot of Invisalign segment, we see a 4x increase in throughput, okay? When we move a doctor from active to engaged, we see a 4x. When we move a doctor from engaged to expert, we see another 4x increase in throughput.
The investment we make in our doctor training and growth programs, as we call it, is absolutely critical, you know, to kind of bring to life all of the products in the go-to-market that John talked about. We invest very significantly in it year after year.
Okay. Raj, how do you move users for up on those tiers of active, engaged, ex-expert?
By building their clinical confidence and by helping solve their barriers better. When a doctor is not doing a lot of cases, one of the key things that we've learned now is clinical confidence is absolutely critical in terms of what we need to do. When we move the doctor to the next level, we need to help. You know, the doctor has clinical confidence. Maybe he's not confident about treating the most complex of cases. You know, you gotta focus more on the complex cases. Now you also start focusing on practice efficiency. Now that the doctor is doing a lot more cases, how do you make it efficient for the doctor to kind of see all of this and change the workflow? At the highest level, you know, we talk about practice integration.
How do you integrate the platform end-to-end into the practice so that you could get the best benefit out of it, in addition to all the clinical stuff that we do? It's a multifunctional, very holistic effort. You have sales, marketing, clinical, customer service, all involved in building this holistic engagement.
Got it. That's helpful. Couple minutes left. I'm trying to I'll try to incorporate a couple of the Q&As coming in. One of them is just, you know, I'm sure you get this question always, but recent, what are you guys seeing from competitors out in the field these days? You know, there's several other companies that are talking about success they're seeing within clear aligners. You know, you guys feel like you're holding share. What's kind of the latest that you've been sharing in terms of competition?
I think when we think of competition, you know, it goes back to this vastly under-penetrated market, whether you're talking about teens or overall cases. You know, we think of the innovation that we're bringing as the best products that, you know, are best in our doctors' hands. The competition that we see, it's, you know, something that we might've had a few years ago, several years ago. There's nothing that's coming to market that we would say, "Wow, that's different than what we would have," or unique, and something that we might have missed. We don't feel from a technology standpoint that there's something coming to market that you know, is any different. I mean, we look at... It's not from an arrogant standpoint.
It comes down to we're doing this for 25+ years, we have pretty good understanding of how to move teeth predictably and reliably, and we spend the money. I mean, this is an investment that we make to be able to get to get the outcomes that our doctors expect. Now, when you see competition, look, they're driving awareness and they might be pushing doctors who were all just doing 100% of their cases with wires and brackets. Now they might do some cases with some of the other competitors. Great. We weren't selling to those doctors anyway. Let's get more doctors into the digital mindset, the digital ecosystem that we're trying to create here. We think that's good. Broadly, when you look at competition, it's the technology is not where we're at.
The reason why we see this in the market is, you know, they'll say it's almost like or it's just like us, as the, as the leader, but then they'll discount cases, and they'll charge something less, or they'll do some promotions and so on. I look at it as, you know, That's not sustainable. You wouldn't do that on a long-term basis where you're gonna. If you're really coming up with an innovative new product, you wouldn't charge so much less, or at least try to get so much less than have your customers trial this and so on. We think it's moving. You know, we have to move the market forward. We wanna lead that with our technology and innovation.
Others that come in, look, if they can help, if it can help move things from an analog to digital world, we think great. I also think that it's less about share shifting when you have that environment. The market is wires and brackets, unfortunately. More companies coming in to help digitize and make this so that it's clear aligners, we think that's great because we know that with our technology and our go-to-market abilities, we can win those customers.
Okay. John, just one last one. I know we're bumping up on time here, but we haven't talked to any of the CFO here, and we haven't asked a single P&L question. Maybe I'll ask one to kind of wrap us up here, and that's, you know, you have this full year guidance for an operating margin slightly above 20%. To what degree can you guys pull back on spend if you need to? What's the lag time? You know, I think we talked a little bit about this on the last earnings call, but maybe just for all of us to understand so that there is some confidence regardless of where sales come in, it depends on the macro environment. Do you guys feel comfortable that you can hit that 20% op margin guidance for the full year?
What we wanted to be able to convey, and really we've done this the last few years here when we talked about some of the uncertainty around COVID and so on, we've kinda kept that op margin number out there on an overall basis for the year. Really, when we look at our model and we're in a fortunate position to be have a profitable model, we're very conscious about our gross margin down to op margin and being able to, you know, push and pull levers where needed to be able to drive growth. In some cases, you spend more in certain areas because you have that growth opportunity or you have the digital adoption that's taking place, and we wanna try to continue that growth or accelerate that growth.
In other places where you see a signal that says, "Look, there's some uncertainty in the market," maybe you pull back on some of that spending. That's really why I wanted to give the total year because that is a recognition of the model that we have. There's levers that you can pull or not pull, based on what we have. That's why I'm confident that when I look at the total year, that's on us to be able to adjust our model in a way that still pushes things forward. You know, the innovation and the technology that we're bringing, like I said, that's been the last three years that we are continuing to spend to be able to get to that.
I wanna be mindful of that, but it's a model that we have to be able to grow the market, grow our share in that market, but do it in a way that's respectful for our investors, the people who have invested back to us. What have we done with that? We've expanded our business. That cash that we generate to keeping that op margin, we've invested back into the business. We've put a plant in Poland to be closer to our customers there, reduce cycle time and so on. We buy back our shares. We bought back, we authorized $1 billion two years ago. We closed that out in less than two years. Now authorized another $1 billion.
We're very mindful of the model and the investments that we need back into our model, and then the excess goes back to our shareholders. It really starts with making sure that we have the right amount of profitability to be able to make everything work. That's why we put that out there for the year, and we feel that we have the levers to be able to pull or not pull, to be able to get to that.
Great. All right. Well, I kept you guys a few minutes over, so I appreciate it. This was a great conversation. There was a whole long list of other things we could have talked about. Maybe when we have you guys at our Growth Stock Conference in a couple of weeks, we can pick up on some of the other ones. Thanks again for participating. Appreciate it.
Look forward to it. Thanks, Brandon.
Thanks. Bye.