ALIGN TECHNOLOGY INCALGN

ALIGN TECHNOLOGY INC Leases Disclosure

10-KFiled Feb 27, 20262 min read
Leases
Lessee Information

We have operating leases for our digital treatment planning and office facilities, retail spaces, vehicles and office equipment. The components of lease expense consist of following (in thousands):
Year Ended December 31,
Lease Cost202520242023
Operating lease cost 1
$43,401 $42,299 $44,614 
Variable lease cost 2
4,054 3,630 16,013 
Total lease cost $47,455 $45,929 $60,627 
1    Includes expense associated with short term leases, lease terms of 12 months or less, which is not material.
2    Includes payments related to agreements with embedded leases that are not otherwise reflected on the balance sheet.

The following table provides a summary of our operating lease terms and discount rates:
December 31,
Remaining Lease Term and Discount Rate20252024
Weighted average remaining lease term (in years)5.15.4
Weighted average discount rate 4.1 %3.8 %
As of December 31, 2025, the future payments related to our operating lease liabilities are as follows (in thousands):

Fiscal Year Ending December 31,Operating Leases
2026$35,694 
202729,595 
202823,986 
202915,564 
20307,212 
Thereafter13,060 
Total lease payments125,111 
Less: Imputed interest(10,665)
Total lease liabilities$114,446 

As of December 31, 2025, we had additional leases that had not commenced with future lease payments of $58.4 million. These leases will commence during 2026 with non-cancelable lease terms of two to fourteen years.

Lessor Information

We lease iTero intraoral scanners to customers which are classified as operating leases. Our portfolio of leased iTero scanners included in Property, plant and equipment, net are as follows:

December 31,
20252024
Scanners under operating leases, gross$55,576 $33,770 
Less: accumulated depreciation(26,222)(12,038)
Scanners under operating leases, net$29,354 $21,732 

As of December 31, 2025, the future lease payments due to us are as follows (in thousands):
Fiscal Year Ending December 31,Operating Leases
2026$33,898 
202728,587 
20288,736 
20291,080 
Thereafter— 
Total lease payments$72,301 

For the years ended December 31, 2025, 2024 and 2023, operating lease income was $28.8 million, $21.7 million and $16.6 million, respectively. Operating lease income is recorded in Net revenues in our Consolidated Statements of Operations.

Historical Timeline

Fiscal YearFiled
2025Feb 27, 2026Showing above
2020Feb 26, 2021
2019Feb 28, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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