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Segments and Geographical Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segments and Geographical Information Segments and Geographical Information
Segment Information

We report segment information based on the management approach. The management approach designates the internal reporting used by our Chief Operating Decision Maker (“CODM”), our Chief Executive Officer, for decision making and performance assessment as the basis for determining our reportable segments. We group our operations into two reportable segments: Clear Aligner segment and Imaging Systems and CAD/CAM services (“Systems and Services”) segment, which are based on our predominant product lines.

Our CODM uses gross profit and income from operations to assess each reportable segments performance, by reviewing each measure against internal forecasts and historical performance. Our CODM may also benchmark each segments performance against our competitors and external expectations.
Summarized financial information by reportable segment is as follows (in thousands):
 Year Ended December 31,
202420232022
Net revenues
Clear Aligner$3,230,122 $3,199,329 $3,072,585 
Systems and Services768,890 662,931 662,050 
Total net revenues$3,999,012 $3,862,260 $3,734,635 
Cost of net revenues1
Clear Aligner$952,136 $911,291 $844,415 
Systems and Services247,717 244,106 256,445 
Total cost of goods sold
$1,199,853 $1,155,397 $1,100,860 
Gross Profit
Clear Aligner$2,277,986 $2,288,038 $2,228,170 
Systems and Services521,173 418,825 405,605 
Total gross profit
$2,799,159 $2,706,863 $2,633,775 
Other Segment expenses
Clear Aligner$1,135,782 $1,105,781 $1,093,750 
Systems and Services251,951 227,470 225,840 
Unallocated corporate expenses803,798 730,274 671,590 
Total operating expenses
$2,191,531 $2,063,525 $1,991,180 
Segment income from operations
Clear Aligner$1,142,204 $1,182,257 $1,134,420 
Systems and Services269,222 191,355 179,765 
Total segment income from operations
$1,411,426 $1,373,612 $1,314,185 
1    Management has identified cost of net revenues as a significant expense for our Clear Aligner and Systems and Services reportable segments.

Other segment expenses typically include employee related costs, marketing and advertising costs, and depreciation and amortization expense incurred by various functions including selling, marketing, general and administrative and research and development. Our CODM does not regularly receive these operating expenses at the reportable segment level.

Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment. Certain operating expenses are not directly attributable to a reportable segment and must be allocated. Each allocation is measured differently based on the nature of the cost being allocated. Certain other operating expense are not specifically allocated to segment income from operations and generally include various corporate expenses such as stock-based compensation and costs related to IT, facilities, human resources, accounting and finance, legal and regulatory, other separately managed general and administrative costs outside the reportable segments and restructuring costs.

The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes (in thousands):
Year Ended December 31,
202420232022
Segment income from operations
$1,411,426 $1,373,612 $1,314,185 
Unallocated corporate expenses(803,798)(730,274)(671,590)
Total income from operations607,628 643,338 642,595 
Interest income20,218 17,258 5,367 
Other income (expense), net(18,887)(19,392)(48,905)
Net income before provision for income taxes
$608,959 $641,204 $599,057 

The following table includes certain non-cash expenses for each reportable segment (in thousands):
Year Ended December 31,
202420232022
Stock-based compensation
Clear Aligner$22,888 $13,963 $14,816 
Systems and Services1,595 1,293 994 
Unallocated corporate expenses149,220 138,770 117,557 
Total stock-based compensation$173,703 $154,026 $133,367 
Depreciation and amortization
Clear Aligner$67,450 $64,781 $57,888 
Systems and Services30,998 31,518 28,300 
Unallocated corporate expenses46,586 46,102 39,605 
Total depreciation and amortization$145,034 $142,401 $125,793 

Our CODM does not regularly review total assets at the reportable segment level; however, we have provided geographical information related to our long-lived assets below.

Geographical Information

Net revenues are presented below by geographic area (in thousands): 
 Year Ended December 31,
 202420232022
Net revenues 1:
U.S.$1,695,696 $1,665,925 $1,660,045 
Switzerland983,629 1,168,320 1,216,094 
Other International1,319,687 1,028,015 858,496 
Total net revenues$3,999,012 $3,862,260 $3,734,635 
1    Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities.

Long-lived assets, which includes Property, plant and equipment, net, and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):
 December 31,
 20242023
Long-lived assets 1:
Switzerland$571,628 $575,432 
U.S.207,689 210,275 
Other International605,193 623,155 
Total long-lived assets$1,384,510 $1,408,862 
1    Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.