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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2025
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | Stockholders’ Equity Common Stock The holders of common stock are entitled to receive dividends whenever funds are legally available and when and if declared by the Company’s Board of Directors. We have not historically declared or paid dividends on our common stock. Stock-Based Compensation Plans Our Align Technology, Inc. 2005 Incentive Plan, as amended (the “2005 Incentive Plan”), provides for the granting of incentive stock options, non-statutory stock options, restricted stock, stock appreciation rights, performance units and performance shares to employees, non-employee directors and consultants. Shares granted on or after May 16, 2013 as an award of restricted stock, restricted stock units, performance shares or performance units (“full value awards”) are counted against the authorized share reserve as one and nine-tenths (1 9/10) shares for every one (1) share subject to the award, and any shares canceled that were counted as one and nine-tenths shares against the plan reserve will be returned at the same ratio. As of December 31, 2025, the 2005 Incentive Plan has a total reserve of 34,668,895 shares of which 4,608,476 shares are available for issuance. We issue new shares from our pool of authorized but unissued shares to satisfy the exercise and vesting obligations of our stock-based compensation plans. Summary of Stock-Based Compensation Expense Stock-based compensation related to our stock-based awards and employee stock purchase plan for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):
|  | Year Ended December 31,
|  | 2025 |  | 2024 |  | 2023
Cost of net revenues |  | $ | 6,177 |  |  | $ | 6,995 |  |  | $ | 7,462 |
Selling, general and administrative |  | 132,362 |  |  | 123,979 |  |  | 115,992 |
Research and development |  | 47,331 |  |  | 42,729 |  |  | 30,572 |
Total stock-based compensation |  | $ | 185,870 |  |  | $ | 173,703 |  |  | $ | 154,026 |
The income tax benefit related to stock-based compensation was $20.0 million, $19.0 million and $17.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Restricted Stock Units (“RSUs”) The fair value of RSUs is based on the closing price of our stock on the date of grant. Generally, RSUs vest over a period of four years. The following table summarizes RSU activity for the year ended December 31, 2025:
|  | Number of Shares Underlying RSUs (in thousands) |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024 |  | 1,019 |  |  | $ | 331.10 |  |  |  |  |
Granted |  | 692 |  |  | 195.43 |  |  |  |  |
Vested and released |  | (313) |  |  | 354.77 |  |  |  |  |
Forfeited |  | (148) |  |  | 274.34 |  |  |  |  |
Unvested as of December 31, 2025 |  | 1,250 |  |  | $ | 256.80 |  |  | 1.3 |  | $ | 195,141 |
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (calculated by multiplying our closing stock price on the last trading day of fiscal year 2025 by the number of unvested RSUs) that would have been received by the unit holders had all RSUs vested and been released on the last trading day of fiscal year 2025. This amount will fluctuate based on the fair market value of our stock. During 2025, of the 312,735 shares vested and released, 90,466 shares were withheld for employee statutory tax obligations, resulting in a net issuance of 222,269 shares. The total fair value of RSUs vested as of their respective vesting dates during 2025, 2024 and 2023 was $61.1 million, $78.8 million and $63.0 million, respectively. The weighted average grant date fair value of RSUs granted during 2025, 2024 and 2023 was $195.43, $307.12 and $316.16, respectively. As of December 31, 2025, we expect to recognize $191.9 million of total unamortized compensation costs, net of estimated forfeitures, related to RSUs over a weighted average period of 2.3 years. Market-Performance Based Restricted Stock Units (“MSUs”) We grant MSUs to members of senior management. Each MSU represents the right to one share of our common stock. The actual number of MSUs which will be eligible to vest will be based on the performance of our stock price relative to the performance of a stock market index over the vesting period. MSUs vest over a period of three years and the maximum number of shares eligible to vest is 250% of the MSUs initially granted. The following table summarizes MSU activity for the year ended December 31, 2025:
|  | Number of Shares Underlying MSUs (in thousands) |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024 |  | 193 |  |  | $ | 679.14 |  |  |  |  |
Granted |  | 127 |  |  | 362.98 |  |  |  |  |
Vested and released |  | (30) |  |  | 878.35 |  |  |  |  |
Forfeited |  | (27) |  |  | 638.92 |  |  |  |  |
Unvested as of December 31, 2025 |  | 263 |  |  | $ | 507.88 |  |  | 1.3 |  | $ | 41,148 |
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (calculated by multiplying our closing stock price on the last trading day of 2025 by the number of unvested MSUs) that would have been received by the unit holders had all MSUs been vested and released as of the last trading day of 2025. This amount will fluctuate based on the fair market value of our stock. During 2025, of the 29,995 shares that vested and released, 11,091 shares were withheld for employee statutory tax obligations, resulting in a net issuance of 18,904 shares. The total fair value of MSUs vested as of their respective vesting dates during 2025, 2024 and 2023 was $5.7 million, $10.1 million and $7.8 million, respectively. As of December 31, 2025, we expect to recognize $44.9 million of total unamortized compensation costs, net of estimated forfeitures, related to MSUs over a weighted average period of 1.3 years. The fair value of MSUs is estimated at the grant date using a Monte Carlo simulation that includes factors for market conditions. The weighted average assumptions used in the Monte Carlo simulation were as follows:
|  | Year Ended December 31,
|  | 2025 |  | 2024 |  | 2023
Expected term (in years) |  | 3.0 |  | 3.0 |  | 3.0
Expected volatility |  | 51.5 | % |  | 52.0 | % |  | 59.1 | %
Risk-free interest rate |  | 4.2 | % |  | 4.3 | % |  | 4.3 | %
Expected dividends |  | — |  |  | — |  |  | — |
Weighted average fair value per share at grant date |  | $ | 362.98 |  |  | $ | 617.79 |  |  | $ | 629.53 |
Restricted Stock Units with Performance Conditions (“PSUs”) Our PSUs typically include a service and performance condition. We recognize share-based compensation expense for PSUs if it is probable that the performance condition will be achieved. The following table summarizes PSU activity for the year ended December 31, 2025:
|  | Number of Shares Underlying PSUs (in thousands) |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Unvested as of December 31, 2024 |  | 11 |  |  | $ | 204.33 |  |  |  |  |
Granted |  | — |  |  | — |  |  |  |  |
Vested and released |  | (5) |  |  | 201.63 |  |  |  |  |
Forfeited |  | — |  |  | — |  |  |  |  |
Unvested as of December 31, 2025 |  | 6 |  |  | $ | 206.36 |  |  | 1.0 |  | $ | 984 |
During 2025, of the 4,728 shares vested and released, 1,923 shares were withheld for employee statutory tax obligations, resulting in a net issuance of 2,805 shares. As of December 31, 2025, we expect to recognize $0.5 million of total unamortized compensation costs, net of estimated forfeitures, related to PSUs over a weighted average period of 1.0 year. Employee Stock Purchase Plan (“ESPP”) In May 2010, our stockholders approved the 2010 Employee Stock Purchase Plan (as amended and restated, the “2010 Purchase Plan”) which consists of consecutive overlapping twenty-four month offering periods with four six-month purchase periods in each offering period. Employees purchase shares at 85% of the lower of the fair market value of the common stock at either the beginning of the offering period (grant date) or the end of the purchase period. The 2010 Purchase Plan will continue until terminated by either the Board of Directors or its administrator. The 2010 Purchase Plan also allows for purchase rights to employees outside the U.S. and Canada with six-month offering periods and purchase periods. In May 2021, the 2010 Purchase Plan was amended and restated to increase the maximum number of shares available for purchase to 4,400,000 shares. The following table summarizes the ESPP shares issued:
|  | Year Ended December 31,
|  | 2025 |  | 2024 |  | 2023
Number of shares issued (in thousands) |  | 147 |  |  | 120 |  |  | 114 |
Weighted average price |  | $ | 148.77 |  |  | $ | 213.11 |  |  | $ | 234.19 |
As of December 31, 2025, 1,728,664 shares remain available for future issuance. The fair value of the option component of the 2010 Purchase Plan shares was estimated at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:
|  | Year Ended December 31,
|  | 2025 |  | 2024 |  | 2023
Expected term (in years) |  | 1.2 |  | 1.3 |  | 1.2
Expected volatility |  | 56.2 | % |  | 49.2 | % |  | 56.4 | %
Risk-free interest rate |  | 4.0 | % |  | 4.6 | % |  | 4.9 | %
Expected dividends |  | — |  |  | — |  |  | — |
Weighted average fair value at grant date |  | $ | 64.94 |  |  | $ | 94.75 |  |  | $ | 132.94 |
We recognized stock-based compensation related to our employee stock purchase plan of $15.1 million, $14.0 million and $20.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, we expect to recognize $10.6 million of total unamortized compensation costs related to future employee stock purchases over a weighted average period of 0.6 years.

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