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Align Technology(NASDAQ: ALGN)
Q3 2024 Earnings Call
Oct 23, 2024, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings. Welcome to the Align third-quarter 2024 earnings call. [Operator instructions]. Please note this conference is being recorded.
I will now turn the conference over to your host, Shirley Stacy, with Align Technology. You may begin.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Good afternoon, and thank you for joining us. I'm Shirley Stacy, vice president of corporate communications and investor relations. Joining me for today's call is Joe Hogan, president and CEO; and John Morici, CFO. We issued third-quarter 2024 financial results today via Business Wire, which is available on our website at investor.aligntech.com.
Today's conference call is being audio webcast and will be archived on our website for approximately 1 month. As a reminder, the information provided and discussed today will include forward-looking statements, including statements about Align's future events and product outlook. These forward-looking statements are only predictions and involve risks and uncertainties that are described in more detail in our most recent periodic reports filed with the Securities and Exchange Commission, available on our website, and at sec.gov. Actual results may vary significantly, and Align expressly assumes no obligation to update any forward-looking statement.
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We posted historical financial statements with corresponding reconciliations, including our GAAP to non-GAAP reconciliation, if applicable, and our third-quarter 2024 conference call slides on our website under quarterly results. Please refer to these files for more detailed information. With that, I'll turn the call over to Align Technology's president and CEO, Joe Hogan. Joe?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Thanks, Shirley. Good afternoon, and thanks for joining us today. On our call today, I'll provide an overview of our third-quarter results and discuss a few highlights from our two operating segments, Systems and Services and Clear Aligners. John will provide more detail on our Q3 financial performance and comment on views for the remainder of the year.
Following that, I'll come back and summarize a few key points and open the call to questions. Overall, Q3 '24 results were mixed and reflect strong system services year-over-year revenue growth as well as good Clear Aligner volume in Asia Pacific, EMEA, and Latin America regions, partially offset by declines in the United States. As recently reported by many analysts and third-party research firms, the underlying dental market in the United States remains sluggish, and our doctor customers cite similar trends. Q3 '24 revenues of $978 million increased 1.8% year over year, and Clear Aligner volumes of $617,000 were up 2.5% year over year.
Despite strong growth from Systems and Services revenues, a record 87,000 doctor submitters, a record of 236,000 teams starting treatment driven by record teen case starts in China, and a record 25,000 of DSP Invisalign touch-up cases, total revenues for Q3 were slightly below our Q3 revenue outlook in part due to more pronounced seasonality for clear aligners than expected as well as continued weak consumer sentiment, and a soft dental market, especially in the United States. Q3 '24 non-GAAP operating margin of 22.1% was better than expected and increased year over year compared to 21.8% in Q3 of '23. For Clear Aligners, Q3 volumes were up year over year and down slightly sequentially. The Year-over-year volumes were driven by strong growth in APAC, especially China, as well as growth from the EMEA and Latin American regions.
On a sequential basis, Clear Aligner volumes were down from Q2, reflecting more pronounced seasonality and soft dental markets in the U.S., offset somewhat by strength in APAC and Latin American regions. In the teen and growing kids segment, a record 236,000 teens and younger patients started treatment with Invisalign Clear Aligners during the third quarter and an increase of 9.1% sequentially and up 6.7% year over year, reflecting growth across regions, especially from Invisalign First in the APAC and EMEA regions. In Q3, the number of doctors submitting teen or younger patient case starts was up over 6% year over year, led by continued strength from doctors treating young kids, also known as growing patients. During the quarter, we continue to commercialize the Invisalign Palatal Expander, Align's first direct 3D printed orthodontic appliance.
Q3 reflected steady momentum for doctors, submitters, and shipments in the United States and Canada. We recently announced commercial availability in Singapore, and we're excited to extend the availability of the transformative Invisalign Palatal Expander system to even more doctors and their patients and markets across the Asia Pacific region. We expect it to be available in other markets spending future applicable regulatory approvals. Non-case revenues include our Vivera Retainers, retention aligners ordered through our doctor subscription program or DSP, clinical training and education, accessories, and e-commerce.
In Q3, non-case revenues were up year over year, primarily due to continued growth in retainers and the DSP program, including non-Invisalign patients getting retainers. DSP includes Invisalign touch-up cases up to 14 stages and is currently available in North America and certain countries in Europe. For Q3, total Invisalign DSP touch-up cases were up nearly 30% year over year to more than 25,000 cases. Q3 '24 Clear Aligner volume from DSO customers increased sequentially and year over year, reflecting growth across all regions.
The DSO business in the United States continues to outpace our retail doctors driven by our largest DSO partners, Smile Doctors, and Heartland Dental. We also had strong growth in iTero Scanner sales from DSOs investing in their member practices and end-to-end digital workflows. Q3 was another strong quarter for our Systems and Services business, and year-over-year revenue growth was up 15.6%, reflecting higher scanner ASPs and nonsystems revenues driven by iTero Lumina, wand upgrades, increased scanner rentals, and certified preowned or CPO leasing programs, as well as increased services revenues, partially offset by lower scanner volumes. On a sequential basis, Q3 Systems and Services revenues were down 2.9%, reflecting lower scanner ASPs and nonsystems revenues, particularly offset by higher scanner volumes.
The iTero Lumina's new multi-direct capture technology replaces the confocal imaging technology in earlier models and has a 3 times wider field of capture and a 50% smaller and 45% lighter one, delivering faster scanning speed, higher accuracy, super visualization, and a more comfortable scanning experience. Lumina is currently available with orthodontic workflows as new stand-alone scanner or as a wand upgrade from the iTero Element 5D scanner. Overall for Q3, we continue to be very pleased with the ongoing adoption of iTero Lumina scanner with ortho workflow and response from customers. We currently expect to begin a limited market release for the restorative software on the iTero Lumina Scanner in Q1 '25, followed by full commercialization by the end of Q1.
Today, we announced new iTero Scanner products, innovations to further enhance digital dentistry workflows, and integrated treatment options in oral health, restorative and aesthetic treatment, and general dentistry, Align oral healthcare suite with new comparison tools that aid in multi-modality assessments in personalized oral health records and reports, Invisalign Outcome simulator, pro and multiple treatment simulation to drive chair side patient education about treatment options, and iTero design suite with intuitive design capabilities for in-practice 3D printing now commercially available in selected markets. We believe the iTero Intraoral Scanner innovations introduced today enable doctors to present a variety of treatment options to their patients, supporting chair side education and communications. That helps deliver a great patient experience and supports patients in making more informed choices about their dental treatment and consultation with our doctors. We're also pleased to share that Invisalign Japan was recently awarded the Golden Design Award for 2024 for the iTero Lumina Intraoral Scanner, making this the second time we receive this prestigious award in the past 2 years.
The Golden Design Award is globally known and recognized by domestic and international designers and is the only comprehensive evaluation and recommendation system of design in Japan. The award designation increases the recognition and reliability of awarded works of companies, promotes problem-solving through design, and focuses on the significance of design to people and society. Before I turn the call over to John, I want to comment on the employment actions we announced today resulting from a global reorganization and restructuring. As part of the Align's 2025 annual operating plan process, we identified positions to be eliminated or transferred to other locations.
These are difficult actions, and valuable employees will leave the company. As part of this restructuring, Raj Pudipeddi's position as EVP and MD Americas and chief marketing officer has been eliminated, and we will leave -- and he will leave in the fourth quarter. We thank Raj for his contributions to Align over the past 5-plus years in leading our marketing and product innovation management, as well as overseeing the APAC and Americas regions. We wish Raj well.
I'm pleased to welcome Frank Quinn back to Align. He's a well-established leader with a customer focus and a proven track record in orthodontics and digital dentistry. Frank's deep experience, understanding, and insights into what digital means for our doctor customers is key, and he's excited to be rejoining Align. With that, I'll now turn the call over to John.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Thanks, Joe. Now for our Q3 financial results. Total revenues for the third quarter were $977.9 million, down 4.9% from the prior quarter and up 1.8% from the corresponding quarter a year ago. On a constant currency basis, Q3 '24 revenues were not significantly impacted by foreign exchange sequentially and were unfavorably impacted by approximately $14.6 million year over year or approximately 1.5%.
For Clear Aligners, Q3 '24 revenues of $786.8 million were down 5.4% sequentially, primarily from lower volume, higher discounts, product mix shift to lower-priced products and geographic mix, partially offset by lower net revenue deferrals. Q3 Clear Aligner revenues were not significantly impacted by foreign exchange sequentially. Q3 '24 Clear Aligners per case shipment of $1,275 was lowered by $20 on a sequential basis due to higher discounts, product, and geographic mix, partially offset by lower net revenue deferrals. On a year-over-year basis, Q3 Clear Aligner revenues were down 1%, primarily from lower ASPs, reflecting the impact from unfavorable foreign exchange of $11.7 million or approximately 1.5%, a 20% price reduction in the U.K.
to offset a 2024 ruling by the U.K. tax authorities in Q1 of '24 that requires a 20% VAT be applied to Clear Aligner sales in the U.K., product mix shift to lower-priced products, geographic mix, and higher discounts. This decrease was partially offset by lower net deferrals and price increases, along with higher volumes and higher non-case revenues. Q3 '24 Clear Aligner per case shipment of $1,275 was down $45 on a year-over-year basis due to unfavorable foreign exchange of $18, impact of U.K.
VAT of $12, product and geographic mix, higher discounts, and partially offset by lower net revenue deferrals and price increases. Our Invisalign Comprehensive Three and Three product is available in North America, EMEA, and in certain markets across APAC. We are pleased with the continued adoption of the Invisalign Comprehensive Three and Three product and anticipate adoption will continue. Comprehensive Three and Three provides doctors the flexibility they want while allowing us to recognize more revenue upfront, with deferred revenue being recognized over a shorter period compared to our traditional Invisalign Comprehensive product, which in turn allows us to benefit from a more favorable gross margin.
Clear Aligner deferred revenues on the balance sheet decreased $6.2 million or 0.5% sequentially and decreased $25.8 million or 2% year over year and will be recognized as additional aligners are shipped under each sales contract. Q3 '24 Systems and Services revenue of $191 million were down 2.9% sequentially, primarily due to lower ASP and decreased nonsystem revenues mostly related to fewer upgrades, partially offset by higher scanner volumes. Q3 '24 Systems and Services revenue were up 15.6% year over year, primarily due to higher ASPs, increased nonsystem revenues mostly related to upgrades in our leasing rental programs, and higher services revenue, partially offset by lower scanner volumes. Q3 '24 Systems and Services revenues impact by foreign exchange was approximately flat sequentially.
On a year-over-year basis, Systems and Services revenues were unfavorably impacted by foreign exchange of approximately $2.9 million or approximately 1.5%. Systems and Services deferred revenues on the balance sheet was down $1.5 million or 0.7% sequentially and down $40.6 million or 15.4% year over year, primarily due to the recognition of services revenue, which are recognized ratably over the service period. The decline in deferred revenues, both sequentially and year over year, primarily reflects the shorter duration of service contracts applicable to initial scanner purchases. Moving on to gross margin.
Third-quarter overall gross margin was 69.7%, down 0.5 points sequentially and up 0.7 points year over year. Overall gross margin was not significantly impacted by foreign exchange sequentially and was unfavorably impacted by approximately 0.4 points on a year-over-year basis. Clear Aligner gross margin for the third quarter was 70.3%, down 0.5 points sequentially due primarily to lower ASPs and higher mix of additional aligners, partially offset by lower manufacturing spend. Clear Aligner gross margin for the third quarter was down 0.5 points year over year due -- primarily due to lower ASPs, partially offset by lower manufacturing spend.
On a constant currency basis, Clear Aligner gross margin was unfavorably impacted by foreign exchange by 0.4 points year over year. Systems and Services gross margin for the third quarter was 67.5%, down 0.7 points sequentially due primarily to mix, partially offset by lower manufacturing spend and freight costs. Systems and Services gross margin for the third quarter was up 6.5 points year over year, due primarily to higher ASPs, partially offset by higher service and freight costs. On a constant currency basis, Systems and Services gross margin was unfavorably impacted by foreign exchange by 0.5 points year over year.
Q3 operating expenses were $519.5 million, down 9.7% sequentially and up 4.6% year over year. On a sequential basis, operating expenses were down $56.1 million, due primarily to nonrecurring legal settlements, advertising and marketing, and employee compensation. Year over year, operating expenses increased by $22.7 million, primarily due to employee compensation. On a non-GAAP basis, excluding stock-based compensation, amortization of acquired intangibles related to certain acquisitions, restructuring, legal settlements, and other charges, operating expenses were $472.7 million, down 5.4% sequentially and up 3.1% year over year.
Our third-quarter operating income of $162.3 million resulted in an operating margin of 16.6%, up 2.3 points sequentially and down 0.7 points year over year. Operating margin was favorably impacted from foreign exchange of approximately 0.1 point sequentially and unfavorably impacted by 0.8 points year over year. On a non-GAAP basis, which excludes stock-based compensation, amortization of intangibles related to certain acquisitions, restructuring, legal settlements, and other charges, operating margin for the third quarter was 22.1%, down 0.2 points sequentially and up 0.3 points year over year. Interest and other income and expense, net for the third quarter was an income of $3.6 million, primarily due to foreign exchange compared to an expense of $3.2 million in Q2 of '24 and an expense of $4.2 million in Q3 of '23.
The GAAP effective tax rate in the third quarter was 30.1% compared to 32.9% in the second quarter and 25.1% in the third quarter of the prior year. The third-quarter GAAP effective tax rate was lower than the second-quarter effective tax rate, primarily due to adjustments related to tax return filings, partially offset by a small increase in uncertain tax position reserves. The third-quarter GAAP effective tax rate was higher in the third quarter than the third-quarter effective tax rate in the prior year primarily due to recognizing a onetime benefit related to the application of tax guidance issued during the third quarter of the prior year. Our non-GAAP effective tax rate in the third quarter was 20%, which reflects our long-term projected tax rate.
The third-quarter net income per diluted share was $1.55, up sequentially $0.27, and down $0.03 compared to the prior year. Our EPS was favorably impacted due -- primarily due to foreign exchange by $0.03 on a sequential basis and unfavorably impacted by $0.08 on a year-over-year basis. On a non-GAAP basis, net income per diluted share was $2.35 for the third quarter, down $0.06 sequentially and up $0.21 year over year. Moving on to the balance sheet.
As of September 30, 2024, cash and cash equivalents were $1.419 billion, up sequentially $280.5 million, and down $197.1 million year over year. Of our $1.419 billion balance, $285 million was held in the U.S., and $756.5 million was held by our international entities. We have $500 million available for repurchase of our common stock under our January 2023 repurchase program. Beginning in Q4 2024 and continued into Q1 '25, we expect to repurchase up to $275 million of our common stock through either a combination of open market repurchases, or an accelerated stock repurchase agreement.
Q3 accounts receivable balance was $1.106 billion, down sequentially. Our overall day sales outstanding was 93 days, up approximately 4 days sequentially and up approximately 8 days as compared to Q3 last year. Cash flow from operations for the third quarter was $263.7 million. Capital expenditures for the third quarter were $29.8 million, primarily related to investments in our manufacturing capacity and facilities.
Free cash flow, defined as cash flow from operations less capital expenditures, amounted to $233.9 million. Turning to our 2024 outlook. Assuming no circumstances occur beyond our control, including foreign exchange, we expect the following business outlook for the fourth quarter. We expect Q4 '24 worldwide revenues to be in the range of $995 million to $1.015 billion.
We expect Q4 '24 Clear Aligner volume and ASPs to be slightly up sequentially. We expect Q4 '24 Systems and Services revenues to be up sequentially, consistent with typical Q4 seasonality. We expect Q4 '24 GAAP operating margin to be slightly lower than 14%, primarily due to restructuring charges related to severance for impacted employees. We estimate these restructuring charges will impact Q4 '24 GAAP operating margin by approximately 3 points.
We anticipate Q4 '24 non-GAAP operating margin to be slightly up sequentially. For fiscal 2024, we expect investments in capital expenditures to be above $100 million. Capital expenditures primarily relate to building construction and improvements as well as manufacturing capacity in support of continued expansion. As we have said many times, we continually evaluate and evolve our business model to provide doctors with the best tools and resources that they need to help them treat their patients while managing our operations responsibly.
Today's restructuring action is designed to adjust our business to more closely align with the existing business environment. We expect the restructuring actions we announced today will give us margin accretion for full year in 2025 even as we scale up our next-generation direct 3D printing fabrication manufacturing. With that, I'll turn it back over to Joe for final comments. Joe?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Thanks, John. In closing for Q3, I was pleased to report another strong systems and services quarter, and I'm excited about our next-generation Lumina Scanner. And this continued positive impact on our customers' digital workflow, with Ortho software today and restorative software expected to be released in Q1 of next year. Q3 was also strong for our Invisalign Clear Aligner business in the Asia Pacific, EMEA, and Latin America regions for those markets are our fastest-growing regions and helped to balance outperformance in other geographies.
We understand that operating environment is more challenging, and we are adapting and driving our growth strategy despite continued weak consumer demand trends, especially in the United States in a sluggish dental market. In the face of inflation, high interest rates, less patient traffic, and longer conversion cycles, especially for adult patients, orthodontists and dentists are facing challenges in practice growth and profitability that impacts the way many of them approach orthodontic treatment. It is more important than ever that we differentiate our products and services and become the best partner for our customers by creating solutions that drive more patients to their practices, accelerates treatment conversion, and improves their experience and bottom line. As the innovation leader in digital dentistry technology, it's our job to ensure we have the organizational structure, focus, and rigor to help doctors realize the full potential of this opportunity by doing more to engage our doctor customers and support their practice growth and to help consumers and potential patients connect with these practices to get to smiles that they love.
We continue to evaluate and evolve our business to provide doctors with the best tools and resources they deserve. Align is the leader in digital orthodontics, and we are committed to supporting doctor customers and the future of digital innovation. We're committed to supporting doctor customers and the future of the digital innovation and are excited at the next wave of growth drivers that we believe will revolutionize the orthodontic industry in scanning software and direct 3D printing. We're in the midst of several key technology developments that are critical for the business.
We will take the needed actions to get us through this while at the same time investing in the key areas that we know will transform our industry and our business. The restructuring actions we announced today focused on ROI investments and activities that drive revenue and enable margin expansion while making room for investments in critical future technologies, including scaling our direct 3D printing operations. With that, I thank you for your time today. I look forward to updating you on our continued progress over the coming quarters.
Now I'll turn the call back over to the operator for questions. Operator?
Questions & Answers:
Operator
[Operator instructions]. Our first question comes from Brandon Vazquez with William Blair. you may proceed.
Brandon Vazquez -- Analyst
Hey, everyone. Thanks for taking the question. I wanted to start on a little bit just the macro backdrop. Last year, the year-over-year comp also had a little bit of weakness in the September period, if I remember, in 2023, so things are a little bit worse now.
I'm just curious if you can talk about did things get worse from last year, which was already a little bit of -- a little weak. And in case that doesn't make sense, the crux of the question is essentially just talk to us about where macro is going into year-end. Is it stable? I think you guys have used that phrase before. Is it worsening? Just any thoughts you guys are seeing on end markets?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah, Brandon, it's Joe. I'd say, first of all, third quarter is always a tough quarter because of the discontinuities we have with Europe shutting down and different countries being on vacation at different times. So I wouldn't say that the third quarter this year was worse in some way than the third quarter last year. I'd just say that it was the kind of seasonality in the difficult market.
What we try to call out, as you could see, is that United States market seems to be one of the most affected, and it's really one of our largest markets, too. And so that's been a challenge in that sense also. John, do you want to add anything?
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
That's accurate.
Brandon Vazquez -- Analyst
OK. And then as my follow-up, just quickly. As we look toward 2025, right, and if we just assume end markets are stable, right, let's say things remain stable, how should we think about what the topline on this business could do and what the P&L could look like in a year where things are stable, right? You guys are somewhat macro-hindered right now. So is it a continuation of what we're seeing in '24? Are there reasons to get a little bit more excited and accelerate the business? Any expectations around that would be helpful.
Thank you.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Joe, again. I'd just say we'd like to see some increased consumer confidence, obviously, in the United States and just an economy that feels better to consumers. We feel that this is more of an external issue than it is an internal issue when you look at Align overall in our growth rates, particularly in the United States. And so any kind of increase in economic activity and increase in consumer confidence, we think would be really positive for our customers and then for Align in turn.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thanks, Brandon. Next question please.
Operator
Thank you. Our next question comes from Jon Block with Stifel. You may proceed.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hi, John.
Jon Block -- Analyst
Good afternoon, Joe. Joe, maybe just to start with you, sort of picks up on that last question. Anything to call out with the different results in the U.S. versus international? In other words, I think I've got this right, but cases up 2.5% globally.
But as you mentioned, down in the U.S. So is it just the consumer? Is there anything to focus on from a go-to-market strategy? Do we have to think about incremental competition that might be more acute in the U.S. versus OUS? Just would love your thoughts on that dynamic.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah, Jon, it's a good question. I'd say no, it's mainly external when I look at it. I don't think there's been any dramatic changes from a competitive standpoint in the marketplace. If I look at our ortho channel and our dental channels, they're both challenged in the sense of patient throughput and their ability to close.
I was just talking to some of our largest DSOs this morning, and the comparison is similar. This is -- and these are -- the close rates at our customers are more difficult, too. It's customers come in, we know they want teeth treatment, but they're not really confident in the sense of their ability to pay for it or wanting to pay for it right now in the economic situation. So I wouldn't call out anything externally from a competitive standpoint or whatever.
This is more what we feel is the external economics and consumer confidence issue in the United States. But we see, Jon, the same thing in Europe. But Europe has been a little better and a little different because all those countries have different situations, but it's more pronounced in the United States because it's so large and so uniform in that sense.
Jon Block -- Analyst
Got it. OK. And then second question will be sort of a famous two-parter. But, John, just to start, I just want to be crystal clear.
You guys are committing to overall op margin expansion in '25 if that's correct. It will be somewhat muted by the direct 3D printing fabrication initiative. Maybe if you can verify that. And then any thoughts on the top line? That would just be first question, or I'll call it part A.
In part B -- sorry. Go ahead, John.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
I was going to give the op margin. The op margin, yes, we made the restructuring actions, giving us room so that we can get the year-over-year margin accretion while still investing in all the things that we've talked about with Direct Fab and 5-minute ClinCheck and Lumina, and so on. So we're going to continue making those investments. The restructuring gives us some room to show that margin accretion.
Jon Block -- Analyst
OK. And again, the other part of that question was, any thoughts on the topline? If you're committing to the OM expansion, what does that mean from a topline perspective? And the second one, Joe, just -- if I can pivot and if you can talk to some of the initiatives out there. In other words, it seems like cost goes off to a slow start for our checks. Do you need to be in the store? And then more recently, we picked up on a new financing initiative.
It seems like you're rolling out at sort of guarantees the case approval. Denial has had been a problem. Where are you with that initiative? And when do you expect it to have a more sort of prominent impact on the overall P&L? Thanks, guys.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah. And, Jon, just kind of just frame your question. The first one, like Costco. We've had some success in Costco, but it's nothing that's material for the business right now.
But I think you have to look at that as we do internally. It's a brand strategy. We have the No.1 brand in the world. We're looking at different areas of how we can leverage that brand to try to encourage consumers more in this sense of entertaining Invisalign treatment.
As far as financing, we know that customers right now are challenged in the sense that they do want a treatment from an orthodontic standpoint, but they're really challenged from a financial standpoint. And John and the team are doing all they can. And also our DSO, big DSO partners, are doing what we can to offer the type of financing that would give consumers more confidence to move forward.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
And on overall revenue, Jon, we'll give more of an update as we get closer into 2025. But as we've said and as we've made the adjustments, we're committed to driving growth, investing where we can find that growth, balancing our investments on some of the new technologies that we have that we know will transform this business. So that's all at stake now and things that we're mindful of, but we'll give more of an update on 2025 as we get closer.
Jon Block -- Analyst
Thank you.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah. You're welcome, Jon.
Operator
Thank you. Our next question comes from Elizabeth Anderson with Evercore ISI. You may proceed.
Elizabeth Anderson -- Evercore ISI -- Analyst
Hi, guys. Hi. I'm also going to try my hand at a two-parter as well since that's the theme. One, I mean, as you talk about the restructuring and sort of Frank coming back to the organization, I think you hinted at it a little bit.
I know it's a little bit early. So your sort of high-level quality of thoughts would be fine on this, too. Like, what do you mean when you're -- what are you sort of -- what is he going to sort of drive? Or what do you -- is there sort of like an inflection that you're thinking about how he operates the business differently? And sort of as a corollary to that, like I think you talked about getting closer to the consumer, if you could talk maybe about that portion of it. And then secondarily, it was nice to hear the positive commentary about China, so I'd love to hear a little bit more about that market and sort of how you're thinking about consumer outlook for that market as well.
Thank you.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hey, Elizabeth, it's Joe. On Frank coming back, Frank was -- had been in the business from 2013. I think he left us in 2022 for another type of venture. Look, this business is about -- it's about three things.
One is relationships. This is not a transactional business. This is one where you want to have good relationships and good trust with doctors, and Frank really brings that from a leadership standpoint. Secondly is you would need a good understanding of the technology and the types of programs that can help to drive growth.
Frank is really an expert in that area. He's shown that over the years. When you look at our DSO program today, it's been really effective. Frank has happened to put that together back when I first arrived back in 2015, 2016 and really made that happen.
Thirdly is you need someone with scope in the sense of understands the industry, understands the competition, knows what really makes doctors make decisions and orthodontists and how they make decisions versus the general practitioners. Frank has all that, and he's a trusted commodity within the business. So we're excited to have him back.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
And then the last part of your question, Elizabeth, on China. We're pleased with China results. Sold to more doctors, pleased with the utilization. It's a great team season for us in China.
We saw good adoption of various products, including Invisalign First and others, where we saw good utilization there. So China, for us, from a team standpoint especially, played out really well for us.
Elizabeth Anderson -- Evercore ISI -- Analyst
Thank you.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
You're welcome.
Operator
Thank you. Our next question comes from Jason Bednar with Piper Sandler. You may proceed.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hi, Jason.
Jason Bednar -- Piper Sandler -- Analyst
Hey, there. Yeah. Good afternoon. I'm going to come back and follow up on one of Jon's questions.
I know a lot of us have been trying to estimate the margin upside or the margin impact from 3D printing over time, just given the cost benefits you can realize from the initiative. But the comment today here with the restructuring offsetting some of the -- maybe some of the investments you're making, it would seem like that this initiative may be dilutive to gross margins in '25. So maybe just help us bridge the thinking that you're making in these comments today reconcile some of those comments and if you can quantify kind of the puts and takes.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Yeah. I'll take my best at this. So, overall, we were talking of margin. We think that the restructuring that we're making is going to be up margin accretive on a year-over-year basis despite all the investments.
You're right from a gross margin standpoint. As we scale things, the direct fab printing, while it gives us a lot of capability and a lot of benefits for our doctors, there is a higher cost initially until we start to scale that. But we're committed to that op margin accretion on a year-over-year basis for next year despite that. And then as we have new products that come and we know the doctors are going to love what we're bringing to market, that will scale up.
And as that scales up, then that really drives the overall productivity that we will see on the gross margin side, primarily from the materials and the less material that we need to go into the product.
Jason Bednar -- Piper Sandler -- Analyst
All right. Understood. And I guess maybe one follow-up to there and then another separate follow-up. But just any timeline on when we might see the gross margin benefits or expansion off of historical norms once that 3D printing does scale? And then just with the teen season maybe now mostly complete, I guess what's your assessment of that part of the market, Joe, inside the U.S., outside the U.S.? The data we see has been a bit more mixed between kind of the clear aligner and bracket and wire part of the markets in the past several months.
Your business has grown decently in the past 1.5 years. So just -- do you have better visibility in this part of the market? I'm just trying to understand this again in the context of the broader comments you're making on the U.S. a little bit softer. Thanks.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
So, Jason, this is John. I'll take the first part of your question on gross margin. Look, we've talked about it being like a 2- to 3-year journey to be able to help scale this up. I can say this, we're very pleased with the progress that we're making around resin and being able to scale that and get it at the right cost.
So that's good progress there. As well as on the equipment side, we're making good progress around being able to scale up the actual manufacturing of this. But in terms of when you scale this and get it to a larger extent, it's really 2 to 3 years. But you will see some new products that we have on the direct fab showing up next year and in doctors' hands to give them those capabilities.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Just on the teen market, I mean, when you look at the international teen market, obviously, we had really good success in Asia in the quarter. We have really a terrific portfolio when you think about our Invisalign First product. Now we have Invisalign Palatal Expander. With that also is what we call mandibular advancement with occlusal blocks, which are used for Class 2, usually for patients between 10 and 11 years old.
So when you look at those pre-teen ages, we have a really good portfolio to line up in that sense. So I think you're seeing that come through with our sales overall. When you reflect back on the United States, obviously, our orthodontic customers are really challenged. And 80% on an average, 75% of what they do are teens.
And some of the close rates on teens, just talking to some of the DSOs and different doctors that we have on the orthodontic side, the close rates are even tougher on the teen segment than what it's been in the past, too. And so times like this where they're pressed for traffic and they're pressed for margin, they will reflect back to wires and brackets to support the profitability of their practice. We know that. We understand it.
It's our job to communicate to consumers and to orthodontists what their benefits are, particularly this early treatment and what we can do. And so this is a doctor-to-doctor situation. But again, it's an external environment, where consumers are concerned with their pocketbooks right now, and they're reluctant to make decisions and close at times. And obviously, the orthodontists are responding from an individual practice standpoint accordingly.
Jason Bednar -- Piper Sandler -- Analyst
All right. Very helpful. Thank you.
Operator
Thank you. Our next question comes from David Saxon with Needham & Company. You may proceed.
David Saxon -- Analyst
Great. good afternoon, and thanks for taking my question. I'd like to start on iTero, actually. I'd love to get some color around how we should think about iTero growth with the ongoing Lumina rollout, particularly literally with the restorative workflow coming out early next year, but then in the context of interest rates remaining high and then lapping comps from the initial ortho launch.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah, David, I think you have to start with -- and I think I get to just to your question, there's a lot of pressure on capital equipment sales in the marketplace, given of what we're talking about with customers being challenged in that way. I think what you have to do with the Lumina and think about it, it's truly a brand-new platform. It's not an iteration of old technology like the next phase of our older technology. It's something that's really new, and it's captured doctors' attention.
And I think it's -- the size of our sales and how well we've done, particularly in the traditional third quarter that's a little bit slower, I think it surprised a lot of people. So I think this is a testimony to the technology that we've brought forward and the uniqueness of that technology, why we've been able to have those kinds of sales at this point in time. We're excited about the restorative coming on in the first quarter. The team is making good progress on that.
So overall, it's just a great foundation to grow from them. What's wonderful about that platform, too, is we'll iterate from that platform going forward in different areas that will really help us to diversify the product line and target certain applications in the future.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
And two things that really have helped iTero and kind of go through this, especially with the new product and so on. It's really given us a lot of opportunity on other products that we sell within the iTero kind of family, so all the way from CPOs that we have certified preowned, all the way to the 5D. We actually sold a lot of 5Ds this past quarter. So that really helps us.
And then the added part in a tougher economy, we're giving a lot more flexibility to doctors to kind of sell the way that they want to buy. Some don't want to purchase outright because of the economic conditions and so on. So we see a lot more leasing. Or in other places, we see more rental.
And for us, that's a great trade. It will get that recurring revenue off of those different selling options, but then it's great when a doctor uses iTero because we know that they'll use more Invisalign.
David Saxon -- Analyst
Great. Thanks for that. And then on the U.S. side, on the clear aligners, can you give more color on kind of where that weakness is actually coming from? Is it the ortho channel? Or is it with GPs? And then anywhere specifically from a portfolio perspective? Thanks so much.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yes. I mean it's almost equal in both. We see pressure on the ortho side. I mean if you look at any kind of industrial data right now as far as patients entering the dental industry right now, the GP space, it's challenged overall.
So we see pressure on both of those areas for the same reasons we talked about before.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Yeah. Thanks, David. Next question please.
Operator
Thank you. Our next question comes from Jeff Johnson with Baird. You may proceed.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hey, Jeff.
Jeff Johnson -- Analyst
Thank you. Hey, Joe. How are you? Good afternoon, guys. Let me ask one high-level question and then maybe just a modeling question for John.
But from a high level, your R&D was down 4% year over year this quarter. You're making the headcount reductions. Capex at $100 million is well below even the last couple of years, closer to $250 million those years. You're talking about increasing the buyback, margin improvement next year.
All of these comments kind of just point to a more mature company, and that's not a critique at all. I think that's where we all know you are and see where you are. So I guess my question is, how does this change your management style, your management objectives over the next few years? Obviously, you came into this business really pushing the topline. But is there an evolution that's having to go on with how you lead this company and lead this organization as well?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hey, Jeff, I think it's a really good question. I'd say we're responding to the times here. Don't make it a reflection on what the opportunity of the company is at all. We're so underpenetrated, not just in the United States or North America or whatever, but all over the world.
And there's hundreds of millions of people that need to have their teeth straight, and the only way you could ever do that in a broad sense is with digital orthodontics. So don't miss that point, Jeff. We are going through a spell right now, and what you see with the R&D down and Capex and different things like that. CapEx is we're not putting on any more manufacturing right now.
We have enough manufacturing. And we're still bringing up our Poland plant, right? We're being responsible from a business leadership standpoint for our shareholders in this specific situation. But at the same time, Jeff, we are putting a lot of money into 3D printing, 5-minute ClinCheck, next phases of Lumina. All these things will really enter into just another growth cycle when this market starts to come back with brand new tech.
This is the technology of the future if you really want to play in digital orthodontics. So what we're doing is funding that, being responsible to our shareholders, but not losing our enthusiasm on what we think are opportunities in the future.
Jeff Johnson -- Analyst
Yeah. No, that's all fair. You are holding the sell-side event or at least an investor event a week from Saturday. Would that be a time to evaluate, though, that LRP, that 20% to 30% intermediate longer-term topline growth expectation?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
I think until we get a better read on what the economy is going to do, Jeff, I think that 20% to 30% represents how we feel that market could grow in the future. But we have to have the right economic conditions, particularly in the biggest markets in the world like the United States that we participate in.
Jeff Johnson -- Analyst
OK. And John, one modeling question. Just when I listen to the ASPs, I think the quick math on that is it sounds like between the VAT issue that should anniversary at the start of next year. Just remind me if I've got the timing on that correct.
But should anniversary started next year. Currency headwinds should be -- we'll see what the U.S. dollar does post-election year, but should be reasonably moderating from here. So I think ex currency and ex VAT, you had about 1.1% down ASP year over year.
One, is that math correct? And two, is that about what we should be thinking about as we head kind of into '25 once VAT and, hopefully, FX normalizes a bit?
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
You're right about Jeff, the FX, hopefully normalizes. It's hard to predict. VAT does anniversary at the beginning of next year. And what we've said in the past that ASPs would be flat to slightly down.
So your percentage you're talking about is in that range.
Jeff Johnson -- Analyst
Thank you.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thanks, Jeff.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Thanks, Jeff.
Operator
Thank you. Our next question comes from Kevin Caliendo with UBS. You may proceed.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hi, Kevin.
Kevin Caliendo -- Analyst
Hey. Thanks. Hey, Joe. Thanks for taking my question.
This is maybe a little bit off, but just wondering if you guys have ever done this analysis in terms of thinking about the Venn diagram between people purchasing GLP-1s and people going and getting Invisalign treatment because the cost, for adults anyway, might be close. And I'm just wondering if there's any -- if you guys have seen any correlation to maybe that's part of the weakness in the adult market as the shortages have -- in GLP-1s have come down or people may be investing $5,000 that way as opposed to into Clear Aligners. Have you guys done that analysis or seen anything?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
I can't say that we've been -- we've overly quantified it. Kevin, we hear that a lot. There's a lot of medical device companies that kind of talk about that that might be corollaries in the sense of what you're seeing with the GLP marketplace overall. I can't say that it's not a factor because it's obviously a high expense and something that's kind of on an annual basis in line with what it would cost to do an Invisalign treatment.
But I haven't wanted to lean into that as one of the drivers here. I think it's just overwhelmed by an economy right now where consumers don't have a lot of money in their pocket or confidence about what it's going to be in the future. And GLP might play a role, and it might not. I think also you can look around the world also in some of the markets like Continental Europe that's not necessarily as affected by it as maybe United States is.
And I can't see I've seen that piece, too. So there's an old saying that correlation doesn't mean causation, right? And so I would stay with that right now.
Kevin Caliendo -- Analyst
Fair enough. That's helpful. And just I know you don't want to talk about '25, but let's just think about the fourth quarter and sort of what you're implying for your guide in exiting the year at sort of a midpoint of like 5%. Should we just sort of take that as a starting point, adjust for whatever we think the economy might do that might impact the adult side of the marketplace more and then think about Lumina as an add-on to that? I mean is that sort of how you're thinking about the business?
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Yeah. I think we'll obviously give more as we get closer to this. But I think, look, you come out of the year, that's probably a good starting point to be able to build off of that and say, look, what do you think is going to happen to the economy. We're going to know more maybe about interest rates and election.
And other things will kind of come about, and we'll have a better view of that. But I think it's a good starting point as you think about next year, you're going to add in some of the things that we've talked about with Lumina restorative and other things and then build off of that. But we'll give more details as we get closer, obviously.
Kevin Caliendo -- Analyst
Appreciate it, guys. Thank you.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thank you.
Operator
Thank you. Our next question comes from Michael Cherny with Leerink Partners. You may proceed.
Michael Cherny -- Analyst
Hi. Good afternoon. Maybe just one following up on a question earlier on the -- some of the 3D printing work in the fab-related products that you're going to be pushing out. As you think about the potential for introduction to those products, how are you thinking -- given that this is a bit of obviously different manufacturing approach that you've taken before about what the rollout will look like, will it look any different in terms of the types of beta customers that you're going to be pursuing? How should we think about tracking -- tracks is not the right word, but making sure that you're hitting on the right customer experience, the right overlap, the right introduction process as you get what obviously could be a very scalable set of products, set of new opportunities out to market?
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hey, Michael, it's Joe. Just taking your question is, as you think about it, when you think of what we do today, when you back in form, obviously, you lose a huge amount of opportunity to differentiate the geometry of that particular product and how it can help a doctor. The one sector of our business that would -- I think will appreciate this the most will be the orthodontic community that do a lot of Class 2 difficult cases, young teens, and we'll be able to produce products that are more and more tailored to consumers in that specific condition than what we could do today. And so we would offer the product that way, and we think it would be very appealing to them.
Secondly, from a general dentistry standpoint, it's a big part of our marketplace too. There's a lot that we can do to help them with this product line also. So I hope I'm answering your question, but the design freedom that we have here in the end, and we have to prove it, when you can use relatively different thicknesses, you can do different configurations for different kinds of clinical issues that a patient might have, we expect to have more predictability in the sense of how fast you can move those teeth and more certainly and how long those cases will take. And I think doctors are going to appreciate that.
But I think as we're certain of that, patients will appreciate that, too, and we certainly would communicate that to patients.
Michael Cherny -- Analyst
No, that certainly does help. And then maybe just one quick question. I promise it's not an attempt to go at '25 guidance specifically. But obviously, the -- you mentioned numerous times the U.K.
VAT that's impacting ASPs internationally this year, is there any outliers or onetime dynamics that we should be thinking about or contemplating relative to next year, something that like the U.K. VAT or anything else that could factor into the modeling that's not normal?
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Michael, this is John. Nothing that we would say is not normal. I mean the nice thing about the anniversary of the U.K. VAT is it does anniversary.
Obviously, we're doing things to try to work with the government there to explain and ideally not half of VAT on our products because it affects what goes to doctors and how much they pay and then passing it on to potential patients. But there's nothing like that that we would see on the horizon as that type of impact.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thanks, Michael. Next question please.
Operator
Thank you. Our next question comes from Erin Wright with Morgan Stanley.
Erin Wright -- Analyst
Thanks. Can you speak a little bit more on just the nature of the restructuring outside of the executive change today, I guess, the timeline scope, magnitude, and anything that you can give us in terms of quantifying that benefit from a profit perspective into 2025 and what that translates into just broadly speaking, but also just what -- how this kind of came about in terms of what's on the table? What were your changes that you were thinking about in terms of the business outlook or backdrop that really changed in your view since it's been a sluggish kind of consumer backdrop for some time now? I guess what else has changed? Thanks.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Yeah, Erin, I could try to give you kind of an overview of where things are at. Just as part of a normal AOP process, you're always evaluating where you're going to make investments, where are you going to fund it, how are you going to fund it, and so on. So this is part of our process that we go through, where we're planning out where we're going to end up for the year and what does it mean for next year and how do we grow and do all the things that we want to talk through. This type of restructuring, this is about 2 times of what we did last year.
Last year, we did about 350 or so, just over 300. This is close to 700 people. There's some restructuring charges. We talked about that this year.
But really, what it does and what -- I go back to what Joe was talking about, we want to be focused in on what we can drive as our business, what we can do from a growth platform standpoint, whether it's the direct fab, 5-minute ClinCheck, Lumina restorative. We want to fund those, but we've got to also show some margin accretion, and we want to be margin accretive on a year-over-year basis. So we can fund what we need to fund to really be driving our business, and we'll fund it based on some of these changes here, but it really set us up for a position to be able to show that margin accretion next year.
Erin Wright -- Analyst
OK. Great. And then as we head into the fourth quarter, I guess does your guidance assume a continuation of the same in terms of the sluggish environment in the U.S.? Or does it have any sort of changes across other regions that you anticipate either continued acceleration or deterioration across other kind of markets or geographies here? Thanks.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Yeah, Erin. It just kind of assumes what we've seen. Like as we pointed out, U.S., North America, not great. We kind of assume the same.
Other places, we actually saw good improvement in parts of Asia Latin America, Middle East, other places, and we continue to invest and expect to grow in those areas. So like any forecast, you take the best information you have at the time, you try to translate to what that's going to mean for the upcoming quarter, and that's what we did for fourth quarter.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thanks, Erin. Next question please.
Operator
Thank you. [Operator instructions] Our next question comes from Mike Ryskin with Bank of America. You may proceed.
Michael Ryskin -- Analyst
Hey. Thanks, guys. Just a couple of clean up follow-up questions. One, I think just kind of following up on what Erin touched there.
And John, you touched on this as well. 2 years in a row now, and again part of that is just natural attrition, natural cleanup of the business, but should we expect this to be sort of the normal going forward in terms of the restructuring? You guys famously kind of held off on that for a while. I think very famously during COVID, you actually reinvested, and you refused to cut when others were cutting. So just think -- help us think in terms of how we should factor that in going forward.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Hey, comparing this time with COVID as a stretch, Mike, overall, when we didn't lay anybody off to on COVID, our expectation was that that wouldn't last as long as it did. But fortunately, that was a decision to pay off well because the market came back so strongly. Right now, we're looking at just a sustained economic malaise, I would call it, in the United States, and we're responding accordingly. We haven't lost our enthusiasm and our belief in how this business can grow and this market potential of this business.
What you're seeing in the restructuring is we're responding to external pressures that we see in, being responsible from a business standpoint and being sure that we fund these key three technologies that we know will lead into the future from an overall digital orthodontics standpoint.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
And that's the key point of it. Now it's being able to make space and have the budget to be able to fund these key technologies because we know that's going to drive the future, and it's doing things that we know no one else can do. No other company can do what we're trying to do with this. So it's really important for us now to keep that focus through these budget changes and so on.
It's what companies do to be able to push the future and do it in a responsible way where we could show margin accretion. We know we always talk about levers that we could pull or not pull. This is a part of it, and it just comes about on a more annual basis as you assess the current environment.
Michael Ryskin -- Analyst
OK. And then a quick cleanup, if I could, on the ASPs. You talked about it earlier, I think in the Q&A, you touched on some of the factors that impacted you in the quarter and your thoughts about next year. But just on 4Q, I think you guided up ASP sequentially, and you've had some of these mix dynamics, some of the discounting and FX for a number of quarters in a row.
What are you seeing so far through October that's giving you confidence that you'll be able to reverse that? Because I think some of those headwinds don't fade until next year.
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Yeah. Well, I think part of -- really all our advantage programs kind of go from -- they ended at the end of June and then they reset as you come into that second half. So third quarter kind of took the advantage changes, so that shows up in discounts. So I don't expect that to continue.
And then where you do have the benefit and in our case, where Europe becomes a bigger part of our business in the fourth quarter and China and some of the other businesses become less, that's good from a mix standpoint. We have a higher ASP in Europe and a lower ASP in China. So whereas that mix hurt us from a country standpoint in the lower ASP in the third quarter, we actually get the benefit on that in the fourth quarter based on seasonality.
Michael Ryskin -- Analyst
OK. That's helpful. Thanks.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Thank you, Michael.
Joseph M. Hogan -- Director, President, and Chief Executive Officer
Yeah. Thanks, Mike.
Operator
Thank you. And we have reached the end of our Q&A session. I'll now turn the call back over to Shirley Stacy for closing remarks.
Shirley Stacy -- Vice President, Corporate and Investor Communications
Great. Thank you, operator. And thanks, everyone, for joining us on the call today. We look forward to speaking to you at upcoming financial conferences and for those of you who will see at the Invisalign Ortho Summit in Las Vegas next week.
If you have any other questions, please feel free to contact Investor Relations, and have a great day.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Shirley Stacy -- Vice President, Corporate and Investor Communications
Joseph M. Hogan -- Director, President, and Chief Executive Officer
John F. Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Joe Hogan -- Director, President, and Chief Executive Officer
Brandon Vazquez -- Analyst
John Morici -- Chief Financial Officer and Executive Vice President, Global Finance
Jon Block -- Analyst
Elizabeth Anderson -- Evercore ISI -- Analyst
Jason Bednar -- Piper Sandler -- Analyst
David Saxon -- Analyst
Jeff Johnson -- Analyst
Kevin Caliendo -- Analyst
Michael Cherny -- Analyst
Erin Wright -- Analyst
Michael Ryskin -- Analyst
Mike Ryskin -- Analyst
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