Align Technology, Inc. (ALGN) Earnings Call Transcript & Summary

Hi, everyone. Welcome to the Align Technology fireside chat. My name is Elizabeth Anderson. I'm the health care and technology analyst at Evercore. And I'm very pleased to be joined today by John Morici, CFO of Align. [Operator Instructions] So thanks so much for joining us today, John.

Happy to, Elizabeth.

Perfect. Well, I assume that Align probably needs little to no introduction. So maybe we'll just jump in. And so last week, you obviously held an Investor Day, which was very helpful in sort of framing the broader opportunity. When you discussed last week how you're seeing volume momentum on October go into November, can you kind of unpack that a little bit? Are you -- can you talk about maybe like any impact from COVID upticks you're seeing? Or potentially like teen versus adult, just to sort of help us to understand what you're seeing there?

Yes it's a good question. I mean -- and really, what we're seeing is a continuation of the momentum that we saw in the third quarter. We talked about at our third quarter earnings that every month was sequentially getting better as we were in the recovery, and we're making investments to be able to help us recover. We saw that continue into October, and we talked about that at earnings. And then just last week, as you said, talked about that momentum carrying into November. And it's really broad. It's teens and adults. It's not just one geography, it's across the company. We're seeing it with ortho and GPs that we sell to. And we're really also seeing it across our tiers of doctors. Doctors that do a lot of volume with us have done more volume, and doctors that did a small amount of volume are doing more and more. So we're really encouraged by the growth that we've seen that showed up in Q3, and we're heading that way into Q4.

Perfect. And just on like COVID prevalence thing, have you noticed any impact from like geographies that are more or less affected? Or you think that given that people have sort of a high degree of comfort in terms of the procedures in place at dentists and ortho offices, we're not seeing that kind of impact that we saw earlier in the year?

There is more of that, Elizabeth. As we've all gone through this now crisis for a period of time, we've learned how to interact and transact given the wearing the mask and social distancing and washing hands and all those things that we do, and that's no different than you do in a doctor's office as well. The key though for us, though, is even if there's an outbreak happening and so on, as long as those offices remain open, that's the key. Because if you remember back in end of March, early April, things just shut down. It was just say-at-home orders. That will impact our volume if that happens. As long as doctor offices are open and the doctors can transact and meet with their patients and so on, that's the key. And that's really when we talk about giving updates and so on. We talk about things that we can control. There's things that we can control and the investments we're making, the growth that we've seen and so on with that. There's things that are outside of our control. An outbreak...

COVID.

That -- it shuts things down, that could impact things. Or even if an office is open technically, if somebody in the office gets it, doctor or the staff or somebody else, that could shut things down. So that's how we've kind of looked at this. That's control the things we can control, and we've talked a lot about that. And then the leave open to things that we can't control, and that's why we wouldn't give guidance on this.

Yes. No, that makes sense. And also sort of the things that you can control in reaction to things that you can't control like COVID, like your decision not to cut costs or furlough staff or things like that, that have sort of set you up for the re-ramp.

And that's really been key, Elizabeth, is when we look back at early on into the crisis, this is end of March, early April, we made a decision as a leadership team that we weren't going to furlough people. We weren't going to cut people, we weren't going to reduce salaries. And in fact, we continue to make investments. We added salespeople. We added some of the marketing spend, because we knew people would be on their computers or watching TV or on their phones more and more, and we knew that we'd still have that opportunity to provide a lot of tools and productivity to our doctors through some of the visualization and remote care that we provided. So we really wanted to continue to grow this. Because as we've said even at an Investor Day, but we've said all along that it was a vastly underpenetrated market prior to COVID. It's still a vastly underpenetrated market even as we get into this recovery. So we feel that investments really help us grow into this new market.

Yes. No, that certainly makes sense. And one of the things I thought was interesting that you said in your first comment was just like that the growth has increased, it's sort of like low -- sort of low-tier people, high-tier people, and then I've been traditionally -- I know you guys are caught out sort of a sticking point that people had gotten to 20% of cases and then kind of hit a ceiling, or they've gotten to 50% of cases and kind of hit the ceiling. What do you think has sort of helped push people over those historical like gates that had sort of held them back?

Well, it's a good question. And I think when you look at things, Elizabeth, you have a situation where, I think, the crisis didn't create something new, it accelerated trends that were already happening. So the trends that were already happening is really the move to digital. It's moving from analog to digital and creating a -- what we're trying to create is a digital ecosystem so that we can provide productivity, provide a way for orthodontists and general dentists to be able to perform orthodontic care in a digital sense. And I think it really lends itself in this recovery period to be able to do that. We knew that digital makes doctors more productive. They have less chair time with patients. There's less time that they have to come back. You can really fine-tune some of the adjustments through the aligners and refinements that are made. And it drives a lot of productivity for those doctors. And prior to COVID, that productivity doctors embraced, but they didn't maybe necessarily need to embrace that. Now in a post-COVID world, where maybe half of your chairs can be used in a doctor's office, you've got to socially distance, you've got to have PPE. You've got to have a lot of other things. Invisalign really lends itself well to driving productivity that's needed within those offices for them to stay up and running and be able to try to maintain some of the profitability that they had. So it's always been there as we know that we can drive productivity to those doctors. But now it becomes more of a necessity. And many doctors have embraced that. Doctors that were at low tiers, say, look, we need to have some understanding, some certainty of some of the revenue that we're going to have so that if something happens to the office and it gets closed down, people in treatment can continue their treatment. And many patients now come in, the messaging that we have and when patients are coming in, they're not only asking it -- for it by name, but they're demanding Invisalign because it's just a safe, effective way to be able to start treatment and continue treatment through their process.

Yes. No, that makes sense. Last week when Joe was talking about the move from 12 million annual cases to 15 million, that was sort of like a big, obviously, increase in your annual TAM there. How do we think about breaking that $3 million into sort of more constituent parts?

Yes. I mean, typically, we had talked to the TAM being about 12 million orthodontic case starts every year, so roughly 4 million in a region. And really what we found as in each of the regions, each of the 3 regions, we found more availability of between orthodontists and others within the region to be able to do some of these cases. And so we saw some of the growth that we've seen to add more volume, more TAM into the Americas with some of the Latin America growth that we've seen. We also see this in Eastern Europe, Africa. We see this in Southeast Asia with Vietnam and India and other places where that TAM has increased. And there's more orthodontic case starts -- more orthodontic case starts that orthodontists and dentists can work as well as what we can help provide. So really, it was just a reflection of some of the trends that we had been seeing. This was an opportunity to explain that TAM and roughly added about 1 million of orthodontic case starts per region to take us up to the 15 million.

Got it. Okay. That's helpful. So I think another thing that was surprising about your 3Q results was obviously iTero. Because people think, oh, it's a capital good, like I have to pay for it, like people, I think we're a little bit worried about that. But clearly, you sort of blew those estimates way out of the water. So now that we have that sort of like increase in installations, like what do you see as the like typical ramp-up in cases in terms of somebody who's just purchased an iTero? And maybe it's different if it's their first iTero versus their fourth. But maybe to the extent that you can sort of generalize from them.

Yes. That's a good question. And really, when you look at that, we're very happy with the 3Q results for iTero. As you said, it's a capital purchase. But it's one where I think the doctors recognize the need for this equipment. The real -- because this is the front end of our digital ecosystem, getting a scan, having things done digitally versus the physical analog process of an impression and so on and having this. I think many doctors who have that we saw in the third quarter, that have one scanner, wanted another one. Or they had 2 and they wanted 4 because some of it is, look, it's a further push to the digital ecosystem that we're creating and, I think logistically, they just looked at it as, look, there's only a certain amount of patients that they can see. There's only a certain amount that you can -- a throughput that you can have. Adding another scanner or increasing the number of scanners as you have, helps with your throughput to be able to get those patients through. And I think you saw -- we saw others where doctors didn't have a scanner at all. And again, remember, this is a vastly underpenetrated market. Most doctors, most dentists don't have any scanner.

Yes. Do you have -- how would we have a good sense of the percentage of that?

We think that it's over 50% of the doctors don't have any scanner, globally. And so when you look at just as Clear Aligner is vastly underpenetrated market, so are the scanners. But we had many doctors who didn't have a scanner at all who said, look, we've got to get in the game with this. We've got to start our steps to having a digital ecosystem that we can support. They're having patients come in saying, I'm not going to sit in a chair and have all this physical impression done and spend time in the chair. I want to scan, I want to do something different. And many doctors have realized that. So -- and once they have a scanner in, we know that they're going to do more Invisalign. That digital process that they start to create lends itself more to additional Invisalign. Because while they're in the chair, they're getting a scan, they might also be getting a cleaning. That doctor then can provide how their teeth have moved over a period of time, they can look at what their teeth could be with orthodontic treatment, and it really lends itself well to being able to grow Invisalign case volume. Once you have that starting point, which is the iTero within those chairs. So it's a huge opportunity for us. We look at this as we're very happy with what we saw with iTero. It's a key part of our business as we explained that at Investor Day, and we're excited about the opportunities.

Yes. No, that makes sense. So 5D obviously just got approved relatively recently in the U.S. and has been a popular feature. Are there any other like notable features that providers have been asking for in terms of iTero capabilities?

Well, I think the -- you're right, 5D has been approved in many countries, including the United States. And really 5D technology, basically, it does all the things that a regular scanner would do, being able to image the surface and be able to provide what those teeth look like digitally. But also can see, through near-infrared technology, see inside the tooth and be able to understand and be able to give the doctor an understanding of, do you have lesions or cracks or other things that are inside without providing the radiation to that patient. So there's a lot of advantages to that. It's very fast. It's one scan to be able to see inside a tooth as well as everything that the scanner does to be able to help position it for orthodontic care like through Invisalign and so on. So it brings it all together. I think doctors like that productivity. It just becomes part of their everyday practice that they have. They take a scan at the beginning. And it's not only great for Invisalign, but it's also more of a diagnostic tool to be able to help. So I think you're going to see more of that. You're going to see more of that, that portfolio across iTero, where you're going to have some scanners that just do more of the basic scan, just -- and great for Invisalign. And all the way up to a 5D that does the scan plus an imaging, but it also sees inside the tooth as well. And being able to provide that to our doctors to be able to give them the type of tools that they need to be able to run their practice every day, we think that's very critical. And iTero is an integral part of our business, and that really helps us to create that digital ecosystem, get those doctors to really move their practice more and more to the digital ecosystem that we talked about, the platform that we talked about last week. And we know that, that's good for the overall company.

No, that makes sense. Can you talk me through the biggest drivers of the faster growth in teen cases? Because obviously, that's such a huge portion of the market that's been relatively underpenetrated.

It's exactly it. When you look at -- we talked about the 15 million orthodontic case starts, 75% of those, 11 million, let's just say, orthodontic cases are teen. So teen is a huge market within that orthodontic side. And when you look at the growth that we've had, we've been growing close to 40% for a number of years. And you look at what we did in the third quarter growing, that was the fastest we've grown in 6 quarters and really starting to resonate more and more with teen. And so even though we've had that growth, you look at the TAM opportunity and the under-penetration that we have, we're still single-digit market share in teen, pretty much everywhere, everywhere and even included in the U.S. So we've developed products that, as we've talked about with Invisalign First to be able to help treat patients that are very young with mixed dentation, 5-year-old, 6-year-old, 7-year-old, having products with mandibular advancement to be able to adjust the jaw as well as straighten teeth, really being able to drive better products to be able to treat and help children and teens with their cases. And then also create the awareness with advertising. We've got a lot, as we've noted...

I now know who Charli D'Amelio is.

You now know Charli, who's -- and we've found out about Charli as well to be able to help drive with influencers and be able to reach a wider audience, to be able to get teens and others to understand about our products, the benefits that we can bring and so on and have people come in and ask for it by name. So you combine it with great products that can treat through a qualified doctors, and 80-plus percent of the cases, many doctors do 100% of the cases they see with Invisalign or 90-plus percent. So you've got to have great products. You create that demand with some of the marketing and the efforts that we have with influencers, as you spoke. And then you have a sales team that can really focus in on in many areas that we've done, including the U.S., we split our sales force to have on the ortho side, we have dedicated salespeople. And on the general practitioner side, we have dedicated sales. Because it's a different selling, orthodontists want -- essentially orthodontists are mostly treating teens. They treat others, but focus is teens. And that's a different selling proposition than a general dentist who maybe 95% of what they do is not orthodontic work. And being able to split that, have that focus, coupled with all the other parts of the marketing and product, that really helps you grow teen. And it's difficult to grow on the teen side because you've got to have products, you've got to have capability to be able to do this. This is something that's taken us years to develop, and millions of cases to be able to come in and really develop products and process for teenage cases. And we have a long ways to go. We're, like I said, very low penetration, but we feel good about the opportunities that we have.

Yes. Within teen, are there any sort of like pockets that you can identify that are like particularly hard to convert? Is it like a sort of a doctor issue or I've heard things anecdotally like, oh, the cool kids at that school all have yellow rubber bands on their braces. So everybody wants yellow. Like I just see all these different sort of stories, but they're all anecdotal. How do you think -- so I just don't know how to think about the like difficult pockets of that in terms of what the real barriers are?

Look, there's all of that. There's things that come up for all different reasons. In the end, there's usually 3 that are involved in the equation. There's what the teenager wants in terms of do they want this? Typically, even though they might -- you might hear like they want certain colors or certain things. In the end, they want flexibility. They want something that it's easier for them to live their lives, be able to go and band or play sports or whatever else, where they can pull out their aligners and kind of live their lives versus the wires and brackets of -- typically teens want Invisalign, where you also have to win, one of the two is either the parent, usually the mom who says, look, my -- is my child going to wear this? Are they going to wear them the right amount of time during the day? I mean how are they going to influence that? And then also the doctor. What does the doctor want? Are they comfortable treating these cases? Do they -- is that part of their -- the tools that they have. So typically, we have to win 2 out of the 3. And I think what we're finding more and more, especially in a COVID -- kind of, post-COVID world, look, there's other concerns that have been brought into this. People having -- if you're in wires and brackets, you're going to have to go to back to your orthodontists or dentists more frequently, much more than you would have with Invisalign. So your risk of exposure, risk of just the process to be able to -- have to go through that is more time-consuming and more of an effort with wires and brackets. And same way from a doctor standpoint. They have got to look at it as, look, they've got a limited amount of chair time given -- especially in the world that they're in now, maybe they're using less of their chairs, maybe they have to schedule things differently and so on. So their chair time is very, very precious. And I think they have to balance that. And you're seeing more doctors balance that to bear and say, look, I've got to put some cases into Invisalign because I need that productivity. Like I said before, that productivity was a nice thing before COVID. Post-COVID, it's almost a necessity. And I think many doctors look at that. And look, we like that. We like the fact that you get more teens into treatment because we know they're going to have a great experience. And then with that great experience, that word of mouth, what they talk about will be very positive. And we also know that doctors are going to be more productive and, ultimately, more profitable through using Invisalign. So this helps us get further along that path.

No, that makes sense. We have a question from the audience here. Do you have any update on the Invisalign Swift product for lower acuity cases? How do you think about your portfolio for lower acuity cases generally?

Really, when we look at our product portfolio, we have a product portfolio that can help doctors treat the most mild cases, all the way to the most complicated cases. Like I was talking about Invisalign First or mandibular advancement and so on. So we already have that product portfolio. It really comes down to what I described earlier. And it doesn't have to be think of it as a different product or anything else. It simply comes down to we've got a product portfolio that now once you look at the process that a doctor has, so think about it as a general practitioner, you see patients, a lot of patients on a daily basis. If you scan that patient as part of their normal hygiene and so on that they have, you get that scan, they go through whatever treatment that they were going to have at the doctor's office, and then at the end of that, the doctor usually comes in and kind of reviews things and so on. At that very same time, the doctor can review your scan with your iTero and say, here's how your teeth have moved over 24 months. And more importantly, here's what treatment would look like if, say, you need 10 sets of aligners to be able to fix the gap that you have or some realignment that you need and so on. And if they price that in a way, showing them visually while they're in the chair and you work with that patient to come up with a pricing plan that works for them, you can get that conversion right there, right there in the chair, and you don't need a special -- there's no special products. There's no special process that you have, it's the normal process that goes on within the doctor's office and be able to drive that conversion to very powerful imaging that you can have to be able to see this visually right there near your chair. And that can work for the patient. If you get the right economics with them, it works for the doctor as well because that doctor doesn't need, in a case like I described, 10 sets of aligners, it might be -- you come in, you make the order for the case, and you get the product sent to the doctor, you come in as a patient, get your aligners fit. Maybe there's an attachment or not. And then you go through treatment and then you finish treatment. And those economics to a general practitioner are very attractive, and it could be more and more part of what they do. And quite honestly, Elizabeth, that's how you get at this 500 million potential patients that are out there. They're out there every day going to their doctor for some type of treatment. If you can add in the visualization and the digital platform that we're creating with Invisalign that will help serve those patients. And really, that's ultimately the only way that we're going to be able to reach these potential patients. You're not going to do it with wires and brackets. There's not enough time, chair time and everything else to be able to do this, you're going to have to reach these potential patients while they're in the doctor's office on a regular basis.

No. That makes sense. Maybe turning from the sort of more demand side of the equation to the price side of the equation. Is there any big moving pieces as far as sort of ASPs to consider either for 4Q or sort of as we move out of COVID? I know, obviously, you guys didn't take a price increase this year, and there's sort of FX concerns to think about. But how do you just think about any of the moving pieces there?

Yes, you're right. And as we looked at the third quarter, typically, we've taken price increases around that time, July or so. Given the pandemic crisis and then the recovery, it didn't make sense for us to add to that. And when we look at the future, we'll evaluate on whether that pricing -- we should make some pricing changes and so on. We invest upwards of $250 million next year into R&D. So you want to -- you develop the latest products and the process and so on, systems, you want to be able to see that come through from a price standpoint, but we haven't decided on whether that comes through. What we are seeing and what you mentioned it from really the third quarter and it carries into the fourth quarter, we just see a higher mix of cases where doctors are coming in ordering new cases to meet the demand that they have with the patients that they see, and they're doing less, proportionately less refinement existing cases. So it stands to reason. Doctors, they want to help grow their practice, meet the demands of their patients, and they're really focusing on new cases that come through. And so what does that mean for us? It might mean as we saw in the third quarter, a little bit lower ASP, but it's a gross margin benefit. We actually see great gross margin because you're really focusing on the new cases. And look, if we need less refinements in those cases going forward, that's better for us from a gross margin standpoint. So even though you might get a little revenue from that refinement, there's also a cost behind that as well. And that margin is lower than if it would have been a new case. So we like the dynamics that have shaped up where new cases are coming in. New demand is being created. We're able to satisfy that demand. You see it show up in favorable gross margins, and you saw it show up in favorable op margin as we exited Q3.

And just to remind people who may not be as familiar with it, can you talk about the revenue recognition for like new cases versus alignment -- refinements? Sorry.

Yes. So our rev-rec revenue recognition is on shipment from the factory to the doctor. So that's the point of rev-rec. And really, when you look at it, there's essentially 2 types of revenue that we'll have from a case. Some cases where we have to provide additional aligners, like our comprehensive cases, where we say, you order this set of aligners as your treatment. But if you need additional aligners, we'll provide them. We, as a company, will provide them to the doctor for the next 5 years to be able to finalize and treat those patients. Now that additional revenue that we get is over a period of time, and it's the deferred revenue that we would have. So when you initially ship that comprehensive case, you book a certain amount of revenue right at that time, and then you defer revenue over the next 5 years based on when you think that's going to come in. We have many other cases, and especially our noncomprehensive cases that there's no additional revenue that's booked. You book 100% of the revenue up on shipment because there's no additional aligners as part of that product. They could buy additional aligners and we book the revenue then, but there's none. So that's the differences that we see. So it's a nuance in terms of our deferred revenue that we have and how we book that. But in the end, we're servicing the demand that we see, which is a lot of primary new cases and new demand that they have. And that's the way it plays to our P&L. Okay.

Okay. No, that makes sense. One of the interesting things I thought about the Investor Day last week was the hub-and-spoke manufacturing model in the different geographies. So how does that help with demand flexibility and sort of the impact of margins maybe in the shorter-term as you potentially have excess capacity? I remember that from when you built the factory in Ziyang, but then also like longer term, as you have that ability to sort of move things around potentially?

Well, it's really a continuation of the globalization strategy that we have. We wanted to be close to our customers. And being close to our customers means you do -- as you sell to them, you have treatment planning that's there. You have ultimately manufacturing that's closer. And really, where it helps us a lot is like you mentioned, China, where we had initial facility. It was a temporary facility. We put up a brand-new facility and had it up and running, even during COVID that we had now for really started at the third quarter, we were up and running with that. And we had great gross margins coming out of that facility because we knew how to scale that up and get that utilization coming through. And you also get a lot of savings from a freight standpoint. You're closer to the customer. You don't have to ship it, air ship it across the world out of our main plant in Mexico. And the timing is just much less time to be able to get it to the customer and ultimately meet their demand. So you see this a lot where we'll want to do this and replicate this in EMEA and some other places where we get closer to our customer, you start to build up some of the scale in these areas. And this is a great way to do this. And it also helps us diversify a little bit. With most of our manufacturing traditionally had been in Mexico, now Mexico and China, if you diversify a bit, you're not as dependent on 1 plant even in this COVID world that you have as things happen, we have production in different areas. So for a lot of reasons, it makes sense. We know how to manufacture. We know how to manufacture at scale. We're producing 750,000 plus aligners sometimes in a day, sometimes 1 million unique aligners in a day. So it's massive scale. And we're always having to add capacity. Given the growth that we have, we know we need to add capacity. In these cases, you're just going to add that capacity to the regions that need it from a growth point. So we have a lot of flexibility with this, and we know that this is something that's going to ultimately be really good for our customers down the line.

And then from a gross margin perspective?

Gross margin, I mean, from that standpoint, you build your capacity there. We were able to transition that quickly, as I said, in the third quarter, to have a greenfield. Went from a temporary China facility to a greenfield brand-new facility, and then you increase that utilization there. We can manage those startups that we see there. And like I said, we're adding capacity all the time even during -- as we've gone through this crisis and so on, we still need to keep adding our capacity to be able to...

So it's not necessarily an additional step-up...

It's not additional.

Continuation of the trend.

We get some timing, but we've learned to kind of start and stop things kind of as needed and as we further diversify that will -- as we globalize, that will help this. And really, we're the only company that can do this. And we've been able to -- we can expand like this because we have that volume, we have that ability to be able to expand into these regions. And quite honestly, we have the technical know-how to be able to do this, that we've -- it's taken us years to perfect, but Emory and the operating team have done a good job to be able to allow this to take place in closer to our customers.

Okay. No, that makes sense. As you think about the sale -- from a sales and marketing perspective, where do you see like right now as the biggest areas of opportunity from an ROI perspective?

Well, we're always looking at ROI, and that's one thing. When we look at the levers that we can pull across the company, it's based on returns, short and long-term returns. And we're managing to that. As we said at last week's Investor Day, we're committed to that 20% to 30% revenue growth, and we're committed to 25% operating margin. So you've got to pull levers the right way. Within that marketing side, there's levers that you pull that work maybe in one country, it might not work in another country. We might not even be able to advertise and do some of the things in certain countries. So we've got to adjust for that. And then even within the country, we find that there are like we said with influencers that become popular, there might be other influencers that become more popular. And then you have to say, okay, where do you want to put your investments? We just signed and have been working with the NFL to really be closer to the NFL through the advertising and some of the co-marketing that we can do because it gives us a return. We like the outcomes that we're getting. So we're constantly looking at adjustments to our spend to make sure that we're getting that proper return. And it also helps us, Elizabeth, to understand that if we're making some of these investments, can we do other investments in other places? Obviously, the U.S. is kind of the biggest market from a marketing investment standpoint. But we're also learning that as we started to build some scale outside of the U.S., we can invest some marketing in other regions. In Europe, we're seeing good results, Southeast Asia, across Asia. And also Latin America. So we can find that we can learn some things in certain markets, and then we can take the parts that work and apply it to other markets. And we're seeing really good results with that. And that's something that when we talk about the investments that we continue to make; remember, we didn't stop marketing during the Q2 when many others. Most others did stop. We found ways to be able to learn from what's working, being able to apply those learnings. And then into this recovery, be able to really make these investments that help sustain our growth. So it's -- it doesn't end with something that you spend. We're learning a lot from it, but ultimately, it comes down to getting the best return on investment, both short term and long term, and that's the key to making marketing work.

Yes. No, that makes sense. One of the other parts of the presentation last year that I thought was really interesting was Jen Olson's comments about sort of the scaling of customer support because that's obviously a hard to do and be potential areas like do you grow too big to adequately sort of service those customers on a personalized yet scalable way. So how do you kind of think about where those investments and sort of where you see further opportunities in that area?

It's good, I'm glad you brought that up because that is a very important part. As we become a bigger company and as we become more global and ultimately, we never want to lose sight of the importance of our customers. The customers drive everything. They're buying your product because they believe in your product, they believe that it's going to work, it's going to be part of their practice. But it also has to be a part of -- we've got to make sure that it's a frictionless as much as possible, a real partnership that we have. So I think she brings a lot of experience. She's been at the company for a while that if there's concerns where doctors are on hold for too long or they have the same complaints that they come up with or there's billing issues or issues that they have, we want to be able to understand these issues and be able to correct them and really listen to our customers, understand what their concerns are and build into our process that we can go fix these and build it in so that they never have this problem to begin with. And really, she has brought some common sense, some good things to think about and bringing in some companies that really do a good job with this, where you never have to deal with customer service because they just don't get it wrong. That's what we want to be able to bring with this because we're scaling and we're growing and we're doing all these things, but we can never lose sight of the importance of our customers and what they bring to us. And quite honestly, they make us better. They'll push us. And they'll bring information to us. We saw some of the panels last week with Investor Day on customers that we have, that have grown with us, they give us their opinion. And it's up to us to listen to what they're saying and really take that in. And I think where we're seeing great results as our NPS results, a Net Promoter Score. We've seen really good movement across the U.S. and other areas where we've gone from relatively lower scores to significantly good improvements that we've seen. And really, we've been at this from kind of a customer success standpoint with Jennifer for about a year, 1.5 years. And we're excited about the progress. But we never want to lose sight of the importance of what our customers are feeling, especially as we scale.

No, that makes a ton of sense. And you said sort of like listening to the customers and they have -- them having some ideas. What are some ideas or an idea that have come across recently that you've gotten from your customer base?

I think our customer base is -- they're looking for ways that when they think about how do they scale their business. When we think about -- as we scale our company, they say, well, what does it mean for them? How do they scale? So I think things that we've been able to help them with, and we've talked about programs like ADAPT, which is the Align Digital and Practice Transformation. That's about getting more productive within their practice, but also helping them how do they -- once they have that productivity, how do they get more patients in. What can we do with -- help them with their website? How do we do things to help them with their workflow? What are things that advertising that we could do partnering with the NFL to be able to help drive traffic in. Doing things that you want to do on an overall global basis or on a national basis, but ultimately getting down to the practices so that they can actually see the productivity and profitability there. So there's a lot of things that we're doing to really drive that customer marketing piece of it. We've added resources to get closer to our customers. And we think that's a huge benefit because these are the front end, we sold to 70,000 doctors in Q3. That's the largest amount of doctors that we've ever sold to. Those are the front end, those are the front lines to working with their patients. And if we could do more to be able to drive that demand, right at that doctor level with those patients, we know that we can be successful and grow into the markets that we see.

Yes. No, that makes sense. How do you think about the decision to give guidance sort of -- just in terms of like what would have to happen on the pandemic front? And how are you sort of thinking about maybe like approaching 2021 in terms of giving guidance?

Well, right now, I mean, we're focused on controlling what we can control. So we've said some -- pulling some of these levers around sales and marketing and R&D and operations, we're continuing to do as we scale our business. And those are things that we can control and we know how to grow. The ones that you have out there that you don't know, if there is a shelter in place order where they shut down offices and no one can go to a dental office. We know that, that will impact our business. And until we're further along away from that fear, I think having the vaccines, whereas they start to roll out to get little more people vaccinated; that will help provide some security there. That's going to take some time. I think the election transition, there's a little bit of uncertainty, okay, when -- it's moving along, but we want to get part of that past us as well. So I think once we get through this fourth quarter here, we'll assess what it means in terms of some of the unknowns that are still -- are not in our control. And we'll give an update as to what we can and can't be able to talk to. We'd love to be able to do more because we know we have predictability within our model, and we know how we can grow, and we'd like to be able to talk more about it. But once it gets more in less of these unknowns, I think we can get to that point.

Okay. That's very helpful. Okay. I guess we have 2 more minutes on the clock. I guess, what are you most excited about at this point?

I think, Elizabeth, when I look at the breadth of opportunities that we have, and we try to give that at Investor Day. And I would encourage anybody who's listening to this or watching this to go to our Investor Day presentation, you will see that the breadth of opportunity. We talked about the TAM opportunity with the 15 million orthodontic case starts, the 500 million potential patients that are out there in the bigger ecosystem. You see the technology that we're bringing with this digital platform, the products that are coming, the productivity that's coming to our doctors who use our system. The integration with exocad and really helping this digital platform and being able to create and grow this. And all the levers that we could pull to be able to grow on a global basis, doing it with the customer success in mind, like you said, with doing it in a way that customers feel like they're part of our growth and not left behind, doing this in a way where you have all these different opportunities. To me, it's just exciting. It's exciting to think that we've been at this for 20-plus years, and we're still such a low-market share relative to where we should be. To me, the excitement is we can continue to grow this business with all the tools and all the things that we've described and know that we can continue to grow in this marketplace because it's not a matter of if the change is going to be to Invisalign being the standard of care, it's a matter of when. And we're going to do everything we can to try to accelerate that and get to that point. But we look at the opportunity ahead of us, and we're really excited about the investments and the opportunities that we have to be able to grow this business.

Perfect. All right. Well, we will leave it there. Thank you very much, John. It's a pleasure, as always. We always learn a lot. And thanks for joining us today.

Thank you, Elizabeth. Have a good day.