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

All right, guys. I think we're all set. Good morning. Jon Block at Stifel. And welcome to the 2025 Stifel Jaws & Paws Conference. We really have a great day, it's fully loaded. We've got 15 total sessions. Overall, we have 23 companies, 4 physician panels and animal health industry discussion across our 2 day conference. And I will largely be your emcee for most of that. Importantly, we're going to open up the conference with Align Technology. We have their CEO, Joe Hogan; their CFO, John Morici. And thanks again, guys. You're pretty constant for participating in the conference this year.

I'm going to get into it, guys. If you have questions, throw up your hand or shout out if I have my head down. But Joe, I want to start with the business, and I'll start off by circling back to the recent Investor Day. You guys provided a 2026 to 2028 LRP, which at the midpoint, implies a decent revenue acceleration and op margin expansion from your 2025 or the 2025 estimate. So Joe, just touch on how you see the business right now and what allows Align to accomplish those goals?

Jon, we talked about a marketplace that we felt relatively good about in the first quarter. We talked about double-digit growth overall. We saw in Asia, we also saw in Europe. North America is relatively flat in that sense. We feel good about the momentum we've seen in the business overall, especially overseas. And we feel good about our strategy when we look at -- from a distribution standpoint in North America going forward. We feel we have -- with IPE, MAOB, some of the products that you know you'd keep up with, too, gives us good momentum in the marketplace. It opens up segments we really haven't participated in, particularly in that teen segment that we talk about a lot that gives us more confidence. And so we just -- we felt pretty good about the foundation of the company, what we're seeing distribution wise right now. And at least North America being stable, and we're -- and with our new products. And John, what about from a margin standpoint?

Yes. And from a margin standpoint, we have a lot of, as we know, a lot of initiatives underway to try to take costs out productivity-wise, even on treatment planning, a lot of the automated ClinCheck and other things to be able to drive productivity. So we feel like we have, as Joe said, that revenue or the volume in a good place, but then also the productivity that we could drive to be able to show and aim for this year to be able to offset some of that relatively minor tariff impact, but we have productivity to be able to offset that.

Okay. And then hopefully, I plan on getting more into gross margin in a little bit. I want to maybe go a little bit more near-term oriented. And I remember, I think it was in some of our conversations back in the February, March time frame. Hey, where should investors heads be at when you look at some of these different metrics that are scrutinized? And so you have Google Trends that gets a lot of eyeballs. On the flip side, you've got consumer confidence. And those have diverged more recently than in the past. And so when we look at those metrics, which one is more prevalent for your business, Joe, in your view?

Well, I think, well, first of all, when you talk about consumer confidence indices are mostly associated with the United States or North America, and you have to keep that in mind. Google is more global, right, in general. So I'd say I wouldn't overly focus on either of the 2. I kind of take them in conjunction. Google shows that interest. Some of it could be driven by us and our advertising or whatever we're doing around the world. And just those kinds of trends show you the interest overall that patients have. It doesn't necessarily mean they're going to convert, it means that they're interested. And there are certain paths along the way that might trip a switch that they'll decide to take treatment some way. But it's a good indicator that people are interested in the product line and that kind of growth available. On the consumer confidence indices in the States, I just think it's become a little more political maybe in the past, the way they're doing their surveys now, not versus phone, but web-based or whatever. I think there's just -- there's some continuity there that you have to be careful with. But I do -- I think you look at them both and you just kind of triangulate around them.

Okay. And you mentioned the interest being there, anything that you guys can do on the conversion rate, right? Obviously, the interest does look like it's going up or a favorable trend line on a worldwide basis. You guys have had certain conversion tools. You've got some more rolling out. Do you want to briefly touch on some of those? And how do you think that may help conversion rates in coming quarters?

Yes. I think specifically is once we have someone in a dental chair on an orthodontic chair or whatever, we know that the closure rates can be much higher. If you can actually see a simulation or we have a video now that actually shows really good response that way. So this is an emotional purchase often, okay? It's not one that someone might have to take but they want to take in some way. And actually seeing themselves in a video or seeing themselves in real time makes a difference. The way we've changed that programming recently is our new IOSim Pro is rather than just showing someone kind of a simulated look at what their teeth would look like if they're straight, we actually can run the algorithms immediately during the scan. And we can tell that patient exactly how many aligners it will take and what the cost of that would be rather than, okay, I'm interested now, I want to do a treatment plan. It will take 2 weeks to go back and forth to try to figure it out. And the immediacy of that, I think, helps with that urgency of people wanting to make a decision here or there.

Okay. So the thought is get the sales force push it out, get the adoption, notably in the GP channel where it's adult, it's discretionary.

Exactly.

It's more emotional.

That's right.

Okay. And just sticking more in the near term for a moment. On -- for the 2025 guidance on the 1Q print, you guys decided to raise revenue and flush through the favorable FX rates, John, relative to the beginning of the year. Despite the volatility, it was sort of just post Liberation Day that was occurring notably in the U.S. So can you talk to us on what you're seeing out there that gives you the confidence to do that despite the variability? And is that confidence more driven, call it, U.S. or international markets?

Yes. I think when we look at the total year, we looked at what we saw at the first quarter and the volume was consistent to our mid-single digits for the year. So we felt good about that. And the new products and other initiatives that Joe talked about, those continue. So we feel good about the underlying business in terms of being able to achieve that mid-single digits. So we didn't change that from a volume standpoint. And like you said, FX for us, the dollar got weaker and we just let that favorability come through. So a couple of points more of foreign exchange and put us above mid-single digits sort of revenue as well. And then the added piece that we did and really showed that we could offset is there was some impact from tariffs. It's about $1 million or so a month, mostly coming from our flow of scanner from Israel to the U.S., and we're able to offset that and be able to hold that 22.5%. So it was just a reflection of Q1 was as expected. We let that volume through, it makes the numbers for the total year and then we just adjusted for FX.

Okay. One last one. And Joe, maybe this is for you, but there's the markets and then there's business, right? And so you had the tariffs, you had the Liberation Day, the market's going to a tailspin. Like did you see that run through the business in the month of April and then things sort of smooth out or get more predictable? Or was that just, again, more isolated to a Wall Street issue?

I don't think you can just call it a Wall Street issue. I think it permeates and flows through the business or whatever. But I'd say there's been a lot of turmoil in this marketplace, even pre Liberation Day and post Liberation Day. So I'm just looking at a straight line of turbulence, Jon, in general that we're going to navigate through.

Okay. Fair enough. APAC and EMEA, I'll start to go down some of the markets by region. So at the Analyst Day, the company conveyed confidence on double-digit growth in APAC and EMEA. And actually the double digit is really critical, right, because it's 50% of the biz. I think people are questioning the midpoint of the LRP. And if 50% of the business is low double digit, call it, it implies very modest growth in North America to get to that 10% bogey. So why the confidence in the double digit? And if you could break it apart, Joe, maybe start with APAC, if you don't mind and then take us to EMEA. Are there certain things that you would flag that's geography-specific?

Yes, Jon, if anything, let's start with APAC is, obviously, APAC's a lot of different economies. But in general, they didn't necessarily devastate their economies during COVID, right? So most of them are pretty good fiscal shape. And we've seen patient closing and patient interest in our business really good. I'd take Australia out of that discussion because Australia has been kind of burdened from a consumer standpoint. But the rest of them, Japan, China, as we reported in the quarter, it is a good quarter. It's been growing well, too. And then the Southeast Asian countries have shown a good positive growth also. Look, our portfolio of products, we're just moving IPE over that area now, that's going to help, too. We got approval in China. We have to ramp up production in China to make that happen. MAOB, we'll start to move that into that in the second half of this year, too. And so from a product portfolio standpoint and from a consumer acceptance standpoint, we feel good about Asia and what we've seen. Europe, actually the same thing. We see, look, there's -- Europe is never Europe. What Henry Kaiser say, who do I call when I call Europe, right? There's no phone number. But Spain and Italy have been pretty good for the Latino side. Germany has been tough. U.K. has come back pretty well. And the -- what our UAE business has been extremely strong and very helpful. So what I would say, what gives us confidence, they are not single points of growth, okay? We have growth and expansion of the portfolio. We have growth in different countries and different around the area. And we don't expect those to all collapse at one point in time. We expect some continuity through that.

And it seems like you called out the double-digit growth that you're currently experiencing. And then on top of that, you may layer in new products, right? I mean everything sort of started in North America. So DSP is going over there. IPE is going over there. MAOB will go over there. That could, in my words, maybe further augment what you're currently experiencing. What about in North America? And is there anything that you guys can do to help thaw what's largely been a pretty stagnant market of late?

Yes. Well, I think our -- we try to take advantage of as much demand. I think our relationship with Hartford -- when you look at Heartland overall, our relationship there has been good, being able to tap into consumer demand, work together to help to drive that and so we'll be able to leverage those types of relationships have been good. You've seen our uptick from a teen standpoint. I think IPE helps with that, again, MAOB helps with that. It helps to drive Invisalign First also. And so where we see a difficult demand pattern, we do have relationships that I think are good that can help us move forward. Heartland being a really good example. And then secondly is our product portfolio is much broader in the sense of what we can appeal to. And primarily, those Phase I customers for teens or kids that I'm sure we'll get into really helps to drive it, too. So I think in this business, too, we know the market in North America is static. We've seen that overall from a dental standpoint, orthodontic standpoint. Our job is to be able to leverage different areas where we know we have an opportunity, whether it's our partners out there or whether it's through our portfolio to drive as much growth as we possibly can until that market actually gets -- seeks a new balance here.

Or through a geographic perspective as well.

That's right.

Okay. And you sort of teed me up and I'll go into teen, and then maybe I'll try to wrap it back to the LRP, if possible. But if you can talk to the uptake of IPE and is it time or when is it time where you start to lean in from a DTC perspective? I think you want to give it some time out in the market for the uptake for orthos to increase. But can we see the company lean in from a DTC perspective shortly?

I mean advertising to consumers is a big part of our strategy. And so that product line is easy to advertise to consumers because if anyone's had a child and you've had a palate expander or [ Essix ] device and you had to slam a wrench in your mouth and turn it, right? We all know the anxiety associated with that. We want to make sure, though, that with our orthodontic partners, too, that we had that product, that it's understood before we really go out with it. And we think most patients understand this. We don't necessarily have to show the graphics of turning the screw. But most patients know the difference between the 2. And we think we'll just enhance, hey, this device is available out there, talk to your orthodontists or to talk to a local dentist or anyone who might administer that, and we feel there'll be a good uptake on that. Right now, demand is not necessarily our problem with that product line, it's not a problem at all. We're just ramping up production and ramping up efficiency up. So I feel good based on our strategy for this year with IPE, we're tracking pretty well.

And you say demand is not an issue with IPE. And I remember doing some of the early work on that product, but still like when I'm running the numbers and then you slap on the roughly $500 ASP versus what you get on the aligner side of things and you do it over a $4 billion base, right? That's sort of a good problem to have. But the contribution to growth is somewhat muted. It's incremental, but it's somewhat muted. And so can you talk to us, Joe, what you're experiencing because I always thought, hey, it's sort of a double way. I mean, one, are you going to get the revenue for IPE? And then do you see the flow-through and a higher attachment rate, call it, on a teen because you've proven to the parent, hey, this kid's actually more compliant than you might think. They can wear these things and swap them out. And so are you seeing the pull-through because now we're a good 12 months plus with that product in North America that I think you'd have a good database to evaluate that.

Yes. We see the pull-through with Invisalign First, too. What's interesting at Invisalign First and with IPE, you're moving bone, a lot of bone. Now with Invisalign First, you're moving teeth and bone, but when you're on IPE, you're basically moving bone in that sense. And so there's kind of a time sequence of when an individual would be in either of them. But also when you want to move the lower -- your lower arch while you're doing IPE, we have many docs now starting to move with Invisalign First to do the lower one to keep those things in sequence, too. So there is a pull-through there. And I feel MAOB has the same. MAOB time frame is 11 to 13 years old, depending on kids and their growth cycles. And so those things all come together under that Phase I kind of thing that we talk about. And remember, there are certain doctors out there, orthodontists that practice Phase I, some don't, but we focus obviously on the Phase I docs that want to use that technology.

Okay. And then one more on teen and then, John, maybe I'll try to wrap it up and go back to the LRP and pull you back in. But the 1Q '25 double-digit teen volume growth was a solid number, it's one of the more solid results in teen in some time. You're just going into the international markets with IPE. You have MAOB in your back pocket. You're talking about this attach rate. Obviously, a little bit of a leading question. But like how do you see this unfolding in terms of teen durability with that double-digit attached to it?

Well, it certainly supports it, Jon. I mean, it really helps it. And I think for years, we've worked on this portfolio to be more relevant in the teen segment. And that Phase I is on an average, 20% to 25% of the procedures that are out there are Phase I. So if I'm answering your question, there's certain amount of continuity in that market utilization or penetration that we're pushing through with those product lines that help. And obviously, that positions us well if we can pick up the teens on Phase I. If there is a Phase II sequence, they're used to our system, they're used to that product line. We feel that flows well with it, too.

And I've been covering you guys long enough to go back to mandibular advancement. You launched mandibular advancement with wing tips and Invisalign First out of the gate. And I remember getting a ton of e-mails coming in from clients. Like none of these kids are going to wear it. Meanwhile, Invisalign First ended up being a huge product. But pardon me, I think wing tips struggled a little bit sometimes with the durability. So specific to MA, when we look out 2 or 3 years, is it mostly the MAOB? Like how do you see the split between MAOB and wing tips? It is it 90-10, is it 50-50? Just briefly address it, if you don't mind.

It's a guess, Jon. But with -- you can effectively, in a Class II, you can move the mandible forward well with the wing tips, but there's a collapsing issue. There's a fit issue with those product lines. It works really well with certain dentition in a certain way the molders are positioned. But my guess, and you got to take this from a non-clinical person, 75% will be MAOB, 25% will be wings. You're going to need both product lines to hit that market.

Okay. And you're pricing MAOB at a premium?

That's right.

Okay. John, so let's take everything that we just kicked around for 15 minutes and go back to the initial question on the LRP. Is the thought there, hey, you see a line of sight to durable double-digit APAC, durable double-digit EMEA. I know I'm double counting in here, but there's a teen that's got momentum of double digit, and it implies a very modest ask in North America, even if we try to do that build to the midpoint-ish of the LRP.

That's the right way to think of the regions. Like we said, we would expect faster growth in APAC and Europe, maybe not as much in North America, and that's kind of the market that we're in. But then you supplement it with additional products that we have that we're talking about, IPE and MAOB and so on, and also some of the go-to-market opportunities that we have with some of the doctor subscription program and other products that really are just launching in many of those other places. And you take that all together, that's the framework when we think about that 5% to 15%. And if we can accelerate some of those with some of the new products and some of the ways that we're selling on a go-to-market basis, we can be within that range and maybe on the high end of the range if that takes off.

Okay. And I might go back and address ASP in more detail later, but within that range, just think about a 200 bps spread approximately of volume to revenue by some ongoing price or ASP degradation because of mix and other issues, and apply that to what, John, the 2025 ASP where we're all landing, does that make sense?

Yes. That's a good starting point to apply it to 2025. We're still going to have, and we've talked a lot about this from an ASP standpoint. Look, as you're selling to more doctors, we sold to the more -- the most doctors that we ever sold to in the first quarter. Many of those new doctors, they don't necessarily do the most comprehensive cases to start. And many times, they'll just do some type of touch-up case or some type of low-stage case. Those are at lower list prices that contributes to the mix that we talk about. So I think if you start with that ASP kind of from this year and you add in some of the mix that you have in products as well as also regional mix. We talk about some of these areas. They are growing tremendously for us in Turkey and India and other places. Those are just lower list price products that we have to be able to sell there. It doesn't mean that it's a lower gross margin, and we can get into whatever gross margin we want to get into, and we've talked about that difference where some of those lower list price products, they might contribute to lower ASPs, and that's a reality that we have, but they also give us better gross margin rates because the cost to serve is less. It's kind of a one and done. There's not additional follow-up or other work that we have to do to support those products.

Okay. Great. I'm going to try to hit on 3 important topics and I'll roll through them pretty quickly. Systems and Services, Joe, you had a big product cycle with Lumina. You had mid-teen revenue growth in 2024. You're guiding to Systems and Services to be above CA growth in '25. So maybe call it mid-single-digit plus. My concern is, hey, when we look out to 2026, here we are a year 3 of our product cycle, IOS just continues to experience a lot of pricing pressure. Can you guys continue to sort of fend that off and have durable growth into '26 in that third year and why?

Yes. Jon, when you look at what Lumina is, it's not a continuation of our confocal imaging we had before with like 5D Plus and 5D, right? It's a brand-new platform that's never been introduced in IOS scanning before. And so as you look -- you saw our portfolio from a confocal kind of span 5, 6, 7 years, right, as we maximize on that technology. There are several areas of the new Lumina technology. Remember, just -- I don't want to be too physics-based here, but when you look at what we were constrained to in confocal image, from it's that one size, actually picture size, everything we're kind of trying to eliminate noise and have more signal. What we did with Lumina was actually we got, what, 5 -- 6 cameras and 5 LEDs on that thing, huge signal. You can scan the whole mouth, even John and I can actually scan with Lumina, right? It's that simple to do. And so what we're going to do with that product line is we're going to do several iterations to make that better. And inherently, that's a less expensive platform. We spent a lot of money in software to get to where it is. But from a hardware standpoint, it's a less expensive platform. We'll be able to utilize that going forward, too. So I really think that Lumina sets a new standard of IOS capability in the marketplace, and we're going to work that platform to take advantage of it.

Okay. And in the background, we certainly have seen the Systems and Services gross margin, John, improve, right? And so that goes to Joe's point of lower cost, 50% still recurring.

The mix there is right. I mean the cost base for those new products is better for us. That's great, higher ASP. And then like you said, for the overall business, it's 40%, 50% recurring business and high-margin software.

And one more on the Systems and Services, and it's more like a strategic question. And I love staring at a computer screen then coming up with these strategy questions because it's that easy to run a business. So I still get the surveys that come in with like the anger and the angst of, these guys, I can't submit for Invisalign, right? And they have a prime scanner, they've got some.

I read those, too. I wish you give us a name sometimes.

Yes. We can't disclose. But when you think about IOS, tremendous product cycle for dentistry, we hear different numbers, but maybe 20%, 25% penetration. We can probably debate that. You get to the flattening of the S-curve. So the growth of the market is slow, you came out with a huge product, Lumina, that's entering year 3, which I'm sure you wanted to capitalize on that, and you've got the killer app, right? You can only -- you can send for Invisalign. When we look out a couple of years, Joe, do you ever think about completely opening up the platform, taking the scans from competing IOS systems in an effort to further accelerate your Invisalign business?

I mean, obviously, that's -- we hear that from customers. We understand that backlash or whatever. But when you look at -- that's the front end of our system. When you talk about our digital platform and how we work, you start with iTero, and iTero is a workhorse in the sense of once you scan, whether you want to do a simulation, what do you want to do with the next pack. It is -- it's also a diagnostic to a certain extent that allows that. As we talk about touchless ClinCheck, all those algorithms we write are based on the signals that we have on Lumina and 5D Plus, right? If I have to take say, a 3-shape scanner and run it through that kind of thing, it's a completely -- right now, I don't want to take a bunch of software resources and put it on that. We have to really reflect that kind of productivity through our own automation and capabilities. So the signatures of those machines are really different, Jon, right? If you're just taking a picture and you're reflecting it back to someone on a screen somewhere, they're going to walk through it, that's one part, right? If you're going to -- and even DDT, so when you scan, what happens is you have to make -- you have to verify that, that scan is a scan, right? So one of the sequences, whether it would come back to someone, and for a minute or 2 minutes, 3 minutes, they'll look up on the screen and say, Jon had corn for lunch so we got to pull that out of his teeth with that. With the algorithm we write today, it's like we extract that just from that distraction from your tooth at that point in time and then run the algorithms through our pieces. So that's -- it's very strategic for us to -- and if we wanted to open that up from a scan standpoint, we can't offer the same experience to doctors.

The quality of that scan from Lumina opens up a whole bunch of other?

Exactly, speed and everything else.

Okay. So let's stick with technology, and I'll go to direct fabrication. And John, I do want to kick something off on direct fab because I thought there was a little bit of confusion coming out of the Analyst Day. You had the slides, and I always see this when companies give like interim metrics and then long term. In the '26 to '28, I think you had direct fab dilutive and people were going, "Oh, man, this thing is not going to be accretive until 2029." I think you did have a slight delay. The way I read it is direct fab dilutive in '25, dilutive in '26, but you still believe accretive in '27. Can you address that?

It really comes down to what you have with direct fab when you think about our overall cost that we have to produce. Let's just say it's split across the 4 buckets that we have: material, labor, overhead and then freight for our products. This direct fab really addresses the material piece of this where our traditional manufacturing we have now, we have to make the negative, make the mold and it's a significant amount of material for that and then you vacuum form the plastic on top of it and kind of throw away or don't use that negative in terms of your product. Whereas when you direct fab, you make the product, you don't need to make a negative and so on. So it's a tremendous savings from a material standpoint that we have in our overall. And when we think of the direct fabrication and how we're trying to scale this up, you've got a scaling efforts that you have on the resin itself. It's a brand-new resin. You've got to get the right quantities and so on to be able to get this on a per cost, per unit basis to be reasonable from a costing standpoint. And then you also have to scale up the manufacturing, the Cubicure printers that we have. That combination needs utilization. You need to be able to get new products through there. So we'll have a series of new products that come in this year into next year and you really start to scale those up. Now you've achieved a throughput that is going to lend itself to productivity because then you're going to capitalize on the material savings that we have in that direct fab. So it really comes down to we know that -- we know what the technology is. We know how to produce these. It will just come down to how much throughput we have. And that's where we think by 2027, you'd have enough throughput coming through that process to be able to start seeing those savings.

Jon, I think what's tough to digest sometimes is what John said, it's resin and it's process, right? And the process, we understand this process will work it out. The resin piece, this is not like, okay, it's a new polyester, okay? So we're going to use a different reactor or something like that. This is a completely different resin that's really ever been commercialized. And so there -- that sequence, too, is we're going to go through it. We can see how to get there, but it's just important that we focus as much on that resin scale-up to get those costs down as it is on the cost down on the process, too.

And Joe, to try to ask a tough question down the direct fab, the pushback that I get is like, hey, Jon, this seems like it's transformational, right? And I think they've got a better line of sight and they're going to get there. But they're probably going to get there in a bigger way in '27, '28 with the accretion to GMs and new products. So if I'm an investor here in May of 2025, how do I get paid over the next 12 months on direct fab? And if I pose that question to you, your answer is?

Well, I think we still run our current business, like John said, I mean, we see accretion in 2027, right? But in the meantime, I mean, we're still taking cost out of our vacuum form line. We are already still making investments in those areas with different kinds of treatment planning. Yes, treatment planning piece is big. I mean, we have how many thousand people in treatment planning right now, John?

There's thousands of people doing treatment planning that every month, we have less and less that we need to manually do something and more of that.

It's $200 million roughly of your COGS in treatment planning?

Yes.

And as you go from 20% touchless to 80% touchless, clearly, you think that can come down significantly?

You're certainly going to get a productivity there. And you're also going to get resources now that we have to help new doctors do treatment planning and really provide this treatment planning services to be able to help those doctors be able to do some more complicated cases. So they can help with the clinical efficiency as well. But it's working on the current platform, drive as much volume and revenue as we can there and be as proactive as possible. And then on the direct fabrication, we're going to start selling products to be able to help us from a volume and revenue standpoint. But then as that scale, that's where you start to see that productivity.

A couple of minutes left. I want to hit on competition. Joe, how do you see this unfolding where you have a handful of lab-based players, and let's put Angel aside for a moment. The other guys where growth has slowed for the industry. And some of these platforms still are not profitable, and they're part of a bigger dental entity. And I think a lot of people, if you look at some of these competitors, LRPs, everyone thought the clear aligner market was going to grow 15% to 20%. So I thought it was like, well, I'll eventually scale into it, right ? Because industry grows 15% to 20%, I'll grow 20% plus. I'll take some share. But now industry is growing 3% to 5%, and they're growing 5% to 7%. And so have you seen like a better behavior from a pricing perspective amongst, again, let's do ex Angel first?

Yes, ex Angel, situationally we have. Some respectful nature in a sense of pricing in some areas. I wouldn't say it's across the board for sure. But I'd say more maybe continuity in our strategy from some of our -- I don't want to point them out specifically. And I think there's just a realization. It costs a lot of money to scale this business. We're talking about treatment planning. We're talking about what -- when you have to do, what, 1.5 million aligners a day now. And they don't have to scale to that extent, but that takes a lot of money to scale that. So I think there's a realization of our competitors in the sense of what it takes to get from A to B, and you have to be respectful of price to really make that jump.

And Angel will continue to try to subsidize through their China ops and they've got backing as well. So the thought is that they'll probably remain a little bit more price focused in the near term?

I think that's our strategy. There's no question, Jon.

I got to conclude, but I'll end with the speed dating one. I'm just curious if I've got it right, HMRC has got until June 19 to appeal. Have they appealed as of yet?

They have not.

Not yet.

And if they don't hear, it's roughly $32 million that comes back from a pricing perspective?

That's right. Yes.

I jammed in a lot in 30 minutes. Guys, thanks very much.