Dental industry CEO warns rising costs are squeezing dentists and families

Key Concepts

• Invisalign Pallet Expander/First: Pre-teen orthodontic products focusing on expanding the palate and mandibular advancement.
• Phase One Orthodontics: Early orthodontic treatment for children aged 6-10.
• Digital Orthodontics: Utilizing digital scanning, AI, and data analysis in orthodontic treatment planning and execution.
• Market Dynamics: Analysis of orthodontic market trends, including regional variations (North America, International), impact of economic pressures, and competitive landscape (wires & brackets vs. aligners).
• Operating Costs (Dental Practices): Challenges faced by dental practices due to rising expenses like labor, rent, and taxes.
• NFL Partnership/Brand Promotion: Utilizing sponsorships like the Super Bowl Smile Zone to increase brand awareness and promote Invisalign technology.

Market Performance and 2026 Outlook

Joe Hogan acknowledges that 2025 presented a “tale of two cities” for the company. The first half was challenging, particularly the second quarter, but momentum built in the third and fourth quarters, reflected in the market’s positive reaction to recent earnings. He expresses optimism for 2026, citing improved market stability and the positive momentum carried from late 2025. While the stock experienced a 26% year-over-year decline, Hogan anticipates a potential rebound.

Teen & Pre-Teen Market Dynamics

Despite economic pressures impacting American families, the company is seeing success in the teen market, particularly with the introduction of new products. The primary competitor in this segment remains traditional wires and brackets, predominantly used in North America. However, Invisalign is experiencing significant growth internationally. Specifically, the Invisalign Pallet Expander and Invisalign First products, designed for patients aged 6-10 (Phase One orthodontics), demonstrated “tremendous” year-on-year growth globally. This indicates a successful expansion into the pre-teen orthodontic market.

Pricing and Cost Considerations

The average cost of Invisalign for adults is approximately $5,000. However, the company positions Invisalign as cost-competitive with traditional braces. The majority of orthodontists utilizing Invisalign in the US charge comparable prices to wires and brackets. This is attributed to Invisalign cases typically being completed about six months faster and requiring fewer doctor visits, resulting in cost savings for both the doctor and the patient (reduced chair time and parental time off).

Dental Practice Challenges

Dental practices, both general dentists and orthodontists, are facing challenges related to patient traffic, which is either down or flat year-over-year. This is coupled with increasing operating costs, including labor, rent, taxes, and property ownership. Despite these challenges, practices are still servicing patients and maintaining reasonable throughput.

International Market Growth

North America presented the biggest challenge in the last quarter, with flat growth. However, significant growth was observed in international markets. Specifically:

• Europe: Double-digit growth, particularly in Turkey, the Middle East, Eastern Europe, Spain, Portugal (Iberia region), and the UK.
• Asia-Pacific: Strong double-digit growth, with a good performance in China and Southeast Asia.
• Latin America: Growth close to 20%.

These results highlight the increasing importance of international markets to the company’s overall performance.

NFL Sponsorship & Brand Promotion

The company is actively investing in brand promotion, including a sponsorship with the NFL and a “Smile Zone” installation at the Super Bowl. This initiative aims to promote the Invisalign brand and technology to a broad audience. Hogan emphasizes the NFL’s value as a partner and the Super Bowl as a significant platform for brand visibility.

Technological Advancements & Data Utilization

Hogan underscores the technological sophistication behind Invisalign. He highlights the fully digital workflow, from scanning teeth to generating treatment plans in as little as 15 minutes – a process that took nearly two days nine years ago. Artificial Intelligence (AI) is now integral to this process. The company has completed 22 million cases globally, and this data is leveraged to refine treatment protocols and improve outcomes, even for complex cases. Hogan notes that many consumers are unaware of the extensive technology underpinning the Invisalign system and its continuous improvement. He asserts that Invisalign can now address 100% of orthodontic cases.

Logical Connections

The conversation flows logically from an overview of recent performance to a deeper dive into specific market segments (teen, international), cost considerations, and challenges faced by dental practices. The discussion then circles back to promotional efforts and concludes with a focus on the underlying technology driving the company’s success. The international market growth is presented as a counterbalance to the challenges in North America, demonstrating a diversified growth strategy.

Notable Quotes

• Joe Hogan: “2025 is a tale of two cities…we gained momentum in the third quarter and then even stronger momentum in the fourth quarter that the market is seeing right now.”
• Joe Hogan: “We normally can do a case in about six months faster than what wires and brackets can do. And you also have maybe half the trips to the doctor that you normally would have.”
• Joe Hogan: “Remember just about everything we do is digital…We can scan your teeth and we can get you back with a case within 15 minutes. That took almost two two days just nine years ago.”

Conclusion

The interview paints a picture of a company navigating a challenging market environment but demonstrating resilience and growth potential. Key takeaways include the successful expansion into the pre-teen orthodontic market with products like Invisalign Pallet Expander and First, the increasing importance of international markets, the cost-competitiveness of Invisalign compared to traditional braces, and the significant technological advancements driving the company’s innovation. While acknowledging current challenges, Hogan expresses optimism for 2026, fueled by positive momentum and a commitment to leveraging data and AI to improve treatment outcomes.