Segments and Geographical Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segments and Geographical Information

Segments and Geographical Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer.  We report segment information based on the management approach.  The management approach designates the internal reporting used by CODM for decision making and performance assessment as the basis for determining our reportable segments. The performance measures of our reportable segments include net revenues and gross profit.

We have grouped our operations into two reportable segments which are also our reporting units: Clear Aligner segment and Scanner segment.

• Our Clear Aligner segment consists of our Invisalign System which includes Invisalign Full, Express/Lite, Teen, Assist, Vivera Retainers, along with our training and ancillary products for treating malocclusion.

• Our Scanner and Services ("Scanner") segment consists of intra-oral scanning systems and additional services available with the intra-oral scanners that provide digital alternatives to the traditional cast models.  This segment includes our iTero scanner and OrthoCAD services.

These reportable operating segments are based on how our CODM views and evaluates our operations as well as allocation of resources. The following information relates to these segments (in thousands):

	For the Year Ended December 31,
Net Revenues	2015		2014		2013
Clear Aligner	$	800,186	$	712,549	$	614,649
Scanner	45,300		49,104		45,557
Total net revenues	$	845,486	$	761,653	$	660,206
Gross Profit
Clear Aligner	$	628,187	$	562,889	$	484,835
Scanner	11,923		15,554		13,271
Total gross profit	$	640,110	$	578,443	$	498,106

Geographical Information

Net revenues and tangible long-lived assets are presented below by geographic area (in thousands):

	For the Year Ended December 31,
	2015		2014		2013
Net revenues1:
United States	$	585,874	$	532,569	$	491,410
the Netherlands	167,128		156,817		122,494
Other international	92,484		72,267		46,302
Total net revenues	$	845,486	$	761,653	$	660,206

¹ Net revenues are attributed to countries based on location of where revenue is recognized.

	As of December 31,
	2015		2014
Long-lived assets 2:
United States	$	112,632	$	76,511
Mexico	15,422		6,229
Other international	8,419		7,385
Total long-lived assets	$	136,473	$	90,125

² Long-lived assets are attributed to countries based on entity that owns the assets.