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Segments and Geographical Information
 9 Months Ended
Sep. 30, 2020
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, gross profit and income from operations. Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the segment. Certain operating expenses are attributable to operating segments and each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Costs not specifically allocated to segment income from operations include various corporate expenses such as stock-based compensation and costs related to IT, facilities, human resources, accounting and finance, legal and regulatory, and other separately managed general and administrative costs outside the operating segments.

We group our operations into two reportable segments: Clear Aligner segment and Imaging Systems and CAD/CAM services ("Systems and Services") segment. The Systems and Services segment was formerly known as the Scanner and Services segment prior to our acquisition of exocad on April 1, 2020 (Refer to Note 4 "Business Combination" of the Notes to Condensed Consolidated Financial Statements for additional details on the exocad acquisition).

•Our Clear Aligner segment consists of Comprehensive Products, Non-Comprehensive Products and Non-Case revenues as defined below:

▪Comprehensive Products include, but are not limited to, Invisalign Comprehensive and Invisalign First.

▪Non-Comprehensive Products include, but are not limited to, Invisalign Moderate, Lite and Express packages and Invisalign Go.

▪Non-Case includes, but not limited to, Vivera retainers along with our training and ancillary products for treating malocclusion. 

•Our Systems and Services segment consists of our iTero intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, OrthoCAD services and ancillary products, as well as exocad’s CAD/CAM software solution that integrates workflows to dental labs and dental practices.
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):

 Three Months Ended
September 30, 		Nine Months Ended
September 30,
2020201920202019
Net revenues
Clear Aligner$620,764 $516,265 $1,400,716 $1,482,172 
Systems and Services113,380 91,076 236,705 274,837 
Total net revenues$734,144 $607,341 $1,637,421 $1,757,009 
Gross profit
Clear Aligner$463,747 $379,202 $1,007,605 $1,096,702 
Systems and Services70,341 58,352 145,167 175,237 
Total gross profit$534,088 $437,554 $1,152,772 $1,271,939 
Income from operations
Clear Aligner$261,774 $211,952 $467,078 $614,622 
Systems and Services34,912 32,760 52,194 100,286 
Unallocated corporate expenses(119,617)(117,560)(345,285)(323,565)
Total income from operations$177,069 $127,152 $173,987 $391,343 
Depreciation and amortization
Clear Aligner
$10,413 $9,306 $30,231 $27,851 
Systems and Services
5,092 1,987 11,882 5,349 
Unallocated corporate expenses
8,981 8,413 26,656 23,994 
Total depreciation and amortization$24,486 $19,706 $68,769 $57,194 
Impairments and other (gains) charges
Clear Aligner
$— $(6,792)$— $22,990 
Total impairments and other (gains) charges$— $(6,792)$— $22,990 
Litigation settlement gain
Clear Aligner
$— $— $— $(51,000)
Total litigation settlement gain$— $— $— $(51,000)

The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes and equity losses of investee (in thousands):

 Three Months Ended
September 30, 		Nine Months Ended
September 30,
2020201920202019
Total segment income from operations$296,686 $244,712 $519,272 $714,908 
Unallocated corporate expenses(119,617)(117,560)(345,285)(323,565)
Total income from operations177,069 127,152 173,987 391,343 
Interest income329 3,478 2,788 9,576 
Other income (expense), net7,147 (2,211)(12,368)5,935 
Net income before provision for (benefit from) income taxes and equity in losses of investee$184,545 $128,419 $164,407 $406,854 
Geographical Information

Net revenues are presented below by geographic area (in thousands):
 Three Months Ended
September 30, 		Nine Months Ended
September 30,
 2020201920202019
Net revenues 1:
United States $332,414 $286,050 $744,978 $861,710 
Switzerland 2
219,910 — 512,681 — 
The Netherlands 2
— 173,926 — 540,858 
China76,825 63,636 142,927 151,075 
Other International 104,995 83,729 236,835 203,366 
Total net revenues$734,144 $607,341 $1,637,421 $1,757,009 

1 Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities.
2 During the first quarter of 2020, we implemented a new international corporate structure. This changed the structure of our international procurement and sales operations from the Netherlands to Switzerland.

Tangible long-lived assets, which includes Property, plant and equipment, net, and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):
 September 30,
2020		December 31, 2019
Long-lived assets 1:
Switzerland 2
$241,782 $7,755 
United States 178,767 164,451 
China107,042 73,174 
Costa Rica99,000 82,083 
The Netherlands 2
855 226,286 
Other International159,597 134,225 
Total long-lived assets$787,043 $687,974 
 
1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.
2 As a result of the new international corporate structure changes, most of the long-lived assets were transferred from our Netherlands entity to our Switzerland entity during the first quarter of 2020.