
									Reported as:
September 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable securities, short-term		Marketable securities, long-term
Cash	$	988,029	$	—	$	—	$	988,029	$	988,029	$	—	$	—
Money market funds	250,984		—		—		250,984		250,984		—		—
Corporate bonds	44,572		—		(1,160)		43,412		—		31,828		11,584
U.S. government treasury bonds	11,394		—		(235)		11,159		—		6,503		4,656
Asset-backed securities	2,477		—		(7)		2,470		—		1,582		888
Municipal bonds	701		—		(10)		691		—		691		—
U.S. government agency bonds	5,263		—		(66)		5,197		—		4,188		1,009

Total	$	1,303,420	$	—	$	(1,478)	$	1,301,942	$	1,239,013	$	44,792	$	18,137


									Reported as:
December 31, 2022	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Marketable securities, short-term		Marketable securities, long-term
Cash	$	712,921	$	—	$	—	$	712,921	$	712,921	$	—	$	—
Money market funds	229,129		—		—		229,129		229,129		—		—
Corporate bonds	69,390		—		(2,915)		66,475		—		36,510		29,965
U.S. government treasury bonds	20,559		—		(549)		20,010		—		15,404		4,606
Asset-backed securities	4,514		1		(37)		4,478		—		2,909		1,569
Municipal bonds	3,447		—		(61)		3,386		—		2,711		675
U.S. government agency bonds	5,231		1		(69)		5,163		—		—		5,163

Total	$	1,045,191	$	2	$	(3,631)	$	1,041,562	$	942,050	$	57,534	$	41,978

The securities that we invest in are generally deemed to be low risk based on their credit ratings from the major rating agencies. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As interest rates increase, those securities purchased at a lower yield show a mark-to-market unrealized loss. Our unrealized losses as of September 30, 2023 and December 31, 2022 are primarily due to changes in interest rates and credit spreads.

The following tables summarize the gross unrealized losses as of September 30, 2023 and December 31, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position (in thousands):


	As of September 30, 2023
	Less than 12 months				12 Months of Greater				Total
September 30, 2023	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate bonds	$	2,509	$	(11)	$	40,608	$	(1,149)		$	43,117	$	(1,160)
U.S. government treasury bonds	1,995		(43)		9,163		(192)			11,158		(235)
Asset-backed securities	1,975		(4)		495		(3)			2,470		(7)
Municipal bonds	—		—		691		(10)			691		(10)
U.S. government agency bonds	4,030		(28)		1,166		(38)			5,196		(66)

Total	$	10,509	$	(86)	$	52,123	$	(1,392)		$	62,632	$	(1,478)


	As of December 31, 2022
	Less than 12 months				12 Months of Greater				Total
December 31, 2022	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Corporate bonds	$	10,639	$	(440)	$	54,634	$	(2,475)		$	65,273	$	(2,915)
U.S. government treasury bonds	5,262		(177)		14,748		(372)			20,010		(549)
Asset-backed securities	2,636		(17)		1,275		(20)			3,911		(37)
Municipal bonds	—		—		2,412		(61)			2,412		(61)
U.S. government agency bonds	3,017		(5)		1,136		(64)			4,153		(69)

Total	$	21,554	$	(639)	$	74,205	$	(2,992)		$	95,759	$	(3,631)

We enter into factoring transactions on a non-recourse basis with financial institutions to sell certain of our non-U.S. accounts receivable. We account for these transactions as sales of accounts receivables and include the cash proceeds as a part of our cash flows from operations in the Condensed Consolidated Statements of Cash Flows. Total accounts receivable sold under the factoring arrangements was $24.2 million during the three months and $40.4 million for the nine months ended September 30, 2023. Factoring fees on the sales of receivables were recorded in other income (expense), net in our Condensed Consolidated Statement of Operations and were not material.

Fair value is an exit price, representing the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use the GAAP fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value:

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. We obtain fair values for our Level 2 investments. Our custody bank and asset managers independently use

professional pricing services to gather pricing data which may include quoted market prices for identical or comparable financial instruments, or inputs other than quoted prices that are observable either directly or indirectly, and we are ultimately responsible for these underlying estimates.

Level 3 — Unobservable inputs to the valuation methodology that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.


Description	Balance as of September 30, 2023		Level 1		Level 2
Cash equivalents:
Money market funds	$	250,984	$	250,984	$	—





Short-term investments:

U.S. government agency bonds	4,188		—		4,188
U.S. government treasury bonds	6,503		6,503		—
Corporate bonds	31,828		—		31,828
Municipal bonds	691		—		691
Asset-backed securities	1,582		—		1,582
Long-term investments:
U.S. government treasury bonds	4,656		4,656		—
Corporate bonds	11,584		—		11,584


U.S. government agency bonds	1,009		—		1,009
Asset-backed securities	888		—		888



	$	313,913	$	262,143	$	51,770


Description	Balance as of December 31, 2022		Level 1		Level 2
Cash equivalents:
Money market funds	$	229,129	$	229,129	$	—




Short-term investments:
U.S. government treasury bonds	15,404		15,404		—
Corporate bonds	36,510		—		36,510
Municipal bonds	2,711		—		2,711
Asset-backed securities	2,909		—		2,909



Long-term investments:
U.S. government treasury bonds	4,606		4,606		—
Corporate bonds	29,965		—		29,965
Municipal bonds	675		—		675
U.S. government agency bonds	5,163		—		5,163
Asset-backed securities	1,569		—		1,569






	$	328,641	$	249,139	$	79,502

Our investments in privately held companies in which we cannot exercise significant influence and do not own a majority equity interest or otherwise control are accounted for under the measurement alternative. Under the measurement alternative, the carrying value of our equity investment is adjusted to fair value for observable transactions for identical or similar investments of the same issuer. Investments in equity securities are reported on our Consolidated Balance Sheet as other assets, and we periodically evaluate them for impairment. We record any change in carrying value of our equity securities, in other income (expense), net in our Consolidated Statement of Operations. The carrying value of our equity investments in privately held companies without readily determinable fair values were not material, excluding Heartland, as of September 30, 2023 or 2022 and the associated adjustments to the carrying values of the investments were not material during the quarters ended September 30, 2023 and 2022.

On April 24, 2023, we entered into a Subscription Agreement (the "Subscription Agreement") with Heartland Dental Holding Corporation (“Heartland”) who is an affiliate of KKR Core Holding Company LLC, which is an investment vehicle managed or advised by, or otherwise affiliated with, Kohlberg Kravis Roberts & Co. L.P. Heartland is a dental support organization (“DSO”) that provides nonclinical administrative and support services to supported dental professional corporations (“PCs”). Pursuant to the Subscription Agreement we acquired less than a 5% equity interest and have no significant influence in Heartland through the purchase of Class A Common Stock for $75 million. In connection with the Subscription Agreement, we entered into a Stockholders’ Agreement, by and among us, Heartland Dental Topco, LLC (“Topco”) and funds and accounts managed by affiliates of KKR & Co. Inc. (“KKR”), and a Side Letter, by and among us, Heartland, Topco and KKR (the "Side Letter"). Subject to certain restrictions set forth in the Side Letter, we agreed to provisions applicable to Heartland’s stockholders, including certain drag-along and voting obligations.

Similar to our other private equity investments Heartland is accounted for under the measurement alternative. Based on review of our equity investment, we determined there were no adjustments to the carrying value and it is properly reflected on our Consolidated Balance Sheet in other assets at $75 million as of September 30, 2023.

On September 6, 2023, we entered into a definitive agreement to acquire privately held Cubicure GmbH. The purchase price for the transaction will be approximately €79 million subject to customary closing adjustments and adjustments for Align’s existing ownership of capital stock of Cubicure. The acquisition is expected to close in the fourth quarter of 2023 or early 2024.

We enter into foreign currency forward contracts to minimize the short-term impact of foreign currency exchange rate fluctuations on certain trade and intercompany receivables and payables. These forward contracts are classified within Level 2 of the fair value hierarchy. As a result of the settlement of foreign currency forward contracts, during the three months ended September 30, 2023 and 2022, we recognized net gains of $19.8 million and of $34.6 million, respectively, and during the nine months ended September 30, 2023 and 2022, we recognized net gains of $14.4 million and of $43.8 million, respectively. As of September 30, 2023 and December 31, 2022, the fair value of foreign exchange forward contracts outstanding was not material.


	September 30, 2023
	Local Currency Amount	Notional Contract Amount (USD)
Euro	€271,600	$	287,705
Canadian Dollar	C$103,200	76,384
Polish Zloty	PLN293,200	67,110
British Pound	£46,398	56,620
Chinese Yuan	¥399,000	54,764
Swiss Franc	CHF27,900	30,615
Japanese Yen	¥4,400,000	29,612
Brazilian Real	R$90,000	17,861
Mexican Peso	M$230,000	13,214
Israeli Shekel	ILS50,300	13,208
New Zealand Dollar	NZ$8,700	5,227
Czech Koruna	Kč86,800	3,762
Australian Dollar	A$3,970	2,567
New Taiwan Dollar	NT$77,600	2,405
Korean Won	₩1,400,000	1,036
		$	662,090


	December 31, 2022
	Local Currency Amount	Notional Contract Amount (USD)
Euro	€186,900	$	200,010
Polish Zloty	PLN365,988	83,307
Canadian Dollar	C$109,000	80,514
Chinese Yuan	¥471,000	68,223
British Pound	£41,200	49,677
Japanese Yen	¥6,200,000	47,196
Israeli Shekel	ILS110,030	31,383
Swiss Franc	CHF25,000	27,165
Brazilian Real	R$141,200	26,839
Mexican Peso	M$230,000	11,746
New Zealand Dollar	NZ$6,000	3,806
Australian Dollar	A$4,000	2,721
Czech Koruna	Kč56,000	2,469
New Taiwan Dollar	NT$60,000	1,959
		$	637,015