#1smile DIRECT CLUB 2019 Q4 Results February 2020#2Forward-Looking Statements This presentation contains forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. Forward-looking statements generally relate to future events and include, without limitation, projections, forecasts and estimates about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. Some of these statements may include words such as "expects," "anticipates," "believes," "estimates," "targets," "plans," "potential," "intends," "projects," and "indicates." Although they reflect our current, good faith expectations, these forward-looking statements are not guarantees of future performance, and involve a number of risks, uncertainties, estimates, and assumptions, which are difficult to predict. Some of the factors that may cause actual outcomes and results to differ materially from those expressed in, or implied by, the forward-looking statements include, but are not necessarily limited to: our ability to manage our growth; the execution of our business strategies, implementation of new initiatives, and improved efficiency; our sales and marketing efforts; our manufacturing capacity, performance, and cost; our ability to obtain future regulatory approvals; our financial estimates and needs for additional financing; consumer acceptance of and competition for our clear aligners; our relationships with retail partners and insurance carriers; our R&D, commercialization, and other activities and expenditures; the methodologies, models, assumptions, and estimates we use to prepare our financial statements, make business decisions, and manage risks; laws and regulations governing remote healthcare and the practice of dentistry; our relationships with vendors; the security of our operating systems and infrastructure; our risk management framework; our cash and capital needs; our intellectual property position; our exposure to claims and legal proceedings; and other factors described in our filings with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2019. New risks and uncertainties arise over time, and it is not possible for us to predict all such factors or how they may affect us. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We are under no duty to update any of these forward-looking atements after the date of this presentation to conform these statements to actual results or revised expectations. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation. Market and Industry Data This presentation also contains estimates and other statistical data obtained from independent parties and by us relating to market size and growth and other data about our industry and ultimate consumers. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates and data. In addition, projections, assumptions, and estimates of our future performance and the future performance of the geographic and other markets in which we operate are necessarily subject to a high degree of uncertainty and risk. Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, including adjusted EBITDA ("Adjusted EBITDA"). We provide a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure in the appendix to this presentation and in our Current Report on Form 8-K announcing our quarterly earnings results, which can be found on the SEC's website at www.sec.gov and our website at investors.smiledirectclub.com. This presentation is a supplement to, and should be read in conjunction with, SmileDirectClub's earnings release for the quarter ended December 31, 2019. smile DIRECT CLUB 2#3smile DIRECT CLUB Before and happily ever after. AMBOOL Maa VaRe 3#4WHAT WE STAND FOR Our mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. 4#5We are a global medtech platform with unique value propositions. Access Convenience Affordability Members smile DIRECT CLUB 1 6 5 3 2 1 smile DIRECT CLUB Mission-driven brand with positive member experience. Omni-channel presence with a large SmileShop network. Exclusive licensed doctor network across the U.S., Canada, U.K., Australia, New Zealand, Ireland, Hong Kong, & Germany. SmilePay captive financing increases accessibility and reduces purchasing friction. Vertical integration, powered by SmileCheck, allows us to optimize every step of the member journey. Visionary, founder-led company with a history of disrupting incumbents. Control of our destiny Compelling unit economics Accelerating growth Business LO 5#6SDC has built a brand at scale that our members love. We compared our member satisfaction scores with those of other DTC competitors and traditional DSO providers and consistently tracked higher than the competition. Google Reviews & Member Sentiment 5.0 4.8 4.6 4.4 4.2 4.0 Total # of Reviews 70,000 60,000 50,000 40,000 30,000 20,000 10,000 4.9 SDC 97% 65,905 SDC Customer Rating (¹) 4.3 DTC Competitors 4.4 DSO smile Source: Internal company surveys, public information. Data as of Dec 2019. DIRECT CLUB 83% 1,829 Total Reviews DTC Competitors % Positive NPS 53(2) - one of the highest in spec. healthcare industry. BBB rating of A-. Note: DTC rating is an average of DTC competitors. DSO rating is average of two larger DSOs in the US. (1) Google rating. (2) All time average rating. (3) Company website. 87% 9,769 DSO 100% 95% 90% 85% 80% 75% % Positive Sentiment Approx. 20% of members | come from referrals. I I Average rating 4.6 / 5.0 with approx. 170K member¹ reviews(3), 6#7Where SDC is today. smile DIRECT CLUB S SMILESHOPS 391 SmileShops across 46 states, Puerto Rico, Canada, Australia, New Zealand, U.K, Ireland, & Hong Kong. ~5MM unique visits to our website per month. TEAM LARGE FOOTPRINT . 6,300 team members ● 2,800 in TN. 1,800 in Costa Rica. • 1,700 in SmileShops across the U.S., Puerto Rico, Canada, Australia, New Zealand, U.K, Ireland & Hong Kong. BUSINESS SCALE Note: SDC metrics as of 12/31/2019. B DOCTOR NETWORK ~250 licensed orthodontists and dentists in proprietary network across all 50 states, Puerto Rico, Canada, Australia, New Zealand, U.K, Ireland, & Hong Kong. 850K+ members treated with aligners. RETAIL 3,800 Wal-Mart stores Full line of oral care products. Includes patent-pending toothbrush, Brighton premium whitening, toothpaste, SmileSpa, and water flosser. 7#82020 Guidance and Long- Term Targets. smile DIRECT CLUB 1 en for a time supply confidence. 41 smile#92020 guidance. For fiscal year 2020, we expect the following: Revenue between $1.00 billion to $1.10 billion representing growth of 40% year- over-year at the mid-point of the range. Adjusted EBITDA(1) for the fiscal year is expected between negative $50 million to negative $75 million. Including turning adj. EBITDA positive by Q4 2020. ● Revenue Assumptions(²) ASP ● Revenue Unique Orders Shipped Implicit Price Concession Reserves & adjustments Financing Revenue smile DIRECT CLUB Other Revenue FY 2020 $1.00 $1.10 billion billion 591k 650k $1,725 $1,725 (8.5%) (8.5%) (6.5%) (6.5%) 6.5% 6.5% 6.5% 6.5% Adj. EBITDA (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for definition of Adjusted EBITDA. (2) See definitions on slide 13 for definitions of each term. Percentages represent percent of net revenue. FY 2020 $(50) - $(75) million 9#10Financial components beyond 2020 - Revenue. Controlling growth in existing markets to position us for long- term global growth. North America International Existing Markets +00 International New Markets smile DIRECT CLUB ● Anticipated growth rate of 10% - 20%. Low end of the range assumes no further penetration into new age demographics. High end of the range assumes further penetration of the teen market which represents 2/3 of industry case starts. Focus on driving demand through existing SmileShop footprint and leveraging new customer acquisition channels, including wholesale and Walmart. Opportunity to enter into partnerships with additional insurers. Growth rate of 20% to 30% annually. Includes the following countries: Australia, U.K., New Zealand, Ireland, Hong Kong. 46 shops outside of North America as of Dec. 31, 2019. Massive global opportunity of ~500mm people. Anticipated revenue contribution of $100mm from new countries each year. Continue to execute on proven international expansion roadmap. Growth rate of 20% to 30% annually on a global basis 10#11Financial components beyond 2020 - Costs. Leveraging automation, our existing SmileShop footprint and cost discipline to drive towards profitability. Automation Leverage existing shop footprint Leveraging G&A Spend smile DIRECT CLUB -$ Continued advancement in automation and streamlining of our manufacturing process. Efforts to increase the use of automation in both treatment planning and aligner manufacturing process. Manufacturing automation will boost gross margins, improve our customer experience and allow us to keep pace with demand. Focus on driving demand across our existing network of SmileShops. Current footprint of SmileShops has already been scaled and is equipped to handle future demand. Only 25% utilized today. Continued rigorous cost discipline across the business. Rightsizing our spend to conform to our business priorities and long-term growth targets. Long Term% of Revenue Gross Margin: 85% Sales & Marketing: 40-45% G&A: 15% Long-term Adj. EBITDA margin of 25% - 30% 11#12Financial Results. smile DIRECT CLUB right on mes smil 12#13Gross to net revenue bridge. ($ in millions; except for Aligners Shipped and ASP) Total Unique Aligner Orders Shipped (¹) Average Aligner Gross Sales Price ("ASP") Aligner Gross Revenue Implicit Price Concession (2) Reserves and other adjustments (³) (4) Aligner Revenue Financing Revenue (5) Other Revenue and adjustments (6) Total Net $ $ smile DIRECT CLUB $ Q1 2018 42,827 $1,731 74.2 $ (7.5) (2.6) 64.1 $ 3.6 0.7 68.4 $ Q2 2018 66,692 $1,739 116.0 $ (11.9) (4.5) 99.6 $ 5.9 1.1 106.6 $ Q3 2018 72,387 $1,773 128.3 $ (13.3) (5.3) 109.7 $ 7.2 2.8 9.7 $ Q4 2018 76,372 $1,797 137.3 $ (13.8) (6.5) 117.0 $ 8.4 3.1 128.5 $ Q1 2019 109,894 $1,767 194.1 $ (17.3) (11.6) 165.2 $ 9.1 3.4 177.7 Q2 2019 122,047 $1,761 214.9 $ (18.9) (14.6) 181.5 $ 10.6 3.8 195.8 (3) Includes impression kit revenue, refunds and sales tax. (4) As defined in quarterly and annual filings (Aligner Gross Revenue less IPC and Reserves and other adjustments). (5) Represents interest income earned on our SmilePay financing program, net of IPC starting in 2019, as noted in footnote 2 above. (6) Includes net revenue related to retainers, whitening, and other ancillary products. Q3 2019 106,070 $1,788 189.6 $ (15.5) (12.0) 162.2 $ 11.5 6.5 180.2 $ Q4 2019 (1) Each unique aligner order shipped represents a single contracted member. (2) Estimated based on historical write-off percentages and expected net collections. Excludes implicit price concessions associated with financing revenue starting in 2019 of $1.035mm for Q1, $1.851mm for Q2, $1.817mm for Q3, and $2.005mm for Q4. See footnote 5 below. 115,042 $1,771 203.7 (16.3) (12.9) 174.5 12.7 9.5 196.7 13#14● Q4 2019 results. Revenue for the quarter was $197 million, which represents an increase of 53% over the fourth quarter of 2018. ● ● This increase was driven primarily by a 51% YoY increase in aligner shipments which came in at 115,042. Had we been able to keep pace with Q4 orders from a manufacturing perspective, revenue would have come in at the high end of our range. Gross margin for the quarter was 73%, an over 200-basis point improvement versus the prior year. smile DIRECT CLUB Gross margin improvement was driven by manufacturing 100% of aligners in house. Q4 Adjusted EBITDA(¹) loss came in at negative $60 million. Adjusted EBITDA came in under expectation due to a miss on gross margin and higher than expected G&A spend. Net Revenue Gross Profit Gross Margin % Adjusted EBITDA (2) EPS, Diluted Net Revenue Gross Profit Gross Margin % Adjusted EBITDA (²) EPS, Diluted (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for definition of Adjusted EBITDA. $ 196.7mm $ 143.3mm Q4 2019 $ (60.0)mm $ (0.25) $ LA $ 73% FY 2019 750.4mm 572.0mm 76% (102.9)mm $ (1.14) YOY +53% +58% +217bps YOY NM ΝΑ +77% +98% +788bps NM ΝΑ 14#15Gross margin. Gross margin for the quarter was 73%, an over 200-basis point improvement versus the prior year. ● We were unable to keep pace with order demand in Q4 2019 due to certain Gross margin for FY 2019 was 76%, an almost 800-basis point improvement versus the prior year. This was driven by manufacturing 100% of our aligners in-house. challenges in manufacturing automation. This resulted in increased costs and a 415-basis point sequential decline in gross margin. ● smile DIRECT CLUB We remain very focused on improving our strong gross margin profile through continued advancements in our technology, and further automation of our core manufacturing processes. 68% FY 2018 Gross margin % 76% FY 2019 71% Q4 2018 73% Q4 2019 15#16Marketing & selling. Marketing and selling expenses were $141 million, in line with our expectation, or 72% of net revenue. ● ● We continued to make significant strategic investments in launching international markets, and building on our already strong brand recognition. We expect to begin to leverage our SmileShop footprint in 2020 and beyond, with our marketing and selling long-term target being 40-45% of revenue. smile DIRECT CLUB Quarter Referrals as a % of Aligner Orders SmileShop Count 48% $57mm Q3 2018 Q3 2018 54% Q4 Q1 2018 2019 $69mm 19% 19% 20% 20% 20% 20% Marketing & selling expenses 139 190 223 310 54% $96mm Q2 Q3 Q4 2019 2019 2019 Q4 2018 Q1 2019 Actual $ 58% $113mm 73% $131mm 366 391 72% $141mm Q2 2019 Q3 2019 Q4 2019 % of Net Revenue 16#17General & administrative. General and administrative expenses were $95 million in Q4 compared to $44 million in the prior year period. ● ● ● Legal and lobbying expenses increased "18% sequentially. We expect continued elevated legal spend as we maintain our proactive stance in defending our mission and improving customers access to care. Our overall G&A structure was based on an aggressive hiring plan designed to conform to an earlier 2020 revenue outlook. We saw higher than expected spend across the following categories: legal, technology, consulting, D&O insurance coverage, and international expansion. ● smile DIRECT CLUB Some of these were one time in nature such as D&O IPO insurance, SOX compliance, and lease accounting standards. The other expense items are associated with the need for broader cost controls that we will be implementing in 2020 and beyond. General & administrative expenses(¹) 20% $6mm $24mm Q3 2018 (1) Percentages represent G&A as a percent of revenue, excluding stock-based compensation and IPO related costs.. 30% 23% $6mm $8mm $38mm $42mm Q4 2018 24% $0mm $47mm $6mm Q2 2019 $324mm 33% Q1 2019 G&A I Stock-based Compensation IPO-bonuses & other costs $59mm Q3 2019 37% $4mm $17mm $73mm Q4 2019 17#18Adjusted EBITDA & net income. Interest Expense: ● Taxes: smile DIRECT CLUB ● Interest expense was $4 million in the fourth quarter, associated with borrowings on indebtedness from our credit facility. The interest rate on our facility is LIBOR + 320bps. ● Our provision for income tax was $1.7 million in the fourth quarter. We generated $22 million of deferred tax assets related to net operating losses in 2019, of which $11 million relates to Federal, $10 million relates to State and $1 million relates to Foreign. No liability was recorded under our Tax Receivable Agreement as part of our Up-C structure during 2019. Other: Other expense (benefit) was ($0.6mm) in the fourth quarter, primarily related to foreign currency transactions. ($15mm) Q3 2018 $4mm Q3 2018 (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for definition of Adjusted EBITDA. ($26mm) Q4 2018 ($13mm) Q4 2018 Net income ($20mm) ($32mm) Q1 2019 Adj. EBITDA(¹) ($4mm) Q2 2019 Q1 2019 $6mm Q2 2019 ($388mm) Q3 2019 ($45mm) Q3 2019 ($97mm) Q4 2019 ($60mm) Q4 2019 18#19Balance sheet highlights. We ended the fourth quarter with $318 million in cash and cash equivalents. ● ● ● Debt as of the end of Q4 was $209 million. This is primarily associated with our credit facility, which finances our SmilePay program. Cash from operations for the fourth quarter was negative $141 million, driven by negative $60 million of Adjusted EBITDA(1) and an increase in accounts receivable of $34 million. Cash spent on investing for the fourth quarter was $40 million, mainly associated with leasehold improvements, capitalized software and building our manufacturing automation. smile DIRECT CLUB ($ in millions) Cash Debt Accounts Receivable, Net Cash Flow from Operations Cash Flow from Investing Free Cash Flow (1) Adjusted EBITDA is a non-GAAP financial measure. See appendix for definition of Adjusted EBITDA. (2) Includes approximately $100 million set aside for IPO expenses and future payments or distributions as referenced in our S-1. (3) Includes approximately $40 million of IPO expenses in the fourth quarter. Q4 2018 Q2 2019 Q3 2019 (2) $313.9 $149.1 $547.6 $156.8 $205.0 $219.4 Q4 2019 $318.5 $208.5 $174.2 $275.1 $311.7 $345.7 $(31.6) $(65.9) $(94.1) $(141.2) $(21.9) $(10.7) $(28.2) $(40.0) (3) $(53.5) $(76.7) $(122.3) $(181.2) 19#20Appendix. smile DIRECT CLUB 20#21Net Income to adjusted EBITDA. (In thousands) Net loss Depreciation and amortization Total interest expense Income tax expense Loss on disposal of property, plant, & equipment Fair value adjustment of warrant derivative Loss on extinguishment of debt Equity-based compensation IPO related costs Other Adjusted EBITDA smile DIRECT CLUB Note: Adjusted EBITDA is a non-GAAP financial measure. Three Months Ended December 31, 2019 $(97,326) 11,099 4,052 1,672 1 17,363 3,746 (644) $(60,038) 2018 $(26,014) 3,894 3,176 67 1 6,213 13 $(12,651) Years Ended December 31, 2019 $(537,805) 27,336 15,734 2,268 29,672 350,122 9,892 (142) $(102,923) 2018 $(74,771) 8,861 13,705 361 617 14,500 19,839 31 $(16,857) 21#22smile DIRECT CLUB