SmileDirectClub Investor Presentation Deck
Gross margin.
Gross margin for the quarter was 72.5%, which
represents a 94 bps increase from prior year
and a 1,155 bps increase compared to Q4 2022.
When compared to Q1 2022 increased
margins relates primarily to higher labor
efficiency.
Lower Q4 2022 gross margin was
driven by lower volumes and lower retail
margins, as well as higher holiday
shipping costs and higher impression kit
volume which has a higher cost relative
to other sales.
We continue to leverage our manufacturing
automation enhancements with our 2nd Gen
machines producing over 95% of our aligners
in the quarter.
The Q1 2023 decline in gross margin dollars
compared to prior year was driven by lower
aligner shipments as a result of the challenging
macroeconomic environment.
smile
DIRECT CLUB
I
100%
95%
90%
85%
I
1
I 80%
I
1 75%
70%
I 65%
I
60%
I
I 55%
I
50%
76%
Q1 2021 Q2 2021
$152
74%
Q1 2021
$128
Q2 2021
71%
Q3 2021
$98
Q3 2021
Gross margin %(¹)
4%
H
72%
65%
Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
Gross Profit
$82
Q4 2021
$109
Q1 2022
73%
$92
Q2 2022
70%
$75
61%
$53
Q3 2022 Q4 2022
73%
$87
Q1 2023
(1) In Q4 2021, one-time costs related to the implementation of our internal treatment planning software, SmileOS and lower retail margin, primarily 25
due to higher expansion costs and excess inventory costs had an approximate 400 bps impact on margin.View entire presentation