0001775625-22-000020 | 10-K | XBRL Viewer

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
ASSETS
Cash	$ 224,860	$ 316,724
Accounts receivable, net	184,558	221,973
Inventories	40,803	29,247
Prepaid and other current assets	17,519	12,832
Total current assets	467,740	580,776
Accounts receivable, net, non-current	59,210	71,355
Property, plant and equipment, net	227,201	189,995
Operating lease right-of-use asset	24,927	31,176
Other assets	15,480	11,487
Total assets	794,558	884,789
LIABILITIES AND EQUITY (DEFICIT)
Accounts payable	19,922	36,848
Accrued liabilities	122,066	100,589
Deferred revenue	20,258	26,619
Current portion of long-term debt	10,997	15,664
Other current liabilities	4,997	6,821
Total current liabilities	178,240	186,541
Long-term debt, net of current portion	729,973	392,939
Operating lease liabilities, net of current portion	20,352	27,771
Other long-term liabilities	347	43,400
Total liabilities	928,912	650,651
Equity (Deficit)
Additional paid-in-capital	448,867	483,393
Accumulated other comprehensive income (loss)	293	(102)
Accumulated deficit	(295,321)	(192,879)
Noncontrolling interest	(305,852)	(73,932)
Warrants	17,620	17,620
Total equity (deficit)	(134,354)	234,138
Total liabilities and equity (deficit)	794,558	884,789
Common Class A
Equity (Deficit)
Common stock	12	11
Common Class B
Equity (Deficit)
Common stock	$ 27	$ 27

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Common Class A
Common stock, par value (USD per share)	$ 0.0001	$ 0.0001
Common stock, shares issued (in shares)	119,280,781	115,429,319
Common stock, shares outstanding (in shares)	119,280,781	115,429,319
Common Class B
Common stock, par value (USD per share)	$ 0.0001	$ 0.0001
Common stock, shares issued (in shares)	269,243,501	270,908,566
Common stock, shares outstanding (in shares)	269,243,501	270,908,566

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Total revenues	$ 637,611	$ 656,780	$ 750,428
Cost of revenues	177,597	206,852	163,861
Cost of revenues—related parties	0	0	14,529
Total cost of revenues	177,597	206,852	178,390
Gross profit	460,014	449,928	572,038
Marketing and selling expenses	388,450	322,919	481,468
General and administrative expenses	325,569	311,982	580,843
Lease abandonment and impairment of long-lived assets	1,481	25,457	0
Other store closure and related costs	3,798	7,034	0
Loss from operations	(259,284)	(217,464)	(490,273)
Interest expense	23,154	45,010	15,659
Interest expense—related parties	0	0	75
Loss on extinguishment of debt	47,631	13,781	29,672
Other expense (income)	4,313	(878)	(142)
Net loss before provision for income tax expense	(334,382)	(275,377)	(535,537)
Provision for income tax expense	1,268	3,122	2,268
Net loss	(335,650)	(278,499)	(537,805)
Net loss attributable to noncontrolling interest	(233,208)	(200,133)	(423,292)
Net loss attributable to SmileDirectClub, Inc.	$ (102,442)	$ (78,366)	$ (114,513)
Earnings (loss) per share of Class A common stock:
Basic (in USD per share)	$ (0.87)	$ (0.71)
Diluted (in USD per share)	$ (0.87)	$ (0.72)
Weighted average shares outstanding:
Basic (in shares)	118,360,801	109,854,360	102,442,525
Diluted (in shares)	387,775,890	385,200,442	381,917,030
Common Class A
Earnings (loss) per share of Class A common stock:
Basic (in USD per share)	$ (0.87)	$ (0.71)	$ (1.12)
Diluted (in USD per share)	$ (0.87)	$ (0.72)	$ (1.14)
Excluding Financing Revenue
Total revenues	$ 594,692	$ 607,373	$ 706,529
Financing Revenue
Total revenues	$ 42,919	$ 49,407	$ 43,899

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Other Comprehensive Income [Abstract]
Net loss	$ (335,650)	$ (278,499)	$ (537,805)
Other comprehensive income (loss):
Foreign currency translation adjustment	1,295	663	(1,010)
Comprehensive loss	(334,355)	(277,836)	(538,815)
Comprehensive loss attributable to noncontrolling interests	(232,308)	(199,640)	(424,030)
Comprehensive loss attributable to SmileDirectClub, Inc.	$ (102,047)	$ (78,196)	$ (114,785)

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

Consolidated Statements of Changes in Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock Common Class A	Common Stock Common Class B	Additional Paid-in Capital	Warrants	Accumulated Deficit	Noncontrolling Interest	Accumulated Other Comprehensive Income (Loss)	AOCI Including Portion Attributable to Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2018				108,878	369,000
Beginning balance at Dec. 31, 2018	$ (90,437)			$ 57,677	$ 315	$ (148,429)
Beginning balance, temporary equity at Dec. 31, 2018	388,634
Increase (Decrease) In Members' Equity [Roll Forward]
Net loss prior to Reorganization Transactions	(537,805)
Preferred Unit redemption accretion	(59,250)			$ (59,250)
Preferred Unit redemption accretion	59,250
Redemptions prior to Reorganization Transactions (in shares)				(20,710)
Redemptions prior to Reorganization Transactions	(54,154)			$ (54,154)
Share-based compensation prior to Reorganization Transactions	8,561			8,561
Distributions payable	(43,400)			$ (43,400)
Effect of Reorganization Transactions (in shares)				(88,168)	(369,000)
Effect of Reorganization Transactions	342,925			$ 90,566	$ (315)	252,674
Effect of Reorganization Transactions	(447,884)
Ending balance (in shares) at Dec. 31, 2019				0	0
Ending balance at Dec. 31, 2019	0			$ 0	$ 0	0
Ending balance, temporary equity at Dec. 31, 2019	0
Beginning balance (in shares) at Dec. 31, 2018		0	0
Beginning balance at Dec. 31, 2018	298,197	$ 0	$ 0	0	0	0	$ 0		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	(537,805)
Redemptions prior to Reorganization Transactions	(54,154)			(54,154)
Distribution payable	(43,400)			(43,400)
Foreign currency translation adjustment	(1,010)
Ending balance (in shares) at Dec. 31, 2019		103,303,674	279,474,505
Ending balance at Dec. 31, 2019	458,285	$ 10	$ 28	447,866	0	(114,513)	125,166	$ (272)
Increase (Decrease) In Members' Equity [Roll Forward]
Net loss prior to Reorganization Transactions	(278,499)					(78,366)	(200,133)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	(278,499)					(78,366)	(200,133)
Equity-based compensation	44,903			44,903
Issuance of Class A shares in connection with equity based awards (in shares)		2,100,320
Issuance of Class A shares in connection with equity-based awards	0
Exchange of Class B common stock for Class A common stock (in shares)		10,025,325	(10,025,325)
Exchange of Class B common stock for Class A common stock	0	$ 1	$ (1)	395			(395)
Exercised (in shares)			1,459,386
Issuance of Class B shares in connection with warrant exercise	922			(15)			937
HPS Warrant issuance	17,620				17,620
Equity-based payments	(9,901)			(9,901)
Foreign currency translation adjustment	663						493	170
Other	145			145
Ending balance (in shares) at Dec. 31, 2020		115,429,319	270,908,566
Ending balance at Dec. 31, 2020	234,138	$ 11	$ 27	483,393	17,620	(192,879)	(73,932)	(102)
Increase (Decrease) In Members' Equity [Roll Forward]
Net loss prior to Reorganization Transactions	(335,650)					(102,442)	(233,208)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	(335,650)					(102,442)	(233,208)
Equity-based compensation	44,628			44,628
Issuance of Class A shares in connection with equity based awards (in shares)		2,011,602
Issuance of Class A shares in connection with equity-based awards	0	$ 1		(1)
Exchange of Class B common stock for Class A common stock (in shares)		1,665,065	(1,665,065)
Exchange of Class B common stock for Class A common stock	0			(388)			388
Issuance of shares in connection with stock purchase plan (in shares)		174,795
Issuance of shares in connection with stock purchase plan	1,031			1,031
Equity-based payments	(10,028)			(10,028)
Foreign currency translation adjustment	1,295						900	395
Capped call instruments	(69,518)			(69,518)
Other	(250)			(250)
Ending balance (in shares) at Dec. 31, 2021		119,280,781	269,243,501
Ending balance at Dec. 31, 2021	$ (134,354)	$ 12	$ 27	$ 448,867	$ 17,620	$ (295,321)	$ (305,852)	$ 293

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Activities
Net loss	$ (335,650)	$ (278,499)	$ (537,805)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	70,113	56,390	27,336
Deferred loan cost amortization	5,148	4,407	3,969
Equity-based compensation	44,628	44,903	350,122
Loss on extinguishment of debt	47,631	13,594	17,693
Paid in kind interest expense	3,324	8,450	0
Asset impairment and related charges	1,481	27,767	0
Other non-cash operating activities	372	10,071	1,783
Changes in operating assets and liabilities:
Accounts receivable	49,560	52,400	(171,577)
Inventories	(11,775)	(11,602)	(9,650)
Prepaid and current assets	(8,733)	(378)	(13,059)
Accounts payable	(11,296)	(7,670)	(1,182)
Accrued liabilities and other	10,039	(4,585)	13,107
Due to related parties	0	0	(20,305)
Deferred revenue	(6,361)	1,184	6,376
Net cash used in operating activities	(141,519)	(83,568)	(333,192)
Investing Activities
Purchases of property, equipment, and intangible assets	(106,567)	(97,141)	(106,361)
Net cash used in investing activities	(106,567)	(97,141)	(106,361)
Financing Activities
IPO proceeds, net of discount and related fees	0	(1,155)	1,277,010
Repurchase of Class A shares and LLC Units	0	0	(696,489)
Proceeds from warrant exercise	0	922	0
Repurchase of Class A shares to cover employee tax withholdings	(10,028)	(9,901)	(85,684)
Settlement of canceled awards	0	0	(2,000)
Issuance of Class A common stock	0	0	6
Proceeds from stock purchase plan	1,031	0	0
Repayment of HPS Credit Facility	(396,497)	0	0
Payment of extinguishment costs	(37,701)	0	0
Proceeds from HPS Credit Facility and Warrants, net	0	388,000	0
Borrowings of long-term debt	747,500	16,807	176,000
Payments of issuance costs	(21,179)	(11,784)	(6,127)
Purchase of capped call transactions	(69,518)	0	0
Final payment of Align arbitration	(43,400)	0	0
Principal payments on long-term debt	(4,609)	(194,439)	(193,516)
Principal payments on related party debt	0	0	(22,352)
Payments of finance leases	(11,055)	(10,138)	(3,017)
Other	1,173	663	251
Net cash provided by financing activities	155,717	178,975	444,082
Effect of exchange rates change on cash and cash equivalents	505	0	0
Increase (decrease) in cash	(91,864)	(1,734)	4,529
Cash at beginning of period	316,724	318,458	313,929
Cash at end of period	$ 224,860	$ 316,724	$ 318,458

SEC Schedule, Article 12-09, Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2021

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure

Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2021, 2020, and 2019:


Description	Balance at Beginning of Year		Charged to Revenue		Charged to Other Accounts		Write-offs and Other Adjustments		Balance at End of Year
Allowance for credit losses and other revenue adjustments:
Year ended December 31, 2019	$	35,013	$	111,330	$	(15)	$	(96,963)	$	49,365
Year ended December 31, 2020	$	49,365	$	125,938	$	522	$	(126,561)	$	49,264
Year ended December 31, 2021	$	49,264	$	109,806	$	814	$	(116,787)	$	43,097

Organization and Basis of Presentation	12 Months Ended
Organization and Basis of Presentation	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Basis of Presentation	Organization and Basis of Presentation Organization SmileDirectClub, Inc. was formed on April 11, 2019 with no operating assets or operations as a Delaware corporation for the purpose of facilitating an initial public offering and other related transactions in order to carry on the business of SDC Financial LLC and its subsidiaries. Unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “SmileDirectClub,” and similar references refer to SmileDirectClub, Inc. and its consolidated subsidiaries, including SDC Financial LLC and its subsidiaries. “SDC Financial” refers to SDC Financial LLC and “SDC Inc.” refers to SmileDirectClub, Inc. The Company is engaged by its network of doctors to provide a suite of non-clinical administrative support services, including access to and use of its SmileCheck platform, as a dental support organization. For purposes of these Notes to Consolidated Financial Statements, the Company’s affiliated network of dentists and orthodontists is included in the definition of “we,” “us,” “our,” and the “Company” as it relates to any clinical aspect of the member’s treatment. All of the Company’s manufacturing operations are directly or indirectly conducted by Access Dental Lab, LLC (“Access Dental”), one of its operating subsidiaries. SmileDirectClub is an oral care company and creator of the first MedTech platform for teeth straightening. Through the Company’s cutting-edge teledentistry technology and vertically integrated model, it is revolutionizing the oral care industry, from clear aligner therapy to its affordable, premium oral care product line. SmileDirectClub’s mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. SmileDirectClub is headquartered in Nashville, Tennessee and operates in the U.S., Costa Rica, Puerto Rico, Canada, Australia, United Kingdom, France, and Ireland. SDC Inc. is a holding company. Its sole material asset is its equity interest in SDC Financial which, through its direct and indirect subsidiaries, conducts all of the Company’s operations. SDC Financial is a Delaware limited liability company and wholly owns SmileDirectClub, LLC (“SDC LLC”) (a Tennessee limited liability company) and Access Dental (a Tennessee limited liability company). Because SDC Inc. is the managing member of SDC Financial, SDC Inc. indirectly operates and controls all of the business and affairs of SDC Financial and its subsidiaries. Initial Public Offering On September 16, 2019, SDC Inc. completed an initial public offering (“IPO”) of 58,537,000 shares of its Class A common stock at a public offering price of $23.00 per share. SDC Inc. received $1,286 million in proceeds, net of underwriting discounts and commissions. SDC Inc. used substantially all of the net proceeds after expenses to purchase newly-issued membership interest units from SDC Financial. Reorganization Transactions In connection with the IPO, the Company completed the following transactions (the “Reorganization Transactions”): •the formation of SDC Inc. as a Delaware corporation to function as the ultimate parent of SmileDirectClub and a publicly traded entity; •SDC Inc.’s acquisition of the pre-IPO membership interest units in SDC Financial (“Pre-IPO Units”) held by certain pre-IPO investors that are taxable as corporations for U.S. federal income tax purposes (“Blockers”), pursuant to a series of mergers (the “Blocker Mergers”) of the Blockers with wholly owned subsidiaries of SDC Inc., and the issuance by SDC Inc. to the equityholders of the Blockers shares of Class A common stock as consideration in the Blocker Mergers; •the amendment and restatement of the SDC Financial’s limited liability company operating agreement (the “SDC Financial LLC Agreement”) to, among other things, modify the capital structure of SDC Financial by replacing the different classes of Pre-IPO Units (including restricted Pre-IPO Units held by certain employees) with a single new class of membership interests of SDC Financial (“LLC Units”); •the issuance to each of the pre-IPO investors previously holding Pre-IPO Units (including restricted Pre-IPO Units) of a number of shares of SDC Inc. Class B common stock equal to the number of LLC Units held by it; •the issuance to certain employees of cash and shares of Class A common stock pursuant to their Incentive Bonus Agreements (“IBAs”); and •the equitable adjustment, pursuant to their terms, of outstanding warrants to purchase Pre-IPO Units held by two service providers into warrants to acquire LLC Units (together with an equal number of shares of SDC Inc.’s Class B common stock). Following the completion of the Reorganization Transactions and the IPO, SDC Inc. owned 26.9% of SDC Financial. Holders (other than SDC Inc.) of LLC Units following the consummation of the Reorganization Transactions and the IPO (“Continuing LLC Members”) owned the remaining 73.1% of SDC Financial. SDC Inc. is the sole managing member of SDC Financial and, although SDC Inc. has a minority economic interest in SDC Financial, it has the sole voting power in, and controls the management of, SDC Financial. Accordingly, SDC Inc. consolidates the financial results of SDC Financial and reports a noncontrolling interest in its consolidated financial statements. As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. In connection with the Reorganization Transactions and the IPO, the Company entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with the Continuing LLC Members, pursuant to which SDC Inc. agreed to pay the Continuing LLC Members 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local income tax or franchise tax that SDC Inc. actually realizes as a result of (a) the increases in tax basis attributable to exchanges of LLC Units by Continuing LLC Members and (b) tax benefits related to imputed interest deemed to be paid by SDC Inc. as a result of the Tax Receivable Agreement. Basis of Presentation and Consolidation The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts of SDC Inc., which consolidates SDC Financial and its wholly-owned subsidiaries, as well as accounts of contractually affiliated professional corporations (“PCs”) managed by the Company. The consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of Accounting Standards Codification (‘‘ASC”) Topic 810, ‘‘Consolidation.” At December 31, 2021, the variable interest entities include 53 dentist owned PCs, and at December 31, 2020 the variable interest entities included 54 dentist owned PCs. The Company is a dental service organization and does not engage in the practice of dentistry. All clinical services are provided by dentists and orthodontists who are engaged as independent contractors or otherwise engaged by the dentist-owned PCs. The Company contracts with the PCs and dentists and orthodontists through a suite of agreements, including but not limited to, management services agreements, supply agreements, and licensing agreements, pursuant to which the Company provides the administrative, non-clinical management services to the PCs and independent contractors. The Company has the contractual right to manage the activities that most significantly impact the variable interest entities’ economic performance through these agreements without engaging in the corporate practice of dentistry. Additionally, the Company would absorb substantially all of the expected losses of these entities should they occur. The accompanying consolidated statements of operations reflect the revenue earned and the expenses incurred by the PCs. COVID-19 Pandemic Although increasing rates of vaccinations across the globe and decreasing governmental restrictions have begun to lessen the impact of COVID-19, the Company continues to navigate the uncertain and unprecedented economic and operating conditions resulting from COVID-19 and its protracted duration. In response to COVID-19 and the related containment measures, the Company made the following operational changes beginning in the second quarter of 2020 to ensure the health and safety of its employees and its members: transitioned its team members, where possible, to a remote working environment; closed a portion of its SmileShops based on the Company’s real estate repositioning program as well as local public health guidelines and evolving customer behaviors and expectations; reconfigured its SmileShops and popup locations to reduce customer overlap in the waiting area and require touchless temperature screening upon arrival; heightened the personal protective equipment protocol (“PPE”) requirements for Smile Guides; reconfigured its production lines to observe social distancing; and implemented enhanced cleaning and sanitizing routines, thermal temperature screening, mandatory PPE protocols and other health and safety measures at its manufacturing facilities. The Company also enacted a resilience policy that provides its team members paid leave for COVID-19 testing and up to two weeks of paid leave for any required self-quarantine due to the team member testing positive for COVID-19. Additionally, the Company took the following actions beginning in the second quarter of 2020 in an effort to fortify the financial position of the business: reduced its marketing spend as a percentage of revenue; reduced its headquarters and retail workforce; secured long-term financing; and initiated a real estate repositioning program. Beginning in the second quarter of 2020, the Company performed a review of its real estate needs and initiated restructuring actions related to a real estate repositioning program that remains ongoing. As a result of these actions, the Company incurred one-time charges of approximately $32,491 during the year ended December 31, 2020. This one-time charge was primarily associated with the closure of our manufacturing facility in Kyle, Texas; the consolidation of several floors at our headquarters in Nashville, Tennessee; the closure and consolidation of many of our SmileShops, which is an on-going evaluation; and the impairment of right of use assets and leasehold improvements at the closed SmileShops. During the year ended December 31, 2021, the Company incurred one-time charges of approximately $5,279, primarily associated with store closure costs and further consolidation of corporate office space. Given the uncertain operating environment and the shift to work-from-home, the Company made the strategic decision to align its rent costs with the current needs of the business, while also ensuring that the Company has sufficient capacity to support future growth. The Company continues to evaluate its properties to determine if it will further rationalize its footprint to better align with marketplace demand, including the direct and indirect effects of the COVID-19 pandemic.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Management Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the reported amounts. On an ongoing basis, the Company evaluates its estimates, including those related to the fair values of financial instruments, useful lives of property, plant and equipment, revenue recognition, equity-based compensation, long-lived assets, and contingent liabilities, among others. In connection with its credit facility with HPS Investment Partners, the Company issued warrants to certain affiliates of HPS Investment Partners. The warrants were recorded at fair value at the time of issuance within equity on the consolidated balance sheet using the Black-Scholes option pricing model (see Note 10). Each of these estimates varies in regard to the level of judgment involved and its potential impact on the Company’s financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact the Company’s financial condition, results of operations, or cash flows. Actual results could differ from those estimates.

Revenue Recognition

The Company’s revenues are derived primarily from sales of aligners, impression kits, whitening gel, and retainers, and interest earned through its SmilePay financing program. Revenue is recorded for all customers based on the amount that is expected to be collected, which considers implicit price concessions, discounts, and cancellations and refunds from customer returns.

The Company identifies a performance obligation as distinct if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates (the number of times a customer is expected to order additional aligners), costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation, in making these estimates. Further, the Company’s process for estimating usage rates requires significant judgment and evaluation of inputs, including historical data and forecasted usages. Changes in the allocation of the SSP between performance obligations will not affect the amount of total revenues recognized for a particular contract. The Company uses the expected cost plus a margin approach to determine the SSP for performance obligations, and discounts are allocated to each performance obligation based on the relative SSP. However, any material changes in the allocation of the SSP could impact the timing of revenue recognition, which may have a material effect on the Company’s financial position and result of operations as the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation.

The Company estimates the amount expected to be collected based upon management’s assessment of historical write-offs, expected net collections including implicit price concessions, and cancellations and refunds from customer returns, business and economic conditions, and other collection indicators. Management relies on the results of detailed reviews of historical write-offs, cancellations, returns, and collections as a primary source of information in estimating the amount of contract consideration expected to be collected. Uncollectible receivables are written-off in the period management believes it has exhausted its ability to collect payment from the customer. The Company believes its analysis provides reasonable estimates of its revenues and valuations of its accounts receivable.

A description of the revenue recognition for each product sold by the Company is detailed below.

Aligners and Impression Kits: The Company enters into contracts with customers for aligner sales that involve multiple future performance obligations. The Company determined that aligner sales comprise the following distinct performance

obligations: initial aligners, touch-up aligners, and retainers for international sales only which can occur at any time throughout the treatment plan (which is typically between five months to ten months) upon the direction of and prescription from the treating dentist or orthodontist.

The Company allocates revenues for each performance obligation based on its SSP and recognizes the revenues as control of the performance obligation is transferred upon shipment of the aligners. The Company recognizes aligner revenue on amounts expected to be collected during the course of the treatment plan.

The Company bills its customers either upfront for the full cost of aligners or monthly through its SmilePay financing program, which involves a down payment and a fixed amount per month for up to 24 months. The Company’s accounts receivable related to the SmilePay financing program are reported at the amount expected to be collected on the consolidated balance sheets, which considers implicit price concessions. Financing revenue from its accounts receivable is recognized based on the contractual market interest rate with the customer, net of implicit price concessions. There are no fees or origination costs included in accounts receivable.

The Company sells doctor-prescribed impression kits to its customers as an alternative to an in-person visit at one of its SmileShops, popup locations, or Partner Network locations, comprised of affiliated dentist and orthodontist offices, where the customer receives a free oral digital imaging of their teeth. The Company combines the sales of its impression kits with aligner sales and recognizes the revenues as control of the performance obligation is transferred upon shipment of the aligners. The Company estimates the amount of impression kit sales that do not result in an aligner therapy treatment plan and recognizes such revenue when aligner conversion becomes remote.

Retainers and Other Products: The Company sells retainers and other products (such as whitening gel and tooth brushes) to customers, which can be purchased on the Company’s website or certain retail outlets. The sales of these products are independent and separate from the customer’s decision to purchase aligner therapy for domestic sales. The Company determined that the transfer of control for these performance obligations occurs as the title of such products passes to the customer or retail partner.

The following table summarizes revenue recognized for each product sold by the Company:


	Years Ended December 31,
		2021		2020		2019
Aligner revenue, net		$	517,552	$	543,136	$	683,429
Financing revenue, net		42,919		49,407		43,899
Retainers and other products revenue		77,140		64,237		23,100

Total revenue		$	637,611	$	656,780	$	750,428
Implicit price concessions, cancellations, and refunds included in total revenue		$	129,307	$	138,841	$	125,535

Deferred Revenue: Deferred revenue represents the Company’s contract liability for performance obligations associated with sales of aligners. During the years ended December 31, 2021, 2020, and 2019, the Company recognized $637,611, $656,780, and $750,428 of revenue, respectively, of which $22,550, $19,750 and $16,630 was previously included in deferred revenue on the consolidated balance sheets as of December 31, 2020, 2019 and 2018, respectively.

Allowance for credit losses and other revenue adjustments: The Company records a provision to maintain an allowance for credit losses and other revenue adjustments that result from the failure or inability of its members or other partners to make required payments deemed collectible when the product was delivered, or customer returns resulting in cancellations or refunds. When determining the allowances for member receivables, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends in its estimation of expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, cancellations, and adjustments, net of

recoveries, as well as an analysis of the aged accounts receivable balances. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as a history of missed scheduled payments and customer service or production issues.

Activity in the allowance for credit losses and other revenue adjustments for the year ended December 31, 2021 was as follows:



Balance at December 31, 2020	$	53,740
Current period provision for expected credit losses and other revenue adjustments	129,307
Write-offs and other adjustments charged against the allowance, net of recoveries	(116,031)
Refunds paid	(17,707)
Balance at December 31, 2021	$	49,309

As of December 31, 2021 and 2020, approximately $43,097 and $49,264 related to implicit price concessions and cancellation and adjustment reserves and is included in net receivables, respectively, and $6,212 and $4,476 related to refund reserves and is included in current liabilities in the accompanying consolidated balance sheets, respectively.

Shipping and Handling Costs

Shipping and handling charges are recorded in cost of revenues in the consolidated statements of operations upon shipment. The Company incurred approximately $22,892, $23,036 and $19,000 in outsourced shipping expenses for the years ended December 31, 2021, 2020 and 2019, respectively.

Cost of Revenues

Cost of revenues includes the total cost of products produced and sold. Such costs include direct materials, direct labor, overhead costs (occupancy costs, indirect labor, and depreciation), fees retained by doctors, freight and duty expenses associated with moving materials from vendors to the Company’s facilities and from its facilities to the customers, and adjustments for shrinkage (physical inventory losses), lower of cost or net realizable value, slow moving product and excess inventory quantities.

Marketing and Selling Expenses

Marketing and selling expenses include direct online and offline marketing and advertising costs, costs associated with intraoral imaging services, selling labor, and occupancy costs of SmileShop locations. All marketing and selling expenses, including advertising, are expensed as incurred. For the years ended December 31, 2021, 2020 and 2019, the Company incurred marketing, selling, and advertising costs of $388,450, $322,919 and $481,468, respectively.

General and Administrative Expenses

General and administrative expenses include payroll and benefit costs for corporate team members, equity-based compensation expenses, occupancy costs of corporate facilities, bank charges and costs associated with credit and debit card interchange fees, outside service fees, and other administrative costs, such as computer maintenance, supplies, travel, and lodging.

Depreciation and Amortization

Depreciation includes expenses related to the Company’s property, plant and equipment, including capital leases. Amortization includes expenses related to definite-lived intangible assets and capitalized software. Depreciation and amortization is calculated using the straight-line method over the useful lives of the related assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the related lease terms or

their useful lives. Depreciation and amortization is included in cost of revenues, selling expenses, and general and administrative expenses depending on the purpose of the related asset.

Depreciation and amortization by financial statement line item were as follows:


	Years Ended December 31,
		2021		2020		2019
Cost of revenues		$	27,467	$	24,718	$	11,186
Marketing and selling expenses		5,001		7,079		5,322
General and administrative expenses		37,645		24,593		10,828
Total		$	70,113	$	56,390	$	27,336

Fair Value of Financial Instruments

The Company measures the fair value of financial instruments as the price 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. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities.

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.

Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The Company’s financial instruments consist of cash, current and non-current receivables, accounts payable, debt instruments, and derivative financial instruments. Due to their short-term nature, the carrying values of cash, current receivables, and trade payables approximate current fair value at each balance sheet date. The Company had $747,500 and $407,902 in borrowings under its debt facilities (as discussed in Note 10) as of December 31, 2021 and 2020, respectively. The fair value of the Company’s debt facilities is based upon market quotes and trades by investors in partial interests of these instruments (Level 2). As of December 31, 2021 the fair value of the debt facility was approximately $305,167 compared to its carrying value of $729,973.

Derivative Financial Instruments

The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability. The Company had no outstanding derivatives at December 31, 2021

or 2020; however, the Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards.

Certain Risks and Uncertainties

The Company’s operating results depend to a significant extent on the ability to market and develop its products. The life cycles of the Company’s products are difficult to estimate due, in part, to the effect of future product enhancements and competition. The inability to successfully develop and market the Company’s products as a result of competition or other factors would have a material adverse effect on its business, financial condition, and results of operations.

The Company provides credit to customers in the normal course of business. The Company maintains reserves for potential credit losses and such losses have been within management’s expectations. No individual customer accounted for 1% or more of the Company’s accounts receivable at December 31, 2021 or 2020, or net revenue for the years ended December 31, 2021, 2020 and 2019.

Some of the Company’s products are considered medical devices and are subject to extensive regulation in the U.S. and internationally. The regulations to which the Company is subject are complex. Regulatory changes could result in restrictions on the Company’s ability to carry on or expand its operations, higher than anticipated costs or lower than anticipated sales. The failure to comply with applicable regulatory requirements may have a material adverse impact on the Company.

The Company’s reliance on international operations exposes it to related risks and uncertainties, including difficulties in staffing and managing international operations, such as hiring and retaining qualified personnel; political, social and economic instability; interruptions and limitations in telecommunication services; product and material transportation delays or disruption; trade restrictions and changes in tariffs; import and export license requirements and restrictions; fluctuations in foreign currency exchange rates; and potential adverse tax consequences. If any of these risks materialize, operating results may be harmed.

The Company purchases certain inventory from sole suppliers, and the inability of any supplier or manufacturer to fulfill the supply requirements could materially and adversely impact its future operating results.

Cash

Cash consists of all highly liquid investments with original maturities of less than three months. Cash is held in various financial institutions in the U.S. and internationally.

Inventories

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method of inventory accounting. Inventory consists of raw materials for producing impression kits and aligners and finished goods. Inventory is net of shrinkage and obsolescence.

Property, Plant and Equipment, Net

Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Routine maintenance and repairs are charged to expense as incurred. At the time property, plant and equipment are retired from service, the cost and accumulated depreciation or amortization are removed from the respective accounts and the related gains or losses are reflected in the consolidated statements of operations.

Leases

On January 1, 2020, the Company adopted the new leases standard using the modified retrospective transition method, which requires that it recognizes leases differently pre- and post-adoption. The Company categorizes leases at their inception

as either operating or finance leases. Lease agreements cover certain retail locations, office space, warehouse, manufacturing and distribution space and equipment. Operating leases are included in operating lease right-of-use assets, other current liabilities, and long-term right-of-use operating lease obligations in the consolidated balance sheets. Finance leases are included in property, plant and equipment, net, current portion of long-term debt, and long-term debt.

Leased assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses a secured incremental borrowing rate as the discount rate for determining the present value of lease payments when the rate implicit in the contract is not readily determinable. Leases that have a term of twelve months or less upon commencement date are considered short-term in nature. Accordingly, short-term leases are not included on the consolidated balance sheets and are expensed on a straight-line basis over the lease term, which commences on the date we have the right to control the property.

Internally Developed Software Costs

The Company generally provides services to its customers using software developed for internal use. The costs that are incurred to develop such software are expensed as incurred during the preliminary project stage. Once certain criteria have been met, direct costs incurred in developing or obtaining computer software are capitalized. Training and maintenance costs are expensed as incurred. Capitalized software costs are included in property, plant and equipment in the consolidated balance sheets and are amortized over useful life of the software which is generally a three-year to five-year period. During the years ended December 31, 2021, 2020, and 2019, the Company capitalized $58,558, $21,509 and $11,861, respectively, of internally developed software costs. Amortization expense for internally developed software was $17,973, $7,978 and $3,384 for the years ended December 31, 2021, 2020, and 2019, respectively.

Impairment

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An asset or asset group is considered impaired if its carrying amount exceeds the future undiscounted net cash flows that the asset or asset group is expected to generate. Factors the Company considers important which could trigger an impairment review include significant negative industry or economic trends, significant loss of customers and changes in the competitive environment. If an asset or asset group is considered to be impaired, the impairment to be recognized is calculated as the amount by which the carrying amount of the asset or asset group exceeds its fair market value. The Company’s estimates of future cash flows attributable to long-lived assets require significant judgment based on its historical and anticipated results and are subject to many assumptions. The estimation of fair value utilizing a discounted cash flow approach includes numerous uncertainties which require significant judgment when making assumptions of expected growth rates and the selection of discount rates, as well as assumptions regarding general economic and business conditions, and the structure that would yield the highest economic value, among other factors.

Debt Issuance Costs

The Company records debt issuance costs related to its term debt as direct deductions from the carrying amount of the debt. The costs are amortized to interest expense over the life of the debt using the effective interest method.

Income Taxes

SDC Inc. is the managing member of SDC Financial and, as a result, consolidates the financial results of SDC Financial in the consolidated financial statements. SDC Financial and its subsidiaries are limited liability companies and have elected to be taxed as partnerships for income tax purposes except for a subsidiary, SDC Holding, LLC (‘‘SDC Holding”) and its domestic and foreign subsidiaries, which are taxed as corporations. As such, SDC Financial does not pay any federal income taxes, as any income or loss is included in the tax returns of the individual members. SDC Financial does pay state income

tax in certain jurisdictions, and the Company’s income tax provision in the consolidated financial statements reflects the income taxes for those states. Additionally, certain wholly-owned entities taxed as corporations are subject to federal, state, and foreign income taxes, in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. The Company further evaluates deferred tax assets in each jurisdiction and recognizes associated benefits when positive evidence of realization exceeds negative evidence, and otherwise records valuation allowances as necessary.

The Company computes the provision for income taxes using the liability method and recognizes deferred tax assets and liabilities for temporary differences between financial statement and income tax bases of assets and liabilities, as well as for operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using tax rates applicable to taxable income in effect for the years in which those tax assets are expected to be realized or settled and provides a valuation allowance against deferred tax assets when it cannot conclude that it is more likely than not that some or all deferred tax assets will be realized. In addition, the Company recognizes tax benefits from uncertain tax positions only if it expects that its tax positions are more likely than not that they will be sustained, based on the technical merits of the positions, on examination by the jurisdictional tax authority. The Company recognizes any accrued interest and penalties to unrecognized tax benefits as interest expense and income tax expense, respectively.

Tax Receivable Agreement

In connection with the Reorganization Transactions and the IPO, the Company entered into a Tax Receivable Agreement with the Continuing LLC Members, pursuant to which SDC Inc. agreed to pay the Continuing LLC Members 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local income tax or franchise tax that SDC Inc. actually realizes as a result of (a) the increases in tax basis attributable to exchanges by Continuing LLC Members and (b) tax benefits related to imputed interest deemed to be paid by SDC Inc. as a result of the Tax Receivable Agreement. The Company recognizes this contingent liability in its consolidated financial statements when amounts become probable as to incurrence and estimable in amount.

Recently Adopted Accounting Pronouncements

In January 2021 the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses” (Topic 326). The FASB issued this update to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the existing guidance of incurred loss impairment methodology with an approach that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which clarifies the scope of guidance in the ASU 2016-13. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In January 2021, the Company adopted FASB ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This standard simplified the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an period and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplified aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. The Company adopted the provisions of this guidance effective January 1, 2021 using the modified retrospective method of adoption which required no cumulative-effect adjustment to retained earnings as of the beginning of the period.

In January 2021, the Company adopted FASB ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which eliminates most of the guidance in Subtopic 470-20 that requires separate accounting for embedded conversion features in convertible debt arrangements. Further, ASU 220-06 removes some of the conditions in

Subtopic 815-40-25, “Contracts on an Entity's own Equity,” that are required for equity classification, including the requirement for equity contracts to permit settlement in unregistered shares. The Company adopted the provisions of this guidance effective January 1, 2021, using the modified retrospective method of adoption which required no cumulative-effect adjustment to retained earnings as of the beginning of the period. The Company applied the provisions of this guidance to the recently issued 2026 Convertible Senior Notes and related capped call transactions.

Inventories

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories are comprised of the following:



	December 31,		December 31,
	2021		2020
Raw materials	$	14,662	$	10,059
Finished goods	26,141		19,188
Total inventories	$	40,803	$	29,247

Prepaid and Other assets

12 Months Ended

Dec. 31, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid and Other assets

Prepaid and Other Assets

Prepaid and other assets are comprised of the following:



	December 31,		December 31,
	2021		2020
Prepaid expenses	$	11,496	$	9,315
Deposits to vendors	5,443		2,111
Other	580		1,406
Total prepaid and other current assets	$	17,519	$	12,832
Prepaid expenses, non-current	$	1,911	$	2,583
Deposits to vendors, non-current	967		1,018
Indefinite-lived intangible assets	7,155		6,692
Other intangible assets, net	2,458		184
Investments and other	2,989		1,010
Total other assets	$	15,480	$	11,487

In March 2019, the Company purchased an intangible asset related to manufacturing. The Company evaluates the remaining useful life and carrying value of this indefinite-lived intangible asset at least annually or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in value may have occurred. There were no impairment charges related to the Company’s indefinite-lived intangible asset during the years ended December 31, 2021, or 2020.

Lease Abandonment, Impairment of Long-Lived Assets and Store Closure and Other Related Charges

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Lease Abandonment, Impairment of Long-Lived Assets and Store Closure and Other Related Charges

Lease Abandonment, Impairment of Long-lived Assets and Store Closure and Other Related ChargesThe Company evaluates its real estate needs on a recurring basis and beginning in the second quarter of 2020, initiated restructuring actions related to a real estate repositioning program. As a result of these changes, the Company incurred one-time charges of $5,279 for the year ended December 31, 2021. These charges were primarily associated with store closure costs and consolidation of a portion of SmileShops, which is an on-going evaluation. Given the uncertain operating environment and the shift to work-from-home, the Company made the strategic decision to align its rent costs with the current needs of the business, while also ensuring that the Company has sufficient capacity to support future growth. The Company continues to evaluate its SmileShops and other properties to determine if it will further rationalize its footprint to

better align with marketplace demand, including the direct and indirect effects of the COVID-19 pandemic. Additional future restructuring charges may result from the Company’s real estate repositioning and optimization initiatives.

The following table summarizes restructuring charges for the periods presented:


	Years Ended December 31,
		2021		2020		2019
Lease abandonment and impairment of long-lived assets:
Impairment of property, plant and equipment		$	586	$	21,628	$	—
Impairment of right of use asset		895		3,829		—
		$	1,481	$	25,457	$	—
Store closure and other related charges:
Impairment of inventory		$	219	$	786	$	—
Short-term lease termination fees		205		4,687		—
Other expenses		3,374		1,561		—
		$	3,798	$	7,034	$	—

The balance of the accruals for the restructuring programs recorded in accrued expenses in the consolidated balance sheet as of December 31, 2021 was $2,023.

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, Net

Property, plant and equipment were comprised of the following:



	December 31,		December 31,
	2021		2020
Lab and SmileShop equipment	$	118,320	$	116,340
Computer equipment and software	178,508		91,595
Leasehold improvements	36,474		25,721
Furniture and fixtures	13,321		13,627
Vehicles	8,018		6,266
Construction in progress	23,182		31,796
	377,823		285,345
Less: accumulated depreciation	(150,622)		(95,350)
Property, plant and equipment, net	$	227,201	$	189,995

The carrying values of assets under finance leases were $10,163 and $20,484 as of December 31, 2021 and December 31, 2020, respectively, net of accumulated depreciation of $18,013 and $15,444, respectively.

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

LeasesThe Company leases property and equipment under finance and operating leases. For leases with terms greater than 12 months, the Company records the related right-of-use assets and right-of-use obligations at the present value of lease payments over the term. Certain of the Company’s leases include rental escalation clauses and renewal options that are factored into the determination of lease payments when appropriate. Certain of the Company’s leased store locations have variable payments based upon scan volume as well as other variable property related costs. The Company does not separate lease and non-lease components of contracts.

Generally, the Company uses its estimated incremental borrowing rate to discount the lease payments based on information available at lease commencement, as most of its leases do not provide a readily determinable implicit interest rate. The Company estimates its collateralized incremental borrowing rate based upon a synthetic credit rating and yield curve analysis at commencement or modification date in determining the present value of lease payments.

The following table presents lease-related assets and liabilities at December 31, 2021:



Leases Assets and Liabilities	Balance Sheet Classification	December 31,			December 31,
		2021			2020
Assets:
Operating leases	Operating lease right-of-use asset	$	24,927		$	31,176
Finance leases(1)	Property, plant, and equipment, net	10,163			20,484
		$	35,090		$	51,660
Liabilities:
Operating leases	Other current liabilities	$	4,997		$	6,821
Finance leases	Current portion of long-term debt	10,997			11,055
Operating leases	Operating lease liabilities, net of current portion	20,352			27,771
Finance leases	Long-term debt, net of current portion	—			10,997
		$	36,346		$	56,644
Weighted average remaining term:
Operating leases		4.8 years			6.0 years
Finance leases		0.8 years			1.6 years
Weighted average discount rate:
Operating leases(2)		4.94		%	5.87		%
Finance leases		7.00		%	7.50		%
(1) Finance lease assets are recorded net of accumulated amortization of $18,013 as of December 31, 2021.
(2) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2020.

The following table presents certain information related to lease expense for finance and operating leases:


Expense Category	Statement of Operations Classification	Years Ended December 31,
			2021		2020		2019
Finance lease expense:
Amortization of leased assets	Cost of revenues		$	9,208	$	9,988	n/a
Interest on lease liabilities	Interest expense		1,265		2,062		n/a
Operating leases(3)			8,607		9,875		n/a
Short-term lease expense(3)			12,290		16,452		n/a
Variable lease expense(3)			728		3,249		n/a
Total lease expense			$	32,098	$	41,626	$	—
(3) Expenses are included in “Cost of revenues”, “Marketing and selling expenses”, or “General and administrative expenses” in our consolidated statements of operations, depending on the purpose of the related asset.

Other Information

The following table represents supplemental cash flow information:


	Years Ended December 31,
	2021		2020
Cash paid for amounts used in the measurement of lease liabilities:
Cash used in operating activities	$	8,265	$	9,056
Cash used in investing activities	$	—	$	—
Cash used in financing activities	$	11,055	$	10,138

Maturities of Lease Liabilities

The following table reconciles the undiscounted cash flows to the finance lease liabilities and operating lease liabilities recorded on the consolidated balance sheet at December 31, 2021:


	Finance Leases		Operating Leases
2022	$	6,859	$	5,673
2023	$	—	$	6,526
2024	—		5,138
2025	—		4,036
2026	—		3,637
2027 and thereafter	—		3,874
Total minimum lease payments	6,859		28,884
Residual value	4,550		—
Amount representing interest	(412)		(3,535)
Present value of future minimum lease payments	10,997		25,349
Less: current portion	(10,997)		(4,997)
Long-term lease liabilities	$	—	$	20,352

Leases

The following table presents lease-related assets and liabilities at December 31, 2021:



Leases Assets and Liabilities	Balance Sheet Classification	December 31,			December 31,
		2021			2020
Assets:
Operating leases	Operating lease right-of-use asset	$	24,927		$	31,176
Finance leases(1)	Property, plant, and equipment, net	10,163			20,484
		$	35,090		$	51,660
Liabilities:
Operating leases	Other current liabilities	$	4,997		$	6,821
Finance leases	Current portion of long-term debt	10,997			11,055
Operating leases	Operating lease liabilities, net of current portion	20,352			27,771
Finance leases	Long-term debt, net of current portion	—			10,997
		$	36,346		$	56,644
Weighted average remaining term:
Operating leases		4.8 years			6.0 years
Finance leases		0.8 years			1.6 years
Weighted average discount rate:
Operating leases(2)		4.94		%	5.87		%
Finance leases		7.00		%	7.50		%
(1) Finance lease assets are recorded net of accumulated amortization of $18,013 as of December 31, 2021.
(2) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2020.

The following table presents certain information related to lease expense for finance and operating leases:


Expense Category	Statement of Operations Classification	Years Ended December 31,
			2021		2020		2019
Finance lease expense:
Amortization of leased assets	Cost of revenues		$	9,208	$	9,988	n/a
Interest on lease liabilities	Interest expense		1,265		2,062		n/a
Operating leases(3)			8,607		9,875		n/a
Short-term lease expense(3)			12,290		16,452		n/a
Variable lease expense(3)			728		3,249		n/a
Total lease expense			$	32,098	$	41,626	$	—
(3) Expenses are included in “Cost of revenues”, “Marketing and selling expenses”, or “General and administrative expenses” in our consolidated statements of operations, depending on the purpose of the related asset.

Other Information

The following table represents supplemental cash flow information:


	Years Ended December 31,
	2021		2020
Cash paid for amounts used in the measurement of lease liabilities:
Cash used in operating activities	$	8,265	$	9,056
Cash used in investing activities	$	—	$	—
Cash used in financing activities	$	11,055	$	10,138

Maturities of Lease Liabilities

The following table reconciles the undiscounted cash flows to the finance lease liabilities and operating lease liabilities recorded on the consolidated balance sheet at December 31, 2021:


	Finance Leases		Operating Leases
2022	$	6,859	$	5,673
2023	$	—	$	6,526
2024	—		5,138
2025	—		4,036
2026	—		3,637
2027 and thereafter	—		3,874
Total minimum lease payments	6,859		28,884
Residual value	4,550		—
Amount representing interest	(412)		(3,535)
Present value of future minimum lease payments	10,997		25,349
Less: current portion	(10,997)		(4,997)
Long-term lease liabilities	$	—	$	20,352

Accrued Liabilities

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities were comprised of the following:



	December 31,		December 31,
	2021		2020
Accrued marketing and selling costs	$	37,883	$	19,236
Accrued payroll and payroll related expenses	15,829		27,912
Accrued sales tax and related costs	8,769		14,877
Other	59,585		38,564
Total accrued liabilities	$	122,066	$	100,589

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesSDC Inc. is the managing member of SDC Financial and, as a result, consolidates the financial results of SDC Financial. SDC Financial and its subsidiaries are limited liability companies and have elected to be taxed as partnerships for income tax purposes, except for a subsidiary, SDC Holding and certain of its domestic and foreign subsidiaries, are taxed as corporations. The Company files income tax returns in the U.S. federal, various states and foreign jurisdictions. Any taxable income or loss

generated by SDC Financial is passed through to and included in the taxable income or loss of its members, including SDC Inc., generally on a pro rata basis or otherwise under the terms of the SDC Financial LLC Agreement. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss of SDC Financial, as well as any stand-alone income or loss generated by SDC Inc.

The Company’s U.S. federal and state income tax returns for the tax years 2017 and beyond remain subject to examination by the Internal Revenue Service. The Company also has operations in Costa Rica, Puerto Rico, Canada, Mexico, Australia, the U.K., Germany, Austria, the Netherlands, Spain, Ireland, France, Hong Kong, Singapore, Taiwan, and New Zealand with tax filings in each foreign jurisdiction. With respect to state and local jurisdictions, the Company and its subsidiaries are typically subject to examination for several years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that may be incurred due to state or local audits and uncertain tax positions. The Company is also subject to withholding taxes in foreign jurisdictions. The Company’s income tax expense may vary from the expense that would be expected based on statutory rates due principally to its organizational structure and recognition of valuation allowances against deferred tax assets.

Income Tax Expense

The components of loss before income taxes were as follows:


	Years Ended December 31,
	2021		2020		2019
Domestic	$	(320,870)	$	(269,211)	$	(532,379)
Foreign	(13,512)		(6,166)		(3,158)
Loss before income taxes	$	(334,382)	$	(275,377)	$	(535,537)

The income tax provision was as follows:


	Years Ended December 31,
		2021		2020		2019
Current:
Federal		$	258	$	1,169	$	1,018
State		359		642		309
Foreign		(12)		1253		491
Current income tax provision		$	605	$	3,064	$	1,818
Deferred:
Federal		$	—	$	—	$	—
State		80		58		450
Foreign		583		—		—
Deferred income tax provision		$	663	$	58	$	450
Total income tax provision		$	1,268	$	3,122	$	2,268

The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows:


	Years Ended December 31,
	2021		2020		2019
U.S. federal income tax statutory rate	21.0	%	21.0	%	21.0	%
Income attributable to noncontrolling interest and non taxable income	(13.0)	%	(13.2)	%	(16.6)	%
State income tax, net of federal benefit	(0.1)	%	(0.1)	%	(0.1)	%
Losses for which no benefit has been recognized	(12.5)	%	(0.4)	%	(3.8)	%
Foreign rate differential	0.2	%	(0.1)	%	(0.1)	%
Uncertain tax position	(0.1)	%	(0.5)	%	(0.2)	%
Change in investment in partnership	4.1	%	(7.8)	%	—	%
Other	—	%	—	%	(0.6)	%
Effective income tax rate	(0.4)	%	(1.1)	%	(0.4)	%

Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of deferred tax assets and liabilities are as follows:


	Years Ended December 31,
	2021		2020
Deferred tax assets:
Deferred revenue	$	369	$	351
Accruals and reserves	4,411		3,511
Net operating loss carryforwards	111,413		63,542
Deferred warrant expense	—		—
Basis in partnership	173,092		181,673
Gross deferred tax assets	289,285		249,077
Valuation allowance	(288,506)		(248,420)
Net deferred tax assets	$	779	$	657
Deferred tax liabilities:
Depreciation and amortization	(814)		(818)
Other	(757)		—
Gross deferred tax liabilities	(1,571)		(818)
Net deferred tax liabilities	$	(792)	$	(161)

At December 31, 2021 the Company had unused federal net operating loss carryforwards (tax effected) for federal income tax purposes of approximately $71,464, which can be carried forward indefinitely and may be used to offset future taxable income. In addition, the Company had unused net operating loss carryforwards (tax effected) for state income tax purposes of approximately $33,434, which expire from 2029 through 2035. The Company also had unused net operating loss carryforwards (tax effected) for foreign income tax purposes of approximately $6,515. Additionally, the Company has certain other deferred tax assets related to potential future tax benefits. All deferred tax assets are evaluated using positive and negative evidence as to their future realization. The Company considers recent historic losses to be significant negative evidence, and as such, records a valuation allowance against substantially all of its deferred tax assets.As of December 31, 2021, the Company maintained a valuation allowance of approximately $288,506 against its deferred tax assets. If there is a change in the Company’s assessment of the amount of deferred income tax assets that is realizable, adjustments to the valuation allowance will be made in future periods.

Unrecognized Tax Benefits

A reconciliation of the Company’s gross unrecognized tax benefits is as follows:


	Years Ended December 31,
	2021		2020
Balance at beginning of year	$	2,555	$	1,006
Increases for tax positions taken in prior years	—		462
Decreases for tax positions taken in prior years	—		—
Increases for tax positions taken in current year	438		1,087
Decreases for settlements with taxing authorities	—		—
Decreases for lapsing of the statute of limitations	(65)		—
Balance at end of year	$	2,928	$	2,555

The total amount of accrued interest and penalties were not significant as of December 31, 2021. The total amount of unrecognized tax benefit recorded during 2021 and 2020 was $2,928 and $2,555, respectively. All our unrecognized tax benefits, if recognized, would have a favorable impact on the effective tax rate.

Tax Receivable Agreement

The Company expects to obtain an increase in its share of the tax basis in the net assets of SDC Financial when LLC Units are redeemed from or exchanged by Continuing LLC Members. The Company intends to treat any redemptions and exchanges of LLC Units as direct purchases of LLC Units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that it would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the Reorganization Transactions and the IPO, the Company entered into the Tax Receivable Agreement with the Continuing LLC Members. The Tax Receivable Agreement provides for the payment by SDC Inc. of 85% of the amount of any tax benefits that SDC Inc. actually realizes, or in some cases is deemed to realize, as a result of (i) increases in SDC Inc.’s share of the tax basis in the net assets of SDC Financial resulting from any redemptions or exchanges of LLC Units, (ii) tax basis increases attributable to payments made under the Tax Receivable Agreement, and (iii) deductions attributable to imputed interest pursuant to the Tax Receivable Agreement (collectively, the “TRA Payments”). The Company expects to benefit from the remaining 15% of any of cash savings, if any, that it realizes.

During the year ended December 31, 2019, the Company acquired an aggregate of $635,690 in LLC Units in connection with the redemption of certain Continuing LLC Members, which resulted in an increase in the tax basis of the assets of SDC Financial subject to the provisions of the Tax Receivable Agreement. The Company has not recognized any additional liability under the Tax Receivable Agreement after concluding it was not probable that such TRA Payments would be paid based on its estimates of future taxable income. No payments were made to the Continuing LLC Members pursuant to the Tax Receivable Agreement during the years ended December 31, 2021 or 2020.

The amounts payable under the Tax Receivable Agreement will vary depending upon a number of factors, including the amount, character, and timing of the taxable income of SDC Inc. in the future. If the valuation allowance recorded against the deferred tax assets applicable to the tax attributes referenced above is released in a future period, the Tax Receivable Agreement liability may be considered probable at that time and recorded within earnings.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Long-Term Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-Term Debt

The Company’s debt and finance lease obligations are comprised of the following:



	December 31,		December 31,
	2021		2020
2026 Convertible Senior Notes, net of unamortized financing costs $17,527 and $0, respectively	$	729,973	$	—
HPS Credit Facility, net of unamortized financing costs of $0 and $10,431, respectively	—		381,942

Align redemption promissory note	—		4,609
Finance lease obligations	10,997		22,052
Total debt	740,970		408,603
Less current portion	(10,997)		(15,664)
Total long-term debt	$	729,973	$	392,939

2026 Convertible Senior Notes

On February 9, 2021, the Company issued $650,000 principal amount of the Company’s 0.00% Convertible Senior Notes due 2026 (the “Notes”). The Company also granted the initial purchasers of the Notes an option to purchase up to an additional $97,500 aggregate principal amount of the Notes (“Option Notes”). On February 9, 2021, the initial purchasers of the Notes exercised their option to purchase $70,000 aggregate principal amount of the Option Notes (the “First Greenshoe Exercise”). The sale of the Option Notes from the First Greenshoe Exercise closed on February 12, 2021. On February 11, 2021, the initial purchasers of the Notes exercised the remaining portion of their option to purchase $27,500 aggregate principal amount of the Option Notes (the “Second Greenshoe Exercise” and, the Option Notes issued in connection with the Second Greenshoe Exercise, the “Second Greenshoe Option Notes”). The sale of the Second Greenshoe Option Notes closed on February 16, 2021.

The Notes were issued and governed by an indenture, dated February 9, 2021, (the “Indenture”), between the Company and Wilmington Trust, National Association, as trustee. The Notes will mature on February 1, 2026, unless earlier repurchased, redeemed or converted. The Notes will not bear regular interest, and the principal amount of the Notes will not accrete.

The initial conversion rate for the Notes is 55.3710 shares of the Company's Class A Common Stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $18.06 per share of Class A Common Stock. The initial conversion price of the Notes represents a premium of approximately 40% over the last reported sale of $12.90 per share of the Company's Class A Common Stock on February 4, 2021. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events in accordance with the terms of the Indenture.

The Company recorded $21,338 related to deferred financing costs of the Notes. During the year ended December 31, 2021, the Company amortized under the effective interest rate method $3,811 of deferred financing costs.

The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including the Company’s trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

The Company may, at its option, redeem some of the Notes, in whole or in part, at the applicable redemption price as set forth in the Indenture.

If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s Class A common stock.

The Notes have customary provisions relating to the occurrence of an “Event of Default” (as defined in the Indenture), which include the following: (i) a default by the Company in the payment when due (whether at maturity, upon redemption or repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase price for, any Note (ii) a default by the Company for 30 days in the payment when due of special interest, if any, on any Note; (iii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iv) a default by the Company in its obligation to convert a Note in accordance with the Indenture upon the exercise of the conversion right with respect thereto, if such default is not cured within three business days after its occurrence; (v) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (vi) a default by the Company in its other obligations or agreements under the Indenture or the Notes (other than a default set forth in clauses (i), (ii), (iii), (iv) or (v) above) if such default is not cured or waived within 60 days after written notice is given in accordance with the Indenture; (vii) certain defaults by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $50,000; and (viii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of the Company’s significant subsidiaries.

If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid special interest, if any, on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of Notes then outstanding, by written notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid special interest, if any, on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 0.50% on the principal amount of the Notes.

The Company used approximately $69,518 of the net proceeds from the Notes to fund the cost of entering into the capped call transactions described below. The Company used a portion of the remainder of the net proceeds from the offering to repay amounts owed under the HPS Credit Facility.

On February 4, 2021, in connection with the pricing of the Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with certain of the initial purchasers of the Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”). In addition, on February 9, 2021, in connection with First Greenshoe Exercise and on February 11, 2021, in connection with the Second Greenshoe Exercise, the Company entered into additional privately negotiated capped call transactions (collectively, and together with the Base Capped Call Transactions, the “Capped Call Transactions”) with the Option Counterparties. The Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of Class A common stock initially underlying the Notes. The Capped Call Transactions are expected generally to reduce potential dilution to the Class A common stock upon any conversion of the Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of such converted Notes, as the case may be, with such reduction and/or offset subject to a cap.

The Capped Call Transactions are separate transactions entered into by the Company with each Option Counterparty, and are not part of the terms of the Notes and will not affect any noteholder’s rights under the Notes. Noteholders will not have any rights with respect to the Capped Call Transactions.

In connection with the issuance of the Notes, SmileDirectClub, Inc. entered into an intercompany convertible promissory note (“Intercompany Convertible Note”) with SDC Financial, LLC, whereby SmileDirectClub, Inc. provided the net proceeds from the issuance of the Notes to SDC Financial, LLC. The terms of the Intercompany Convertible Note mirrors the terms of the Notes issued by SmileDirectClub, Inc. The intent of the Intercompany Convertible Note is to maintain the parity of shares of Class A common stock with LLC Units as required by the SDC Financial LLC Agreement.

HPS Credit Facility

In May 2020, SDC U.S. SmilePay SPV (“SPV”), a wholly-owned special purpose subsidiary of the Company, entered into a Loan Agreement among SPV, as borrower, SmileDirectClub, LLC, as the seller and servicer, certain lenders, and HPS Investment Partners, LLC, as administrative agent and collateral agent, providing a five-year secured term loan facility to SPV in an initial aggregate maximum principal amount of $400,000, net of original issue discount of $12,000, with the ability to request incremental term loans of up to an additional aggregate principal amount of $100,000 with the consent of the lenders participating in such increase (the “HPS Credit Facility”).

The proceeds of the HPS Credit Facility were used to repay all outstanding amounts under the previous JPM Credit Facility and for working capital and other corporate purposes. In connection with the repayment, the Company paid $187 in fees and wrote-off the remaining unamortized loan costs of $1,594, both of which were included in loss from extinguishment of debt in the period in which the HPS Credit Facility was entered.

The Company recorded $11,784 related to deferred financing costs of the HPS Credit Facility in the second quarter of 2020. During the year ended December 31, 2021, the Company amortized under the effective interest rate method $536 of deferred financing costs. The remaining original issue discount is included in loss from extinguishment of debt in the accompanying consolidated statements of operations for the year ended December 31, 2021.

Outstanding loans under the HPS Credit Facility bore interest at a variable rate equal to three-month LIBOR (subject to a 1.75% per annum floor), plus 7.50% per annum payable in cash, plus 3.25% per annum payable in kind or, at the Company’s election, wholly or partially in cash.

Subject to certain exceptions, the HPS Credit Facility was secured by first-priority security interests in SPV’s assets, which consisted of certain receivables, cash governed by a control agreement with HPS, intellectual property and related assets. SPV’s obligations under the Loan Agreement were guaranteed on a limited basis by SmileDirectClub, LLC and SDC Financial LLC.

The HPS Credit Facility contained various restrictions, covenants, ratios and events of default, including:

•SPV had limitations on consolidations, creation of liens, incurring additional indebtedness, dispositions of assets, investments and paying dividends or other distributions.

•SDC Financial LLC, its consolidated subsidiaries and certain originator entities had to maintain minimum monthly liquidity of $100,000 and are subject to additional leverage ratios upon the occurrence of additional debt.

•SDC Financial LLC was subject to a consolidated leverage ratio measured as of the end of each fiscal quarter beginning March 31, 2022, to be calculated based on annualized EBITDA for the first three quarters of 2022, and thereafter, to be calculated based on EBITDA during the trailing four fiscal quarters for the relevant period.

The HPS Credit Facility could have been refinanced during the first year, provided that SPV would be required to pay the amount of interest that would have accrued during the remainder of the first year, plus 4% of the principal amount prepaid; and after the first year, for a fee of 4% of the principal amount prepaid, with the prepayment fee decreasing each year to 3% in the third year, 2% in the fourth year and 1% in the fifth year.

On March 29, 2021, the HPS Credit Facility was paid in full and terminated. In connection with the repayment, the unamortized loan costs, the unaccreted warrant value, and the prepayment fee described above are recorded as a loss on extinguishment of debt in the accompanying consolidated statements of operations.

HPS Warrants

In connection with the HPS Credit Facility, the Company issued warrants (“HPS Warrants”) to affiliates of HPS Investment Partners, LLC exercisable at any time into an aggregate of 3,889,575 shares of the Company’s Class A common stock, which amounted to 1% of the Company’s total outstanding Class A and Class B common stock, including the HPS Warrants, as of the closing date of the HPS Credit Facility, at an exercise price of $7.11 per share, payable in cash or pursuant to a cashless exercise. The HPS Warrants were recorded at their initial fair value of $17,620 and included within stockholders’ equity. The termination and payoff of the HPS Credit Facility did not impact the HPS Warrants.

Align Redemption Promissory Note

In connection with the required redemption of Align’s 20,710 Pre-IPO Units described in Note 16, the Company entered into a promissory note with Align Technology, Inc. (“Align”). Under the terms of the promissory note, the Company was scheduled to make monthly payments of $2,311 to Align through March 2021. The promissory note bore annual interest of 2.52% which is included in the consolidated statement of operations. As of December 31, 2021, the Company has $0 outstanding under this promissory note.

Future Maturities

Annual future maturities of long-term debt, excluding finance lease obligations, and unamortized financing costs, are as follows:


	2026 Convertible Senior Notes

2022	$	—
2023	—
2024	—
2025	—
2026	747,500
Total	$	747,500

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Noncontrolling Interests	12 Months Ended
Noncontrolling Interests	Dec. 31, 2021
Noncontrolling Interest [Abstract]
Noncontrolling Interests	Noncontrolling InterestsSDC Inc. is the sole managing member of SDC Financial, and consolidates the financial results of SDC Financial. Therefore, SDC Inc. reports a noncontrolling interest based on the common units of SDC Financial held by the Continuing LLC Members. Changes in SDC Inc.’s ownership interest in SDC Financial, while SDC Inc. retains its controlling interest in SDC Financial, are accounted for as equity transactions. As such, future redemptions or direct exchanges of LLC Units by the Continuing LLC Members will result in a change in ownership and reduce or increase the amount recorded as noncontrolling interest and increase or decrease additional paid-in capital when SDC Financial has positive or negative net assets, respectively. As of December 31, 2021, SDC Inc. had 119,280,781 shares of Class A common stock outstanding, which resulted in an equivalent amount of ownership of LLC Units by SDC Inc. As of December 31, 2021, SDC Inc. had a 30.7% economic ownership interest in SDC Financial.

Variable Interest Entities	12 Months Ended
Variable Interest Entities	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities	Variable Interest Entities Upon completion of the IPO, SDC Inc. became the managing member of SDC Financial with 100% of the management and voting power in SDC Financial. In its capacity as managing member, SDC Inc. has the sole authority to make decisions on behalf of SDC Financial and bind SDC Financial to signed agreements. Further, SDC Financial maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that SDC Financial is determined to be a limited partnership or similar legal entity as contemplated in ASC 810. Furthermore, management concluded that SDC Inc. is SDC Financials’ primary beneficiary. As the primary beneficiary, SDC Inc. consolidates the results of SDC Financial for financial reporting purposes under the variable interest consolidation model guidance in ASC 810. SDC Inc.’s relationship with SDC Financial results in no recourse to the general credit of SDC Inc. SDC Financial and its consolidated subsidiaries represents SDC Inc.’s sole investment. SDC Inc. shares in the income and losses of SDC Financial in direct proportion to SDC Inc.’s ownership percentage. Further, SDC Inc. has no contractual requirement to provide financial support to SDC Financial. SDC Inc.’s financial position, performance and cash flows effectively represent those of SDC Financial as of and for the years ended December 31, 2021 and 2020. Prior to the IPO and Reorganization Transactions, SDC Inc. was not impacted by SDC Financial.

Incentive Compensation Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Incentive Compensation Plans

In connection with the IPO, the Company adopted the 2019 Omnibus Incentive Compensation Plan (the “2019 Plan”) in August 2019. The Company’s board of directors or the compensation committee of the board of directors, acting as plan administrator, administers the 2019 Plan and the awards granted under it. The Company reserved a total of 38,486,295 shares of Class A common stock for issuance pursuant to the 2019 Plan. The Company currently has two types of share-based compensation awards outstanding under the 2019 Plan: Class A common stock options (“Options”) and Class A restricted stock units (“RSUs”), including those issued pursuant to IBAs.

Class A Common Stock Options

Options activity was as follows during the year ended December 31, 2021:


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2020	1,679,339	$	23.00	8.7	$	—
Granted	50,000	12.21		9.1	—
Exercised	—	—		—	—
Expired	—	—		—	—
Forfeited	(65,217)	23.00		—	—
Outstanding at December 31, 2021	1,664,122	$	22.70	7.7	$	—
Exercisable at December 31, 2021	597,816	$	23.00	7.7	$	—

The Company estimates fair value of the Options using the Black-Scholes option pricing model. Inputs to the Black-Scholes option pricing model for awards issued during the years ended December 31, 2021, include an expected dividend

yield of 0.0%, expected volatility of 65.6%, risk-free interest rate of 0.8% and an expected term of 6.3 years, pursuant to time-based vesting terms, resulting in a weighted average fair value of $8.17 per Option. As of December 31, 2021, unrecognized compensation expense related to the Options was $4,183. This expense is expected to be recognized over a weighted average period of 0.9 years.

Expected dividend yield - An increase in the expected dividend yield would decrease compensation expense.

Expected volatility - This is a measure of the amount by which the price of the equity instrument has fluctuated or is expected to fluctuate. The expected volatility was based on the historical volatility of a group of guideline companies. An increase in expected volatility would increase compensation expense.

Risk-free interest rate - This is the U.S. Treasury rate as of the measurement date having a term approximating the expected life of the award. An increase in the risk-free interest rate would increase compensation expense.

Expected term - The period of time over which the awards are expected to remain outstanding. The Company estimates the expected term as the mid-point between actual or expected vesting date and the contractual term. An increase in the expected term would increase compensation expense.

Restricted Stock Units

Incentive Bonus Awards

The Company has IBA agreements with several key employees to provide a bonus payment in the event of a liquidation event as defined in each agreement. The bonus amounts are calculated based on the value of the Company at the time of the liquidation event, less an amount determined upon the employee entering into the agreement. The right to the payment generally vests annually over a five-year period, with certain liquidation events resulting in an acceleration of the vesting period. As the vesting of these awards was contingent on a liquidation event, no amounts were required to be recorded prior to a liquidation event. The IBA agreements were modified in August 2019 to accelerate certain vesting conditions upon a liquidation event and to modify the settlement terms, whereby the Company settled the vested portion of each IBA in 50% shares of Class A common stock and/or vested RSUs and 50% cash, of which approximately 80% of the cash (40% of the total vested portion of the award) that the IBA holders would have otherwise received was withheld by the Company to fulfill tax withholding obligations and the remainder was paid out to IBA holders upon the occurrence of a liquidation event. As a result of the modification and the occurrence of a liquidation event through the IPO, the Company recorded equity-based compensation expense of $316,959, equivalent to the amount of IBAs vested at the time of the IPO, in the form of cash, 5,654,078 shares of Class A common stock and 2,199,453 vested RSUs to be released over a period of six to twenty-four months following the date of the IPO. The unvested portion of the IBAs are represented in the form of unvested RSUs that will vest, subject to the holders’ continued employment, over a period generally ranging from 2 years to 4 years.

Non-IBA Restricted Stock Units

The Company granted RSUs to certain team members that generally vest annually over two to three years or after three years from the date of grant, subject to the recipient’s continued employment or service to the Company through each vesting date.

A summary of activity related to these RSUs is as follows:


	IBA RSUs	Non-IBA RSUs	Total RSUs	Weighted Average Grant Date Fair Value
RSUs outstanding, December 31, 2020	1,626,738	2,193,144	3,819,882	$	16.68
Granted	—	4,333,642	4,333,642	$	11.00
Vested	(1,470,650)	(1,290,175)	(2,760,825)	$	16.89
Forfeited	—	(555,538)	(555,538)	$	11.12
RSUs outstanding, December 31, 2021	156,088	4,681,073	4,837,161	$	15.53

As of December 31, 2021, unrecognized compensation expense related to unvested IBA and non-IBA RSUs was $38,812. This expense is expected to be recognized over a weighted average period of 2.4 years.

Employee Stock Purchase Plan

The SmileDirectClub, Inc. team member Stock Purchase Plan (“SPP”) was initiated in November 2019. Under the SPP, the Company is authorized to issue up to 5,772,944 shares of its Class A common stock to qualifying employees. Eligible team members may direct the Company, during each six months option period, to withhold up to 30% of their base salary and commissions, the proceeds from which are used to purchase shares of Class A common stock at a price equal to the lesser of 85% of the closing market price on the exercise date or the grant date. For accounting purposes, the SPP is considered a compensatory plan such that the Company recognizes equity-based compensation expense based on the fair value of the options held by the employees to purchase the Company’s shares.

Summary of Equity-Based Compensation Expense

The Company recognized compensation expense of $44,628, $44,903 and $350,122 for the years ended December 31, 2021, 2020 and 2019, respectively. Amounts are included in general and administrative expense on the consolidated statements of operations.

Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per ShareBasic earnings per share of Class A common stock is computed by dividing net loss attributable to SDC Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net loss attributable to SDC Inc., adjusted for the assumed exchange of all potentially dilutive LLC Units for Class A common stock, by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Prior to the IPO, the SDC Financial membership structure included Pre-IPO Units, some of which were profits interests. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, the basic and diluted earnings per share for the year ended December 31, 2019, represents only the period from September 11, 2019 to December 31, 2019, which represents the period wherein the Company had outstanding Class A common stock.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock:


	Years Ended December 31,
		2021		2020		2019
Numerator:
Net loss		$	(335,650)	$	(278,499)	$	(537,805)
Less: Net income attributable to SDC Financial prior to the Reorganization Transactions		—		—		(104,245)
Less: Net loss attributable to noncontrolling interests subsequent to the Reorganization Transactions		(233,208)		(200,133)		(319,047)
Net loss attributable to SDC Inc. - basic		(102,442)		(78,366)		(114,513)
Add: Reallocation of net loss attributable to noncontrolling interests after the Reorganization Transactions from the assumed exchange of LLC Units for Class A common stock		(233,208)		(200,133)		(319,047)
Net loss attributable to SDC Inc. - diluted		$	(335,650)	$	(278,499)	$	(433,560)
Denominator:
Weighted average shares of Class A common stock outstanding - basic		118,360,801		109,854,360		102,442,525
Add: Dilutive effects as shown separately below
LLC Units that are exchangeable for Class A common stock		269,415,089		275,346,082		279,474,505
Weighted average shares of Class A common stock outstanding - diluted		387,775,890		385,200,442		381,917,030

Earnings (loss) per share of Class A common stock outstanding - basic		$	(0.87)	$	(0.71)	$	(1.12)
Earnings (loss) per share of Class A common stock outstanding - diluted		$	(0.87)	$	(0.72)	$	(1.14)

Shares of the Company’s Class B common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been presented.

Due to their anti-dilutive effect, the following securities have been excluded from diluted net earnings (loss) per share in the periods presented:


	Years Ended December 31,
		2021	2020	2019
Options		1,664,122	1,679,339	1,744,556
Restricted Stock Units		4,837,161	3,819,882	5,884,190
Warrants		3,889,575	3,889,575	1,471,735
Shares issuable under the Notes (if converted method)(1)		41,389,822	—	—

(1) In connection with the issuance of the Notes, the Company entered into Capped Call Transactions, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive. The Capped Call Transactions are expected to reduce the potential dilution to the Company’s common stock (or, in the event a conversion of the Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the Notes the Company’s common stock price exceeds the conversion price of the Notes.

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2021
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit PlansThe Company has a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code of 1986, as amended, that covers substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. For the years ended December 31, 2021, 2020 and 2019 the Company matched 100% of employees’ salary deferral contributions up to 3% and 50% of employees’ salary deferral contributions from 3% to 5% of employees’ eligible compensation. The Company contributed $3,141, $3,202 and $2,707 to the 401(k) plan for the years ended December 31, 2021, 2020 and 2019, respectively.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2021
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Products and Services The Company is affiliated through common ownership by the Company’s Chairman and Chief Executive Officer, with several other entities (‘‘Affiliates”). Certain Affiliates incur (or previously incurred) costs related to the Company, including travel costs, certain senior management personnel costs, freight, and rent, the most significant of which is freight. The Company reimbursed $0, $0 and $7,433 of freight incurred through an Affiliate during the years ended December 31, 2021, 2020 and 2019, respectively, which is included in cost of revenues. These costs incurred by Affiliates related to the Company are billed at actual cost to the Company by the Affiliates. In addition, the Company paid one of the Affiliates $0, $0 and $1,255 in management fees for the years ended December 31, 2021, 2020 and 2019, respectively, which is included in general and administrative expenses. These fees include charges relating to several individuals who provide senior leadership to the Company as well as certain other services. Certain of these individuals have been granted IBUs, which have resulted in equity-based compensation expense (see Note 13). The Company purchased legal services from a law firm where a partner is an immediate family member of an executive officer and director of the Company. Fees paid for services totaled $5,806, $5,790 and $1,716 for the years ended December 31, 2021, 2020 and 2019, respectively. The Company was party to a Strategic Supply Agreement with Align, a former equityholder of the Company, in which the Company had the option to purchase aligners from Align at a price that varies with the level of product purchased. While the majority of the Company’s aligners were manufactured in-house, the Company did purchase aligners under this agreement during the first quarter of 2019. Additionally, the Company purchases oral digital imaging equipment from Align. For the years ended December 31, 2021, 2020 and 2019, purchases from Align of equipment were $0, $0 and $6,025, respectively, and purchases of aligners included in cost of revenues were $0, $0 and $7,659, respectively. In February 2020, the Company completed the purchase of a private aircraft from Camelot SI Leasing, LLC, an entity indirectly under common control with Camelot, for $3,400, the appraised value of the aircraft. Distribution Payable In August 2019, SDC Financial declared a distribution of $43,400 less any amount determined to be due and payable to Align in connection with the Align arbitration proceedings to the pre-IPO investors. The arbitration proceedings were finalized and this amount plus accrued interest was paid to Align in March 2021.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Matters In the ordinary course of conducting its business, the Company is involved, from time to time, in various contractual, product liability, intellectual property, and other claims and disputes incidental to its business. Litigation is subject to many uncertainties, the outcome of individual litigated matters is not predictable with assurance, and it is reasonably possible that some of these matters may be decided unfavorably to the Company and could have a material impact on the financial statements. In addition, the Company periodically receives communications from state and federal regulatory and similar agencies inquiring about the nature of its business activities, licensing of professionals providing services, and similar matters. Such matters are routinely concluded with no financial or operational impact on the Company. From September to December 2019, a number of purported stockholder class action complaints were filed in the U.S. District Court for the Middle District of Tennessee and in state courts in Tennessee, Michigan, and New York against the Company, members of the Company’s board of directors, certain of its current or former officers, and the underwriters of its IPO. The following complaints have been filed to date: Mancour v. SmileDirectClub, Inc., 19-1169-IV (TN Chancery Court filed 9/27/19), Vang v. SmileDirectClub, Inc., 19c2316 (TN Circuit Court filed 9/30/19), Fernandez v. SmileDirectClub, Inc., 19c2371 (TN Circuit Court filed 10/4/19), Wei Wei v. SmileDirectClub, Inc., 19-1254-III (TN Chancery Court filed 10/18/19), Andre v. SmileDirectClub, Inc., 19-cv-12883 (E.D. Mich. filed 10/2/19), Ginsberg v. SmileDirectClub, Inc., 19-cv-09794 (S.D.N.Y. filed 10/23/19), Franchi v. SmileDirectClub, Inc., 19- cv-962 (M.D. Tenn. filed 10/29/19), Nurlybayev v. SmileDirectClub, Inc., 19-177527-CB (Oakland County, MI Circuit Court filed 10/30/19), Sasso v. Katzman, et al., No. 657557/2019 (NY Supreme Court filed 12/18/19), Nurlybayev v. SmileDirectClub, Inc., No. 652603/2020 (Supreme Ct. N.Y. Cty. filed June 19, 2020). The complaints all allege, among other things, that the registration statement filed with the SEC on August 16, 2019, and accompanying amendments, and the Prospectus filed with the SEC on September 13, 2019, in connection with the Company’s initial public offering were inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and omitted to state material facts required to be stated therein. The complaints seek unspecified money damages, other equitable relief, and attorneys’ fees and costs. All the actions are in the preliminary stages. The Company denies any alleged wrongdoing and is vigorously defending against these actions. In December 2019, the Fernandez, Vang, Mancour and Wei Wei actions were consolidated and re-captioned In re SmileDirectClub, Inc. Securities Litigation, 19-1169-IV (Davidson County, TN Chancery Court). Plaintiffs filed a consolidated amended complaint on December 20, 2019, and Defendants moved to stay or dismiss the action on February 10, 2020. On June 4, 2020, the court denied that motion. Defendants subsequently moved for permission to seek an interlocutory appeal of that decision. On June 22, 2020, the court granted that motion. On August 3, 2020, Defendants filed an application for interlocutory appeal with the court of appeals, which was denied. On September 21, 2020, Defendants filed an application for interlocutory appeal with the Tennessee Supreme Court, which was denied. On October 2, 2020, Plaintiffs moved for class certification, which Defendants opposed on January 25, 2021. On April 28, 2021, the court ruled in favor of the Plaintiffs class certification. The Company filed its notice of appeal on May 4, 2021. That appeal was fully briefed and has been pending since oral argument on December 2, 2021. All trial court proceedings are stayed during the pendency of the appeal. The Andre and Ginsberg actions were transferred to the U.S. District Court for the Middle District of Tennessee, where they were consolidated with the Franchi action. Plaintiffs filed a consolidated amended complaint on February 21, 2020, and Defendants moved to dismiss the action on March 23, 2020. That motion remains pending. While that motion was pending, the parties stipulated to allow Plaintiffs to file a further amended complaint, which Plaintiffs filed on March 31, 2021. Defendants’ motion to dismiss the new complaint was due on or before May 14, 2021. That motion was fully briefed as of July 19, 2021 and remains pending. In the Nurlybayev action, on January 10, 2020, certain Defendants, including the Company, moved to be dismissed from the action for lack of personal jurisdiction and the remaining Defendants moved to dismiss or stay the entire action in favor of the related actions pending in Tennessee. On February 26, 2020, the Court granted Defendants' motion to dismiss the entire action in favor of the related actions pending in Tennessee. On June 19, 2020, Plaintiff Nurlybayev filed a substantially similar action in New York state court. On August 21, 2020, Defendants filed a motion to dismiss that action, which the Court granted on May 25, 2021. Plaintiff has filed a notice of appeal. Plaintiff perfected his appeal on January 21, 2022 and briefing on the appeal is in progress. In the Sasso action, Plaintiff agreed to stay the action pending resolution of any motions to dismiss in any of the related actions. The Court so-ordered the parties’ stipulation to that effect on January 22, 2020. In November and December 2019 and March 2020, three stockholder derivative actions were filed against the members of the Company’s board of directors, certain of the Company’s current and former officers and related entities: Doris Shenwick Trust v. Katzman et al., C.A. No. 2019-0940-MTZ (filed Nov. 22, 2019); Harts v. Katzman et al., C.A No. 2019-1027-MTZ (filed Dec. 23, 2019); and Sammons v. Katzman et al., C.A No. 2020-0169-MTZ (Mar. 5, 2020). The three derivative actions were consolidated into In Re SmileDirectClub, Inc. Derivative Litigation, C.A. No. 2019-0940-MTZ (Delaware Chancery Court) and Plaintiffs filed a consolidated amended complaint on April 8, 2020. The complaint alleges, among other things, that the defendants breached their fiduciary duties by allowing the Prospectus filed with the SEC on September 13, 2019, in connection with the Company's initial public offering, to contain materially misleading statements and by approving that the IPO proceeds be used to acquire Units and Common Stock from selling directors in connection with the IPO at an allegedly inflated price. The complaint also alleges that certain related entities aided and abetted the directors' alleged breach of fiduciary duties by selling their Common Stock and LLC Units and profiting from those sales. The complaint also alleges that the directors and related entities were unjustly enriched. The complaint seeks, among other things, disgorgement from the director and entity defendants. The Company denies any alleged wrongdoing and moved to dismiss the action. Briefing on the motion to dismiss was complete on November 6, 2020. A hearing on the motion to dismiss was held on February 17, 2021. The Court granted the motion to dismiss on May 28, 2021 and dismissed the complaint. On June 24, 2021, plaintiffs filed a Notice of Appeal. The parties submitted appellate briefing and on December 8, 2021, oral argument was held before the Delaware Supreme Court. On January 6, 2022, the Delaware Supreme Court affirmed dismissal of the derivative action on the basis of and for the reasons assigned by the Court of Chancery. In September 2019, a putative class action on behalf of a consumer and three orthodontists was brought against the Company in the U.S. District Court for the Middle District of Tennessee, Ciccio, et al. v. SmileDirectClub, LLC, et al., Case No. 3:19-cv-00845 (M.D. Tenn.). The Plaintiffs assert claims for breach of warranty, false advertising under the Lanham Act, common law fraud, and various state consumer protection statutes relating to the Company’s advertising. Following a proactive voluntary dismissal by the majority of consumer plaintiffs, one consumer has since sought to rejoin the Middle District of Tennessee litigation or, in the alternative, to intervene, which the Court granted. That ruling has been appealed, and the Court stayed the consumer claims pending the appeal. On June 25, 2021, the appellate court reversed the district court and remanded with instructions to order the intervening plaintiff to mandatory binding arbitration. All remaining consumer claims remain stayed. Litigation is in the discovery stage. On October 13, 2021, the Court entered an Amended Scheduling Order, effectively staying merits discovery, and setting deadlines of March 30, 2022, to complete class certification fact discovery and September 2, 2022, to complete briefing on motions regarding class certification. The Company denies any alleged wrongdoing and intends to defend against this action vigorously. Some state dental boards have established new rules or interpreted existing rules in a manner that limits or restricts the Company’s ability to conduct its business as currently conducted in other states or have engaged in conduct so as to otherwise interfere with the Company’s ability to conduct its business. We have filed actions in federal court in Alabama, Georgia, and California against the state dental boards in those states, alleging violations by the dental boards of various laws, including the Sherman Act and the Commerce Clause. While a national orthodontic association has filed Amicus Briefs in support of the dental boards in both the Georgia and Alabama litigations and has filed a motion to do the same in California (which motion was denied), the FTC and DOJ have filed joint Amicus Briefs in support of the Company in both the Alabama and Georgia matters. The California matter was amended, and an order of dismissal was entered on July 7, 2020. The Company filed notice of appeal on July 17, 2020, and the FTC and DOJ filed a joint Amicus Brief in support of the Company. Oral argument was held on July 26, 2021, with the FTC and DOJ arguing in support of the Company at oral argument as well. The appellate court has not yet issued its ruling. Both the Alabama and Georgia matters were then sent to the 11th Circuit Court of Appeals as a result of the dental boards in both states appealing the lower court’s decisions. Oral argument before the 11th Circuit Court of Appeals occurred in the Georgia matter on May 20, 2020, and in the Alabama matter on July 8, 2020. The FTC and DOJ participated in oral arguments in support of the Company. The DOJ’s antitrust chief presented in the Alabama matter. On August 11, 2020, the 11th Circuit Court of Appeals affirmed the Georgia district court’s denial of the board members’ motion to dismiss. On December 8, 2020, the 11th Circuit Court of Appeals voted to have a rehearing en banc. The FTC and DOJ filed an amicus and participated in oral argument that was held on February 23, 2021. On July 20, 2021, the 11th Circuit Court of Appeals ruled in the Company’s favor, finding that the Georgia Dental Board did not have an interlocutory right of appeal and therefore denied the Georgia Board’s appeal. On July 29, 2021, the 11th Circuit Court of Appeals also denied the Alabama Dental Board’s appeal. Both cases were remanded to the respective District Courts to proceed accordingly into the discovery phase. On November 22, 2021, the Georgia Board filed a motion to dismiss in the Northern District of Georgia. On January 6, 2022, a hearing was held on the motion to dismiss. The parties await a final order and discovery is ongoing. On August 17, 2021, the Alabama Dental Board and the Company entered into a tentative settlement agreement, subject to the FTC’s proposed Consent Order being entered into by the Board, precluding the Alabama Dental Board from requiring onsite supervision for scanning by doctors in SmileShops. On September 28, 2021, the FTC issued its press release and memorandum regarding its proposed Consent Order with the Alabama Dental Board which precludes the Board from engaging in conduct intended to preclude teledentistry in the State of Alabama or to preclude dentists and orthodontists from using the Company’s teledentistry platform to treat patients. On December 22, 2021, the Consent Order was finalized, and the District Court in Alabama thereafter entered its order approving the joint motion for dismissal of the lawsuit per the terms of the settlement reached between the parties. On July 12, 2021, the Australian Competition & Consumer Commission filed an Originating Application against SmileDirectClub, LLC and the Company’s Australian affiliate SmileDirectClub Aus Pty Ltd. The Originating Application alleges certain misstatements by the Company in connection with the availability of consumers having the ability to have private health care coverage cover a portion of their costs when seeking treatment through the Company’s telehealth platform. The Company has denied any wrongdoing and has filed its Concise Response to the Statement of Claim. Should the matter not be resolved, trial has been scheduled to commence on April 17, 2023. In March 2019, a final arbitration award was issued in an arbitration proceeding brought by the Company alleging that one of our former members, Align, violated certain restrictive covenants set forth in its operating agreement. The arbitrator ruled that Align breached both the non-competition and confidentiality provisions of the Company’s operating agreement and that, as a result, Align was required to close its Invisalign Stores, return all of the Company’s confidential information, and sell its membership units to the Company or certain of its pre-IPO unitholders for an amount equal to the balance of Align’s capital account as of November 2017. The arbitrator also extended the non-competition period to which Align is subject through August of 2022 and prohibited Align from using the Company’s confidential information in any manner going forward. The Company paid Align $54,000, pursuant to a promissory note payable over 24 months through March 2021, in full redemption of Align’s membership units pursuant to this ruling. The ruling has been confirmed in its entirety in the circuit court of Cook County, Chicago, Illinois, but Align continued to object to the purchase price and repurchase documentation despite the arbitration ruling and its confirmation, and filed a subsequent arbitration proceeding disputing the $54,000 redemption amount and seeking an additional $43,400. Arbitration was held in December 2020. The arbitrator reached final decision in March 2021 and the Company paid Align the remaining amount of $43,400 (which it had reserved) plus accrued interest. In December 2020, a class action complaint was filed in the Illinois state court: Stacy Benbow et al. v. SmileDirectClub, Inc. et al., 2020 CH 07269 (Cook County Circuit Court filed 12/14/20). The complaint alleges violations of the Telephone Consumer Protection Act and seeks to represent a nationwide class of similarly situated persons. The complaint seeks injunctive relief, statutory damages, and attorneys’ fees and costs. A tentative settlement was approved by the court and the Company has recorded an estimated loss of $4,800 related to such tentative settlement. Notice to the class was sent on March 20, 2021, and final approval was set for May 19, 2021. On May 19, 2021, the final approval was granted by the Cook County Circuit Court. The final cost of the settlement was approximately $4,000. Tax Receivable Agreement As described in Note 9, the Company is a party to the Tax Receivable Agreement pursuant to which SDC Inc. is contractually committed to pay the Continuing LLC Members 85% of the amount of any tax benefits that SDC Inc. actually realizes, or in some cases is deemed to realize, as a result of certain transactions. The Company is not obligated to make any payments under the Tax Receivable Agreement until the tax benefits associated with the transactions that gave rise to the payments are realized. TRA Payments are contingent upon, among other things, (i) generation of future taxable income over the term of the Tax Receivable Agreement and (ii) future changes in tax laws. If the Company does not generate sufficient taxable income in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then it will not be required to make the related TRA Payments. During the years ended December 31, 2021 and 2020, the Company recognized no liabilities relating to its obligations under the Tax Receivable Agreement, after concluding that it was not probable that the Company would have sufficient future taxable income over the term of the Tax Receivable Agreement to utilize the related tax benefits. There were no transactions subject to the Tax Receivable Agreement for which the Company recognized the related liability, as the Company concluded that it would not have sufficient future taxable income to utilize all of the related tax benefits. Other Tax Matters We operate in numerous jurisdictions in which taxing authorities may challenge our position with respect to income and non-income-based taxes. We routinely receive inquiries and may also from time to time receive challenges or assessments from these taxing authorities. With respect to non-income-based taxes, we recognize liabilities when we believe it is probable that amounts will be owed to the taxing authorities and such amounts are estimable. For example, in most countries we charge and remit Value Added Tax (“VAT”) when procuring goods and services, or providing services, within the normal course of business. VAT receivables are established in jurisdictions where input VAT exceeds output VAT and are recoverable through the filing of refund claims. These receivables have inherent audit and collection risks unique to the specific jurisdictions that evaluate our refund claims. We have received a challenge from a non-US taxing authority for VAT related to certain sales made and services provided by certain of the Company’s subsidiaries. The Company believes these transactions are exempt from VAT and has filed legal actions challenging the taxing authority’s application of VAT to them. Discussions on these matters are ongoing. The Company believes its interpretation of these VAT rules is appropriate, and that it will be successful in its challenge against the taxing authority’s assessments. Accordingly, the Company does not believe it is probable that it will incur a loss related to these matters. However, the interpretation and application of these VAT rules is an unsettled issue, and the resolution of tax and regulatory matters is unpredictable. If it is determined in these proceedings that VAT applies to some or all of these various transactions, the Company could incur a charge that ranges between zero and $17,900 for these matters, including any interest and penalties associated with these matters and the amount, if any, of VAT the Company might subsequently recover related to its input costs.

Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Segment ReportingThe Company provides aligner products. The Company’s chief operating decision maker (“CODM”) views the operations and manages the business primarily on a consolidated basis, however, the CODM regularly evaluates, monitors, and makes operational decisions based on the results of operations segmented between North America (defined as the U.S. and Canada) and Rest of World. For the year ended December 31, 2021, approximately 82.4% of the Company’s revenues were generated by sales within North America, and substantially all of its net property, plant and equipment was within North America. Below are the tabular results of operations summarized at the revenue and operating loss level for North America and the Rest of World for the years ended December 31, 2021 and 2020. For the year ended December 31, 2019, the results of operations were not segregated and presented to the chief operating decision maker at this same level and therefore are not presented herein.


	Year Ended December 31, 2021
(in thousands)	North America		Rest of World		Total
Revenue	$	525,366	$	112,245	$	637,611

Net loss before provision for income tax expense	$	(236,177)	$	(98,205)	$	(334,382)

Reconciliation of operating income (loss) to Adjusted EBITDA
Depreciation and amortization	$	57,734	$	12,379	$	70,113
Interest expense	22,920		234		23,154
Lease abandonment and impairment of long-lived assets	1,301		180		1,481
Other store closure and related costs	1,323		2,475		3,798
Loss on extinguishment of debt	47,585		46		47,631
Equity-based compensation	37,429		7,199		44,628
Other non-operating general and administrative losses (gains)	2,812		7,561		10,373
Adjusted EBITDA	$	(65,073)	$	(68,131)	$	(133,204)


	Year Ended December 31, 2020
(in thousands)	North America		Rest of World		Total
Revenue	$	568,775	$	88,005	$	656,780

Net loss before provision for income tax expense	$	(220,161)	$	(55,216)	$	(275,377)

Reconciliation of operating income (loss) to Adjusted EBITDA
Depreciation and amortization	$	48,119	$	8,271	$	56,390
Interest expense	43,844		1,166		45,010
Lease abandonment and impairment of long-lived assets	25,457		—		25,457
Other store closure and related costs	6,648		386		7,034
Loss on extinguishment of debt	13,781		—		13,781
Equity-based compensation	38,562		6,341		44,903
Other non-operating general and administrative losses (gains)	6,955		(1,237)		5,718
Adjusted EBITDA	$	(36,795)	$	(40,289)	$	(77,084)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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+ Details

Quarterly Results of Operations Data (Unaudited)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results of Operations Data (Unaudited)


	Three Months Ended
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Revenue, net	$	126,286	$	137,683	$	174,181	$	199,461
Gross profit	81,922		98,271		128,321		151,500
Loss from operations	(93,220)		(85,035)		(53,200)		(27,829)
Net loss	(95,365)		(89,383)		(55,257)		(95,645)
Net loss attributable to noncontrolling interest	(66,104)		(61,991)		(38,377)		(66,736)
Net loss attributable to SmileDirectClub, Inc.	(29,261)		(27,392)		(16,880)		(28,909)

Earnings (loss) per share of Class A common stock:
Basic	$	(0.25)	$	(0.23)	$	(0.14)	$	(0.25)
Diluted	$	(0.25)	$	(0.23)	$	(0.14)	$	(0.25)

Weighted average shares outstanding:
Basic	119,188,971		118,918,072		118,344,050		116,961,510
Diluted	388,432,472		388,161,573		387,609,677		386,878,524

	Three Months Ended
	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Revenue, net	$	184,556	$	168,501	$	107,073	$	196,650
Gross profit	136,017		118,741		58,297		136,873
Loss from operations	(19,200)		(27,765)		(74,019)		(96,480)
Net loss	(32,951)		(43,482)		(94,666)		(107,400)
Net loss attributable to noncontrolling interest	(23,224)		(30,892)		(67,867)		(78,150)
Net loss attributable to SmileDirectClub, Inc.	(9,727)		(12,590)		(26,799)		(29,250)

Earnings (loss) per share of Class A common stock:
Basic	$	(0.09)	$	(0.11)	$	(0.25)	$	(0.28)
Diluted	$	(0.09)	$	(0.11)	$	(0.25)	$	(0.28)

Weighted average shares outstanding:
Basic	114,008,652		111,703,080		109,048,411		104,595,081
Diluted	386,128,446		385,672,677		385,133,303		383,855,705

Supplemental Cash Flow

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Abstract]

Supplemental Cash Flow

The supplemental cash flow information comprised of the following for the years ended December 31:


	2021		2020		2019
Interest paid	$	18,035	$	30,900	$	9,664
Income taxes paid	$	—	$	—	$	—
Purchases of property and equipment included in accounts payable	$	13,094	$	11,809	$	28,638
Property acquired under finance lease	$	—	$	—	$	23,973

Costs associated with IPO included in accrued expenses	$	—	$	—	$	1,155

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On January 24, 2022, the Company announced that following an evaluation of its business and the continuing macroeconomic factors impacting consumers, the Company is taking specific actions that will focus efforts on supporting the key growth initiatives that will produce the highest return on investment. These initiatives include the expansion of its professional channel, the SmileDirectClub Partner Network; innovations to its aligner products so as to allow the Company to capture greater market share of the teen and higher-household income demographics; its burgeoning oral care product business; and SmileShop growth in markets with strong consumer demand. Expansion into new international markets will be paused while the global economy recovers from pandemic and macroeconomic pressures that have contributed to challenging operating environments. In connection with these operational changes, the Company announced it has suspended operations in Mexico, Spain, Germany, Netherlands, Austria, Hong Kong, Singapore and New Zealand. The Company will continue to operate in and scale its presence in the United States, Canada, United Kingdom, Ireland, France and Australia. With these changes, the Company initiated a reduction in workforce to right-size its operating structure so it is tailored to the countries in which the Company will continue to operate and focus.

Summary of Significant Accounting Policies (Policies)	12 Months Ended
Summary of Significant Accounting Policies (Policies)	Dec. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and ConsolidationThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts of SDC Inc., which consolidates SDC Financial and its wholly-owned subsidiaries, as well as accounts of contractually affiliated professional corporations (“PCs”) managed by the Company. The consolidated financial statements include the accounts of variable interest entities in which the Company is the primary beneficiary under the provisions of Accounting Standards Codification (‘‘ASC”) Topic 810, ‘‘Consolidation.” At December 31, 2021, the variable interest entities include 53 dentist owned PCs, and at December 31, 2020 the variable interest entities included 54 dentist owned PCs. The Company is a dental service organization and does not engage in the practice of dentistry. All clinical services are provided by dentists and orthodontists who are engaged as independent contractors or otherwise engaged by the dentist-owned PCs. The Company contracts with the PCs and dentists and orthodontists through a suite of agreements, including but not limited to, management services agreements, supply agreements, and licensing agreements, pursuant to which the Company provides the administrative, non-clinical management services to the PCs and independent contractors. The Company has the contractual right to manage the activities that most significantly impact the variable interest entities’ economic performance through these agreements without engaging in the corporate practice of dentistry. Additionally, the Company would absorb substantially all of the expected losses of these entities should they occur. The accompanying consolidated statements of operations reflect the revenue earned and the expenses incurred by the PCs.
Management Use of Estimates	Management Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the reported amounts. On an ongoing basis, the Company evaluates its estimates, including those related to the fair values of financial instruments, useful lives of property, plant and equipment, revenue recognition, equity-based compensation, long-lived assets, and contingent liabilities, among others. In connection with its credit facility with HPS Investment Partners, the Company issued warrants to certain affiliates of HPS Investment Partners. The warrants were recorded at fair value at the time of issuance within equity on the consolidated balance sheet using the Black-Scholes option pricing model (see Note 10). Each of these estimates varies in regard to the level of judgment involved and its potential impact on the Company’s financial results. Estimates are considered critical either when a different estimate could have reasonably been used, or where changes in the estimate are reasonably likely to occur from period to period, and such use or change would materially impact the Company’s financial condition, results of operations, or cash flows. Actual results could differ from those estimates.
Revenue Recognition	Revenue Recognition The Company’s revenues are derived primarily from sales of aligners, impression kits, whitening gel, and retainers, and interest earned through its SmilePay financing program. Revenue is recorded for all customers based on the amount that is expected to be collected, which considers implicit price concessions, discounts, and cancellations and refunds from customer returns. The Company identifies a performance obligation as distinct if both of the following criteria are met: the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. Determining the standalone selling price (“SSP”) and allocation of consideration from a contract to the individual performance obligations, and the appropriate timing of revenue recognition, is the result of significant qualitative and quantitative judgments. Management considers a variety of factors such as historical sales, usage rates (the number of times a customer is expected to order additional aligners), costs, and expected margin, which may vary over time depending upon the unique facts and circumstances related to each performance obligation, in making these estimates. Further, the Company’s process for estimating usage rates requires significant judgment and evaluation of inputs, including historical data and forecasted usages. Changes in the allocation of the SSP between performance obligations will not affect the amount of total revenues recognized for a particular contract. The Company uses the expected cost plus a margin approach to determine the SSP for performance obligations, and discounts are allocated to each performance obligation based on the relative SSP. However, any material changes in the allocation of the SSP could impact the timing of revenue recognition, which may have a material effect on the Company’s financial position and result of operations as the contract consideration is allocated to each performance obligation, delivered or undelivered, at the inception of the contract based on the SSP of each distinct performance obligation. The Company estimates the amount expected to be collected based upon management’s assessment of historical write-offs, expected net collections including implicit price concessions, and cancellations and refunds from customer returns, business and economic conditions, and other collection indicators. Management relies on the results of detailed reviews of historical write-offs, cancellations, returns, and collections as a primary source of information in estimating the amount of contract consideration expected to be collected. Uncollectible receivables are written-off in the period management believes it has exhausted its ability to collect payment from the customer. The Company believes its analysis provides reasonable estimates of its revenues and valuations of its accounts receivable. A description of the revenue recognition for each product sold by the Company is detailed below. Aligners and Impression Kits: The Company enters into contracts with customers for aligner sales that involve multiple future performance obligations. The Company determined that aligner sales comprise the following distinct performance obligations: initial aligners, touch-up aligners, and retainers for international sales only which can occur at any time throughout the treatment plan (which is typically between five months to ten months) upon the direction of and prescription from the treating dentist or orthodontist. The Company allocates revenues for each performance obligation based on its SSP and recognizes the revenues as control of the performance obligation is transferred upon shipment of the aligners. The Company recognizes aligner revenue on amounts expected to be collected during the course of the treatment plan. The Company bills its customers either upfront for the full cost of aligners or monthly through its SmilePay financing program, which involves a down payment and a fixed amount per month for up to 24 months. The Company’s accounts receivable related to the SmilePay financing program are reported at the amount expected to be collected on the consolidated balance sheets, which considers implicit price concessions. Financing revenue from its accounts receivable is recognized based on the contractual market interest rate with the customer, net of implicit price concessions. There are no fees or origination costs included in accounts receivable. The Company sells doctor-prescribed impression kits to its customers as an alternative to an in-person visit at one of its SmileShops, popup locations, or Partner Network locations, comprised of affiliated dentist and orthodontist offices, where the customer receives a free oral digital imaging of their teeth. The Company combines the sales of its impression kits with aligner sales and recognizes the revenues as control of the performance obligation is transferred upon shipment of the aligners. The Company estimates the amount of impression kit sales that do not result in an aligner therapy treatment plan and recognizes such revenue when aligner conversion becomes remote. Retainers and Other Products: The Company sells retainers and other products (such as whitening gel and tooth brushes) to customers, which can be purchased on the Company’s website or certain retail outlets. The sales of these products are independent and separate from the customer’s decision to purchase aligner therapy for domestic sales. The Company determined that the transfer of control for these performance obligations occurs as the title of such products passes to the customer or retail partner. Deferred Revenue: Deferred revenue represents the Company’s contract liability for performance obligations associated with sales of aligners. Shipping and Handling Costs Shipping and handling charges are recorded in cost of revenues in the consolidated statements of operations upon shipment. The Company incurred approximately $22,892, $23,036 and $19,000 in outsourced shipping expenses for the years ended December 31, 2021, 2020 and 2019, respectively. Cost of Revenues Cost of revenues includes the total cost of products produced and sold. Such costs include direct materials, direct labor, overhead costs (occupancy costs, indirect labor, and depreciation), fees retained by doctors, freight and duty expenses associated with moving materials from vendors to the Company’s facilities and from its facilities to the customers, and adjustments for shrinkage (physical inventory losses), lower of cost or net realizable value, slow moving product and excess inventory quantities.
Marketing and Selling, General and Administrative Expenses	Marketing and Selling ExpensesMarketing and selling expenses include direct online and offline marketing and advertising costs, costs associated with intraoral imaging services, selling labor, and occupancy costs of SmileShop locations. All marketing and selling expenses, including advertising, are expensed as incurred. General and Administrative Expenses General and administrative expenses include payroll and benefit costs for corporate team members, equity-based compensation expenses, occupancy costs of corporate facilities, bank charges and costs associated with credit and debit card interchange fees, outside service fees, and other administrative costs, such as computer maintenance, supplies, travel, and lodging.
Depreciation and Amortization	Depreciation and Amortization Depreciation includes expenses related to the Company’s property, plant and equipment, including capital leases. Amortization includes expenses related to definite-lived intangible assets and capitalized software. Depreciation and amortization is calculated using the straight-line method over the useful lives of the related assets, ranging from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the related lease terms or their useful lives. Depreciation and amortization is included in cost of revenues, selling expenses, and general and administrative expenses depending on the purpose of the related asset.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company measures the fair value of financial instruments as the price 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. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted (unadjusted) prices in active markets for identical assets or liabilities. 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. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company’s financial instruments consist of cash, current and non-current receivables, accounts payable, debt instruments, and derivative financial instruments. Due to their short-term nature, the carrying values of cash, current receivables, and trade payables approximate current fair value at each balance sheet date.
Derivatives Financial Instruments	Derivative Financial Instruments The Company accounts for derivative financial instruments in accordance with applicable accounting standards for such instruments and hedging activities, which require that all derivatives are recorded on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability. The Company had no outstanding derivatives at December 31, 2021 or 2020; however, the Company may enter into derivative contracts that are intended to economically hedge a certain portion of its risk, even though hedge accounting does not apply or the Company elects not to apply the hedge accounting standards.
Certain Risks and Uncertainties	Certain Risks and Uncertainties The Company’s operating results depend to a significant extent on the ability to market and develop its products. The life cycles of the Company’s products are difficult to estimate due, in part, to the effect of future product enhancements and competition. The inability to successfully develop and market the Company’s products as a result of competition or other factors would have a material adverse effect on its business, financial condition, and results of operations. The Company provides credit to customers in the normal course of business. The Company maintains reserves for potential credit losses and such losses have been within management’s expectations. No individual customer accounted for 1% or more of the Company’s accounts receivable at December 31, 2021 or 2020, or net revenue for the years ended December 31, 2021, 2020 and 2019. Some of the Company’s products are considered medical devices and are subject to extensive regulation in the U.S. and internationally. The regulations to which the Company is subject are complex. Regulatory changes could result in restrictions on the Company’s ability to carry on or expand its operations, higher than anticipated costs or lower than anticipated sales. The failure to comply with applicable regulatory requirements may have a material adverse impact on the Company. The Company’s reliance on international operations exposes it to related risks and uncertainties, including difficulties in staffing and managing international operations, such as hiring and retaining qualified personnel; political, social and economic instability; interruptions and limitations in telecommunication services; product and material transportation delays or disruption; trade restrictions and changes in tariffs; import and export license requirements and restrictions; fluctuations in foreign currency exchange rates; and potential adverse tax consequences. If any of these risks materialize, operating results may be harmed. The Company purchases certain inventory from sole suppliers, and the inability of any supplier or manufacturer to fulfill the supply requirements could materially and adversely impact its future operating results.
Cash	Cash Cash consists of all highly liquid investments with original maturities of less than three months. Cash is held in various financial institutions in the U.S. and internationally.
Inventories	Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method of inventory accounting. Inventory consists of raw materials for producing impression kits and aligners and finished goods. Inventory is net of shrinkage and obsolescence.
Property, Plant and Equipment, net	Property, Plant and Equipment, Net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Routine maintenance and repairs are charged to expense as incurred. At the time property, plant and equipment are retired from service, the cost and accumulated depreciation or amortization are removed from the respective accounts and the related gains or losses are reflected in the consolidated statements of operations.
Leases	Leases On January 1, 2020, the Company adopted the new leases standard using the modified retrospective transition method, which requires that it recognizes leases differently pre- and post-adoption. The Company categorizes leases at their inception as either operating or finance leases. Lease agreements cover certain retail locations, office space, warehouse, manufacturing and distribution space and equipment. Operating leases are included in operating lease right-of-use assets, other current liabilities, and long-term right-of-use operating lease obligations in the consolidated balance sheets. Finance leases are included in property, plant and equipment, net, current portion of long-term debt, and long-term debt. Leased assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses a secured incremental borrowing rate as the discount rate for determining the present value of lease payments when the rate implicit in the contract is not readily determinable. Leases that have a term of twelve months or less upon commencement date are considered short-term in nature. Accordingly, short-term leases are not included on the consolidated balance sheets and are expensed on a straight-line basis over the lease term, which commences on the date we have the right to control the property.
Internally Developed Software Costs	Internally Developed Software CostsThe Company generally provides services to its customers using software developed for internal use. The costs that are incurred to develop such software are expensed as incurred during the preliminary project stage. Once certain criteria have been met, direct costs incurred in developing or obtaining computer software are capitalized. Training and maintenance costs are expensed as incurred. Capitalized software costs are included in property, plant and equipment in the consolidated balance sheets and are amortized over useful life of the software which is generally a three-year to five-year period.
Impairment	ImpairmentThe Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. An asset or asset group is considered impaired if its carrying amount exceeds the future undiscounted net cash flows that the asset or asset group is expected to generate. Factors the Company considers important which could trigger an impairment review include significant negative industry or economic trends, significant loss of customers and changes in the competitive environment. If an asset or asset group is considered to be impaired, the impairment to be recognized is calculated as the amount by which the carrying amount of the asset or asset group exceeds its fair market value. The Company’s estimates of future cash flows attributable to long-lived assets require significant judgment based on its historical and anticipated results and are subject to many assumptions. The estimation of fair value utilizing a discounted cash flow approach includes numerous uncertainties which require significant judgment when making assumptions of expected growth rates and the selection of discount rates, as well as assumptions regarding general economic and business conditions, and the structure that would yield the highest economic value, among other factors.
Debt Issuance Costs	Debt Issuance Costs The Company records debt issuance costs related to its term debt as direct deductions from the carrying amount of the debt. The costs are amortized to interest expense over the life of the debt using the effective interest method.
Income Taxes	Income Taxes SDC Inc. is the managing member of SDC Financial and, as a result, consolidates the financial results of SDC Financial in the consolidated financial statements. SDC Financial and its subsidiaries are limited liability companies and have elected to be taxed as partnerships for income tax purposes except for a subsidiary, SDC Holding, LLC (‘‘SDC Holding”) and its domestic and foreign subsidiaries, which are taxed as corporations. As such, SDC Financial does not pay any federal income taxes, as any income or loss is included in the tax returns of the individual members. SDC Financial does pay state income tax in certain jurisdictions, and the Company’s income tax provision in the consolidated financial statements reflects the income taxes for those states. Additionally, certain wholly-owned entities taxed as corporations are subject to federal, state, and foreign income taxes, in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. The Company further evaluates deferred tax assets in each jurisdiction and recognizes associated benefits when positive evidence of realization exceeds negative evidence, and otherwise records valuation allowances as necessary. The Company computes the provision for income taxes using the liability method and recognizes deferred tax assets and liabilities for temporary differences between financial statement and income tax bases of assets and liabilities, as well as for operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using tax rates applicable to taxable income in effect for the years in which those tax assets are expected to be realized or settled and provides a valuation allowance against deferred tax assets when it cannot conclude that it is more likely than not that some or all deferred tax assets will be realized. In addition, the Company recognizes tax benefits from uncertain tax positions only if it expects that its tax positions are more likely than not that they will be sustained, based on the technical merits of the positions, on examination by the jurisdictional tax authority. The Company recognizes any accrued interest and penalties to unrecognized tax benefits as interest expense and income tax expense, respectively. Tax Receivable Agreement In connection with the Reorganization Transactions and the IPO, the Company entered into a Tax Receivable Agreement with the Continuing LLC Members, pursuant to which SDC Inc. agreed to pay the Continuing LLC Members 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local income tax or franchise tax that SDC Inc. actually realizes as a result of (a) the increases in tax basis attributable to exchanges by Continuing LLC Members and (b) tax benefits related to imputed interest deemed to be paid by SDC Inc. as a result of the Tax Receivable Agreement. The Company recognizes this contingent liability in its consolidated financial statements when amounts become probable as to incurrence and estimable in amount.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In January 2021 the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standard Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses” (Topic 326). The FASB issued this update to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the existing guidance of incurred loss impairment methodology with an approach that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which clarifies the scope of guidance in the ASU 2016-13. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In January 2021, the Company adopted FASB ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This standard simplified the accounting for income taxes by eliminating certain exceptions to the guidance in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an period and the recognition of deferred tax liabilities for outside basis differences. The guidance also simplified aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating consolidated income taxes to separate financial statements of entities not subject to income tax. The Company adopted the provisions of this guidance effective January 1, 2021 using the modified retrospective method of adoption which required no cumulative-effect adjustment to retained earnings as of the beginning of the period. In January 2021, the Company adopted FASB ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which eliminates most of the guidance in Subtopic 470-20 that requires separate accounting for embedded conversion features in convertible debt arrangements. Further, ASU 220-06 removes some of the conditions in Subtopic 815-40-25, “Contracts on an Entity's own Equity,” that are required for equity classification, including the requirement for equity contracts to permit settlement in unregistered shares. The Company adopted the provisions of this guidance effective January 1, 2021, using the modified retrospective method of adoption which required no cumulative-effect adjustment to retained earnings as of the beginning of the period. The Company applied the provisions of this guidance to the recently issued 2026 Convertible Senior Notes and related capped call transactions.
Allowance for credit losses	Allowance for credit losses and other revenue adjustments: The Company records a provision to maintain an allowance for credit losses and other revenue adjustments that result from the failure or inability of its members or other partners to make required payments deemed collectible when the product was delivered, or customer returns resulting in cancellations or refunds. When determining the allowances for member receivables, the Company considers the probability of recoverability of accounts receivable based on past experience, taking into account current collection trends and general economic factors, including bankruptcy rates. The Company also considers future economic trends in its estimation of expected credit losses over the lifetime of the asset. Credit risks are assessed based on historical write-offs, cancellations, and adjustments, net of recoveries, as well as an analysis of the aged accounts receivable balances. Accounts receivable may be fully reserved for when specific collection issues are known to exist, such as a history of missed scheduled payments and customer service or production issues.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of Revenue by Product

The following table summarizes revenue recognized for each product sold by the Company:


	Years Ended December 31,
		2021		2020		2019
Aligner revenue, net		$	517,552	$	543,136	$	683,429
Financing revenue, net		42,919		49,407		43,899
Retainers and other products revenue		77,140		64,237		23,100

Total revenue		$	637,611	$	656,780	$	750,428
Implicit price concessions, cancellations, and refunds included in total revenue		$	129,307	$	138,841	$	125,535

Schedule of Depreciation and Amortization

Depreciation and amortization by financial statement line item were as follows:


	Years Ended December 31,
		2021		2020		2019
Cost of revenues		$	27,467	$	24,718	$	11,186
Marketing and selling expenses		5,001		7,079		5,322
General and administrative expenses		37,645		24,593		10,828
Total		$	70,113	$	56,390	$	27,336

Schedule of Accounts Receivable Allowance for Credit Loss

Activity in the allowance for credit losses and other revenue adjustments for the year ended December 31, 2021 was as follows:



Balance at December 31, 2020	$	53,740
Current period provision for expected credit losses and other revenue adjustments	129,307
Write-offs and other adjustments charged against the allowance, net of recoveries	(116,031)
Refunds paid	(17,707)
Balance at December 31, 2021	$	49,309

Inventories (Tables)

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventories are comprised of the following:



	December 31,		December 31,
	2021		2020
Raw materials	$	14,662	$	10,059
Finished goods	26,141		19,188
Total inventories	$	40,803	$	29,247

Prepaid and Other assets (Tables)

12 Months Ended

Dec. 31, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule Prepaid and Other Assets

Prepaid and other assets are comprised of the following:



	December 31,		December 31,
	2021		2020
Prepaid expenses	$	11,496	$	9,315
Deposits to vendors	5,443		2,111
Other	580		1,406
Total prepaid and other current assets	$	17,519	$	12,832
Prepaid expenses, non-current	$	1,911	$	2,583
Deposits to vendors, non-current	967		1,018
Indefinite-lived intangible assets	7,155		6,692
Other intangible assets, net	2,458		184
Investments and other	2,989		1,010
Total other assets	$	15,480	$	11,487

Lease Abandonment, Impairment of Long-Lived Assets and Store Closure and Other Related Charges (Tables)

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Charges

The following table summarizes restructuring charges for the periods presented:


	Years Ended December 31,
		2021		2020		2019
Lease abandonment and impairment of long-lived assets:
Impairment of property, plant and equipment		$	586	$	21,628	$	—
Impairment of right of use asset		895		3,829		—
		$	1,481	$	25,457	$	—
Store closure and other related charges:
Impairment of inventory		$	219	$	786	$	—
Short-term lease termination fees		205		4,687		—
Other expenses		3,374		1,561		—
		$	3,798	$	7,034	$	—

Property, plant and equipment, net (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant, and Equipment, Net

Property, plant and equipment were comprised of the following:



	December 31,		December 31,
	2021		2020
Lab and SmileShop equipment	$	118,320	$	116,340
Computer equipment and software	178,508		91,595
Leasehold improvements	36,474		25,721
Furniture and fixtures	13,321		13,627
Vehicles	8,018		6,266
Construction in progress	23,182		31,796
	377,823		285,345
Less: accumulated depreciation	(150,622)		(95,350)
Property, plant and equipment, net	$	227,201	$	189,995

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Schedule of Right of Use Assets and Lease Liabilities

The following table presents lease-related assets and liabilities at December 31, 2021:



Leases Assets and Liabilities	Balance Sheet Classification	December 31,			December 31,
		2021			2020
Assets:
Operating leases	Operating lease right-of-use asset	$	24,927		$	31,176
Finance leases(1)	Property, plant, and equipment, net	10,163			20,484
		$	35,090		$	51,660
Liabilities:
Operating leases	Other current liabilities	$	4,997		$	6,821
Finance leases	Current portion of long-term debt	10,997			11,055
Operating leases	Operating lease liabilities, net of current portion	20,352			27,771
Finance leases	Long-term debt, net of current portion	—			10,997
		$	36,346		$	56,644
Weighted average remaining term:
Operating leases		4.8 years			6.0 years
Finance leases		0.8 years			1.6 years
Weighted average discount rate:
Operating leases(2)		4.94		%	5.87		%
Finance leases		7.00		%	7.50		%
(1) Finance lease assets are recorded net of accumulated amortization of $18,013 as of December 31, 2021.
(2) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2020.

Schedule of Lease Expense and Supplemental Cash Flow Information for Finance and Operating Leases

The following table presents certain information related to lease expense for finance and operating leases:


Expense Category	Statement of Operations Classification	Years Ended December 31,
			2021		2020		2019
Finance lease expense:
Amortization of leased assets	Cost of revenues		$	9,208	$	9,988	n/a
Interest on lease liabilities	Interest expense		1,265		2,062		n/a
Operating leases(3)			8,607		9,875		n/a
Short-term lease expense(3)			12,290		16,452		n/a
Variable lease expense(3)			728		3,249		n/a
Total lease expense			$	32,098	$	41,626	$	—
(3) Expenses are included in “Cost of revenues”, “Marketing and selling expenses”, or “General and administrative expenses” in our consolidated statements of operations, depending on the purpose of the related asset.

Other Information

The following table represents supplemental cash flow information:


	Years Ended December 31,
	2021		2020
Cash paid for amounts used in the measurement of lease liabilities:
Cash used in operating activities	$	8,265	$	9,056
Cash used in investing activities	$	—	$	—
Cash used in financing activities	$	11,055	$	10,138

Schedule of Operating Lease Liability Maturities

The following table reconciles the undiscounted cash flows to the finance lease liabilities and operating lease liabilities recorded on the consolidated balance sheet at December 31, 2021:


	Finance Leases		Operating Leases
2022	$	6,859	$	5,673
2023	$	—	$	6,526
2024	—		5,138
2025	—		4,036
2026	—		3,637
2027 and thereafter	—		3,874
Total minimum lease payments	6,859		28,884
Residual value	4,550		—
Amount representing interest	(412)		(3,535)
Present value of future minimum lease payments	10,997		25,349
Less: current portion	(10,997)		(4,997)
Long-term lease liabilities	$	—	$	20,352

Schedule of Finance Lease Liability Maturities

The following table reconciles the undiscounted cash flows to the finance lease liabilities and operating lease liabilities recorded on the consolidated balance sheet at December 31, 2021:


	Finance Leases		Operating Leases
2022	$	6,859	$	5,673
2023	$	—	$	6,526
2024	—		5,138
2025	—		4,036
2026	—		3,637
2027 and thereafter	—		3,874
Total minimum lease payments	6,859		28,884
Residual value	4,550		—
Amount representing interest	(412)		(3,535)
Present value of future minimum lease payments	10,997		25,349
Less: current portion	(10,997)		(4,997)
Long-term lease liabilities	$	—	$	20,352

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities were comprised of the following:



	December 31,		December 31,
	2021		2020
Accrued marketing and selling costs	$	37,883	$	19,236
Accrued payroll and payroll related expenses	15,829		27,912
Accrued sales tax and related costs	8,769		14,877
Other	59,585		38,564
Total accrued liabilities	$	122,066	$	100,589

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Summary of Loss Before Income Taxes

The components of loss before income taxes were as follows:


	Years Ended December 31,
	2021		2020		2019
Domestic	$	(320,870)	$	(269,211)	$	(532,379)
Foreign	(13,512)		(6,166)		(3,158)
Loss before income taxes	$	(334,382)	$	(275,377)	$	(535,537)

Schedule of Income Tax Provision

The income tax provision was as follows:


	Years Ended December 31,
		2021		2020		2019
Current:
Federal		$	258	$	1,169	$	1,018
State		359		642		309
Foreign		(12)		1253		491
Current income tax provision		$	605	$	3,064	$	1,818
Deferred:
Federal		$	—	$	—	$	—
State		80		58		450
Foreign		583		—		—
Deferred income tax provision		$	663	$	58	$	450
Total income tax provision		$	1,268	$	3,122	$	2,268

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of the statutory U.S. federal income tax rate to our effective income tax rate is as follows:


	Years Ended December 31,
	2021		2020		2019
U.S. federal income tax statutory rate	21.0	%	21.0	%	21.0	%
Income attributable to noncontrolling interest and non taxable income	(13.0)	%	(13.2)	%	(16.6)	%
State income tax, net of federal benefit	(0.1)	%	(0.1)	%	(0.1)	%
Losses for which no benefit has been recognized	(12.5)	%	(0.4)	%	(3.8)	%
Foreign rate differential	0.2	%	(0.1)	%	(0.1)	%
Uncertain tax position	(0.1)	%	(0.5)	%	(0.2)	%
Change in investment in partnership	4.1	%	(7.8)	%	—	%
Other	—	%	—	%	(0.6)	%
Effective income tax rate	(0.4)	%	(1.1)	%	(0.4)	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows:


	Years Ended December 31,
	2021		2020
Deferred tax assets:
Deferred revenue	$	369	$	351
Accruals and reserves	4,411		3,511
Net operating loss carryforwards	111,413		63,542
Deferred warrant expense	—		—
Basis in partnership	173,092		181,673
Gross deferred tax assets	289,285		249,077
Valuation allowance	(288,506)		(248,420)
Net deferred tax assets	$	779	$	657
Deferred tax liabilities:
Depreciation and amortization	(814)		(818)
Other	(757)		—
Gross deferred tax liabilities	(1,571)		(818)
Net deferred tax liabilities	$	(792)	$	(161)

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the Company’s gross unrecognized tax benefits is as follows:


	Years Ended December 31,
	2021		2020
Balance at beginning of year	$	2,555	$	1,006
Increases for tax positions taken in prior years	—		462
Decreases for tax positions taken in prior years	—		—
Increases for tax positions taken in current year	438		1,087
Decreases for settlements with taxing authorities	—		—
Decreases for lapsing of the statute of limitations	(65)		—
Balance at end of year	$	2,928	$	2,555

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Debt and Finance Lease Obligations

The Company’s debt and finance lease obligations are comprised of the following:



	December 31,		December 31,
	2021		2020
2026 Convertible Senior Notes, net of unamortized financing costs $17,527 and $0, respectively	$	729,973	$	—
HPS Credit Facility, net of unamortized financing costs of $0 and $10,431, respectively	—		381,942

Align redemption promissory note	—		4,609
Finance lease obligations	10,997		22,052
Total debt	740,970		408,603
Less current portion	(10,997)		(15,664)
Total long-term debt	$	729,973	$	392,939

Schedule of Maturities of Long-term Debt

Annual future maturities of long-term debt, excluding finance lease obligations, and unamortized financing costs, are as follows:


	2026 Convertible Senior Notes

2022	$	—
2023	—
2024	—
2025	—
2026	747,500
Total	$	747,500

Incentive Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

Options activity was as follows during the year ended December 31, 2021:


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2020	1,679,339	$	23.00	8.7	$	—
Granted	50,000	12.21		9.1	—
Exercised	—	—		—	—
Expired	—	—		—	—
Forfeited	(65,217)	23.00		—	—
Outstanding at December 31, 2021	1,664,122	$	22.70	7.7	$	—
Exercisable at December 31, 2021	597,816	$	23.00	7.7	$	—

Schedule of Restricted Stock Unit Activity

A summary of activity related to these RSUs is as follows:


	IBA RSUs	Non-IBA RSUs	Total RSUs	Weighted Average Grant Date Fair Value
RSUs outstanding, December 31, 2020	1,626,738	2,193,144	3,819,882	$	16.68
Granted	—	4,333,642	4,333,642	$	11.00
Vested	(1,470,650)	(1,290,175)	(2,760,825)	$	16.89
Forfeited	—	(555,538)	(555,538)	$	11.12
RSUs outstanding, December 31, 2021	156,088	4,681,073	4,837,161	$	15.53

Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) Per Share, Basic and Diluted

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A common stock:


	Years Ended December 31,
		2021		2020		2019
Numerator:
Net loss		$	(335,650)	$	(278,499)	$	(537,805)
Less: Net income attributable to SDC Financial prior to the Reorganization Transactions		—		—		(104,245)
Less: Net loss attributable to noncontrolling interests subsequent to the Reorganization Transactions		(233,208)		(200,133)		(319,047)
Net loss attributable to SDC Inc. - basic		(102,442)		(78,366)		(114,513)
Add: Reallocation of net loss attributable to noncontrolling interests after the Reorganization Transactions from the assumed exchange of LLC Units for Class A common stock		(233,208)		(200,133)		(319,047)
Net loss attributable to SDC Inc. - diluted		$	(335,650)	$	(278,499)	$	(433,560)
Denominator:
Weighted average shares of Class A common stock outstanding - basic		118,360,801		109,854,360		102,442,525
Add: Dilutive effects as shown separately below
LLC Units that are exchangeable for Class A common stock		269,415,089		275,346,082		279,474,505
Weighted average shares of Class A common stock outstanding - diluted		387,775,890		385,200,442		381,917,030

Earnings (loss) per share of Class A common stock outstanding - basic		$	(0.87)	$	(0.71)	$	(1.12)
Earnings (loss) per share of Class A common stock outstanding - diluted		$	(0.87)	$	(0.72)	$	(1.14)

Schedule of Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share

Due to their anti-dilutive effect, the following securities have been excluded from diluted net earnings (loss) per share in the periods presented:


	Years Ended December 31,
		2021	2020	2019
Options		1,664,122	1,679,339	1,744,556
Restricted Stock Units		4,837,161	3,819,882	5,884,190
Warrants		3,889,575	3,889,575	1,471,735
Shares issuable under the Notes (if converted method)(1)		41,389,822	—	—

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Schedule Of Reconciliation To Income Loss From Continuing Operations


	Year Ended December 31, 2021
(in thousands)	North America		Rest of World		Total
Revenue	$	525,366	$	112,245	$	637,611

Net loss before provision for income tax expense	$	(236,177)	$	(98,205)	$	(334,382)

Reconciliation of operating income (loss) to Adjusted EBITDA
Depreciation and amortization	$	57,734	$	12,379	$	70,113
Interest expense	22,920		234		23,154
Lease abandonment and impairment of long-lived assets	1,301		180		1,481
Other store closure and related costs	1,323		2,475		3,798
Loss on extinguishment of debt	47,585		46		47,631
Equity-based compensation	37,429		7,199		44,628
Other non-operating general and administrative losses (gains)	2,812		7,561		10,373
Adjusted EBITDA	$	(65,073)	$	(68,131)	$	(133,204)


	Year Ended December 31, 2020
(in thousands)	North America		Rest of World		Total
Revenue	$	568,775	$	88,005	$	656,780

Net loss before provision for income tax expense	$	(220,161)	$	(55,216)	$	(275,377)

Reconciliation of operating income (loss) to Adjusted EBITDA
Depreciation and amortization	$	48,119	$	8,271	$	56,390
Interest expense	43,844		1,166		45,010
Lease abandonment and impairment of long-lived assets	25,457		—		25,457
Other store closure and related costs	6,648		386		7,034
Loss on extinguishment of debt	13,781		—		13,781
Equity-based compensation	38,562		6,341		44,903
Other non-operating general and administrative losses (gains)	6,955		(1,237)		5,718
Adjusted EBITDA	$	(36,795)	$	(40,289)	$	(77,084)

Quarterly Results of Operations Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Results of Operations (Unaudited)


	Three Months Ended
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021
Revenue, net	$	126,286	$	137,683	$	174,181	$	199,461
Gross profit	81,922		98,271		128,321		151,500
Loss from operations	(93,220)		(85,035)		(53,200)		(27,829)
Net loss	(95,365)		(89,383)		(55,257)		(95,645)
Net loss attributable to noncontrolling interest	(66,104)		(61,991)		(38,377)		(66,736)
Net loss attributable to SmileDirectClub, Inc.	(29,261)		(27,392)		(16,880)		(28,909)

Earnings (loss) per share of Class A common stock:
Basic	$	(0.25)	$	(0.23)	$	(0.14)	$	(0.25)
Diluted	$	(0.25)	$	(0.23)	$	(0.14)	$	(0.25)

Weighted average shares outstanding:
Basic	119,188,971		118,918,072		118,344,050		116,961,510
Diluted	388,432,472		388,161,573		387,609,677		386,878,524

	Three Months Ended
	December 31, 2020		September 30, 2020		June 30, 2020		March 31, 2020
Revenue, net	$	184,556	$	168,501	$	107,073	$	196,650
Gross profit	136,017		118,741		58,297		136,873
Loss from operations	(19,200)		(27,765)		(74,019)		(96,480)
Net loss	(32,951)		(43,482)		(94,666)		(107,400)
Net loss attributable to noncontrolling interest	(23,224)		(30,892)		(67,867)		(78,150)
Net loss attributable to SmileDirectClub, Inc.	(9,727)		(12,590)		(26,799)		(29,250)

Earnings (loss) per share of Class A common stock:
Basic	$	(0.09)	$	(0.11)	$	(0.25)	$	(0.28)
Diluted	$	(0.09)	$	(0.11)	$	(0.25)	$	(0.28)

Weighted average shares outstanding:
Basic	114,008,652		111,703,080		109,048,411		104,595,081
Diluted	386,128,446		385,672,677		385,133,303		383,855,705

Supplemental Cash Flow (Tables)

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Abstract]

Schedule of Supplemental Cash Flow Information

The supplemental cash flow information comprised of the following for the years ended December 31:


	2021		2020		2019
Interest paid	$	18,035	$	30,900	$	9,664
Income taxes paid	$	—	$	—	$	—
Purchases of property and equipment included in accounts payable	$	13,094	$	11,809	$	28,638
Property acquired under finance lease	$	—	$	—	$	23,973

Costs associated with IPO included in accrued expenses	$	—	$	—	$	1,155

SEC Schedule, Article 12-09, Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Year	$ 49,264	$ 49,365	$ 35,013
Charged to Revenue	109,806	125,938	111,330
Charged to Other Accounts	(814)	(522)	15
Write-offs and Other Adjustments	(116,787)	(126,561)	(96,963)
Balance at End of Year	$ 43,097	$ 49,264	$ 49,365

Organization and Basis of Presentation - Initial Public Offering (Details) - IPO $ / shares in Units, $ in Millions	Sep. 16, 2019 USD ($) $ / shares shares
Subsidiary, Sale of Stock [Line Items]
Number of shares issued in transaction (in shares) \| shares	58,537,000
Price per share of stock sold (USD per share) \| $ / shares	$ 23.00
Consideration received on sale of stock \| $	$ 1,286

Organization and Basis of Presentation - Reorganization Transactions (Details)	Sep. 17, 2019	Sep. 16, 2019
Affiliated Entity \| Tax Receivable Agreement
Noncontrolling Interest [Line Items]
Related party transaction rate		85.00%
SDC Financial, LLC
Noncontrolling Interest [Line Items]
Ownership percentage	73.10%

Organization and Basis of Presentation - Basis of Presentation and Consolidation (Details) - variable_interest_entity	Dec. 31, 2021	Dec. 31, 2020
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Variable interest entity, number of entities	53	54

Organization and Basis of Presentation - COVID-19 Pandemic (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]
Other store closure and related costs	$ 3,798	$ 7,034	$ 0
COVID-19 Pandemic
Restructuring Cost and Reserve [Line Items]
Restructuring costs and asset impairment charges		$ 32,491
Other store closure and related costs	$ 5,279

Summary of Significant Accounting Policies - Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2021
Minimum
Disaggregation of Revenue [Line Items]
Treatment plan period	5 months
Maximum
Disaggregation of Revenue [Line Items]
Treatment plan period	10 months
Customer payment period	24 months

Summary of Significant Accounting Policies - Schedule of Revenue by Product Including Price Concessions (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 126,286	$ 137,683	$ 174,181	$ 199,461	$ 184,556	$ 168,501	$ 107,073	$ 196,650	$ 637,611	$ 656,780	$ 750,428
Implicit price concessions, cancellations, and refunds included in total revenue									129,307	138,841	125,535
Aligner revenue, net
Disaggregation of Revenue [Line Items]
Revenue recognized									517,552	543,136	683,429
Financing revenue, net
Disaggregation of Revenue [Line Items]
Revenue recognized									42,919	49,407	43,899
Retainers and other products revenue
Disaggregation of Revenue [Line Items]
Revenue recognized									$ 77,140	$ 64,237	$ 23,100

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Summary of Significant Accounting Policies - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Total revenues	$ 126,286	$ 137,683	$ 174,181	$ 199,461	$ 184,556	$ 168,501	$ 107,073	$ 196,650	$ 637,611	$ 656,780	$ 750,428
Aligners
Disaggregation of Revenue [Line Items]
Total revenues									517,552	543,136	683,429
Revenue recognized that was included in deferred revenue	$ 22,550				$ 19,750				$ 22,550	$ 19,750	$ 16,630

- Definition

+ References

+ Details

Summary of Significant Accounting Policies - Schedule of Accounts Receivable Allowance for Credit Loss (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		$ 53,740
Current period provision for expected credit losses	$ 129,307
Write-offs and other adjustments charged against the allowance, net of recoveries	(116,031)
Refunds paid		(17,707)
Ending balance	49,309	49,309
Implicit price concessions and cancellation and adjustment reserves included in net receivables	43,097	43,097	$ 49,264
Customer refund liability, current	$ 6,212	$ 6,212	$ 4,476

Summary of Significant Accounting Policies - Shipping and Handling Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Cost of revenues	$ 177,597	$ 206,852	$ 163,861
Shipping and Handling
Disaggregation of Revenue [Line Items]
Cost of revenues	$ 22,892	$ 23,036	$ 19,000

Summary of Significant Accounting Policies - Marketing and Selling Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Marketing and selling expenses	$ 388,450	$ 322,919	$ 481,468

Summary of Significant Accounting Policies - Summary of Depreciation and Amortization, Income Statement Location (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 70,113	$ 56,390	$ 27,336
Cost of revenues
Property, Plant and Equipment [Line Items]
Depreciation and amortization	27,467	24,718	11,186
Marketing and selling expenses
Property, Plant and Equipment [Line Items]
Depreciation and amortization	5,001	7,079	5,322
General and administrative expenses
Property, Plant and Equipment [Line Items]
Depreciation and amortization	$ 37,645	$ 24,593	$ 10,828
Minimum
Property, Plant and Equipment [Line Items]
Amortization and depreciation, useful life	3 years
Maximum
Property, Plant and Equipment [Line Items]
Amortization and depreciation, useful life	10 years

Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Long-term debt	$ 747,500,000	$ 407,902,000
Debt facilities borrowings	305,167
Carrying value	$ 729,973

Summary of Significant Accounting Policies - Internally Developed Software Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Capitalized internally developed software costs	$ 58,558	$ 21,509	$ 11,861
Amortization of internally developed software costs	$ 17,973	$ 7,978	$ 3,384
Capitalized Computer Software \| Minimum
Property, Plant and Equipment [Line Items]
Amortization period	3 years
Capitalized Computer Software \| Maximum
Property, Plant and Equipment [Line Items]
Amortization period	5 years

Summary of Significant Accounting Policies - Tax Receivable Agreement (Details)	Sep. 16, 2019
Affiliated Entity \| Tax Receivable Agreement
Related Party Transaction [Line Items]
Related party transaction rate	85.00%

Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 14,662	$ 10,059
Finished goods	26,141	19,188
Total inventories	$ 40,803	$ 29,247

Prepaid and Other assets - Summary of Prepaid and Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 11,496	$ 9,315
Deposits to vendors	5,443	2,111
Other	580	1,406
Total prepaid and other current assets	17,519	12,832
Prepaid expenses, non-current	1,911	2,583
Deposits to vendors, non-current	967	1,018
Indefinite-lived intangible assets	7,155	6,692
Other intangible assets, net	2,458	184
Investments and other	2,989	1,010
Total other assets	$ 15,480	$ 11,487

Prepaid and Other assets - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Impairment of indefinite-lived intangible assets	$ 0	$ 0

Lease Abandonment, Impairment of Long-Lived Assets and Store Closure and Other Related Charges - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]
Other store closure and related costs	$ 3,798	$ 7,034	$ 0
Restructuring reserve	2,023
COVID-19 Pandemic
Restructuring Cost and Reserve [Line Items]
Other store closure and related costs	$ 5,279

Lease Abandonment, Impairment of Long-Lived Assets and Store Closure and Other Related Charges - Schedule of Restructuring Charges (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Lease abandonment and impairment of long-lived assets:
Impairment of property, plant and equipment	$ 586	$ 21,628	$ 0
Impairment of right of use asset	895	3,829	0
Lease abandonment and impairment of long-lived assets, total	1,481	25,457	0
Store closure and other related charges:
Other store closure and related costs	3,798	7,034	0
Store closure and other related charges:
Store closure and other related charges:
Impairment of inventory	219	786	0
Short-term lease termination fees	205	4,687	0
Other expenses	3,374	1,561	0
Other store closure and related costs	$ 3,798	$ 7,034	$ 0

Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	$ 377,823	$ 285,345
Less: accumulated depreciation	(150,622)	(95,350)
Property, plant, and equipment and finance lease right-of-use asset, after accumulated depreciation and amortization, total	227,201	189,995
Lab and SmileShop equipment
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	118,320	116,340
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	178,508	91,595
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	36,474	25,721
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	13,321	13,627
Vehicles
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	8,018	6,266
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization	$ 23,182	$ 31,796

Property, Plant and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Finance lease ROU, before accumulated amortization	$ 10,163	$ 20,484
Finance lease ROU, accumulated amortization	$ 18,013	$ 15,444

Leases - ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Assets:
Operating leases	$ 24,927	$ 31,176
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, plant and equipment, net	Property, plant and equipment, net
Finance leases	$ 10,163	$ 20,484
Total leased assets	$ 35,090	$ 51,660
Liabilities:
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities	Other current liabilities
Operating lease, liability, current	$ 4,997	$ 6,821
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current portion of long-term debt	Current portion of long-term debt
Finance lease, liability, current	$ 10,997	$ 11,055
Operating Lease, Liability, Noncurrent	$ 20,352	$ 27,771
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-term debt, net of current portion	Long-term debt, net of current portion
Finance lease, liability, noncurrent	$ 0	$ 10,997
Lease liability	$ 36,346	$ 56,644
Weighted average remaining term:
Operating lease, weighted average remaining lease term	4 years 9 months 18 days	6 years
Finance lease, weighted average remaining lease term	9 months 18 days	1 year 7 months 6 days
Weighted average discount rate:
Operating lease, weighted average discount rate, percent	4.94%	5.87%
Finance lease, weighted average discount rate, percent	7.00%	7.50%
Finance lease ROU, accumulated amortization	$ 18,013	$ 15,444

Leases - Components of Lease Cost and Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Finance lease expense:
Amortization of leased assets	$ 9,208	$ 9,988
Interest on lease liabilities	1,265	2,062
Operating leases	8,607	9,875
Short-term lease expense	12,290	16,452
Variable lease expense	728	3,249
Total lease expense	32,098	41,626	$ 0
Cash used in operating activities	8,265	9,056
Cash used in investing activities	0	0
Cash used in financing activities	$ 11,055	$ 10,138	$ 3,017

Leases - Undiscounted Cash Flows of Operating Lease and Finance Lease (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Finance Lease, Liability, Payment, Due [Abstract]
2022	$ 6,859
2023	0
2024	0
2025	0
2026	0
2027 and thereafter	0
Total minimum lease payments	6,859
Residual value	4,550
Amount representing interest	(412)
Present value of future minimum lease payments	10,997	$ 22,052
Less: current portion	(10,997)	(11,055)
Long-term lease liabilities	0	10,997
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2022	5,673
2023	6,526
2024	5,138
2025	4,036
2026	3,637
2027 and thereafter	3,874
Total minimum lease payments	28,884
Residual value	0
Amount representing interest	(3,535)
Present value of future minimum lease payments	25,349
Less: current portion	(4,997)	(6,821)
Long-term lease liabilities	$ 20,352	$ 27,771

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued marketing and selling costs	$ 37,883	$ 19,236
Accrued payroll and payroll related expenses	15,829	27,912
Accrued sales tax and related costs	8,769	14,877
Other	59,585	38,564
Total accrued liabilities	$ 122,066	$ 100,589

Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Domestic	$ (320,870)	$ (269,211)	$ (532,379)
Foreign	(13,512)	(6,166)	(3,158)
Net loss before provision for income tax expense	$ (334,382)	$ (275,377)	$ (535,537)

Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ 258	$ 1,169	$ 1,018
State	359	642	309
Foreign	(12)	1,253	491
Current income tax provision	605	3,064	1,818
Deferred:
Federal	0	0	0
State	80	58	450
Foreign	583	0	0
Deferred income tax provision	663	58	450
Total income tax provision	$ 1,268	$ 3,122	$ 2,268

Income Taxes - Schedule of Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
U.S. federal income tax statutory rate	21.00%	21.00%	21.00%
Income attributable to noncontrolling interest and non taxable income	(13.00%)	(13.20%)	(16.60%)
State income tax, net of federal benefit	(0.10%)	(0.10%)	(0.10%)
Losses for which no benefit has been recognized	(12.50%)	(0.40%)	(3.80%)
Foreign rate differential	0.20%	(0.10%)	(0.10%)
Uncertain tax position	(0.10%)	(0.50%)	(0.20%)
Change in investment in partnership	4.10%	(7.80%)	0.00%
Other	0.00%	0.00%	(0.60%)
Effective income tax rate	(0.40%)	(1.10%)	(0.40%)

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Deferred revenue	$ 369	$ 351
Accruals and reserves	4,411	3,511
Net operating loss carryforwards	111,413	63,542
Deferred warrant expense	0	0
Basis in partnership	173,092	181,673
Gross deferred tax assets	289,285	249,077
Valuation allowance	(288,506)	(248,420)
Net deferred tax assets	779	657
Deferred tax liabilities:
Depreciation and amortization	(814)	(818)
Other	(757)	0
Gross deferred tax liabilities	(1,571)	(818)
Net deferred tax liabilities	$ (792)	$ (161)

Income Taxes - Narrative (Details) - USD ($)		12 Months Ended
Income Taxes - Narrative (Details) - USD ($)	Sep. 16, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Loss Carryforwards [Line Items]
Valuation allowance		$ 288,506,000	$ 248,420,000
Unrecognized tax benefits		2,928,000	2,555,000	$ 1,006,000
LLC units acquired in the period				$ 635,690,000
Tax Receivable Agreement
Operating Loss Carryforwards [Line Items]
Expected income tax benefit from remaining cash savings percentage	15.00%
Affiliated Entity \| Tax Receivable Agreement
Operating Loss Carryforwards [Line Items]
Related party transaction rate	85.00%
Affiliated Entity \| Tax Receivable Agreement, Payment To Members
Operating Loss Carryforwards [Line Items]
Payments to related parties		0	$ 0
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, tax effected		71,464,000
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, tax effected		33,434,000
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, tax effected		$ 6,515,000

Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at beginning of year	$ 2,555	$ 1,006
Increases for tax positions taken in prior years	0	462
Decreases for tax positions taken in prior years	0	0
Increases for tax positions taken in current year	438	1,087
Decreases for settlements with taxing authorities	0	0
Decreases for lapsing of the statute of limitations	(65)	0
Balance at end of year	$ 2,928	$ 2,555

Long-Term Debt - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Finance lease obligations	$ 10,997	$ 22,052
Total debt	740,970	408,603
Less current portion	(10,997)	(15,664)
Total long-term debt	729,973	392,939
Convertible Debt \| 2026 Convertible Senior Notes
Debt Instrument [Line Items]
Long-term debt	729,973	0
Unamortized financing costs	17,527	0
Line of Credit \| HPS Credit Facility
Debt Instrument [Line Items]
Long-term debt	0	381,942
Unamortized financing costs	0	10,431
Promissory Note \| Align Redemption Promissory Note
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 4,609

Long-Term Debt - 2026 Convertible Senior Notes (Details)			12 Months Ended
	Feb. 11, 2021 USD ($)	Feb. 09, 2021 USD ($) $ / shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Feb. 04, 2021 $ / shares
Debt Instrument [Line Items]
Share price (USD per share) \| $ / shares						$ 12.90
Deferred loan cost amortization			$ 5,148,000	$ 4,407,000	$ 3,969,000
Payments to fund equity transactions		$ 69,518,000
Convertible Senior Notes Due 2026 \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, face amount		$ 650,000,000
Interest rate, stated percentage		0.00%
Debt instrument, convertible, conversion ratio		0.0553710
Debt instrument, convertible, conversion price (USD per share) \| $ / shares		$ 18.06
Debt instrument, convertible, beneficial conversion feature, percentage		40.00%
Deferred financing costs		$ 21,338,000
Deferred loan cost amortization			$ 3,811,000
Debt instrument, debt default, period when payment due of special interest		30 days
Debt Instrument, debt default, period to cure default		3 days
Debt instrument, debt default, written notice period		60 days
Debt instrument, debt default, amount outstanding threshold		$ 50,000
Debt instrument, debt default, percent of aggregate principal amount		25.00%
Debt instrument, debt default, period of special interest payments to meet covenants		180 days
Debt instrument, debt default, period of special interest payments to meet covenants, maximum interest rate		0.50%
Convertible Senior Notes Due 2026, Option Notes \| Convertible Debt
Debt Instrument [Line Items]
Debt instrument, face amount		$ 97,500,000
Proceeds from issuance of debt	$ 27,500,000	$ 70,000,000

Long-Term Debt - HPS Credit Facility (Details) - Revolving Credit Facility - HPS Credit Facility - Line of Credit - USD ($)	1 Months Ended	12 Months Ended
	May 31, 2020	Dec. 31, 2021	Jun. 30, 2020
Line of Credit Facility [Line Items]
Debt term	5 years
Maximum borrowing capacity	$ 400,000,000
Debt discount	12,000,000
Additional aggregate principal available	100,000,000
Financing costs incurred	187,000
Write off of deferred debt issuance cost	1,594,000
Deferred financing costs			$ 11,784,000
Amortization of deferred financing and debt issuance costs		$ 536,000
Debt instrument, covenant minimum monthly liquidity	$ 100,000,000
Debt instrument, refinancing fee, percentage of principal amount prepaid, year one	4.00%
Debt instrument, refinancing fee, percentage of principal amount prepaid, year two	4.00%
Debt instrument, refinancing fee, percentage of principal amount prepaid, year three	3.00%
Debt instrument, refinancing fee, percentage of principal amount prepaid, year four	2.00%
Debt instrument, refinancing fee, percentage of principal amount prepaid, year five	1.00%
London Interbank Offered Rate (LIBOR) \| Minimum
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.75%
LIBOR - Payable In Cash
Line of Credit Facility [Line Items]
Basis spread on variable rate	7.50%
LIBOR - Payable In Kind
Line of Credit Facility [Line Items]
Basis spread on variable rate	3.25%

Long-Term Debt - HPS Warrants (Details) $ / shares in Units, $ in Thousands	May 12, 2020 USD ($) $ / shares shares
Debt Instrument [Line Items]
Exercise price of warrants (USD per share) \| $ / shares	$ 7.11
Fair value of warrants \| $	$ 17,620
Common Class A
Debt Instrument [Line Items]
Warrants outstanding (in shares) \| shares	3,889,575
Common Class A, Common Class B, And Warrants
Debt Instrument [Line Items]
Warrants as a percentage of outstanding common stock and warrants	1.00%

Long-Term Debt - Align Redemption Promissory Note (Details) - USD ($) $ in Thousands	Sep. 16, 2019	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Pre-IPO units required for redemption (in shares)	20,710
Promissory Note \| Align Redemption Promissory Note
Debt Instrument [Line Items]
Monthly payments	$ 2,311
Interest rate, stated percentage	2.52%
Long-term debt		$ 0	$ 4,609

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Long-Term Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total	$ 747,500	$ 407,902
Convertible Debt \| 2026 Convertible Senior Notes
Debt Instrument [Line Items]
2022	0
2023	0
2024	0
2025	0
2026	747,500
Total	$ 747,500

Noncontrolling Interests - Narrative (Details) - shares	12 Months Ended
Noncontrolling Interests - Narrative (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
SDC Financial, LLC
Class of Stock [Line Items]
Economic ownership interest	30.70%
Common Class A
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)	119,280,781	115,429,319

Variable Interest Entities (Details)	12 Months Ended
Variable Interest Entities (Details)	Dec. 31, 2021
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Ownership percentage	100.00%

Incentive Compensation Plans - Class A Common Stock Options Narrative (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) award_type $ / shares	Aug. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of award types \| award_type	2
Expected dividend yield	0.00%
Expected volatility rate	65.60%
Risk-free interest rate	0.80%
Expected term	6 years 3 months 18 days
Weighted average fair value per option (in dollars per share) \| $ / shares	$ 8.17
Unrecognized compensation expense \| $	$ 4,183
Weighted average period, expected expense recognition	10 months 24 days
2019 Omnibus Incentive Compensation Plan \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved for future issuance (in shares) \| shares		38,486,295

Incentive Compensation Plans - Schedule of Stock Option Activity (Details) - 2019 Omnibus Incentive Compensation Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Number of Options
Outstanding at beginning of period (in shares)	1,679,339
Granted (in shares)	50,000
Exercised (in shares)	0
Expired (in shares)	0
Forfeited (in shares)	(65,217)
Outstanding at end of period (in shares)	1,664,122	1,679,339
Exercisable at end of period (in shares)	597,816
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 23.00
Granted (in dollars per share)	12.21
Exercised (in dollars per share)	0
Expired (in dollars per share)	0
Forfeited (in dollars per share)	23.00
Outstanding at end of period (in dollars per share)	22.70	$ 23.00
Exercisable at end of period (in dollars per share)	$ 23.00
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term, outstanding	7 years 8 months 12 days	8 years 8 months 12 days
Weighted Average Remaining Contractual Term, granted	9 years 1 month 6 days
Weighted Average Remaining Contractual Term, exercisable	7 years 8 months 12 days
Aggregate Intrinsic Value
Outstanding at December 31, 2020	$ 0
Outstanding at December 31, 2021	0	$ 0
Exercisable at December 31, 2021	$ 0

Incentive Compensation Plans - Incentive Bonus Awards Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Aug. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense		$ 44,628	$ 44,903	$ 350,122
Restricted Stock Units (RSUs), Incentive Bonus Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs to be released (in shares)		156,088	1,626,738
Restricted Stock Units (RSUs), Incentive Bonus Awards \| 2019 Omnibus Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	5 years
Award accelerated vesting, percent settled in cash	50.00%
Award accelerated vesting, percent of Cash award, withheld for taxes	80.00%
Award accelerated vesting, percent of total vested award	40.00%
Equity-based compensation expense	$ 316,959
RSUs to be released (in shares)	2,199,453
Restricted Stock Units (RSUs), Incentive Bonus Awards \| 2019 Omnibus Incentive Compensation Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	2 years
Award requisite service period	6 months
Restricted Stock Units (RSUs), Incentive Bonus Awards \| 2019 Omnibus Incentive Compensation Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Award requisite service period	24 months
Restricted Stock Units (RSUs), Incentive Bonus Awards \| 2019 Omnibus Incentive Compensation Plan \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award accelerated vesting, percent settled through stock issuance	50.00%
Shares issued, after forfeiture (in shares)	5,654,078

Incentive Compensation Plans - Non-IBA Restricted Stock Units Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 4,183
Weighted average period, expected expense recognition	10 months 24 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense	$ 38,812
Weighted average period, expected expense recognition	2 years 4 months 24 days
Minimum \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	2 years
Maximum \| Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years

Incentive Compensation Plans - Schedule of Restricted Stock Unit Activity (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
IBA RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
RSUs outstanding at beginning of period (in shares)	1,626,738
Granted (in shares)	0
Vested (in shares)	(1,470,650)
Cancelled (in shares)	0
RSUs outstanding at end of period (in shares)	156,088
Non-IBA RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
RSUs outstanding at beginning of period (in shares)	2,193,144
Granted (in shares)	4,333,642
Vested (in shares)	(1,290,175)
Cancelled (in shares)	(555,538)
RSUs outstanding at end of period (in shares)	4,681,073
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
RSUs outstanding at beginning of period (in shares)	3,819,882
Granted (in shares)	4,333,642
Vested (in shares)	(2,760,825)
Cancelled (in shares)	(555,538)
RSUs outstanding at end of period (in shares)	4,837,161
Weighted Average Grant Date Fair Value
RSUs outstanding at beginning of period (in dollars per share) \| $ / shares	$ 16.68
Granted (in dollars per share) \| $ / shares	11.00
Vested (in dollars per share) \| $ / shares	16.89
Cancelled (in dollars per share) \| $ / shares	11.12
RSUs outstanding at end of period (in dollars per share) \| $ / shares	$ 15.53

Incentive Compensation Plans - Employee Stock Purchase Plan Narrative (Details) - Employee Stock - Employee Stock Purchase Plan	1 Months Ended
	Nov. 30, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	5,772,944
Option period	6 months
Maximum employee subscription rate	30.00%
Purchase price of common stock, as a percent of the closing market price	85.00%

Incentive Compensation Plans - Equity-Based Compensation Expense Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Equity-based compensation expense	$ 44,628	$ 44,903	$ 350,122

Earnings (Loss) Per Share - Summary of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended									4 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2019	Sep. 16, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Numerator:
Net loss	$ (95,365)	$ (89,383)	$ (55,257)	$ (95,645)	$ (32,951)	$ (43,482)	$ (94,666)	$ (107,400)	$ (433,560)		$ (104,245)	$ (335,650)	$ (278,499)	$ (537,805)
Less: Net loss attributable to noncontrolling interests subsequent to the Reorganization Transactions	$ (66,104)	$ (61,991)	$ (38,377)	$ (66,736)	$ (23,224)	$ (30,892)	$ (67,867)	$ (78,150)	$ (319,047)		$ (104,245)	(233,208)	(200,133)	(423,292)
Net loss attributable to SDC Inc. - basic												(102,442)	(78,366)	(114,513)
Add: Reallocation of net loss attributable to noncontrolling interests after the Reorganization Transactions from the assumed exchange of LLC Units for Class A common stock												(233,208)	(200,133)	(319,047)
Net loss attributable to SDC Inc. - diluted												$ (335,650)	$ (278,499)	$ (433,560)
Denominator:
Weighted average shares of Class A common stock outstanding - basic (in shares)	119,188,971	118,918,072	118,344,050	116,961,510	114,008,652	111,703,080	109,048,411	104,595,081		102,442,525		118,360,801	109,854,360	102,442,525
Add: Dilutive effects as shown separately below (in shares)										279,474,505		269,415,089	275,346,082
Weighted average shares of Class A common stock outstanding - diluted (in shares)	388,432,472	388,161,573	387,609,677	386,878,524	386,128,446	385,672,677	385,133,303	383,855,705		381,917,030		387,775,890	385,200,442	381,917,030
Basic (in USD per share)										$ (1.12)		$ (0.87)	$ (0.71)
Diluted (in USD per share)										$ (1.14)		$ (0.87)	$ (0.72)

Earnings (Loss) Per Share - Antidilutive Securities Excluded From Computation of Earnings per Share (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,664,122	1,679,339	1,744,556
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	4,837,161	3,819,882	5,884,190
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	3,889,575	3,889,575	1,471,735
Shares issuable under the Notes (if converted method)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	41,389,822	0	0

Employee Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Contribution Plan Disclosure [Line Items]
Company contribution for 401(k)	$ 3,141	$ 3,202	$ 2,707
Threshold One
Defined Contribution Plan Disclosure [Line Items]
Employer match	100.00%	100.00%	100.00%
Employer matching contribution, percent of Employees' gross pay	3.00%	3.00%	3.00%
Threshold Two
Defined Contribution Plan Disclosure [Line Items]
Employer match	50.00%	50.00%	50.00%
Threshold Two \| Minimum
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution, percent of Employees' gross pay	3.00%	3.00%	3.00%
Threshold Two \| Maximum
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution, percent of Employees' gross pay	5.00%	5.00%	5.00%

Related Party Transactions - Products and Services and Distribution Payable Narrative (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Feb. 29, 2020	Aug. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Distribution declared		$ 43,400
Align
Related Party Transaction [Line Items]
Related party costs			$ 0	$ 0	$ 7,659
Private Aircraft
Related Party Transaction [Line Items]
Purchases from related party	$ 3,400
Lab and SmileShop equipment \| Align
Related Party Transaction [Line Items]
Purchases from related party			0	0	6,025
Affiliated Entity
Related Party Transaction [Line Items]
Management fees paid to affiliate			0	0	1,255
Affiliated Entity \| Freight
Related Party Transaction [Line Items]
Related party costs			0	0	7,433
Law Firm of Immediate Family Member of Director of the Company
Related Party Transaction [Line Items]
Management fees paid to affiliate			$ 5,806	$ 5,790	$ 1,716

Commitments and Contingencies - Narrative (Details)			1 Months Ended			5 Months Ended	12 Months Ended	25 Months Ended
Commitments and Contingencies - Narrative (Details)	May 19, 2021 USD ($)	Sep. 16, 2019	Mar. 31, 2021 USD ($)	Sep. 30, 2019 orthodontist	Mar. 31, 2019 USD ($)	Mar. 31, 2020 complaint	Dec. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Mar. 20, 2021 USD ($)
Minimum
Loss Contingencies [Line Items]
Estimated potential income tax expense, VAT assessment							$ 0
Maximum
Loss Contingencies [Line Items]
Estimated potential income tax expense, VAT assessment							$ 17,900,000
Affiliated Entity \| Tax Receivable Agreement
Loss Contingencies [Line Items]
Related party transaction rate		85.00%
Stacy Benbow et al. v. SmileDirectClub, Inc. et al., 2020 CH 07269
Loss Contingencies [Line Items]
Amount awarded to other party	$ 4,000,000
Pending Litigation
Loss Contingencies [Line Items]
Complaints filed \| complaint						3
Pending Litigation \| U.S. District Court For The Middle District Of Tennessee, Ciccio, et al. v. SmileDirectClub, LLC
Loss Contingencies [Line Items]
Number of plaintiffs \| orthodontist				3
Pending Litigation \| Stacy Benbow et al. v. SmileDirectClub, Inc. et al., 2020 CH 07269
Loss Contingencies [Line Items]
Estimate of possible loss									$ 4,800,000
Promissory Note \| Align Redemption Promissory Note
Loss Contingencies [Line Items]
Debt payment								$ 54,000,000
Term of debt					24 months
Debt instrument, face amount					$ 54,000,000
Additional damages sought					$ 43,400,000
Amount awarded to other party			$ 43,400,000

Segment Reporting - Narrative (Details)	12 Months Ended
Segment Reporting - Narrative (Details)	Dec. 31, 2021
North America \| Revenue from Contract with Customer Benchmark \| Geographic Concentration Risk
Revenue, Major Customer [Line Items]
Concentration risk, percentage	82.40%

Segment Reporting - Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Revenue	$ 637,611	$ 656,780
Net loss before provision for income tax expense	(334,382)	(275,377)	$ (535,537)
Depreciation and amortization	70,113	56,390	27,336
Lease abandonment and impairment of long-lived assets	1,481	25,457	0
Loss on extinguishment of debt	47,631	13,781	$ 29,672
Adjusted EBITDA	(133,204)	(77,084)
EBITDA Reconciliation
Segment Reporting Information [Line Items]
Depreciation and amortization	70,113	56,390
Interest expense	23,154	45,010
Lease abandonment and impairment of long-lived assets	1,481	25,457
Other store closure and related costs	3,798	7,034
Loss on extinguishment of debt	47,631	13,781
Equity-based compensation	44,628	44,903
Other non-operating general and administrative losses (gains)	(10,373)	5,718
North America
Segment Reporting Information [Line Items]
Revenue	525,366	568,775
Net loss before provision for income tax expense	(236,177)	(220,161)
Adjusted EBITDA	(65,073)	(36,795)
North America \| EBITDA Reconciliation
Segment Reporting Information [Line Items]
Depreciation and amortization	57,734	48,119
Interest expense	22,920	43,844
Lease abandonment and impairment of long-lived assets	1,301	25,457
Other store closure and related costs	1,323	6,648
Loss on extinguishment of debt	47,585	13,781
Equity-based compensation	37,429	38,562
Other non-operating general and administrative losses (gains)	(2,812)	6,955
Rest of World
Segment Reporting Information [Line Items]
Revenue	112,245	88,005
Net loss before provision for income tax expense	(98,205)	(55,216)
Adjusted EBITDA	(68,131)	(40,289)
Rest of World \| EBITDA Reconciliation
Segment Reporting Information [Line Items]
Depreciation and amortization	12,379	8,271
Interest expense	234	1,166
Lease abandonment and impairment of long-lived assets	180	0
Other store closure and related costs	2,475	386
Loss on extinguishment of debt	46	0
Equity-based compensation	7,199	6,341
Other non-operating general and administrative losses (gains)	$ (7,561)	$ (1,237)

Quarterly Results of Operations Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended									4 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2019	Sep. 16, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Total revenues	$ 126,286	$ 137,683	$ 174,181	$ 199,461	$ 184,556	$ 168,501	$ 107,073	$ 196,650				$ 637,611	$ 656,780	$ 750,428
Gross profit	81,922	98,271	128,321	151,500	136,017	118,741	58,297	136,873				460,014	449,928	572,038
Loss from operations	(93,220)	(85,035)	(53,200)	(27,829)	(19,200)	(27,765)	(74,019)	(96,480)				(259,284)	(217,464)	(490,273)
Net loss	(95,365)	(89,383)	(55,257)	(95,645)	(32,951)	(43,482)	(94,666)	(107,400)	$ (433,560)		$ (104,245)	(335,650)	(278,499)	(537,805)
Net loss attributable to noncontrolling interest	(66,104)	(61,991)	(38,377)	(66,736)	(23,224)	(30,892)	(67,867)	(78,150)	$ (319,047)		$ (104,245)	(233,208)	(200,133)	(423,292)
Net loss attributable to SmileDirectClub, Inc.	$ (29,261)	$ (27,392)	$ (16,880)	$ (28,909)	$ (9,727)	$ (12,590)	$ (26,799)	$ (29,250)				$ (102,442)	$ (78,366)	$ (114,513)
Earnings (loss) per share of Class A common stock:
Basic (in USD per share)										$ (1.12)		$ (0.87)	$ (0.71)
Diluted (in USD per share)										$ (1.14)		$ (0.87)	$ (0.72)
Weighted average shares outstanding:
Basic (in shares)	119,188,971	118,918,072	118,344,050	116,961,510	114,008,652	111,703,080	109,048,411	104,595,081		102,442,525		118,360,801	109,854,360	102,442,525
Diluted (in shares)	388,432,472	388,161,573	387,609,677	386,878,524	386,128,446	385,672,677	385,133,303	383,855,705		381,917,030		387,775,890	385,200,442	381,917,030
Common Class A
Earnings (loss) per share of Class A common stock:
Basic (in USD per share)	$ (0.25)	$ (0.23)	$ (0.14)	$ (0.25)	$ (0.09)	$ (0.11)	$ (0.25)	$ (0.28)				$ (0.87)	$ (0.71)	$ (1.12)
Diluted (in USD per share)	$ (0.25)	$ (0.23)	$ (0.14)	$ (0.25)	$ (0.09)	$ (0.11)	$ (0.25)	$ (0.28)				$ (0.87)	$ (0.72)	$ (1.14)

Supplemental Cash Flow - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other Income and Expenses [Abstract]
Interest paid	$ 18,035	$ 30,900	$ 9,664
Income taxes paid	0	0	0
Purchases of property and equipment included in accounts payable	13,094	11,809	28,638
Property acquired under finance lease	0	0	23,973
Costs associated with IPO included in accrued expenses	$ 0	$ 0	$ 1,155

Label	Element	Value
Stock Issued During Period, Value, Reorganization Effect	sdc_StockIssuedDuringPeriodValueReorganizationEffect	$ 0
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs	us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts	87,685,000
Stockholders' Equity, Other	us-gaap_StockholdersEquityOther	2,964,000
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	1,275,835,000
Stock Repurchased During Period, Value	us-gaap_StockRepurchasedDuringPeriodValue	696,489,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation	0
Noncontrolling Interest, Reorganization Effect	sdc_NoncontrollingInterestReorganizationEffect	0
Members' Equity, Redemptions	sdc_MembersEquityRedemptions	54,154,000
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue	8,561,000
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue	299,199,000
Members' Equity, Distributions Payable	sdc_MembersEquityDistributionsPayable	43,400,000
Retained Earnings [Member]
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	us-gaap_ProfitLoss	(104,245,000)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	us-gaap_ProfitLoss	(114,513,000)
Noncontrolling Interest [Member]
Stock Issued During Period, Value, Reorganization Effect	sdc_StockIssuedDuringPeriodValueReorganizationEffect	315,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax	(738,000)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	us-gaap_ProfitLoss	(319,047,000)
Noncontrolling Interest, Reorganization Effect	sdc_NoncontrollingInterestReorganizationEffect	444,636,000
AOCI Including Portion Attributable to Noncontrolling Interest [Member]
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax	(272,000)
Additional Paid-in Capital [Member]
Stock Issued During Period, Value, Reorganization Effect	sdc_StockIssuedDuringPeriodValueReorganizationEffect	104,609,000
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs	us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts	87,685,000
Stockholders' Equity, Other	us-gaap_StockholdersEquityOther	2,964,000
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	1,275,830,000
Stock Repurchased During Period, Value	us-gaap_StockRepurchasedDuringPeriodValue	696,486,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation	(1,000)
Noncontrolling Interest, Reorganization Effect	sdc_NoncontrollingInterestReorganizationEffect	(444,636,000)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue	299,199,000
Common Class A [Member] \| Common Stock [Member]
Stock Issued During Period, Value, Reorganization Effect	sdc_StockIssuedDuringPeriodValueReorganizationEffect	$ 7,000
Stock Issued During Period, Shares, New Issues	us-gaap_StockIssuedDuringPeriodSharesNewIssues	58,537,000
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 5,000
Stock Repurchased During Period, Shares	us-gaap_StockRepurchasedDuringPeriodShares	31,621,975
Stock Repurchased During Period, Value	us-gaap_StockRepurchasedDuringPeriodValue	$ 3,000
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	us-gaap_StockIssuedDuringPeriodSharesShareBasedCompensation	6,150,461
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation	$ 1,000
Stock Issued During Period, Reorganization Effect	sdc_StockIssuedDuringPeriodReorganizationEffect	70,238,188
Common Class B [Member] \| Common Stock [Member]
Stock Issued During Period, Value, Reorganization Effect	sdc_StockIssuedDuringPeriodValueReorganizationEffect	$ 28,000
Stock Issued During Period, Reorganization Effect	sdc_StockIssuedDuringPeriodReorganizationEffect	279,474,505