INMD - Earnings call transcript Q3 2020

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Operator

Good day and welcome to the InMode Limited Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Miri Segal of MS-IR. Please go ahead.

Miri Segal

operator. you, Thank to day And everybody. good I would InMode's of to welcome quarter to XXXX all third financial you call. like results conference With are today the on Mr. us line CEO; Moshe Board of Mizrahy, & Chairman the Dr. Co-Founder Kreindel, and Mr. Michael CTO; and CFO; Malca, Dr. Yair Spero Theodorou, CMO; Mr. and Shakil Lakhani, President North InMode of America.

would Harbor begin, remind to today's pertains release statement provided outlined I certain forward-looking statements, to our may also this in call Before contain that this and information like we listeners on the call. Safe earnings

release, competitive, not please Relations could have If and differ received those by to the company's of the materially other results it a Investor expressed view you the section website. copy in Changes technological, factors the statements of forward-looking actual today. from in cause business, regulatory made

are necessarily performance. not future of results indicative Our historical

to begin can of with InMode's to to update As an give accuracy statements assume overview by a business followed as with required the Malca, CFO update will financials. Lakhani, as assurance no American InMode's law. North discuss no the by and and North over we Moshe Yair operations, of pass Shakil call them obligation forward-looking to our America our President such, it the except of

the for go the InMode's session. CEO. We ahead. open the Moshe, Mr. Moshe will then call I'll handover please to now question-and-answer call Mizrahy,

Moshe Mizrahy

quarter our discuss third financial the crisis quarter you, during call. Thank our going for COVID-XX outlook you results In we Miri. pandemic, of forward. And context thanks results of conference XXXX will strategy earning of our third in to and joining our all this the call, financial

our of income Dr. from today, the In minimally XX% company. $XX.X XX% New our the traditional North laser California; by RF America driven international of Chief our net record on on of our InMode minimally income in of Dr. Shakil third subdermal hands-free from demand revenue and quarter net In invasive record million of approximately are was from standard Michael the Theodorou, Officer The $XX.X on an in variety of a third increase CTO we and and invasive Kreindel, ablative which engaged for York. derived line from are basis our million Houston; Co-Founder and non-invasive Yair million, Toronto; electrosurgical non-GAAP generated from Spero XXXX, $XX.X proprietary revenue of in Malca, our We me worldwide in our surgical platforms revenue CFO a care of platforms. hands-free RF and record President our a recently platforms introduced of treatment, XX% our for X% procedures. of and a XXXX, GAAP quarter from Lakhani, quarter platforms, third With QX and becoming proprietary XXXX, surgical bipolar the basis. Medical

to here hospital marketing and our and subsidiaries basis. our Korea provide environment. demand year-over-year and in the technologies our the continue organization superior once by We product shifted procedures Europe clinic-based in new that sales social grew distancing during rapidly, and where a InMode and Asia. to in The differentiated our physician doubling we consumer this will concern attract society we was and adaptability COVID-XX innovative our through COVID-XX Mexico, into our leadership for pandemic and safety driven in has revenue normal US growth are Brazil, eased. alternative have Internationally, believe quarter as restriction stay. than This on proven successfully more invasive China, sales and health We activity accelerate to the

sales diversifying continue platforms, research our advancing awareness team to regulatory organization development our market invest and capturing and by and our technologies continue our quarter, we also we while expanding our share processes. progressing This marketing to to capability, creating and in in product succeed our pipeline, and

Additionally, to innovative body technology RF the MorpheusX Platforms, and at fractional entire Body use our we technology introduced treat which groundbreaking many the MorpheusX depts.

to In infringe addition, ophthalmology our Currently, we R&D were technology and our recently vis-à-vis gynecology, intend aesthetic technology. to we protect We to the the industry market. fractional pipeline and patent. the to with who surgical anyone innovative IP our patent a granted our bring covering is market RF designed address products our broaden ENT most serve

Going platforms in beyond. two into markets XXXX plan those to forward, introduce and we

our we will As demand. and out interest new this to we roll build force sales brand continue technology, and innovative to build

sales are future. crisis, organization we back, to supporting pandemic network continue with and instead Looking pleased the extremely growing not our but due downsize our the to decision our for

market the future InMode's remain our through not continue COVID-XX that confident in committed to the uncertainties to behind due are success most investing build we organization yet times. can to Although are even we difficult and us,

shares belief for we X mark the of $XXX $XXX the in performance gross in our range are maintain the Considering commitment to and share As revenue a of announced margin program value, XXXX XX% of our in third million we that InMode up to a to the rest to million full-year guidance and QX. quarter have we of and visibility we strong XXXX repurchase successful million non-GAAP our XXXX, XX%. into to increasing a intend

our have to welfare of protect local Lastly, prioritize and and customers. our followed guidelines employees and worldwide the employees to health we and regional continue

in the call into like America market. go turn would detail activities over our Shakil? more I to Now, Lakhani, Mr. our Shakil will North on to who

Shakil Lakhani

that physicians office fact previous quarter And minimally you, demand team and to guideline in reported investment hands-free record distancing to XXXX. sales and able on thoughts, right hands-free we in believe in We sales position into record strong consumers to technology hello, excited our translate and to the the the and that to invasive North Building team interest social growth, adhere and along the as turn for our restrictions expand America we employees, in be We and leading Moshe. physicians to Thank marketing third our for we and engaged dedication ultimately the this quarter. our Confirming our minimally efforts. invasive surging were keep sales to done a our finish Due of strengthen eased. and as with during the everyone. could growing place in with the this have year devices. continue we our technologies our quarantine

with MorpheusX were During solution MorpheusX physicians a the workstation to micro Platform hand launch quarter, MorpheusX with by MorpheusX for is state-of-the-art the followed we and treatments. RF last different excited first four tips a month. Platform This announced fractional fractional complete Body pieces provides technology standalone and dual and configurations. needle The full-body

competing solutions InMode's commitment to able clearly deeper We successful shows applying true to MorpheusX. were for innovation. have any the other technology, also we which other than go that invasive and formula are minimally developed to We following

MorpheusX a be expect contributor We sales in significant XXXX. to

optimistic Looking to and XXXX, exist. be continue additional to we will new technologies be launch two team the of for preparing still COVID-XX of the that uncertainties despite our

so remain future the We further are on very proud as and establishing of and the the leaders true ourselves our far. team's market. navigate We in ability focused pandemic to innovators

Yair? results over review detail. Now, our let financial in hand the to Yair call to me

Yair Malca

XXXX XXXX and international gross of MorpheusX The approximately United Sales third the XXXX. the hands-free sales revenue InMode's revenue Thanks, expenses XXXX from continued quarter InMode's was Shakil. $XX the primarily quarter increased gain by everyone. basis. organization in international XXX% the XXXX. in momentum in to well increased Total with of driven third third year-over-year. introduced by GAAP of totaled the InMode in marketing the technology on operating margin revenue of quarter in in fractional XX% technology. Good a traction a markets, direct to growing recently third States increase XX% continued million, expenses to XX.X% XX% million, the of and increase the with quarter compared quarter the expansion third of $XX.X as GAAP a day, the of of as

were strong XXXX totaled for XX% margin the expenses the in activities in of performance-based $X.XX Although marketing per third due XXXX. in sheet. higher-than-previously was in $XX.X This XXXX operating was of as XXXX earnings third the third third quarter quarter, non-GAAP due of caused $X.XX quarter the XX% of million $X.XX Non-GAAP stock revenue our a was in revised This events second of quarter compared $X.X non-GAAP the of GAAP of $X.X the to primarily to diluted balance share share XXXX XXXX. $XX.X in as of of well the million restrictions share a quarter expenses earnings in quarter third quarter quarter estimated the quarter to $X.XX million of the COVID-XX. is conference operating Non-GAAP in per granted compared third as XX% third operating no the vesting options third stock-based of XX% during participation to of increased to to margin third as result the States, diluted United quarter diluted in guidance quarter operating per to third in diluted was XXXX. XXXX. the third third record of XX.X%. compensation with GAAP in to our quarter by increase XXXX. quarter million of basis, the compared in per compared to and to share options the quarter of On were attributable a margin decreased increase third compared third XXXX, approximately the XXXX. compared the We quarter such our in operating completed XXXX in in increase XXXX an new the of

securities Asia higher of as cycles $XXX.X XXth, longer the XXXX, to driven from compared the marketable receivables September XX, sales our United where and September volume States. international $XX.X of had As deposits to cash cash by million. payment and particularly of for and equivalents, Accounts company are million distributors increased

of the of million repurchase ordinary X a During shares. we announced up InMode's quarter, share to program

cash continued Our confidence product future share in success new position following repurchase of global of program introductions we face InMode's growing our in the uncertainty. illustrates and the have even the

generated the back flow XXXX, I for to will third cash quarter that, On the Moshe. of record volume. sales by the company the from $XX.X operating With million activities call the turn front, driven

Moshe Mizrahy

you. to Thank Yair. to the go you, need now Thank we believe I Q&A.

Operator

question ahead. [Operator UBS. of go Instructions] The Please Matt first comes from Taylor today

Matt Taylor

morning. good the a I Congrats on a things. Thanks about of couple you to for question. ask taking quarter. Good wanted

decision talk made it And how that mentioned continue organization, one to really about is, like you. for to you you to So, that, that if this to you to the first growth. time, plan off was seems strong wondering investing. continue it's you've given I this over you added you have paid commercial add how the could

Moshe Mizrahy

continue are This believe -- the discipline. all in Moshe. invest I hi. to How Matt, you? continue is We we'll

and We projects main continue we in in five invest the to now. like something pipeline R&D R&D have right

force. sales in invest to continue We

in subsidiary we people They stayed countries a started months Europe. are increase more three we adding for France back and know, now and in other to in our you momentum As April. idle sales in France there

-- We progress But, Zoom. in over, for investing more we we China nice Brazil, in we and got in two South although America, it We're we're are in CFDA see conferences China. doing approval. investing the two did on progress activity all in example, had first marketing we since

it We in meeting. Also, X. do Asia virtual in on also invest distributor December we will

for us, Matt, So, usual. as business

Although we to by of we but what least manufacturing point compared increased time, and a cannot we can restriction have capacity what view, from the we XX%. do at R&D do normal

third more quarter, in have last the the X,XXX produced than platforms quarter. in We

also of We our it's So, same fourth we see any trend. activity. business of no in the in quarter. And signs down see started slowing the

although So, weeks; restriction a In and to in in countries much like Europe, within the lockdown now there, maintain of local regulation. the see we course, we COVID experiencing the as now is can Italy; four we do in Spain, order second the you as UK is -- activity, are the but same; know, wave. for still don't and they as

Matt Taylor

Moshe. Thanks,

The ask I buyback about to you was wanted that other thing announced. the

and What Do $XXX You be shares and general? in you was see to on more I that. now buying have yourself about? something Is are over as allocation in plan your you'd it wondering capital thoughts cash use million securities that steadily? you opportunistic how

Moshe Mizrahy

which a approved Board announced X have program, to Director, we the have of repurchase million we share. Well, on

of As did we very today, limited.

do We that. the have not money to yet used all

X more, We add million, company. Israeli no. an to as a and American we first the will -- buy rules repurchase are we'll for maybe we point we being and the same all $XXX on going view $XXX limitation million, to tell is that of answer you have the maybe to share the not but or But are do within to million us from company. for tax not allocate applied today, later the These to have apply invest if plan the

Matt Taylor

of that just then, came few importance those me. peer-reviewed looking Okay. could recent help study there from a at I this was the recently one of could with out studies, efficacy you -- marketing, the the and studies your RF and published, had I'll last and looking studies then maybe in And treatment. just you was speak wondering Plume of at safety if how some ask guess about difference And were that importance and behavior? of [indiscernible] the COVID. you between to they I could they how that help shift laser

Moshe Mizrahy

you please answer could Spero, that?

Spero Theodorou

the studies, most is that organization studies Thank technology. Okay. philosophy actually Matt. can The Sure, -- backing and sales with the good you, our proper as in our behind to in Appreciate doctors journals up adopt Moshe. question. spend" "marketing read the peer-reviewed of marketing force

has competitors. all us this probably differentiator been biggest our the and So, between

make this effort large with especially we're to Moshe's published get work we out something in that leader as do it's this body to space. there. the if radio a have we frequency, almost And leaders very, of and support very So, in

simple, the now COVID very And Plume in virus plume it's lasers, we it's technology frequency COVID It's did, comparing our there's established basically there as and now. don't fact, a is far out skin. radio we lasers. there's with if Plume, it's As to study know and know in there. is the well we very

exist. little. this plume in are The thing using not the very However, Morpheus very, not or microneedling, does particles

all takes right question, innovates, and probably Does are safety do from that done a that that answer have that body putting also purpose, And is instruct we safety these, to not are that the So, aesthetic to literature company very, we the marketing safety but and large best to behind of procedures now, number we you doctors consider. of also how and being very, work your tool providing have this very a a our we The only company strongest have. it a we seriously. Matt? doctors

Matt Taylor

Thanks, Yes. Thanks, Spero. Appreciate that. guys.

Operator

from question of go Kyle Canaccord ahead. comes Genuity. Next Rose Please

Kyle Rose

for Great, the thank questions. you taking

marketplace. here. I the little what you're seeing wanted ask in to Obviously, about bit quarter very a more So, a just strong

out market. lot looks just for utilization So, of maybe seeing maybe COVID in Are on interest what you're people in the congrats your all then systems, business. are trends placing Obviously, understand trying consumer but spending are recurring us market customers help But And you're the dinners, Just to understand to there, increased trends given higher on traveling they're you less, that, the a less there less what aesthetic procedures? overall the vacations, headwinds. in of with look actual systems like. maybe what revenue like pursuing seeing seeing they're going demand? is maybe the

Moshe Mizrahy

don't add? why Shakil, then start will you I and

Shakil Lakhani

Yes, sure. Hey, question. Kyle. Thanks for the

of at seen definitely we've called that some but So, the looked it, type we of things one suspected and demand. pent-up we've this of and kind

overall, have So, people normally themselves. We it of just you seen aren't that at in on that on, kind look new sales degree what going starting wouldn't but normal, seen have in, retail certain short back Moshe to since to it. types income even some a we've things a maybe the returned do things they're we something people if people possibly carry back thought would to that so term disposable as I spike think normalcy actually reinvest you if to excess calls have that be or might of you for look and certain do traveling, spend said, --

now. some across been of is I'm something I America. the least but say them, our in have it types they've ever of clinics been them offer going to board, a of not all than we've try to that that lot it I think we're busier North these procedures. that allows So, at of in turn, new seeing And do think, right seen and

to a minimally been about Spero, invasive, our popular kind of clinics? regulations with some hands-free in strong in been that bit our really you place little following. really, of people want you're the new seeing So, talk what technology, did the have are very and

Spero Theodorou

We're you, of We Shak. hear thought thank a you Absolutely. seeing lot me? demand. Yes, can --

Kyle Rose

Yes.

Spero Theodorou

Yes.

everywhere it's continued. seeing of a like demand the said, necessarily the and was for we Shak usually back in But it back demand demand large plastic take that. compressed traditionally, procedures school. thought to sort the actually in and of demand It's lot demand. not more continuing kids the demand. same, a usually, we're seen initially in September, expected world, And element haven't practices. September things but to the spring So, off unusual aesthetic these is is This of the We the off taper of the surgery we drop an kind continued typically months of from because mothers and has October. But aberration the times the exactly are

on I of definitely income this time, have think continued see said, but what around more and and Shak to of people sitting which And other it's demand of unprecedented. things, not course. because spending having period definitely we've is welcome we through it, this

Moshe Mizrahy

just measure more you -- I question. is here thing you demand measure The is how for -- the one which way this to for color many only would to to are add us to some give disposable check your and we Moshe procedures want selling.

everything surgical that's sales we our last in minimally those a that invasive, is the and know, disposables, had record. penetrates The the of disposable This treatment. a one-time you quarter, fourth quarter. record ablative, in skin, devices, As per continued

have installed demand every disposables. and We see month. system already worldwide increase we We for increased X,XXX see

per doctors do system in the doctor I much. growth need the this continuation I disposable treatment will the back used. if measure the and the less your they the are If system paying and on again and week, using X, But even that measure that make us the the So, I than don't see necessary. did money question? X months. to of they basically, every how calculation is tells they is system two that being believe we it answer are Is once. the do in month system best

Kyle Rose

color then of very queue, and I then, I international that. kind other everybody helpful. the the China. entrance in and the question to you've on around last does. had, back And absolutely just question, That's appreciate It I'll is the hop the the markets from had

question. progressed? case expectations, I into has end should volumes we how -- just over seen the shutdowns your the QX. and So, think, China pretty us now And of severe some What a again Maybe rising move think XXXX? One international the in two-part markets help also, procedures are in of launch about the markets we how as we've is, understand maybe through then, into Europe.

Moshe Mizrahy

as this regulation Well, double what the we we have itself because Okay. year-over-year that And completed the during in is said, outside international we call all two last QX. US, market, the processes quarters.

sell probably is everything out quarter that know, As we the getting platforms after approval started approved Not in the beginning, China China for yet in have. the nine sell. to of start and we two you second to we in

subsidiary. an a have Guangzhou, office in We

Chinese situation We we who doing of the the is China product the distributor growth the in the although good is of and we into the today that third continue have COVID-XX. job under because fourth see grew in quarter, on compared the I the are a will introduction countries in believe Beijing quarter, And Other Brazil, second to momentum. some in market. quarter. difficult And technology Brazil

know course, plastic but we the right, introduction but there. sell in from the especially in fourth subsidiary to accept a And today and to and do the in getting momentum was situation Europe, restriction. the COVID. the second surgical quarter, conference surgeons, surgical as but there subsidiary well some for difficult, I big a although, in many the in and more just to well consideration, do taking now, platforms. Asia. terrible quarter procedure we the the was are America Brazil the But second we're pandemic, a we now a because there have quarter South do third have of we in managed right is not you in not than bit shape second India, quarter of third as is leaders are Korea wave that into and we Mexico, although everything see we're the the situation and start can, better distributors situation and quarter they growth our All from virtual in to everybody as believe a and experiencing Europe, there, the commitment stopping little a improvement

tough daily better. a of how a Although is Europe right basis, same as the know little is and the first managed the to because to this second follow wave we bit the not on in now but COVID it control they it wave

even So, quarter, activity contrary. what the not on development saying a any and the is, stopping not in not the the where I the I'm slowdown believe, the Israel in not will best. we're And country, situation fourth is be

Kyle Rose

taking the very Great. you for much questions. Thank

Operator

The next ahead. Jeff Please question Baird. Johnson from go of comes

Jeff Johnson

office got morning, as things the all X.X you've Good Tite Shak, going O-US obviously interested X.X? minutes you is trend give the base that or well, number the that? Evoke mentioned so happening the year you Moshe, in two few got of well? do And split -- So, maybe an doing I'd the over from to per now then, you've on various there like from average platforms to that. got expect platforms increase Is versus next to the per you. you've installed MorpheusX hearing X.X is you Could in Thank or maybe platforms, How be office? that US and Platform, XXXX ago. Evolve a us you guys.

Moshe Mizrahy

answer would Shakil, that? you

Shakil Lakhani

sure. Yes,

on. it more It's physicians is that things we delegate, nice in. we going we're a further But can are that technologies enable process delegate. bundle they two, are But that technologies what's seeing lot these of to deals at in about system, can are time, So, increased. that. bang three the of actually same the few a now call, And you're right what

allows the actually where be to to it And that said, invasive with being so, procedure. have income generate passive the versus, minimally they performing them say, the ones

when after. you physician, the results with. two some have the specialties where heard those great are different on but have depending a then time on want it's punch, areas on position that success one-two a quite an that with a very skin If it's, combine be There tightening. to it together same Obviously, MorpheusX but the at So, with say, it's happy going people while certain they get they OB-GYN, some patients we We've wellness, what Votiva are MorpheusX go Body to return investment a health nice they for so time, and can and we do that in the of for treating start nice far. they women's something might see the overall. done for very, are patients

So, the place. into of Evoke come kind or the Evolve

as has utilization using is sign said, our for on consumables minimal, of well. terms very good. So, increasing, to actually in that a in devices doing which where extremely and prepared versed very default to them a is leases to they're their fit a us it be themselves, have been the ensure take good certain and has where for And which they're going physician positive because well been our how we actual Moshe rates team been degree it's

Jeff Johnson

office you per that kind systems installed US/OUS, Shak, could any split Or of can you. might if X,XXX numbers, I Thank number? want base but And know anyway? not share you to you

Shakil Lakhani

let handle Moshe I'll that.

Moshe Mizrahy

we Yes, can. IR the on US. out we everybody installed section. We which that in system in share It's the with worldwide, X,XXX presentation gave of information. this the X,XXX

Jeff Johnson

now year that. question I And of not missed assuming know should last million absorb of increase can years, absolute Just XXXX? but how million guidance I providing years, year? into you. market the increased my about XXXX XXXX, guidance, the three if accurate think revenue last is, million for kind $XX $XX absolute each about and the should we each I Moshe, year look fairly million an then, three on per what I is apologize. to you've $XX basis. to I is how trend $XX revenue of last typical guess that Thank over you're each here maintain the kind

Moshe Mizrahy

have gave for we guidance XXXX. yet Well, not the

growth which in We same to which But, yes, the next even the guidance years the XXXX can years on three be or in earning February follow last four will that give take will we had will you in for call, next believe February, introducing place XX year. platform. to the of the And be we probably and same the new XXX every in are estimate right. amount XXX for next XXX to new to year or same Yes, close product year is the your will this year. I

Jeff Johnson

Thank appreciate it. you, guys. I

Operator

The of comes question from Instructions] [Operator Please next ahead. go Barel Chandali Asaf Oppenheimer.

Asaf Barel Chandali

an really quarter First congratulations on of full-year all, a again, and exceptional strong guidance.

Just a them couple of questions here. Most of have been asked.

maybe color on use use where cases either terms the on And us you we of be should cases the further color On the XXXX XXXX for onwards? can or timing in further launches? is there any the give then, pipeline, for looking

Moshe Mizrahy

specific we before is file because we timing We you a give know, submission not because, we with of equipment. This to FDA cannot exact in any to the are the launching Europe launch we efficacy, CE it Well, and medical as the we approval for not product study them medical in completed safety cannot that before a market because and prove -- it's of indication product the say regulatory get without issue, the cannot order clearance. we request. full new

-- order what in work we second we longer the in in the efficacy more guideline, well. bring ensure we quarter high the usually, this the because little ask product -- FDA the quarter. the to a a and end might And last if estimate bit beginning platform before claim. Christmas the question as little and or -- to first want third quarter takes than one it what But second everything goes Sometime that fourth have safe us is they more of a bit one clinical to just sometime the towards efficacy a for do and

Asaf Barel Chandali

a just then, questions. of couple And helpful. That's more great. Okay, technical maybe

continue the on tax tax effective thinking to the year up XX%. we next First, somewhere about be rate should moving towards rate,

are it's any bit a would up then, be basis part receivable, kind the accounts but a if international levels, be there growth absolutely are bigger business and bigger of of being the of a higher little that closer business that on maybe which accounts a the second, an So, current on helpful. revenues low the of updates the we that fact a thinking be because are front, minor on should the expected higher. now -- part issue, it's number, to And levels, it's receivables but go-forward to given it's relative a basis, on bit about a of still

Moshe Mizrahy

do Yair, you to want take?

Yair Malca

this question. take I'll Yes.

So, tax rate, end as pretty stay XXXX. of going believe tax similar the what seen the is XXXX, we've XXXX the in much as we exemption only to our to in for tax at expires

So, you've in XXXX, that only mentioned. up will we XX% starting the XX%, to maybe go

that yes, the much probably be markets Regarding the reasonable -- And, will will go to receivable, started might it same doing better, probably remain up. comes it yes, to level. it that now much assume it's pretty international it in

Asaf Barel Chandali

thank questions, you But Thank head any has the I'll I'll if -- into you. another. queue. other nobody Okay, else for back ask

Operator

to This does turn session. back I to would over question-and-answer the remarks. Mizrahy, CEO, closing for conference like our conclude any Moshe

Moshe Mizrahy

Stay next healthy financial Okay. and Thank safe. the to you, in be you, Hope joining all. results. see quarter Thank of for us you operator. to third call. conference Thank you, everybody, XXXX the

Operator

concluded. conference has Thank you. now The

InMode (INMD) 12 Nov 202020 Q3 Earnings call transcript