INMD - Earnings call transcript Q1 2022

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Operator

Hello and welcome to the InMode Limited First Quarter 2022 Earnings Results 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, CEO of MS-IR. Please go ahead.

Miri Segal

everyone us and operator you, for today. joining Thank XXXX to InMode’s call. quarter first Welcome earnings

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

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

Our indicative are historical results not of future necessarily performance.

With can we I pass to call no such, of to go would our over as statements the Mizrahy, Chairman to give please As law. to Moshe, obligation the as accuracy and that, no assurance ahead. except CEO. update like assume and them, Moshe forward-looking by required

Moshe Mizrahy

our earnings our Dr. our our you, Finance. and Malca, Officer; for North thanks to Medical all Officer; Lakhani, Technology Financial our today our Dr. Spero are America; Lickerman, you in Chief of and me Yair Chief XXXX VP Officer; first joining Michael Rafael and Chief With Shakil Thank President of quarter Co-Founder Kreindel, Theodorou, Miri call.

session all remarks. will after available We for be Q&A prepared our

revenue We of quarter pleased the are to an last report year. of increase same million, $XX.X first XX.X% period compared to

profitable million for basis, XX%. achieve despite continued the and the strong, non-GAAP on to growth on basis million the growth quarter reflecting the income We a of was market. $XX.X continue Net uncertainty in year-over-year GAAP global $XX

revenue capital our quarter. forward services our the platforms revenue of installed first modalities the By system new and focusing of representing in revenue main the of total innovative around XX% XX% are As and will quarter. and the to the other by in to global of our on and total a advantage our strategy become base portion from engines and again, strong, globe, ablative consistent growth of Once market, we time the revenue consumable for the between look These of expanding our aesthetic consumable, which mix. continue sales competitive was and companies. InMode more of invasive launching in core on equipment technologies. significant and differentiator platforms accounted Sales are first over the selling result in minimally growth U.S. more a

of in and for Our compared patients technology benefit and plastic but enabled XX% to accounted from in globally. minimal local and achieved and results minimally QX our of revenue with ablative in our last achieved We Hand-free recognition demand our indication platforms growing the brand of QX platforms long-lasting invasive and RF Minimally to represented procedures. similar the downtime, XX% non-invasive and anesthesia revenue one the laser XX% in year. remaining XX%. increasing total surgery, devices invasive the to strong the generated trend this of U.S.

last to quarter the quarter we yet, coming territories demand sales, the see same level million expect Looking international and where presence of very opportunity of established our InMode are from we U.S. already remain most new in in increase business, U.S. of XX at coming keep there total quarters. the $XX.X opened our presence we operate first the the territory. side countries. outside for and have accounted currently with Italy in XX.X% the to year. compared first sales or expanding quarter, subsidiary will this happy In a growth the we outside the in We region of XX% the in

to challenges meet shipment the the global successfully and and – mitigating these impact to due demand delivered we prices. increased ensure we chain shipment While the in days. the in XX were We and of in supply quarter each increased platforms faced within able was operational issue challenges were and

and than challenges. but to stronger We commitment the developed or supply platforms chain closely anticipated will proactively we that order and continue cope are chain physician a process high challenges that situation is clinic on Our each different daily we monitoring have continue, the supply to to the methodologies manage with the and ever current mechanisms very basis.

As we between guidance, revenue million our maintaining $XXX emphasize, to total Yair will million. XXXX are $XXX be expecting to

We you year progress. as will the update to continue

President I would Now, over turn please. in North to Shakil, our call to America. like the Shakil,

Shakil Lakhani

everyone us. and Moshe for joining Thanks,

We terms strong Moshe is indicator InMode demand for utilization consumable a especially As is our installed our for slower revenue which of record platforms a industry-wide. and posted number indicated, another for base. consistently good growing that rate, of in quarter, reported revenue, growing a one increased quarter traditionally a

We $XX.X market to with are device. sales total another XX% quarter to report $XX.X quarter strong happy U.S. line, first growth was our in of million U.S. second InMode the our amounting leading for Over million in the a remains to XXXX. have the the biggest customers to contributor top indicator. compared same The purchased of and

and for be anticipate about revenue contributor main are grow our overall the We the the unique continue North and We optimistic to American technology. platforms demand business for will InMode.

credibility to are support our women’s EmpowerRF the that into the by space. and health response encouraged platform strong performance and We we expansion positive our InMode’s believe will

and of InMode eager noted events applications are wide patients we to they array aesthetic audiences. growing and wellness be their help providing have a improve to attracting in their continues leader goals. More achieve to patients the shown well-being marketing quarter, and more the workshops During and

boost years. growth which we We will will in personnel for new continue sales previous American hiring line just as North the top market, believe

a consistent Yair? over more of the I to team our to review call Yair continued financial commitment and their will to are results for growth. now grateful in our our hand We detail.

Yair Malca

good Thanks, Shakil and everyone. day

of a our quarter quarter $XX.X grew on in year-over-year GAAP revenue XX% of financial Total XX.X% XXXX first gross results the the and same quarterly Sales XX% and goals. Revenues internationally Latin a XX% invasive margin to Now was ablative first mix represented U.S. basis. The in I’d million subdermal U.S. QX the to XXXX. XX% XX% company’s major quarterly our the and increased with greater being America Europe geographical compared outside the to year-over-year XX% in contributors revenues. technologies Canada, like for of in to in minimally revenue review in of detail. XX% the XX%, to quarter with and

in a result at of This the increase most of quarter $X.X in and a for quarter marketing first XX% the we in XX% XXXX. XXXX GAAP an operating XX% XXXX mentioned. the of was an XXXX where in first XXXX. Our quarter of in in chain gross quarter quarter regions in first global as per XXXX. the attributable improvement of the margin strong of quarter quarter similar and million, assume our our quarter decrease impact countries related the of to U.S., QX gross to $X.XX the in quarter first non-GAAP share accounted first challenges expenses $X.X share short-term, XX% to of increase in for status while margin well XX%. a increase service margin remaining increased remained in expenses sheet. $XX.X of supply consumables margins. diluted was XXXX gross may in the the XXXX, first first $XX.X the in-person diluted were first But first saw especially of in the our XXXX diluted earnings in QX the million is continue of balance compared XX% the the the were events operating first same is margin around very in compared expenses increased Non-GAAP reiterate QX share COVID as margin XX%. million million operating operating to in XX% per a rate per in in margin. quarter to expenses million $X.XX of increase We long-term expenses marketing basis, to QX On XXXX $X.XX per operating of margin with same non-GAAP compared first in-sales in compared of XX%. at QX significant world, approximately equipment model compared operating that quarter year-over-year. revenue, Non-GAAP compared GAAP to Capital The and in a change XX% of We Shakil the XXXX. were XXXX operating $X.XX XX%. the Share-based non-GAAP to for the revenues totaled the represented to strong to compensation gross $XX.X Sales quarter GAAP of share of as quarter the of first of as ended primarily XXXX. diluted XXXX. for earnings

cash and and XXXX, million. company securities As $XXX.X of cash XX, deposits the March equivalents of marketable had

company first million the of in front, quarter generated flow XXXX. the On operating activities cash from the $XX.X

share of to another first are program We this announced pleased shares. X million repurchase during have the year up to of quarter

evaluate We cash different to our continue to create and shareholder use venues value.

I our back Moshe, $XXX non-GAAP the million, Moshe. between I non-GAAP operations gross million the from $XXX and revenues would now per income for I earnings XX%, will share million non-GAAP call $X.XX and like between turn diluted back reiterate and million, margin to $X.XX. guidance Before to call between between over $XXX to XXXX, turn XX% to $XXX

Moshe Mizrahy

you, you, Shakil. session. ready Q&A we are for Thank Operator, Yair. Thank

Operator

Please go from with first The Canaccord. comes Instructions] [Operator question Kyle Rose ahead.

Unidentified Analyst

start scaling are and in XXXX? a – COVID in that centers. of approval [indiscernible] of strong being do secondarily, Great. you by of population for been some maybe the talk congrats bit Maybe and about a Good on morning. could affected thoughts more business, what lockdowns has resurgence Kyle your Maybe is quarter. to platforms remainder current two your little the for the the for timeline the This out? pushed that’s how China China you of major And your think on

Moshe Mizrahy

do hotel. in in China now, It’s because went I to to are need Moshe. we will people In China go okay. a answer Yes, the lockdown cannot send situation weeks monitoring anybody China. we that. daily Well, to of a training, the to basis X on right

training no usually not The in and well. restriction. this Beijing was of Certain to accept other territories Shanghai until also from And area from as locked send such no doctors one area So lockdown. are to will lockdown Israel Shanghai we China in China, to they that down. one the started do now is to week.

the as knows, CFDA with people the to they distributors regulation, and as almost trying our to allow where regard have CFDA their of XX% situation COVID. than to They travel XXX% cities Our what reason and is much why as in don’t do lock China solution do sales better. And occupied the vaccination. lockdown company, everybody to budget to is to Beijing not can. continued in as sold and was good – QX. is COVID And city. in We less continued do now We know And they they get from this the the don’t lockdown and city in will the the citizens. the for

quarter, what’s everyday. will the there. market we a clearance would surprised going of getting better, they end Hopefully, are We the the will say toward have have view better and second I on – on

Hong addition fully to are of And getting In other same in Japan and also the has are not China, is Korea the restriction. China, today Kong, open which yet. Asia, part countries but better,

on to as the For mean, order of the come other a what but need into the in call world, the things in difficulties a I is get Asia Yes, Japan, country. of getting and COVID people case. they example, described enter are to you they worst better, making I are part Visa to lot to

Unidentified Analyst

expectations, helpful. had maybe in then again line? That’s for that’s see you, when SUI? you I for the some And questions. follow-up for in could still know data Moshe. in And relatively XXXX. Empower, of previously Thanks just on I Understood. EmpowerRF we then taking terms mentioned million of $XX efficacy could for terms if Thank Is

Moshe Mizrahy

for guidance gave regarding the the SUI you would still XXXX is question million in like $XX I Spero, that yes to results? answer the valid. Yes. say would that we

Spero Theodorou

Sure.

We are impressed. already in our the process already of studies are of a couple

Moshe happy show of SUI. to can you some you preliminary or share those a So I’m with to results

push previous very fields, getting importantly, in encouraging. said off from huge there, are of of. And they I the our where the as So base dataset are we giving us feedback we very, can calls, said, doctors a is more

collecting are just not our conducting. studies we that we been from So data, have alone

based universities prospective, doing that a we with great of big already engaged start have also trials, proof-of-concepts established. to is We some which on these couple

So, you. we can with share

we that that I of think these we you are have past the couple impressed. in could share publications

months, are it out that the We next comes happy or are to hoping in to X you. but X show we

Operator

Needham with ahead. The Matson Mike Company. Okay. question Please go from next & comes

Mike Matson

Thanks afternoon. first ask I margin. good taking good gross questions. to Yes, or for morning want my I guess about

you first XX% XX% did quarter. So the XX% you the year, to guidance in the for maintaining are

of You mentioned near-term kind pressure.

perspective, modeling up gradually ramp that of should we a the from that the and it of reasonable year have probably end end just up So kind assume I of lower a range. sort Is through at more assumption?

Moshe Mizrahy

This in the would am is I with challenges yes, up supply the now first due right to everybody quarter described. lost electronic say that knows mainly I here me. dramatically. Yair is dramatically, Moshe. went X.X% I we component as chain prices sure

sometime And to them. add struggling we get are

We are, before, have on a at develop suppliers as three every managed we we component. we have chain, said to least which supply

production to achieve to the able sometime And circuit So, to need. the board we have managed line. use of do in be component kinds order we printed we that that. But to all managed need not replacement change to shutdown and get we what maneuvering

said at the as used chain. the And its cost, the don’t of to cost tunnel, to we I containers the to XX I you U.S. go we – As see the can foot go light from now don’t tell $X,XXX, see $XX,XXX. to that of Israel shipping end as before, we supply course, I

will we I So, in third the stabilization will that the second And to something. quarter will the better. things market back XX. and guidance maintained believe quarter do get believe to But this XX better. is therefore, eventually the have We of we and also be

better use to your than safe want be XX the model. you side If for XX on is to

Mike Matson

want are I customers a That’s buying, they of helpful. device? seen then that – Can buying maybe was XX% And talk it – guess ask mentioned Shakil I you. have to you Thank maybe Okay. about, you your are U.S. they they second of it type other what that to had? a where same already the using degree devices? one, are of use system? Is replacements sort to continuing not the they these or it’s are And different both device then,

Shakil Lakhani

Mike. Sure,

completely are they no, devices. different actually, So

well our other anything So, that it’s are a promised they in great, which any because not here. order device, actually In first return this they them cap their them is like have investment device, we with device, do. fact that of do with shows with successful than investment get kind up that, other on feather the them of the first successful one to had big you just

something and then to you else. go do with well thing, You one want in invest in

and offering, we do come device, of because in help well, that. with So, can one our them broad get product do portfolio they and if succeed there then will and back in

post generating they reps has a to is been big them, there on our support which our level talking for team, they – and So, field alongside part helpful that also, customers, but order work which are been get with kind also our in of these in have leads. of the sales very

Mike Matson

multiple want I the something But it is – of or customers systems just need same Thanks. the efficiency to not reasons, feasible the Okay. as of as reason that have one surgical, that? to surgeon type go, just would multiple minimally or system guess systems, invasive for the like or there far I guess is any

Moshe Mizrahy

Yes. No. Good question.

example, do for type, essentially, has body obviously that. the surgeon have So, products the we use that to for

they on are For or which are Province these some our depending our delegate they Canada. aesthetic in able have some some State in things, are of them technology actually of other applications, or hands-free which of to we in,

can device that that So they actually essentially, that then else same they the their applications on have and something they to use can time the have at one delegate. want are and they using,

Does the So, sense? time. revenue make that that period they double in are generating of

Mike Matson

Thank you. Yes, it does.

Operator

Mr. follow-up Matson? there Was a

Mike Matson

that’s no, Thank you. it. No,

Operator

go Jeff ahead. The from next Instructions] Johnson question with Baird. Please [Operator comes

Jeff Johnson

morning good the and questions. for guys, afternoon. good Thanks taking Hi

just to of I kind year-over-year start, maybe you there in kind down headwinds insight drag quantify China, Did helpful? much you any Asia China full year contribute Asia, as any as markets? of was a for the full mentioned, What Moshe, the how market. lot be maintaining of even obviously, number wanted So, of are of out x still would points still of growth those and that impact has come that were to guidance, it or you anticipating by year the might way what and even

Moshe Mizrahy

million China right in me, January million. COVID. until close. $X.X in March, did In same the first believe the totally with XXXX, had I the we And now – country was Well, of first we the XXXX, of million. situation China $X.X quarter we $X.X in the did XXXX, excuse quarter

in bit of little a down went the quarter. because the we first situation China, So, on

so. for hope Your we budget maintain or rest we not year, the the question whether for the of China will

don’t that, I say mean putting we We if instead Shanghai, big that, was budget did to XX% I $XX So we restriction of $XX now far, the they China million. change don’t a they just XX% it the and first would of jump anticipate will month, million XXXX will therefore, and a change. And there. Beijing. on do see QX, I for major good. budget, they to original released between on the regional are be

We the platforms from applied the approval other three CFDA are get to for still that waiting for. we

have COVID. slow We of yet, everything not the because is

$XX that than in which go I countries was is more we open because to doing million year, of As the what the better China. COVID. in we India and will And do did to million. last believe Japan, other similar something Asia, we are to difficult Australia now. range Korea $XX of

will that two hope subsidiaries these contribute. So, we

Asia. we for We able territories will will we XXXX, – order sell in we more would the because hope in and cover not to in other be guidance the that, of that in to change shortage to like

Jeff Johnson

today follow-up system be I strong was that again. lost makes think thing may getting numbers number Thank just you. minimally the invasive on sales a themselves, in sense. RF your one is that And then And

XX% I even a product basis hands-free a and down it in for was on think was It’s fantastic another stuff a few the quarter was million up and rate this that down that we for hands-free? quarter. once like of stack rate growth back come new the through comp recovering its million some me first were early COVID. did. But from still dollars? Does great obviously a the over improved again, of whole get headwinds that we seems stabilize days year-over-year maybe it we of time improve through when that issue. that and year-over-year hands-free that But Is to COVID year-over-year that bit headwinds the of recovery, the run kind and here $X it some hands-free at can then hands-free on start company product number a get once to little

Moshe Mizrahy

Okay.

explain combination mean little new hands-free know, as with hands-free that is Transform, of came I called a a happened that’s we me believe with and we And Let why RF. a added of generation which the Evolve. EMS the going up modality bit. the well. what and down went you a We

XX% generation to we the revenue. numbers Evoke this decided – we But the it level We sold few months, between quarter. the total to first only to beginning XX% doing We And next towards Hopefully, used second again Evoke. launching to the are second of the launch of the sold Evolve. we Evoke mainly only third by back in to to quarter the be go will same quarter. the within Evoke the not end therefore, generation same the with Evoke plan the sell quarter, of or on the continue

Jeff Johnson

Okay.

So, not for interest a necessarily you this fundamental product just more point. hands-free It’s fall at timing stuff. off seeing are in the

Moshe Mizrahy

Exactly.

Jeff Johnson

few shipping and when here. spoke Moshe, the on passing component some sorry costs. not And Okay. some costs, you those for I a of I of increased question. were last, have think increased I I you just last

your been pricing you in the passing costs to companies. not has in power maybe freight it think not some costs? doing those I why that. your and/or your system improved like eyes through feels aesthetics, me, for thoughts other rationale on about of for that added standing But Has some of customers? just could, Just there talk

Moshe Mizrahy

longer the trying fight, of we are we supply year. necessarily therefore, gross platforms. we because trying just be in decided don’t back think usually are prices – but some, to overcome disposable come believe it back platforms And supply challenges, try have Challenges cannot And to will normal. temporarily, we the the that chain, same that. with we order of than raise go it It it walk will to not that call to the middle we we having margin. the of to and not to I prices prices I don’t are raise raise the it like Well, to that it’s all chain will in do to the take may the forever. fight

like the will the our at do we end sometime We have maintain structure and the price or like we to we the again, reexamine it same of today. to decisions would decide that year XXXX to would whether

Jeff Johnson

not Okay, even I did put that. a freight surcharge think on I correct? Just remember you that Was me remind in that.

been much everything So, you of absorbing pretty on? and passing have not anything

Yair Malca

Correct. pass customers. anything didn’t our We to

Jeff Johnson

Yes. Thank you.

Operator

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

Moshe Mizrahy

Thank InMode earnings that Spero. all hard like Thank We overcoming course, Shakil. first of Thank you, to you, Thank have call. the organizing challenges again very would we you, quarter, employees. worked operator. to and Miri, all thanks you, Thank I Yair. in Michael described. this of for the you,

hard. continue to work We

forward service thank new in see technologies looking customers will our and in earning all We with you continue the and to up you platforms the year. come and new next best to call. Again, way every

Operator

for Thank presentation. The now conference has you concluded. attending today’s

disconnect. now may You

Miri Segal	Investor Relations
Moshe Mizrahy	Chairman and Chief Executive Officer
Michael Kreindel	Co-Founder and Chief Technology Officer
Yair Malca	Chief Financial Officer
Shakil Lakhani	President, North America
Spero Theodorou	Chief Medical Officer
Rafael Lickerman	Vice President, Finance
Mike Matson	Needham & Company
Jeff Johnson	Baird

InMode (INMD) 2 May 222022 Q1 Earnings call transcript