INMD - Earnings call transcript Q1 2024

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Operator

Good morning, and welcome to the InMode First Quarter 2024 Earnings Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to hand the conference over to Miri Segal, CEO of MS-IR. Please go ahead.

Miri Segal-Scharia

Thank you, operator, and everyone, for joining us today. Quarter Call. First InMode's to XXXX Earnings Welcome

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

please the If company's not release, copy Investor the of a have to Relations website. you the received go section of

forward-looking cause competitive, those actual regulatory factors made the results expressed differ business, and technological, in could Changes from to materially by statements today. other

Our are necessarily of indicative historical not results future performance.

no we can obligation as such, as of As accuracy them, our update statements give required no assurance assume to law. and the by except forward-looking to

With pass Moshe call that, InMode's to like over the to go CEO. I'd ahead. Mizrahy, Moshe, please

Moshe Mizrahy

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

prepared will all questions. to your answer we our remarks, be available Following

start Optimus a macro continued like X to slowdown experienced we first to and challenging, the our quarter. the IgniteRF beginning of with In the would review XXXX, launched during of new platforms, and we advanced first Max. I Meanwhile, quarter. and development the be environment all through

decrease to into year. the for we We industry guidance result, quarter second the continue our as headwinds that a may decided well. As believe

platforms, We Max. IgniteRF Optimus of and and are interest demand for excited to the our latest a see level high the

the to ] are QX, of the All ongoing customers insufficient have in preordered new focused our that inventory efforts mix platforms. fulfilling due promotely levels. who needs our and accounted construction delayed orders on led these for line, platforms that inventory Although of was to sales already ensuring XX% of our [ manufacturing delivery

Quantum technology, second assisted legacy expand line next on a of are new the our IgniteRF frequency handpieces protected XX is half Burst of RF platforms FDA handpiece be patent new handpieces. with to XXXX me and of years. radio the minimally all generation Quantum lipolysis MorpheusX the RF new Let for in expected cleared invasive the platforms. and

MorpheusX RF, laser-based Max and is Burst IPL and with treatment. noninvasive platforms multi-application Optimus

We X in growth will a significant play expect that of our these company. platforms role our

purchase Moving InMode's million to Directors capital allocation. to of approved program, X.XX share third has a up Board shares.

opportunities, we well addition, M&A others option the exploring In as future on all paying table, as keep including additional buyback. dividend, strategic

DCM, the of Discount in a from Limited serving executive traded His hold in Dr. an am financial ] the experience companies. conclude, public I including and significant [ Board. Investment of Before I Columbia Corporation in as board the look as BA a leading experience financial We CEO Engel and member has Board strategic He expertise. to Engel pleased his includes and served Michael welcome to benefiting has and he several new Chairman Economics been Finance PhD forward from of XXXX, University. and publicly Michael Dr. on the has company. Israel. executive MBA since

team our of well-being Management current Israel our in platforms. to safety Finally, of prioritize of would regarding is our the the and employees, war that status investors all situation and and the assure like safe. the we new

and In the pushed may a platforms Israel, half addition, be of longer year. to platform the in take due to new may the of line second delivery assembly war the new complete to

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

Shakil Lakhani

joining for and Moshe, Thanks, everyone us.

the mentioned, not immune As is InMode in industry. our headwinds to

Once $XX.X year-over-year again, demand the recognition in However, despite and to QX. million and testimony brand. accounted we and the the widespread InMode consumables service that XX% slowdown, put report the of to are for pleased grew

platforms, and they improved enthusiasm the about for will going new growth drivers be and for we We us excited believe are demand and forward. our

North market market adjusted growth slower our the this improve. implemented we've year, ourselves in sales for team conditions changes within Considering accelerated demand our markets when infrastructure We've America. anticipated and to position

As space we diversified in the aesthetic the to accomplished and attract with seasoned portfolio, leader most a global salespeople. continue

dedicated and entire Once talented American work. team pivotal in their Our for future team remains to like our thank driving I'd again, hard our success. North continued

for call hand I will the over detail. now results financial of the Yair? Yair to a more in review

Yair Malca

and you for joining Shakil, hello, Thank everyone. Thanks, us.

and a this on As preorder launched Moshe started selling mentioned, basis. platforms X we quarter, new them

not we decided and the results non-GAAP the we We the to sales could the the which quarter. the that business provide activity to forma preorder related these expenses. forma revenue, yet reflect as While results believe during add better sales pro recognize results, pro

InMode $XX.X total XXXX. generated quarter in with the million of first the revenue, Starting

However, invasive XX%, minimally QX revenue of QX, gross $XX includes In accounted forma for of delivered platforms in XXXX. preorders to of gross non-GAAP XX% in was pro XXXX our were while new the technology million, yet. QX and compared margin total was not pro XX% XX% which platforms revenues. margin GAAP forma

our international to Moving operations.

our direct record the XX% have last First million, worldwide. a Europe XX a accounted more In U.S. of for reps team of year. and support quarter XXX our and future distributors representing of than number. U.S. operations XX% QX, sales, growth, was largest reached the decrease we outside sales contributor the compared total a and To sales from $XX ensure sales to revenue currently outside to QX

last million to marketing a GAAP of in operating decreased $XX.X shortfall decrease year-over-year. million, in to QX expenses quarter, and million decrease revenue were $XX.X This the compared expenses slightly XXXX. same to Sales $XX.X the the in first X% attributed quarter in first period year. the

quarter decreased compensation, million of which XXXX. to Next, at in share-based look the $X we first

of operating quarter of XXXX. first quarter operating forma operating margin to QX was and for margin was in quarter the first of XX%, was to compared margin pro compared in first operating margin operating XX%, margin GAAP XX% a Non-GAAP XX% XX%, for the XXXX. of the non-GAAP

share per compared earnings quarter this first share GAAP and $X.XX on $X.XX earnings of diluted of diluted were a per basis. quarter $X.XX earnings this share quarter the per XXXX per in first to quarter non-GAAP diluted were XXXX. were Non-GAAP the for diluted for $X.XX, per to for forma in share share QX compared pro diluted $X.XX

again, ended quarter balance with we Once a strong sheet. the

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

$XX.X This quarter, from operating InMode activities. generated million

turn to the and between revenue XX%, compared of $XXX I $XXX previous like Before share previous $XXX of guidance to you of I'd between to XXXX to Full compared million year XX%. million to guidance to to for to XX% guidance be earnings $XXX million, million, compared to to of from guidance $X.XX. compared previous million share XX% to operations to gross million. diluted to call $XXX back Non-GAAP guidance XXXX. $X.XX Non-GAAP $XXX Moshe, $X.XX margins million $XXX previous $X.XX, our will between income Non-GAAP $XXX million. with per

Moshe. now back call to over turn I the will

Moshe Mizrahy

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

Operator

of Instructions] [Operator from And our first Barclays. comes Miksic question Matt

Matthew Miksic

the talk to Maybe the been sort your it's about of you as and topic InMode talk that like demand. in about do of X X have challenging we the for factors we first, think when for things last and most I -- travel direction end major -- confidence that financing the is delays most months, market in the the

then have If I one follow-up. you could just confidence. that talk And about just

Moshe Mizrahy

demand? we mean I didn't You are on question. market hear the confident the how

Matthew Miksic

stabilization how of year. in anything investors and Yes, of give of play the the I'm you trajectory on this sorry. improvements, expect that can Confidence a to and sort that timing you out

Moshe Mizrahy

interest believe capital of half XXXX, year, beginning rate decision Okay. over years world of the the doctors. financing a of of that equipment Most I reached doctors come the that's their our in rate caused -- States said I in lease on with XX% something the the something the call, have XX%. interest of second financing of acquisition a X that United to like the very at lease of delay XXXX. At lease rates, the years. and in will expect are -- that beginning And the of package start today high the in last with earnings and the X The the down all we

the We rate we and down rise and States second announcement rate are happen that go the were the as last that half will go the down sure in was he again, under of will that the starting inflation will doesn't the rate. April, the know in the interest packages in cutting in to of have United hope second down seen year. so. half of months, what that we lease maybe But start the impression on in the Chairman you the will not well. year, Therefore, We interest that where

third But believe we to grow again, interest see if quarter momentum once medical the we see focus second down, that in change. -- in said And my now, your quarter, want of the the believe this then that to we beginning we Does I maybe go economy the Once rates testimony. especially don't right a answer will start the field. to I and question? major the another will when start will

Matthew Miksic

the That's then potentially launches? can next that to quarters a little of new that I advance of described, in you so terms which control. some Yes, you things And couple What backdrop of of the while the of guess could, maybe if you that very kind just of you helpful. some you bit issues things just things talk, control, macro product can't can much. and you you're advance in geographically -- you the offset sort for waiting about What can described?

Moshe Mizrahy

I are basically venues will There that X describe. Okay.

-- to the partially The was risk some quarter. company believe ease enable We strong finance the first to the second order I program. and But with them leasing share we very that's order work them to deals enable the it we leasing the them with with of finance to in enable in deals. the share we all more trying to to risk that, include of and first more did in and the It pool creating because order to in by company do pool to in balance will helped, successful. that -- continue under and one leasing quarter. risk them work companies did the successful cannot sheet the can we And kind a is we're with have them deals. the We

on maybe we we what new -- if platforms. buy technology a The the some equipment, rate I always call the growth new doctors, bit We new and third maintaining the second I revenue X, is the X are generating X There would that new second breakthrough is platforms the those platforms. if with And say, equipment. breakthrough generation to interest little that or doctors say, venue came are kind the on believe help new would first that up buy platforms the users, in they -- the and all and even will of high quarter. new technology, will revenue even

we The that third knows Japan. in new sure Germany, in venue Austria as I'm one XXXX, is in well, X subsidiaries, one have established that and late cover everybody

It's yet. and It So direct, momentum when and we transfer recognize value sales these to increase momentum that the on on takes say, would X we learning the the not just on because we price, time full subsidiaries line. top go the the to full countries. the direct. build first also, not And I of curve started are But help the in work ride a those quarter. to

to the I that that. do small might Other something do change we're think than don't we too like something macroeconomics, can I believe that,

Matthew Miksic

so Thanks for course. of the Yes, much color.

Operator

Antalffy question next Danielle UBS. from The comes of

Simon Negin

want if Negin just give dig expenses bit. Simon some more for up you administrative is It a like into your a just operating little color Wondering Danielle. ticked there. bit margin and to general could than expected. I This on looks

Moshe Mizrahy

than I G&A the of was think quarter XXXX. don't higher first

and is relatively and or went very measure X and marketing reasons. very, because One, And and up What would sales of we expenses. Our say, sales this was I is percentage, marketing you marketing. very, G&A did low. not when the slim very, -- cut

cut budget, the of and do the okay, sales all planned the R&D. not we're less, basically the say, We marketing this cutting all that year was and when last we continue late We or activity did We not. developed sales. did not beginning we're We year. activity selling did to marketing

continue R&D we to in the the do the of planned as We year. beginning

million cost, expenses and you fixed fixed cost is marketing So you commission, are $XX sell is the or and the -- million. combined fixed same not sales are you which cost but when the when sell when $XXX

it's a little So bit higher. percentage-wise,

if in sales in as if Europe, events: The marketing and America, the usually tough the a have the quarter meeting expenses second, bit expenses on first major X little quarter. overall, revenue, expenses, because a to meeting. marketing is we regular above once I the of are a -- down. at higher with believe And marketing be it adjust number least or far sales than reach I North look quarter on million of to the because get the will of -- IMCAS forma you the and once that look the able we previous therefore, we that as those cost percentage-wise $XXX distributor come we Overall, pro that you original And number. will to again everything said,

Simon Negin

That is really helpful.

will And cannibalize for some about we year, your of expect platforms these this launches you Thinking think of the Just of sales product you. contribution a do of how the any other follow-up the platforms? sales should that throughout to platforms year? quick these about

Moshe Mizrahy

generation because generation. of the minimally time did cannibalize stop it's we an in a But take second years, will It's RFAL. long the I usually, addition. say invasive, first the will in Because first over it and not not above. all cannibalize, generation, Well, to few a selling

to body regular type countries. Optimus the All We rest the of launched not the not selling the it. in regular now right sell were the countries and only second still Ignite, We the Max. few generation the or Optimus and continue

new of to little eventually, buy buy generation, market will there to the for expensive some are But generation. old if always generation. yes, a the it's But old bit the prefer the doctors more than even

X, baseline before the the, regular the And fully type is body believe would which I the platforms that Optimus. X lines, keeping the the at the say, second and first first we're top least generation, which will generation, which generation X cannibalize. will line is So it is and the disappear years I take or

Operator

from Next Canaccord question Caitlin of Cronin comes Genuity.

Unknown Analyst

George This Caitlin. on for is

builds of kind the one first question. our last So off

more about delays your kind As new numbers? at much current how And platforms, these preorders in these of the platforms, delivery, how guidance, of accounted these is you do in so the throughout see year? with kind we then lasting think that especially your long of contribution a guidance looking new of

Moshe Mizrahy

Okay.

and in something preorders. quarter. have least that quarter quarter, Regarding and orders still in which it were the accepting still for believe to second third take the order that XXX quarter devices the the new the we I remember, fulfill we're first would will at Because third to we have preordered. like, deliver We platforms all devices, the say, or

So more it quarter. will than X last

we I to will need quarter, hope that the will in any the fourth deliver everything without preorders. be in line accept and system

year, So of before will business go end usual. the the our back to

the question? remind Now me second

Unknown Analyst

Yes.

new considered is Just on your much like preorders, the platforms, that currently guidance? how within the of

Moshe Mizrahy

preorders within was guidance it the gave mean, that we of QX. all mean into considered I guidance. the account the took I

Unknown Analyst

the our second color U.S.? changes more And just give sales can then Great. in the Okay. question, any on you force

Moshe Mizrahy

that? answer you can Shakil,

Shakil Lakhani

which in and were turn will actually of directors, for people a deserved some some mobility, added We've and group the who have it deserving sure. promotions, has, We've Yes, will be those it. of internal some upward obviously that of the create at management. also had separate changes top which

a once mentioned once a environment bounce-back little little script for just we're the in more us, becomes -- So the favorable things bit I earlier. change planning and on as the that macroeconomic

do to do we're to trying -- while to the prepare to obviously trying well. we're trying it. trying like not this, what as in forward. sheet We're move times at our companies other control for We're balance So many still

So back. trying to things get bounce when prime we're for

Operator

Company. Mike from & of next Matson The question comes Needham

Joseph Conway

how gauge the reduced or What's I I to gotten preorder have I to Are pressure manufacturing worse? get these want This guess, is better preorder an still Mike affecting of some to or update if I look on And that manufacturing may more wanted and a just the ability has apologies. less guess times demand I late. for delivery kind -- capacity asked, is this wanted Or delivery backlog joined you already been get there? maybe facilities. the like? just Joseph on so But of -- I backlog? is maybe labor of times? seeing on just today. that versus much how

Moshe Mizrahy

Okay. Good.

facilities Tiberias and all And X city the We manufacturing a have small in in both in we're manufacturing called X facilities, HaEmek. X X in Migdal of Israel, product them.

line So manufacturing have, that be line every basically, we to can every product. every adjusted

a it's we So full we that's designed build the backup, That's way the it. it okay? and way

the time, duty. And is in employees this were situation of Israel. the built platforms, regard the As every catch we're some reserve of right we're from knows and to now, in Everybody because long up in in X deliver delay But our enable drafted army therefore, Israel, sufficiently yes, order created up shifts a us inventory new that and we the to some that's for and in enough is create delay, preorder. catching are to some working manufacturing. to

But as all quarter we Most already been take will But I quarter. -- don't than preorder. we think already more it will fulfill are X will been them the It orders these to paid. said, of X accepted. take not

are XXX% to that would X months. sure we will next, I we of in say, deliver So XXX% the X them

the can production we production equipment. the to As And Last necessary, more basically sales. manufacture shift. if X,XXX capacity year, systems. far to It's have bring X manufacturing more capital to we run production as line or without the the capacities than XX,XXX only facility, we adding than the double level any

make of because issues due stop. never a that, as production that sure war components, the there are other Israel. So But was delay logistic line the to little a as in than we to purchasing no safety the far of problem, will logistics and inventory building the bit

is preorders, we months, X even and so that XX than now these for on more all are day, far, can within we said the war a will, before, are normal. be but time will back we believe, on that to get will orders with shipped working we a those the a that delivery. time deliver we that we're thing did months. successful The investors only running So not that And hours basically, I few assure of frame

Joseph Conway

Okay. platform. to moving guess new on just Great. maybe the I

your some legacy So platforms to upgraded launching you're devices.

said countries. been number a I there certain -- you of that shipped to think

used And who so maybe info there, of I your early new these wanted platforms. get maybe feedback have from some just some to some customers

you think and I as well complexity. of new As previously kind the procedure lower the BodyTite upgrades the FaceTite, said that

also more So maybe that's, use. a was health you've like or new I plastic if if found guess, curious clinics the not anybody been that, like they selling to platform surgeon, to I anything so easy and

Moshe Mizrahy

Absolutely.

with surgical me what the Let we ease Ignite is body platforms? type, full handle the the we but we first Ignite, The make start can What handpieces. in a surgical higher mean type, face I But platforms. process the the that by the faster. treatment that's Ignite did okay? call do energy generation, full and with order something improved because to the The

developed is X RF addition, reach which, in X easier part have the in they the the the handpieces, than doctor bipolar much new cannula, and body, more the of to we flexible only cannulas, with In makes cannula. RFAL. That have instead regular tip of the any

new which Burst, generation technology. these call that, the Morpheus, the to a handpieces, will include Morpheus addition face is and In now one MorpheusX for And more also for new body. the platforms one X

in depth any every X to any can You [ depth up you go punch can in the pass skin. ] of you want,

every determine the energy can of in You level depth.

go XX%, go X to you millimeter, the of millimeters energy, deliver for in skin to altogether XXX%. go of and deep XX% to millimeter, and So XX% X deliver the example, the deliver up X up energy, can

face and use body for developed, the X this Burst another with So Burst are the technology, handpieces that these call we and to technology XX MorpheusX which with and is or XX pins pins for the able we Scale.

the we something one say all because well our the although of frequency commercializing is the I beginning start nobody infringe that this the radio we now XX protected tried nobody lipolysis, It's beginning in promoting that a since we assists of States. on patent, can breakthrough it's United that years, -- since did to the believe patent, which before, and have the covered when XXXX to platform, So which with count have them BodyTite technology. them

Max. look to developing design, new handpiece able Optimus, we're Optimus Optimus handpieces more the handle screen, IPL little The is has which handpieces it's a is Basically, to in be designed regular platform the different. energy. XX% bit other future that platform than regular second this better much The But adjustable with the with cannot. Optimus now, Max, some the that a and nicer the

So this platform platform. a is another which new is

platforms will type. do that the as Ignite think Now will that these I not will the the first the be generation, X cannibalize means It Optimus before, above. and cannibalize cannibalize said Max will over Optimus, we the or body

more buy every the wants who platforms. to the So doctor do of use one on these X. with the old generation Morpheus to new will handpiece Morpheus need He cannot

that's push X will -- doctors platforms, that different for good X X more So and the have or to us. or

I we and working U.S. now addition, regulation Europe, take the other Will time. territories. Canada, Asia on In them in launching as are said, We're in

it for market. and can about China, just know, ], example, [ to platforms you take new Visa X X on takes get same, we started. years, and In year, the the X years to Brazil it the As in X.X

before take XX countries, So platforms few a X today. years the we're it will available countries, all commercially will that in be these selling

forget. a equipment, it's and It's a It's process. not fire medical

need to clinical you need train, You create data. to

You centers. need training to have

I need takes few You those Did a your will full exploited. of capacity question? platforms process a the answer to It's publish. before that be years

Joseph Conway

yes. was all helpful. just Absolutely, one Maybe That very more.

your using been well less... balances, they you heard for more going providing I that's or loans customers that think I cash discuss -- certain

Moshe Mizrahy

pool finance. them what had we're didn't companies I That's say I an them helping help company I we said. customers. they didn't more deals risk the financing that with that that that. say said that creating agreement in No, didn't a so to no. money cases to of by I say take enable to I loans. in we that not providing the to are help are limit can some the leasing that risk, the leasing few

not. are We

We are a not bank.

Yair Malca

together programs, put and of of in we We in with the [ which under basically ]deeper -- a risk-sharing credit terms profile willing to leasing they some companies take approval are of Yair. is programs provide risk. buy some in And This which faster customers. our fraction return,

Joseph Conway

Yes. Okay.

Okay. question. That makes much that much. up more very sense clears my mean then. you Thank I

Operator

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

Moshe Mizrahy

Okay. the the everybody. want Thank want that that continue Thank again to during we'll having you thank we and you, for team the time over world work company that all us. you, see especially the Thank everybody, for is joining work and the and to us. thank with all to employees I InMode all in I Israeli August. days are performing. this challenging maintaining you today, basically nights activities again, for

Operator

you conference disconnect. now for Thank The and has attending today's now presentation, you may concluded.

InMode (INMD) 2 May 242024 Q1 Earnings call transcript