INMD - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the InMode Fourth Quarter and Full Year 2024 Earnings Results Conference Call. [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, to review the safe harbor statement for today's call. Please go ahead.

Miri Segal-Scharia

Thank you, operator, and to everyone for joining us today. Welcome to InMode's Fourth Quarter and Full Year 2024 Earnings Call.

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

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

Our are results not historical future necessarily performance. indicative of

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

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

Moshe Mizrahy

for Yair Malca, of CFO, our Thank With Kreindel, Finance. to us. Michael Dr. Lickerman, Miri, me our Officer; Co-Founder are and and Technology VP our everyone joining and Rafael Chief today you,

longer and emphasis training the and reach XXXX, and extended in took of launched XXXX. technology, the line. innovation OptimasMAX, breakthrough the on The your our the in prepared focused macroeconomics market complexity quarter we this which to we be cycle which maintaining driving Despite (sic) will intense of InMode all Following compounded to a by productive to X were the and it manufacturing stayed remarks, industry, strong factor. though obstacle, IgniteRF XXXX in was headwinds and We for indeed due R&D. new platforms questions. The navigate we increased XXXX are as challenging fourth tools aesthetic [ both ] broader answer available

we see platforms XXXX. adoption Now that better us, are that optimistic these delivery will the are challenges in behind

minimally of results provide deliver radio tissue of breakthrough platforms, layers, remarkable to that platforms while a technology achieving a the comprehensive a heart is approach. RF needs. surgical frequency IgniteRF deeper invasive energy variety solution At QuantumRF the piece, maintaining of the a XX The aesthetic and address range to

platforms. mentioned, feature of As advanced from tissue contraction that an optimal popular technology previously And multiple outcomes. its IgniteRF the is tissue upgrade our type X at soft for depth -- we body popular our facilitate

doctors would platforms valuable a more color superior update in to allow some stage perform coming deliver the Both translates progress assets, day, per second more energy treatment It solution multi-application heat We of I results. most in has that worldwide we versatile hope can provide patients. one from but on positive. fast seeing platform, the our which are of that higher early of in is distribution, still Since and OptimasMAX. to been efficient to like the revenue, feedback time quarters. the is more numbers early physicians our doctors platforms resulting the about

in several As leading industry you has of innovation InMode technologies. the history long and know, pioneer across a may

We have position and leadership technology aesthetic platforms. with in new maintained exciting market our the and continuously introducing

fact, In to launch new market. plan platform COX the laser medical fractional another X and platforms, the in for XXXX, we

launch. approach share be able more information will to the we We as

when And the on later technology like physicians Our approved downtime. facial and the bundle receive results expect rejuvenation minimal Morpheus to patients fractional Morpheus with to useful year. the results more traction treatment the noticeable platforms laser, FDA Since gain market. and resurfacing to added laser popular focused skin COX our this this we with a and technology, smoother COX more

position, our leading with extensive with product, and market and portfolio streamlined result line compound is margins condition well structure positioned superior our to innovative a benefit of recover. in continue strategy, our generate once InMode As expansion organization will

meet to and the confident are demand. in our operation We the ability

none had relationships with major maintain of located multiple of X with any We significant have in suppliers relationship and subcontractors Israel, delay component. have which long

approximately XX% cash share flow. representing than more returned double capital fiscal via XXXX more than and $XXX to of In our free we our XXXX, million repurchasing, year shareholders

As we share X we approved capital months. a executed Board happy XX over the to are months. X of program be our in new repurchases, has our be capital than that tax-efficient next to our report to to of Together bought today's approximately release, to XXXX of XX% this less up press our with shares XX% mentioned represents shares repurchase within

returning shareholders. free consultation our in our also with cash to in Given our confidence year tax our amount strong financial, capital exploring of and the by of create we value the to flow advisers are our and a business, significant legal end generation future

disciplined value commitment enhance to as to shareholders' balanced, evaluate capital our our company's reflects delivering options strong continue confidence allocation. this latest the and a part for to value decision of our shareholders. approach future We to in believe We

like I Chief turn to over Now would Officer. call please. to Yair, the Yair, our Financial

Yair Malca

of Thanks, XX% generated Moshe, InMode on million basis. quarter revenue, and GAAP you joining Starting for margin $XX.X gross a hello, of a the everyone. us. total with XXXX, with Thank in fourth

of total XX% QX range $XXX.X for and XXXX, and for of million, decrease respectively, XX% platforms XX% to XXXX. highest revenue remained full XXXX. fourth of technology quarter gross XX%, and minimally industry, XXXX, our for totaled our year a the in within full For target revenues. XX% the at year Non-GAAP the of the accounted margin compared our the In and invasive in full year

increase and consumables for For of XX% service from XX% XXXX, revenue, an of XXXX. the year in full accounted

sales year. Fourth compared XX% $XX.X a all or to Moving decrease regions. sales, quarter our XX% for decrease was last million, outside QX of international U.S. across to This the accounted operations.

we of more than XX distributors To XX% $XXX our million sales the For XX% operations to support and and sales of team outside currently XXXX, direct XXX year full XXXX. accounted growth, have of a reps decrease compared worldwide. U.S. the sales, for or

in was $XXX.X the million a $XX.X XX% increased operating last GAAP to the year-over-year, the slightly in quarter compared $XX.X and period $XX.X Sales and same for respectively. year. marketing expenses fourth quarter full in the year, X% million and fourth million to decrease million expenses

a million, XXXX, XXXX. in and sales $XXX other million offset These totaled decrease reduction of a The trade increases share-based marketing compensation. and were year from was from down full sales in marketing costs. commissions in expenses year-over-year lower due the to shows by For partially decline sales primarily salaries, $XXX.X expenses and decreases in resulting

we the million On XXXX basis, of non-GAAP decrease. Next, fourth compared million fourth quarter to same at a $X.X in XXXX, decreased a XXXX. share-based million the to in in expenses representing $XX.X of $XX.X full were look of quarter of quarter a compensation, X% million $XX.X and in the which the year total operating

XXXX. $XXX.X XXXX, For non-GAAP expenses in million operating million compared to $XXX.X were

for per XXXX was XX% margin earnings XXXX for the XX% compared and compared in share XXXX fourth year XXXX. of XXXX. compared in the earnings the GAAP for XX%. $X.XX to diluted QX QX $X.XX XXXX. and quarter compared for was diluted per to $X.XX quarter full XXXX Non-GAAP for quarter quarter first and and $X.XX operating for operating full fourth per GAAP were XX% and XXXX year share XXXX diluted for to XXXX, were compared share for quarter $X.XX for of to Non-GAAP margin fourth and diluted in this for per in the $X.XX to share of $X.XX $X.XX

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

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

last in we million fourth back of cash repurchase which we or operating This generated completed program total, shares, balance X.X fourth buying approved in QX. ordinary repurchase activities. XX X.X InMode manner. $XXX quarter, share September a repurchased during $XXX and from quarter, million In shares $XXX $XX.X our strong million Because returning the XXXX, out our program our purchased This ordinary tax-efficient to in million the May flow, of were million sheet free to addition ordinary is million or shareholders shares. these for capital in programs share approved under back in million

our As a highlight part to financial update, of onetime adjustment. tax significant like I'd

valuation and assets carryforward important income exceeding the related our $XXX primarily a note deductions Over stock tax realizability about this a non-GAAP that federal assets, our recognized recent the $XX.X After adjusted led option evaluating net deferred It's deferred released amount This of approximately tax tax to to from for loss of U.S. cumulative deferred These a tax carryforward to that compensation has state expenses. recognition $XXX.X purposes. reviewing of allowance subsidiary been loss years exercises the has million. accumulated tax years, our assets. of employee million. generated in and stem tax million we of U.S.

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

back I turn Moshe. will the call now to

Moshe Mizrahy

we are ready Operator, questions. Yair. you, Thank for

Operator

comes [Operator from Instructions] Danielle question UBS. Our with first Antalffy

Danielle Antalffy

opportunistic repurchase. share on the But guys past get in on Moshe, to, front. deployment. wanted appreciate also specifically just your thoughts been the have the new I being M&A capital further you I transparent

follow-up just if Just that's curious one after then still that. case? the And

Moshe Mizrahy

Well, we opportunities. as did. that always we will M&A report know, you it's Once come, exploring are we

what line our present will in far, or are not do XXXX, maybe either accumulate devices, $XXX product which back from price. another of able to In to or we So million, we announced us. it the we share synergetic do explore in the we on itself to depending a the had product I doing, now, pipeline. that can we we expanding $XXX synergetic But opportunity be another therefore, something we little or more XX%, million we I with right not something believe the which to have similar will the bit that nothing find make, shares Again, aesthetic dollars decided to if energy-based market. will And which that million to to will very are and buy our to line have mean report. buyback. we the And complementary now start are bought

Danielle Antalffy

And or any Are leading surface that that indicators some Okay. the reason But States, sort -- a you question you see. what seeing your gives too. news my I of in the is Appreciating optimism anything sort turnaround administration are that's there potential what's mean there, United though, are But in here assume seeing you optimism if anything the there? of the XXXX? at that you we for then a here curious We be don't under just in Got new you volatile here? anything pretty flow guidance. economic in that seeing qualitatively guys you point might it. I I comfort have there's reflected follow-up some gives seeing in think place now is economic

Moshe Mizrahy

quarter will sure And that. estimate second I'm XXXX. improve Well, for Unfortunately, We that so one business. we see far, of see Not the we or remember XXXX. unfortunately. were half didn't a the to not XXXX end you was also -- the market our of the see Maybe But wrong. it good can But We was in want economic of point, the don't is don't will it go InMode. the don't they happen. will tunnel, do beginning It businesses, second other rates it we said in interest in that at will in any like the estimation of we answer might no. down the and macroeconomics of some and we happen to come, something. and kind when try we the at to improvement, maybe something, when work report. see if would something we light

Operator

Barclays. question Matt with next Our from Miksic comes

Matthew Miksic

maybe sales So made the about, and you're -- know in the realigning and after. and I markets kind you think, marketing going the structure. changes I that against fall management talking sort on senior of the and of of team structure your one management CMO sort some

I So proceeding? or follow-up. an hear about one to update have should us it? see as we What how that's wondering expect you could then if give And to

Moshe Mizrahy

and of because managerial that countries within was we the existing quarter were Spain, in this. all we that not not U.K. discussed market right that all Europe, XXXX. believe I management just have Well, in in the felt changes refreshed we a the management implemented was changed we we enough, done ago, eager X France and

that It's that And and Europe. a will guy of all believe full working would the subsidiaries sales sales. direct to to differently. it we to a distribution that close In new the us nominated value as manage and to added it position recognize get President addition to actually we and because we much X like be we subsidiaries that, also are as can doctor Vice a have in be because our the allow the emphasize we to

people you know, as the released and refreshed from changed the United we bring States, Basically, of outside. In the Sales. that, We Vice we we X President report organization. the And not and President again management. did we within

one Sales, reps as we different the of between new allocation little far Canada the West President to for -- West. same. Vice We X directors. of we're ability a somebody. or North territory yet and as for have We also, the the to for And East, President have the America because looking East the the maximize one do bit for the and not still to the find U.S. And made stay

Currently, days daily America, the I'm of on spent them North basis. also President with U.S. I and few and a the in month a a working

as management, So the position America. of far out as carrying President of I'm the North

this I'm As the another industry, to the organization, guy tomorrow Asia, and to country for there. countries to. hope who Did than that flying far X within industry. determine budget in changed from go VP will And question? with recently, are not deliver XXXX. used XXXX we we for to the strategy as And the in I your do with the the for by country Asia but hope Asia changes the visit responsible countries some region answer from more I it and him over

Matthew Miksic

Yes. Yes. Very overview helpful. everything of Kind you've done. of

quarter predicting month to later, Or business you or but Yair, us and looking understand, waiting other volume So will for later, uptick in at it that up, it thanks it's both looking this inflects Maybe XXXX when of system for you, and patient pick all just, in about. cadence X X for understand us for we're the your this get expect, system for volumes demand? and And Maybe how not and side then is of that. its and help help and or demand? flow a could in interest we Moshe, you hopefully procedures if you or understand is us asking that traction cycle here? equipment if then help and kind the then

Moshe Mizrahy

XXXX in least that, Okay. Good XX% first, to question. for in XX% at Well, happened is demand saw what procedures. we invasive the decrease minimally

market, and -- that how don't we went And but the sell we disposable the the total numbers It that install we forget, equipment anticipate disposable in should we many it know the down, because additional we grow, sold. did believe Now not. disposable as United of mainly we can in see we States.

a XX% for rate buying which of range time leasing, up the XX% is are Second, method the interest which in inflation during equipment to by the doctors on XXXX went to with less which brought high. annual basis, total fact basically decrease we XX% revenue of very the in in see an up is combined That, that that patient XXXX. doctors the experienced

Now for the future.

will delay these of two thing And once feel that to comfortable on or the of treatment For similar need or treatment interest I A the with to things I down, laser. here. say treatment of Morpheus with go not rate that of don't patient to future, tend going treatment go $XXX rate mean happen. a FaceTite to invasive. treatment I back and One Quantum the believe are treatment. not people macroeconomics. people get start are and will will removal hair interest and $X,XXX the happens to they doctor want Once leasing the to If down. minimally

we to don't once see will down, back the based So see point, numbers we will rate on yet. and interest of a Currently, sell doctor and customers disposable to start that that turnaround. the will go see will will the the doctors, we we at going it office, that

Operator

comes question with next from The Sarcone Michael Jefferies.

Michael Sarcone

in how this us to the just wondering if you're first XXXX. some color modeling in question, of you through didn't XXXX? on we Mike can Matt typical guess seasonality give for seasonality but just This on about type thinking see Was is more morning. a start one I quarters

Yair Malca

we XXXX. on were why with spot in Yes, surprised of kind that's you're

-- XXXX, fact probably is QX, we look quarter is used strongest the summertime, this as the typical is return And expected XXXX, to somewhat that more the we should that to of year. expected slowest of quarter. QX QX where the We quarter. be seasonality want numbers. And seasonality the QX to especially same forma call in the year, a in what QX should soft usually we but numbers then go would pro see quarter overall to QX quarter the this I in strongest do strong year. back XXXX, because the it's to the not year. traditional believe the of was of

Michael Sarcone

then it. Got And might one lines. And just the for last me. have in kind Moshe, think mentioned the you this I reading between of

how just supply Canada, when for suppliers give potential InMode systems. you put around what potential thinking tariffs be may light Could there your of said implemented. chain in I in strategic of if the the and could comments all China? have and tariffs You guess are volatility you Mexico just seeing either risk multiple maybe some us place they we're components about happen or around

Moshe Mizrahy

don't in duty taxes mean, to suffer and I right Well, with Israel. now, change any we the tariff and import

so Some in of made have don't the problem. any components are we Israel,

Some of made in Israel. assemblies the are

us. or protection in world the Because different X give part cetera. X the some not suppliers diode Some . The good believe exclusive between of the one that except Canada supplier. see and we another we I relationship happen in country. like as using, will Mexico. not to multiple And happen I United are, The U.S., it and not are will sense, country, a tariff we're the relationship, good stuff, from us to like laser, States if that we XX% from that and one hope have Israel in then that well. something can component et fact we a it buy the will buy a maybe

We many many. have -- not

with lead in they maintain prices all competition and in work X but -- order least them, and at know with others. suppliers of et cetera, have we are we they that time, to that and We X, negotiate

in happen we that. It us. for tariff will affect probably will will vis-a-vis structure the something if are Israel, not So ready

Operator

question comes The Cronin Genuity. Canaccord from Caitlin next with

Caitlin Cronin

consumables. on one Just

think year-over-year. about U.S. What services about the quarter? for I So the single digits services and down consumable global consumables

Moshe Mizrahy

Well, Certain if XX% all to countries and it's in the the and in in territories, XX% we America Europe or about U.S. well, XXXX in that lost count America North XX% or Latin Europe but all the ROW. were equal Canada, you all XX% XX% territory. in overall, each did in the

Caitlin Cronin

what the year some Great. that if and just be about for tax entail you also capital were color efficient? more on and would return And talking that it would this

Yair Malca

we same XX% pretty every first The that is to believe much that try to it's going we We this tax the announced, do year. XX% efficient. be

capital do program, we that. to like once As tax and the with and We, financial on of we possible. we to world. to it it experts for And efficient future know need wait we and allocation report finalize world discussions course, will will investors. to try we tax both in and advisers, as see, report will But only would as and back the

Moshe Mizrahy

considered dividend. efficient need it tax. I Yair in add to therefore, Israeli believe way do the Israel, IRS, pay you the And tried what said. most We IRS the to a to with cetera. as -- just prewilling XX% to In by paying buyback from is et some

can without we we best paying dividend to tax. shares the So do back buy

Operator

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

Michael Matson

you guys the account does I guidance share guess, first, the as that that well? guiding are to that for you're repurchases EPS providing,

Yair Malca

when put don't we No. program We for repurchase share out. account guidance future usually

Michael Matson

to challenges you it in XXXX, addition it. Got demand. in All there sounds lower out then some supply And were right. called chain like

if could purely more just So Or I where been supply your functioning issue separate -- you there? being there to but really better? it not situation a of know issues, an those don't was mean it's have was systems if two sold have chain I demand possible

Moshe Mizrahy

war normal a in week on a zone received supplied on Israel, day everything or Well, This But the because we the delays the the as in was we in third on worked major just quarter, Moshe. to first delivered north, first our some everything in Okay. to preorders war and have second the quarter. that on we quarter, second call X facilities remember, you are we what back we due the or we XX and is quarter, and the had $XX shifts the of days. a QX, within million X manufacturing.

did supply revenue the of come the chain disability decrease in because manufacture. or So war or logistics in Israel to not or

X produce of facilities, production all one have disposable. lines, our two -- production platforms We each each came to of and one capable

during any of didn't deliver. So see war the we the issue months to even

was back and no supply it order Sometimes than one quarter. later we them

because of the of Europe doctor people the So people, not and the in high enough rate. to macroeconomics get And U.S. a and fact most decrease went that in treatment. and revenue in interest came to slowdown basically the the

Michael Matson

Okay.

been, of summarize like guess. fair quarterly So you sounds of on the I but way sequencing, it affected would annual up Is basis, you to an to sort kind have it be it? may caught that where a otherwise

Moshe Mizrahy

That's correct.

Michael Matson

at All sense at replacement And launching on old new upgraded guess, those now here or sort finally, see the you're just I installed then Okay. do how platforms some start for of average? I'm is And particularly could some platforms with any some you Ignite... enhanced existing what we base, cycle right. that have or point, on are getting machines to

Moshe Mizrahy

on have say the the probably XX,XXX out system something this, we And which market States. oldest in in I XX,XXX the from from XXXX. that the would is of installed worldwide, all Well, United systems like U.S.

RF not more service if machine than So is second buy generation old. of keep XX know, see you maintain and it, very We buying doctors system. an to can a from new are Don't market. this brought the the I contract don't are And it right that you do they years. forget, you we because us,

that's -- are the still the any or from so one working. Ignite patients. of X Optimas, in versus can used. all they're BodyTite. don't not version is base on OptimasMAX example, newest X keep And We any the think see to rooms installed on the being But I versus we and that there system systems, wants parallel they there's market work any to believe doctor For old go

Yair Malca

introduce upgrades, for XXXX, to we there of years. one promotions systems, that old X field for out in that some do the to upgrading add more plan the the for some than I'll And

did to it attractive up and with off, upgrade new OptimasMAX the we some to come the pay So the for new promotions them to, especially doctors and are going Ignite.

Operator

with Jeff comes question from next The Baird. Johnson

Jeffrey Johnson

gross gross below couple the you've the fourth -- in I that slipped just quarter, dealing lower level. just multi-part from margin margin guess volumes? higher XX% Is level? what gross -- last Israel-Hamas maybe with war. the gross it supply Is discounting maybe But been on sorry, doing Is margin in some that questions, that that? cost or higher XX% manufacturing inefficiencies the might fourth Obviously, question. it that be you the chain quarter Just in below the pushed quarter? margin

Moshe Mizrahy

was gross above in margin our Well, XX%. XXXX

or always that's therefore, one that's know, product don't company. IP lost the maintain the the Now believe of not -- why more the And I or we which first, inefficient logistics because we up hardware to in by cost the gross because And went that margin lost, But product, because very components, I And manufacturing. the we and logistic XXXX. and of efficient, . We of did maybe although in not reason cut and we we or lost people. fixed gross there significantly down manufacturing X% still any went and still the we're manage on we did in We're need X% personnel the supply efficient subassemblies XXXX revenue Prices XX%. chain be in margin remember war not X%, to software. was of X% logistics. not of cut above in was in XX%. X%. we is The the and

new subassembly in is once reason the to we we margin. second in and prices we up component X% XXXX. not X%, be will able gross that did believe recover on prices The XXXX, went waste a and see We of momentum,

Jeffrey Johnson

one, a Okay. as war, like from And that's Israeli-Hamas One, on hopefully number moving margin? that to two the so don't then you beyond gross efficiency pick up, workflow we're going enough that, I anything follow-ups help to not believe standpoint, alone guess Moshe. in that, just

helped as the gross my capital the and two, company XXs relative introduce RF the field COX margins margins laser, for number the cost to history you things the the in the ASP is with one that to those And manufacture, of the technology to is solid in is understanding that's gross system. especially of that equipment relatively low the

laser So expensive a than is gross input RF? and is manufacturing, the the margin lower costs it system more of Are COX product?

Moshe Mizrahy

Well, good question.

we You continue, two all that essentially the will war and questions. ceasefire I the One, asked hope mean, on the North.

we will situation. to war So not go back

As you or that. and zone the was months X know, like in war that north, something we're up even ago to

that Your and margin to higher between gross the is the the platforms regarding gross RF, the each laser gross indications we on laser, second RF laser that versus is we in RF, question the because IPL, average margin report other more. all -- cover manufacture the platform. margin cost all And therefore, other the that all the

Operator

BTIG. with Eiber Sam from comes question next The

Sam Eiber

just commentary how love the the be FDA sounded you're hear say for platform with question. COX right, It that last timing laser. up Morpheus. you your like And already I the reading on in you I'm to approval. that's then if to have Anything marketplace. following on positioning Maybe just can going a multi-application do

Moshe Mizrahy

time is Timing, this countries. No, second some first device. hopefully, have carry don't We we the currently, only And will COX quarter. other we of platform. and the COX, of therefore, the end other FDA. quarter a laser It's a beginning cannot I mean the for only to regulation the on laser U.S. RF. traction start any market in seeing have the because

Sam Eiber

since been of I Envision. couple any And a some updates and on quarters Empower heard think That's the of helpful. Okay. it's like we adjacent products

those over how doing quarters? are on last Just of couple wondering the some the latest of

Moshe Mizrahy

And went Empower so-called will medical portfolio, and Envision therefore, well. I will some once the products see the or as increase around XXXX, market full up, Well, like down on this also XX%. we pick medical mean,

Operator

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

Moshe Mizrahy

the Thank the U.S. that the do team agent. employees either operator. will to will We I'm next like everybody many all year better line team around months. would to be for on subsidiaries is XXXX. Thank you, that the hopefully, other and following the sure you, thank it Thank hope everybody. you, Miri. teams yet, of I on would them don't a world, worldwide, it and Israeli come see thank XXXX We -- but or I InMode than line. a who in team the like

Operator

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

You disconnect. now may

InMode (INMD) 4 Feb 252024 Q4 Earnings call transcript