InMode at BNP Virtual Aesthetics Day: Navigating Challenges and Growth

On Monday, 19 May 2025, InMode Ltd (NASDAQ:INMD) participated in the BNP Virtual Aesthetics Day conference, providing a strategic overview of its current challenges and future growth plans. The company, led by CEO Moshe Mizrahi and CFO Yair Malca, highlighted a revenue decline of 20% in 2024, attributed to economic conditions and interest rates, while also outlining initiatives for recovery and expansion in 2025.

Key Takeaways

• InMode’s revenue dropped by 20% in 2024, with a target to stabilize in 2025.
• The company is diversifying into women’s health and ENT solutions using RF technology.
• Strategic initiatives include new product launches and international expansion, especially in Asia.
• InMode has conducted significant share buybacks and is exploring acquisitions.
• The ongoing conflict in Israel presents potential challenges to manufacturing operations.

Financial Results

• Revenue: InMode reported a 20% revenue decline in 2024 compared to $495 million in 2023. The company aims to match 2024 revenue levels in 2025.
• Gross Margin: Approximately 80%, with potential reductions of 2-3% due to tariffs.
• EBITDA: Approximately 25%, impacted by the revenue decline.
• Geographic Distribution: The U.S. and the rest of the world each contribute 50% to revenue.
• Capital Allocation: $412 million in stock buybacks in the last 12 months, $508 million over two years.

Operational Updates

• Product Portfolio: InMode offers 12 platforms, with plans to develop two new platforms annually. Recent launches include IgniteRF and OptimusMAX.
• Geographic Expansion: Operations in 90 countries, with new subsidiaries in Argentina and Thailand. Plans for two more in 2026.
• Manufacturing: Primarily based in Israel, with potential impacts from regional conflicts.
• Sales and Marketing: Focus on both B2B and B2C, accounting for 35-40% of revenue.
• Organizational Changes: U.S. operations restructured into East and West regions, with a new CMO based in Israel.

Future Outlook

• Guidance: Aims to stabilize revenue in 2025 at 2024 levels.
• Market Conditions: Uncertainty persists around economic recovery and interest rates, with low consumer confidence.
• Strategic Initiatives: Continued international expansion, new product launches, and potential acquisitions in neurotoxins, fillers, or hardware.
• GLP-1 Impact: Expected to increase demand for skin tightening procedures.

Q&A Highlights

• Tariffs: Expected 2-3% impact on gross margins due to Israeli manufacturing.
• M&A: Interest in acquiring companies in neurotoxin, filler, and hardware sectors.
• Wellness Platforms: New platforms targeting diverse medical segments.
• Women’s Health: Focus on wellness rather than medical treatments to minimize reimbursement reliance.
• Operating Expenses: Maintained despite revenue decline.
• Israel Operations: Stable despite regional conflicts.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - BNP Virtual Aesthetics Day:

Unidentified speaker, Analyst, BNP Paribas: Hi, everyone. Good morning. Good afternoon. Thanks for attending our third BNP Paribas aesthetics day. Today, I’m joined by Moshe Mizrahi, CEO of InMode, and Yair Malca, CFO of InMode.

Thank you very much for for joining us. And we just, like, had the Galdora session and an expert session where we mostly focus on facial injectables. Maybe if you can give a short intro on InMode, the revenue model, segment breakdown, margin profile, just as an intro.

Moshe Mizrahi, CEO, InMode: Okay. We’ll do we’ll do a short intro. Is an Israeli based company established around sixteen years ago. Everything is based in Israel manufacturing, r and d headquarter, except our CFO who is based in California. We’re specializing in medical aesthetic equipment, mainly surgical equipment, which mean that we are penetrate the skin.

We are not just laser or IPL company who deliver the energy through the skin. We penetrate the skin with the special technology that we have developed, and we own the technology and and the IP. Technology is based on a bipolar RF, mean that we did not invent RF in surgical procedures. It’s known for many years. But what we did, we customized the technology into aesthetic surgical procedures where we can measure the temperature, measure the level of energy, and the amount of energy that we deliver.

The first technology that we developed is called radio frequency assisted lipolysis, which basically can do most of the plastic surgical procedures, face type, body type, neck type. The the plat the the what we sell, we sell a platform which deliver the energy, like a big power supply with some kind of a control mechanism, and a handpiece, which is the one time use that go into the body to perform with one incision point to perform full surgical procedures. Later on, we developed some other technology like bipolar Matrix RF, which is called Morpheus, and we also develop the what we call the commodity type medical aesthetic devices based on laser, based on IPL, based on ultrasound, based on a combination of energies to perform all kind of aesthetic procedures, but mostly mostly in the doctor clinic and mostly under local anesthesia and not full anesthesia. So, basically, instead of going to the hospital to do facelift, we can do it in the cell we can do it in the doctor office under under local anesthesia, in the lunchtime before lunchtime procedure, and the patient can go home immediately after after the treatment. We’re saving money.

We’re saving downtime. We’re saving hospitalization and other stuff. We got the first FDA in 02/2016. We started to commercialize our product in The United States. At that time, in the first year of 02/2017, we sold around $22,000,000.

And in 2023, we we we we actually reached something near $500,000,000, 4 90 5 million dollars in revenue with very high profitability. Later on, we start to diversify our product line, not only in aesthetic and not not only in plastic surgery. We started to develop product based on the same technology based on the same technologies that we control for human health, for application like urine incontinence, overactive bladder, vaginal rejuvenation. We cannot use the word rejuvenation, but all the GSM GSM symptoms. In addition, we develop a product for for dry eye and full face rejuvenation and periorbital.

We continue to develop now product for the ENT market. Whenever whenever we can move an operation in a full site operation procedure from the hospital, from the Operating Room into the doctor office using instead of using NICE Scalpel to use energy based device, which is based on our technology, this is unmet need for us, and we’re coming with solution. We currently have about 12 platforms in our product portfolio for all kind of indication as I as I described. We’re selling in 90 countries. We have currently, we have 11 subsidiaries.

We’re in the process to to establish another two subsidiaries. 80% of our business, we sell direct to our subsidiaries around the world and 20% to our exclusive distributors. We develop two indication of two platforms of two handpieces every year just to keep the market going. We went public in 02/2019 with $7 per share. We went up very high.

And then in 2020 end of twenty twenty three, ’20 ’20 ’4, and the beginning of twenty twenty five, The market slowed down significantly because of several reason. One of them is the interest rate on leasing packages. We sell equipment with the financing of lease to third party companies who are not the finance company. And, of course, the slowdown in the economy in The United States did not help us. We went down 20% in revenue in 2024, and we are currently the target for 2025 is to be the same as 2024, try to try to recover from the slowdown slash recession into a second or into another momentum.

That’s the company. We are about 600 people, a little bit more than that worldwide. We’re the leader in medical aesthetics, and we also want to be the leader in the other, what I call, medical community solution. We believe that aesthetic and wellness can go together, and therefore, any indication which improve quality of life is something that that interest us, and we continue to develop solution for that. That that’s basically the company.

I’m based in Israel, as I said, r and d in Israel, manufacturing in Israel. We have some tough some tough time in Israel during the last two years because of the war, but we managed very, very carefully and successfully throughout this time. We hope that now business will go back to normal. Although, so far, based on the first quarter and the beginning of the second quarter, the market is not improving significantly. We see some sign of improvement, but not not very much.

Unidentified speaker, Analyst, BNP Paribas: Thank you. Thank you for that introduction and also your comments on the macro environment. So it’s I mean, it’s in mobile. It’s other aesthetics medtech that are reporting pressure on the capital equipment sales. So can you remind us of the cost of the device, and has it changed and versus competitors and whether competitors have changed the pricing strategy?

Moshe Mizrahi, CEO, InMode: Okay. First, we sell we sell platforms. You’re right. Capital equipment. But we also sell disposable that go with the capital equipment for onetime use since we penetrate the skin.

About 80% is capital equipment, and something like 20% is disposables. I’ll do I’ll the return on investment to the doctors is very high. For example, if a doctor buy a system in The United States for $130,000, he usually finance the the the the the purchase through a five years lease package, which is about $3,500 a month even with the interest rate of today or maybe a little bit more, depend on the credit scoring of the doctor. He can charge in between 5 to $7,000 per invasive treatment and maybe a package of three treatment for minimum for for noninvasive. So even if he would do five to six treatment per month and charge $5,000, he need to buy disposable for $2,000 and in addition to pay $3,500 for the leasing so we can pay back the system in less than a year.

In most cases, less than a year. So from from the doctor point of view and from the company point of view, it’s a win win. We have about 80% plus minus 1% gross margin, which is very high for capital equipment. It’s mainly, you know, for noncapital equipment like software. You can find gross margin like that.

But we spend we spend heavily on marketing and sales throughout all of our subsidiaries and and distributors. So at the end of the day, we all have to remember that although we have medical equipment equipment devices and manufacturer, but at the end of the day, we are treating healthy people who wants to feel better, they want to look better. And it’s from from a marketing and sales point of view, it’s quite similar to consumer product. The service is relatively consumer oriented. So and the EBITDA is around 25%.

It used to be higher than that, but in the last two years, since since margin and revenue went down, the the gross the the EBITDA went down as well. But we hope that in the future, we will overcome it, and we will improve the profitability as well.

Unidentified speaker, Analyst, BNP Paribas: Thank you. Maybe if you can discuss describe the pressure on the end consumers or maybe coming in less or postponing treatment in US versus outside of The US.

Moshe Mizrahi, CEO, InMode: Well, we do we do marketing to consumer and marketing to doc b to b and b to c, not just in The US. We do it outside in The US as well. The US market is currently 50% of our business, and ROW is 50% of our business from a money point of view, from dollars point of view. From system point of view, since in The US, we can charge higher prices for our equipment, the ratio, I would say, is sixty five thirty five. 30 five percent of our system go to The US, and 65% of our system goes to our W.

But we need to also to remember that whenever we sell outside The US, because everything in US is direct, outside The US through distributors, we recognize only the transfer price and not the full price of the system. And therefore, the ratio is based on 35, 60 five percent on system wise. Dollar wise is more like $50.50.

Yair Malca, CFO, InMode: And in terms of the headwinds, we we do see or feel stronger headwinds in The US compared to OUS. Even though in some pockets of the OUS, we see the same issues, especially consumer confidence or lack thereof. I think overall, we’ve seen that in Q1, Europe and Asia Pacific had a decent quarter for us, and it’s offset a little bit the the drop that we experienced in The US. And so overall, to answer your question about what we see out there is it’s it’s more difficult in The US than in The OUS.

Moshe Mizrahi, CEO, InMode: Just to add to what you you said, this is correct, but and I would say it on that and, unfortunately, we start seeing another sign of inflation in Europe and also in The US. So, yes, we had some first quarter good good first quarter o US, what we call our w. But but recently, we start to see some kind of some kind of I don’t want to call it a slowdown because we don’t we don’t don’t see a big difference from the first quarter, but but interest rates are not going down.

Unidentified speaker, Analyst, BNP Paribas: Okay. And I remember there were some signals that were suggesting a bottoming in 02/2024, but at the end, it didn’t materialize. And do you think we are close to bottoming or see any signs or not yet?

Moshe Mizrahi, CEO, InMode: Well, in 2024, in the beginning of the year, we were we thought it was it was false. We thought that in the second half of twenty twenty four no. It was it was in so we thought that in 2024, interest rate will start coming down, and we will see some momentum. But it was did not happen. And and 2024 was very slow down rate slow down year for us.

If you ask whether we see the the light at the end of the tunnel, not yet. We don’t see that the light at the end of the tunnel yet. Not in the second quarter. We don’t want to predict now because, you know, whenever we predict, I mean, it’s

Yair Malca, CFO, InMode: You never know.

Moshe Mizrahi, CEO, InMode: A habit of wishful thinking. But but we’ll wait to see what will happen in 2025. And and as you can see, the stock market is not reacting well to to what happened in The US, and the interest rate is not going to come down in the speed that we thought. So we don’t know.

Yair Malca, CFO, InMode: Yeah. We we are looking for some stability in the market and to consumer confidence that hit record low a week or two ago. So we are waiting for that to to improve. In return, hopefully, once consumer confidence improves, our doctors would start seeing increasing demand for aesthetic procedures overall. And this would end up translated into them buying additional capital equipment.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And a follow-up on the on this year. So does guidance require higher adoption of product launches as well as execution? And what is the historical cadence So are May and June bigger month than April given the warmer weather?

Moshe Mizrahi, CEO, InMode: You been

Yair Malca, CFO, InMode: q q two is supposed to be stronger stronger quarter than q one. So usually, the cadence throughout the year is that q one is the slowest quarter of the year, historically, going back

Moshe Mizrahi, CEO, InMode: year ago. Added.

Yair Malca, CFO, InMode: No. No. In the industry of our world, not only for InMoon. So it’s usually about 20% of the revenue for the year in q one. Q ’2 is supposed to be a good quarter, about 25% of the revenue.

Q three is a soft quarter because of summertime. It’s more significant in in q three, less so much in q two. And then q four, historically, is the strongest quarter of of them all. That was not a situation in the last year or two because of

Moshe Mizrahi, CEO, InMode: the slowdown. If want to if you want to divide it, first quarter is 20%. Second quarter is about 25%. The third quarter is usually in between twenty two, twenty three, or something like that, and the fourth quarter is usually

Yair Malca, CFO, InMode: 30.

Moshe Mizrahi, CEO, InMode: 30 percent plus.

Unidentified speaker, Analyst, BNP Paribas: Okay. Thank you. Maybe I’ll combine to the next question. So can you describe the the situation for in Israel since the since fire ceasefire? And do you foresee any other impact being based in Israel outside of tariffs?

And maybe a second question on tariffs. What is the in mode tariff exposure in terms of revenue manufacturing exposure type of products? As far

Moshe Mizrahi, CEO, InMode: as far as the ceasefire in Israel, it’s it’s come and go. I mean, I know now now the Israeli government decided that there was no ceasefire and they want to renew the war. That’s happening this morning. Every day every day is changing. Well, the Northern part of Israel.

And on the Northern part of Israel, right now, it’s quiet. The war is more on the South Part Of Israel. So it does not affect us so much. Although some of our people are serving in the reserve duty, and and they were called to the army. So we’re missing some people, especially in the manufacturing.

I hope it will not affect the manufacturing capacity and stability. But, you know, it’s it’s nothing new. It’s better than what it’s better than a year ago, and it’s better than two years ago or less than two years ago when the war started in October 2023. But but we still don’t see the end of the war. It’s still running.

Yair Malca, CFO, InMode: As for the

Moshe Mizrahi, CEO, InMode: As the as for the tariff, yeah, you will have.

Yair Malca, CFO, InMode: So as for the tariffs, you know, the situation is very fluid, and things are changing almost on a weekly basis. We hope that, you know, the Israeli government will be able to walk out some sort of an arrangement with the US administration. Right now, our working plan is to expect between 2% to 3% impact on the gross margins. But as I said, this can change hopefully by next earnings call. We’ll have a better understanding of where this is heading.

Right now, this is our assumption, an impact of between 2% to 3%, mainly because, as Moshe mentioned at the beginning, most of our products are manufactured in Israel and being exported here into The US.

Moshe Mizrahi, CEO, InMode: I mean, when when the when the tariff was announced, Israel tariff was 17%. And later on, it was reduced to 10.

Yair Malca, CFO, InMode: On a temporary basis.

Moshe Mizrahi, CEO, InMode: Temporaries. Yeah. If it will go back to 17, the effect will be higher, will be 4%.

Yair Malca, CFO, InMode: Yes. But

Moshe Mizrahi, CEO, InMode: okay. On 10%, it will be, as the IU said, between two to 3%.

Yair Malca, CFO, InMode: Yeah. We we we are still figuring out the situation. There might be some walking around that we might use here and there. Again, this thing is, as I said, very fluid. Right now, we believe between 2% to 3% is a reasonable impact to expect, but we will update more as we know more.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And then on innovation, can you discuss the recent performance of the newer system? So IgniteRF, OptimusMAX versus the existing platform platforms.

Moshe Mizrahi, CEO, InMode: Well, we introduced, basically, two major system, I would say. The OptimusMAX, which is a versatile system that can handle different type of handpieces for different indication all the way from hair removal, skin rejuvenation, cellulite pigmentation, fine lines, and and also Morpheus, which is which is one of our major product, fractional RF technology. And, basically, this system is in the second generation of a previous system that we developed, which called Optimus. So Optimus Max is the second generation for Optimus with some special technology. Even the Morpheus that that we have on the Optimus Max is the second generation for the Morpheus that we had on the Optimus.

The second device that we brought to the market and and we and we sold in 2024 and in 2025 is called Ignite. Ignite is a second generation for the body type. But on the Ignite, we added another technology, another new technology, not just updated techno another new technology we’ll call which called Quantum, which is different than the body type. And we’re doing it with one cannula instead of two cannula. Basically, almost the same type of procedures, but mostly for non aspirational treatment, non liposuction treatment.

As you probably know, today, all the g GLP ones, drugs that melt fat create loose loose skin on many people on or using the GLP one, and and and they need some additional treatment to tie the skin. So so the the the quantum technology was developed just for that, and the the result that we’re seeing so far are good, and it’s very promising. It’s going to be according to our salespeople and distributors. It’s going to be as successful as the Morpheus and the BodyPipe. So we we hope that that will happen.

We’re working very hard to do studies and publication. It is already approved by the FDA, so we set it free. It’s not approved yet by the CEO in Europe, and we’re working on approval. We just we just tomorrow, we will announce that it’s already approved in Canada, and we’re working on approval in other regulatory bodies around the world. Thank

Unidentified speaker, Analyst, BNP Paribas: you. And if possible, can you discuss the new wellness platforms to be launched later this year? Is that going to be very different indications than the existing one?

Moshe Mizrahi, CEO, InMode: Different station then?

Unidentified speaker, Analyst, BNP Paribas: Different indications than the existing one.

Yair Malca, CFO, InMode: Yeah. Yes. It’s it’s a different indication. It’s a different segment of doctors that we are going after. We will provide additional information at the time of the launch, hopefully, in the in q three.

Moshe Mizrahi, CEO, InMode: Oh, yeah.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And in women’s health, because it’s one of your expansion areas, have do you expect any negative changes from the new administration?

Moshe Mizrahi, CEO, InMode: From the new

Yair Malca, CFO, InMode: Negative changes on the women’s health from the new administration? In in what way?

Unidentified speaker, Analyst, BNP Paribas: I don’t know if any negative changes, maybe less less willingness to treat women’s health.

Moshe Mizrahi, CEO, InMode: From the new administration in The United States?

Unidentified speaker, Analyst, BNP Paribas: Yes. Yes. Sorry.

Yair Malca, CFO, InMode: Yeah. No. We we don’t Well,

Moshe Mizrahi, CEO, InMode: we are not aware of any any major change from the new administration on the aspect of women health. Basically, all the indication that we will develop and bring to the market on women health will be on the wellness side. We’re not saving life or not major, I would say, illnesses or like overactive bladder, like urine incontinence, like vaginal contraction to improve sex. We are not in the business of of medical, I would say. We’re more in the business of wellness women health and less on the medical women health.

So we we do not rely right now on any reimbursement. It’s all private money. If we would develop any indication that we’ll need reimbursement and the reimbursement would be affected by the new administration, it will affect us as well, but we’re not there yet.

Unidentified speaker, Analyst, BNP Paribas: Okay. Thank you. And maybe on your margins, so how are you managing OpEx in that environment, and how does that compare during COVID? Which areas are you prioritizing, deprioritizing, yeah, innovation, r and d versus labor marketing?

Moshe Mizrahi, CEO, InMode: You mean on you mean on on prioritizing r and d?

Unidentified speaker, Analyst, BNP Paribas: Prioritizing of operating expenses, generally, including r and d.

Moshe Mizrahi, CEO, InMode: The g and a and r and d on InMode are very low relatively to competitors and relatively to any medical equipment company. You can see that. Our our expense is sales and marketing. This is our major expense. I mean, g and a is in the in the range of 3%, and maybe r and d is in the range of 4%.

That’s all, which is relatively low because we’re very efficient in our r and d and engineering department. The major expense is commission and and the cost of reps that we pay them. And in addition to that, all the marketing activity that we do b to b and also b to c with all the advertisement on Morpheus, etcetera. So this is this is a major part, and it can be 35 to 40% of our of our of our revenue.

Unidentified speaker, Analyst, BNP Paribas: I don’t know if, Pierre, you have anything to add on the managing of OpEx in today’s environment.

Yair Malca, CFO, InMode: Again, overall, what we’ve done in the past year, despite the decline in the revenue, we continue almost business as usual. We, so far, didn’t terminate anyone, kept all the marketing initiatives we had in place, continue to do the workshops for doc for doctors that we plan to have. So in terms of of of that, you know, we kept everything the the same despite the decline in in revenue, and this translated to some definitely an impact on profitability as we also. We believe this is a short term. At the end of the day, the demand for aesthetic procedures in The US and worldwide is not gonna go away.

At some point, it will come back, and we wanted to have the organization structure ready to take over the market once once that happens.

Moshe Mizrahi, CEO, InMode: We’re the same during the COVID time.

Yair Malca, CFO, InMode: Yes.

Moshe Mizrahi, CEO, InMode: It’s went well, and the return on the on the on the, I would say, on the expense that that that we allocated was very high.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And can you discuss the recent margin geographical mix evolution? And what makes The US and Canada the most profitable regions compared to the other ones?

Yair Malca, CFO, InMode: First of all, we work direct in those two countries. Unlike other regions, Europe, some some of the countries five countries or six, seven countries, work direct. The other, we work through distributors. Once you work through distributor, you get to recognize only the transfer pricing. So by definition, the top line is lower.

And and generally speaking, you know, not only for Static Capital Equipment, overall, for MedTech, usually, US tends to be the region with the highest prices all all around the world. So it tends it tends to be the most profitable region.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And maybe if you can have more detail on what you’re seeing outside of The US. Is that is that getting a touch softer in recent months outside of The US?

Moshe Mizrahi, CEO, InMode: You mean from the economy point of view?

Unidentified speaker, Analyst, BNP Paribas: From foreign mode. Yeah. Impacting foreign mode. How has how has it been on the end consumer and outside of The US? I mean, we we discussed the pressure in The US.

And outside of The US, has it been a bit softer in recent months? Or, yeah, if you can spend more time on discussing outside of The US.

Moshe Mizrahi, CEO, InMode: Well, we are we are currently spending a lot of management attention outside The US. Also in The US, but we’re in the process of establishing another two subsidiaries, one in Argentina and one in Thailand. And and we’re planning on another two in 2026, in the beginning of twenty twenty six since we want to go direct to in major countries and not to distributors. So developing a country, hiring the people, starting to launch the product, doing regulation, it’s a time and management consuming. Time time and management attention consuming process.

That’s one thing. Second, in the in in all of our subsidiaries, in in 2024 and 2025, we we spent time to create stability to hire more salespeople and to expand the market, and we start seeing the result. As Yael said, on the first quarter, Europe, you know, preferred not bad at all, also Asia, compared to the big slowdown that we had in the in The US. And I believe that this is because of the of the time that I I myself and other people in the company are spending in those territories. We have in fact, in in in general, we have a major conference in in in France.

We launched the Ignite and the Optimus Max in Europe at that time, and then we had another major conference in Monaco. Next month beginning of next month, I’m flying to to Bangkok to do a distributor and subsidiaries meeting to introduce new product. We do everything everything we can because, for example, we believe that that Asia is growing much faster than The US as far as the steady, especially China. And we are planning to do some kind of direct operation in China as well. So compared to The US and and you have to remember that in in in the ROW, OUS, we’re dealing with 27 different regulatory bodies and 25 different languages, and we have to cope with all of them.

So it’s it’s not so easy for relatively young and small company like us, but we’re not giving up in any market. We’re supporting the market even if it’s small. Maybe in the future, it will grow. And whenever we can go direct, we will establish direct operation. Thank

Unidentified speaker, Analyst, BNP Paribas: you. That’s very helpful. And I don’t know if, yeah, you have any comments on the what you’re seeing outside of The US versus US.

Yair Malca, CFO, InMode: I think what Moshe covered it. You know, we made some management changes in OUS versus in Europe and Asia in the past few quarters, and we established almost one, two, I want I would say even two subsidiaries every year in the last few years internationally, and we start seeing the results.

Unidentified speaker, Analyst, BNP Paribas: Okay. And and, Moshe, the international expansion that you mentioned, is that this year, or is that later on?

Moshe Mizrahi, CEO, InMode: No. No. The companies that I mentioned are already been established. Well, we hired people in Thailand. We hired people in Argentina, and, hopefully, they will start and launch sometime in the third quarter.

We’re not we’re not waiting for the next year. The next year, it will be another two countries.

Unidentified speaker, Analyst, BNP Paribas: Okay. Thank you. And can you maybe come back on the management changes that you made and maybe progress any progress hiring for a North American segment? And if you can discuss doctor Aaron Krieger’s focus versus your previous CMO.

Moshe Mizrahi, CEO, InMode: Oh, not COO. CMO.

Yair Malca, CFO, InMode: CMO.

Unidentified speaker, Analyst, BNP Paribas: CMO. Yeah.

Moshe Mizrahi, CEO, InMode: He’s he’s chief banker. Okay. Let’s start with The US. Yes. We made some management changes there, which were required.

The US is a big country, and and therefore, I have decided that The US need to be managed with with two, I would say I don’t want to call it branches, but two two arms, one on the East and one on the West with two central central management. And they both report to me. I’m spending some time. I’m spending time every month in The US, at least few days. I will be there in June.

I will be there in July. I’m doing a management meeting, and I’ll be there. I’m I’m I’m in direct contact with all the all the VPs, the two VPs, one of the East and one of the West. We’re changing the organization as we believe the market is developed. And I believe that now the management is better of The US.

It was centralized all US to one management team, and it was too big. Now as regard to the to the to the CMO, yes, we changed the CMO. Erwan is now based in Israel. He’s he’s an aesthetic doctor with thirty years of experience in medical aesthetic, in all type of medical aesthetic. And he’s now responsible not just on The US, but also all over the world.

We just came from The US yesterday. We had few conferences there, and I believe the management of the medical team is better with the one.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And can you discuss the health of your balance sheet and liquidity, and what are your capital allocation priorities today? And shall we expect continued buybacks?

Moshe Mizrahi, CEO, InMode: Well, in the last and I believe we said that in the earning call in the last twelve months, we bought back $412,000,000 of of stock. And if you take into two years or a little bit more than two years, we bought back $508,000,000 of stock. We started with, I don’t know, $50 per share and ending up with $50.16 dollars per share. We did it in the most tax efficient way because this is what the Israeli iOS allow to do buyback without paying dividend tax. What will happen between now and the end of the year?

All the options are on the table. Doing another buyback, m and a, dividend, everything is on the table. It’s depend how the market will develop. As you know, we try to do two m and a two two acquisitions, but we failed because probably the the the price that we offered was not good enough. But if the opportunity would present itself on a company that synergize with our product line or com complement our product line, we will do an acquisition.

It’s not that we don’t want to. I know that some shareholders believe that buyback is the only way to allocate the money back to the shareholders, but we believe that there are some others. I I don’t think that I mean, listen. We we made a billion dollars between 02/2017 until today. To a billion dollars in profit out of which $508,000,000 we did buyback.

So we want to do it carefully. That’s what we’re saying. We’re not we’re not saying we will not do, but but we want to do it carefully.

Yair Malca, CFO, InMode: And and, again, in the last twelve months, we we did buy bought we did buy back 27% of the company. This is a significant number. Are not against buyback, as you can see. We went very aggressive with the buyback in the last year, and we continue to look at that as an option together with some other options.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And you mentioned m and a. So I know that in on our previous discussion, you mentioned interest in neurotoxin and fillers. Is that still a category of interest, or what are your category of interest?

Moshe Mizrahi, CEO, InMode: Yeah. Absolutely. Yes. Because every doctor who does aesthetic procedures using fillers and and and toxin. And this is why we gave one proposal to a Toxin company and one proposal to a to a filler company.

At the time, we thought that this is a good price, which is above the market the market price, but but we did not receive any response from one. And the the second one actually was a negative answer. By the way, we made another offer to to medical to to hardware company, but not officially. I’ve talked with the chairman, and I said, are you willing to discuss with that acquisition in the range of x, y, z? And the answer was no.

I believe they regret that.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And we’ve been discussing GLP one with other players in mode as well, and and I think you’ve been quite vocal about GLP one given the body contouring business. Has it materialized? Are you seeing it now? We know that fitters are discussing it more and more.

Yair Malca, CFO, InMode: Yeah. I I’m not sure if it’s accurate to that we were vocal about GLP one. When when we were asked about g GLP one in the context of will the GLP one come and take away the fat killing business from InMode, we said that, you know, GLP one treat only one aspect of body contouring, which is killing fat, which is sometimes not the most difficult thing to do. But tighten skin, improve the quality of the skin, this is something that you cannot do with g a p one. And especially for patients with g a p one that tends to lose a fairly high volume of fat in a fairly short time, they many of them end up with loose, saggy skin, and this is exactly where we can and our procedures can come into play, especially some of our minimally invasive procedures.

Moshe Mizrahi, CEO, InMode: We believe the GLP one will will do good to to our business.

Yair Malca, CFO, InMode: To the industry of our market.

Moshe Mizrahi, CEO, InMode: We’re not we are basically specializing in skin tightening and melt setting as well simultaneously, and nobody else can do that.

Unidentified speaker, Analyst, BNP Paribas: So we have a a few minutes left, so feel free to send more questions. But maybe if you

Moshe Mizrahi, CEO, InMode: discuss

Unidentified speaker, Analyst, BNP Paribas: the the steps that you’re making for when the market recovers.

Yair Malca, CFO, InMode: How we prepare the organization? How we prepare the organization for the time when the market day is coming back? And, Moshe, you want to take this one?

Moshe Mizrahi, CEO, InMode: Well, I believe we are well prepared. We have the sales team. We have the product. We we did not we we have the r and d team. We continue to to develop product to bring them to the market.

I believe we we never lose the momentum, and therefore, we’re ready for that.

Unidentified speaker, Analyst, BNP Paribas: Thank you. And do you think the re the category and and you said we’re not there yet, but do you think the category might come back stronger after the delayed procedures?

Yair Malca, CFO, InMode: You know, there there are some analysts and companies that has this narrative that all the patients that delayed aesthetic procedures, and that’s the drop in demand for aesthetic procedure that we see now. When things improve, those patients would come back and would need to do even more treatments because they neglected their skin for for so long. Again, we are not pushing this narrative at all, but we are saying, you know, patients who and and consumers would want to come back and and and start treating their skin. We don’t count on on over demand. Let’s put it this way.

We but we we do expect the demand to come back.

Unidentified speaker, Analyst, BNP Paribas: And any final comments and other points that we haven’t discussed you’d like to mention?

Yair Malca, CFO, InMode: Final comments?

Moshe Mizrahi, CEO, InMode: No. I believe you covered most of the issues that that need to be covered.

Unidentified speaker, Analyst, BNP Paribas: Great. Well, thank you very much. Yeah. Thank

Moshe Mizrahi, CEO, InMode: you very much. Thank you.

Unidentified speaker, Analyst, BNP Paribas: And investors, if you have any follow-up question, let me know. And, otherwise, yeah, thank you very much, Moshe and Yehr, again, for your support of the Aesthetics Day this year again. And we’ll have we’ll take a few minutes break, and we’ll have our our last session going back to facial injectables with Evolus. But, again, Invo, thank you very much for your time today.

Yair Malca, CFO, InMode: Thank you for having us.

Moshe Mizrahi, CEO, InMode: We are we are the only medical aesthetic

Yair Malca, CFO, InMode: The capital equipment.

Moshe Mizrahi, CEO, InMode: Company that you cover? You don’t cover Not

Unidentified speaker, Analyst, BNP Paribas: not the only one, but the only one attending this year.

Moshe Mizrahi, CEO, InMode: Oh, okay.

Unidentified speaker, Analyst, BNP Paribas: Yeah. So this year has been mostly

Moshe Mizrahi, CEO, InMode: I’m talking about equipment from which is injectable.

Yair Malca, CFO, InMode: Yeah. We are the only Yeah.

Unidentified speaker, Analyst, BNP Paribas: Yeah. We I I also cover skin, beauty health.

Moshe Mizrahi, CEO, InMode: Oh, beauty health.

Unidentified speaker, Analyst, BNP Paribas: Yeah. The HydraFacial. Yes. So we discussed that with with here, but they’re not attending this year. But I also cover another capital equipment.

Moshe Mizrahi, CEO, InMode: Thank you very much.

Yair Malca, CFO, InMode: Thank you very much.

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