YOKNEAM, Israel, Nov. 2, 2023 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced its consolidated financial results for the third quarter ended September 30, 2023.

INMODE Logo

Third Quarter 2023 Highlights:

  • Quarterly revenue of $123.1 million, an increase of 2% compared to the third quarter of 2022. InMode's proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments represented 83% of quarterly revenues, while 9% came from InMode's hands-free platforms and 8% from InMode's traditional laser and non-invasive RF platforms.
  • GAAP net income of $46.5 million, compared to $48.8 million in the third quarter of 2022; *non-GAAP net income of $53.1 million, compared to $56.6 million in the third quarter of 2022.
  • GAAP diluted earnings per share of $0.54, compared to $0.58 in the third quarter of 2022; *non-GAAP diluted earnings per share of $0.61, compared to $0.66 in the third quarter of 2022.
  • Quarterly revenues from consumables and service of $17.9 million, an increase of 28% compared to the third quarter of 2022.
  • Total cash position of $675.8 million as of September 30, 2023, including cash and cash equivalents, marketable securities, and short-term bank deposits.

 

U.S. GAAP Results

(U.S. dollars in thousands, except for per share data)


Q3 2023

Q3 2022

Revenues

$123,112

$121,232

Gross Margins

84 %

85 %

Net Income

$46,520

$48,789

Earnings per Diluted Share

$0.54

$0.58

*Non-GAAP Results

(U.S. dollars in thousands, except for per share data)


Q3 2023

Q3 2022

Gross Margins

84 %

85 %

Net Income

$53,084

$56,646

Earnings per Diluted Share

$0.61

$0.66

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation adjustments.

Management Comments

"The third quarter was the first time that we experienced a slowdown, which was mainly attributed to a strong seasonality impact. In addition, record-high interest rates affected new leasing agreements and platform sale cycles were longer than usual," said Moshe Mizrahy, Chairman and Chief Executive Officer. "However, we are pleased to see high demand for InMode's treatments, as reflected by year-over-year consumables growth higher than 20%."

Shakil Lakhani, President of InMode North America, commented, "This quarter, the soft launch of Envision continued to gain traction in the U.S., and we were pleased to see the increased adoption level by both ophthalmologists and optometrists."

"As we mentioned last quarter, we are in the process of developing new and improved minimally invasive technologies and platforms as well as upgrading and adding new features to Morpheus8 and Evolve," said Dr. Spero Theodorou, Chief Medical Officer.

Third Quarter 2023 Financial Results

Total revenues for the third quarter of 2023 reached $123.1 million, an increase of 2% compared to the third quarter of 2022.

"Although we experienced some headwinds in the U.S., we are encouraged by our international sales, which increased by 13% in the third quarter of 2023 compared to the third quarter of 2022," said Yair Malca, Chief Financial Officer.  

GAAP and *Non-GAAP gross margin for the third quarter of 2023 was 84% compared to a gross margin of 85% for the third quarter 2022.

GAAP operating margin for the third quarter of 2023 was 38%, compared to an operating margin of 44% in the third quarter of 2022. *Non-GAAP operating margin for the third quarter of 2023 was 43% compared to 51% for the third quarter of 2022. This decrease was primarily attributable to higher sales and marketing expenses, mainly because of the addition of new sales representatives, higher travel expenses, as well as investment in direct-to-consumer advertising campaigns and hosting in-person events to support the company's growth projections.

InMode reported GAAP net income of $46.5 million, or $0.54 per diluted share, in the third quarter of 2023, compared to $48.8 million, or $0.58 per diluted share, in the third quarter of 2022. On a *non-GAAP basis, InMode reported net income of $53.1 million, or $0.61 per diluted share, in the third quarter of 2023, compared to $56.6 million, or $0.66 per diluted share, in the third quarter of 2022.

2023 Financial Outlook

Management provided an outlook for the full year of 2023 ending December 31, 2023. Based on current estimates, management expects:

  • Revenue between $500 million and $510 million
  • *Non-GAAP gross margin between 83% and 85%
  • *Non-GAAP income from operations between $220 million and $225 million
  • *Non-GAAP earnings per diluted share between $2.53 and $2.57

This outlook is not a guarantee of future performance and stockholders should not rely on such forward-looking statements. See "Forward-Looking Statements" for additional information.

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation adjustments.

The Current Situation in Israel

Regarding the current situation in Israel, management would like to assure investors that the Company is prioritizing the safety and well-being of its employees, and all its team are safe. InMode doesn't anticipate any interruption or delay in production or shipment. InMode's inventory levels globally and in Israel are sufficient and include components and subassemblies for at least 6 months.

Use of Non-GAAP Financial Measures

In addition to InMode's operating results presented in accordance with GAAP, this release contains certain non-GAAP financial measures including non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP operating margin. Because these measures are used in InMode's internal analysis of financial and operating performance, management believes they provide investors with greater transparency of its view of InMode's economic performance. Management also believes the presentation of these measures, when analyzed in conjunction with InMode's GAAP operating results, allows investors to more effectively evaluate and compare InMode's performance to that of its peers, although InMode's presentation of its non-GAAP measures may not be strictly comparable to the similarly titled measures of other companies. Schedules reconciling each of these non-GAAP financial measures are provided as a supplement to this release.

Conference Call Information

Mr. Moshe Mizrahy, Chairman and Chief Executive Officer, Dr. Michael Kreindel, Co-Founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer, Mr. Shakil Lakhani, President of North America, and Dr. Spero Theodorou, Chief Medical Officer, will host a conference call today, November 02, 2023, at 8:30 a.m. Eastern Time to discuss the third quarter 2023 financial results.

The Company encourages participants to pre-register for the conference call using the following link

https://dpregister.com/sreg/10183086/fa97575b36.

Callers will receive a unique dial-in number upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

For callers who opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call 10 minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number.

U.S. Toll-Free Dial-in Number: 1-833-316-0562
Israel Toll- Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5736

Webcast URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=5EQBwtdf

At:

8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time

The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/events-presentations/. A replay of the conference call will be available from November 02, 2023, at 12 p.m. Eastern Time to November 16, 2023, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers: 

Replay Dial-in U.S TOLL-FREE: 1-877-344-7529
Replay Dial-in Canada TOLL-FREE: 855-669-9658
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 2198302

To access the replay using an international dial-in number, please select the link below:

https://services.choruscall.com/ccforms/replay.html

A replay of the conference call will also be available for 90 days on InMode's website at https://inmodemd.com/investors/.

About InMode

InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio frequency ("RF") technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically accepted minimally invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com.

Forward-Looking Statements 

The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the future performance described above under the heading titled "2023 Financial Outlook." Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategic plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, including with respect to the impact of the COVID-19 global outbreak. Consequently, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 14, 2023, as well as risk factors relating to the COVID-19 global outbreak and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which pertain only as of the date of this press release.

Company Contact:

Yair Malca

Chief Financial Officer

Phone: (949) 305-0108

Email: Yair.Malca@inmodemd.com

Investor Relations Contact:

Miri Segal

MS-IR LLC

Phone: (917) 607-8654

Email: ir@inmodemd.com

 

 

INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(U.S. dollars in thousands, except for per share data)

(Unaudited)



Three months ended
September 30,

Nine months ended
September 30,



2023

2022

2023

2022


REVENUES

123,112

121,232

365,267

320,700


COST OF REVENUES

20,136

18,765

60,444

52,483


GROSS PROFIT

102,976

102,467

304,823

268,217


OPERATING EXPENSES:






Research and development

3,268

3,166

9,937

9,164


Sales and marketing

50,819

43,062

143,591

113,564


General and administrative

2,479

2,494

6,879

7,533


TOTAL OPERATING EXPENSES

56,566

48,722

160,407

130,261


INCOME FROM OPERATIONS

46,410

53,745

144,416

137,956


Finance income (expense), net

4,953

189

12,687

(350)


INCOME BEFORE TAXES

51,363

53,934

157,103

137,606


INCOME TAXES

4,843

5,145

14,349

13,794


NET INCOME

46,520

48,789

142,754

123,812








NET INCOME PER SHARE:






Basic

0.56

0.59

1.71

1.50


Diluted

0.54

0.58

1.66

1.45


WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF NET
INCOME PER SHARE (in thousands)






Basic

83,703

82,306

83,423

82,494


Diluted

85,970

84,823

85,814

85,120


 

INMODE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except for per share data)

(Unaudited)



September 30,

2023

December 31,

2022

Assets



CURRENT ASSETS:



Cash and cash equivalents

133,733

97,540

Marketable securities

385,860

374,589

Short-term bank deposits

156,253

75,254

Accounts receivable, net of allowance for doubtful accounts

42,692

26,997

Other receivables

19,385

15,094

Inventories

39,989

39,897

         TOTAL CURRENT ASSETS

777,912

629,371

    NON-CURRENT ASSETS:



Accounts receivable, net of allowance for doubtful accounts

4,074

3,973

Deferred income tax asset, net

2,103

3,094

Operating lease right-of-use assets

6,359

5,073

Property and equipment, net

2,482

2,298

Other investments

600

600

TOTAL NON-CURRENT ASSETS

15,618

15,038

TOTAL ASSETS

793,530

644,409

Liabilities and shareholders' equity



CURRENT LIABILITIES:



Accounts payable

12,333

16,242

Contract liabilities

10,625

13,798

Other liabilities

39,230

51,980

TOTAL CURRENT LIABILITIES

62,188

82,020

    NON-CURRENT LIABILITIES:



Contract liabilities

3,502

3,959

Other liabilities

762

303

Operating lease liabilities

3,581

3,509

TOTAL NON-CURRENT LIABILITIES

7,845

7,771

TOTAL LIABILITIES

70,033

89,791




TOTAL SHAREHOLDERS' EQUITY

723,497

554,618

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

793,530

644,409

 

INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except for per share data)

(Unaudited)




Three months ended
September 30,

Nine months ended
September 30,


2023

2022

2023

2022


CASH FLOWS FROM OPERATING ACTIVITIES:






Net income

46,520

48,789

142,754

123,812


Adjustments required to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

129

169

501

462


Share-based compensation expenses

6,564

7,857

17,278

17,304


Allowance for doubtful accounts

426

50

665

402


Loss on marketable securities, net

-

12

-

49


Finance expenses (income), net

(527)

586

(3,236)

1,527


Deferred income taxes, net

(216)

9

(154)

156


Changes in operating assets and liabilities:






Increase in accounts receivable

(10,753)

(6,926)

(16,461)

(11,220)


Decrease (increase) in other receivables

(1,347)

887

(5,367)

(706)


Increase in inventories

(1,421)

(6,050)

(92)

(14,784)


Increase (decrease) in accounts payable

(962)

1,463

(3,909)

4,517


Increase (decrease) in other liabilities

3,040

4,136

(12,792)

3,366


Decrease in contract liabilities

(9)

(5,390)

(3,630)

(459)


Net cash provided by operating activities

41,444

45,592

115,557

124,426


CASH FLOWS FROM INVESTING ACTIVITIES:






Investment in short-term deposits

(179,140)

(48,090)

(285,140)

(93,701)


Proceeds from short-term deposits

91,590

30,090

204,090

73,090


Purchase of fixed assets

(149)

(387)

(684)

(1,247)


Purchase of marketable securities

(60,588)

(58,982)

(233,130)

(97,736)


Proceeds from sale of marketable securities

-

301

-

2,303


Proceeds from maturity of marketable securities

78,465

20,935

230,493

46,092


Net cash used in investing activities

(69,822)

(56,133)

(84,371)

(71,199)


CASH FLOWS FROM FINANCING ACTIVITIES:






Repurchase of ordinary shares

-

-

-

(42,637)


     Exercise of options

2,729

550

5,229

915


Net cash provided by (used in) financing activities

2,729

550

5,229

(41,722)


EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(473)

(1,365)

(222)

(2,593)


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(26,122)

(11,356)

36,193

8,912


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

159,855

88,404

97,540

68,136


CASH AND CASH EQUIVALENTS AT END OF PERIOD

133,733

77,048

133,733

77,048


 

INMODE LTD.

CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS

(U.S. dollars in thousands, except for per share data)

(Unaudited)



Three months ended September 30,

Nine months ended September 30,

2023

2022

2023

2022

Revenues by Category:


















Capital Equipment revenues - United States

67,969

55 %

72,920

60 %

191,548

53 %

180,640

57 %

Capital Equipment revenues - International

37,276

30 %

34,383

28 %

114,284

31 %

97,126

30 %

Total Capital Equipment revenues

105,245

85 %

107,303

88 %

305,832

84 %

277,766

87 %

Consumables and service revenues

17,867

15 %

13,929

12 %

59,435

16 %

42,934

13 %

Total Net Revenue

123,112

100 %

121,232

100 %

365,267

100 %

320,700

100 %

 


Three months ended September 30,

Nine months ended September 30,

2023

2022

2023

2022


%

%

%

%


United
States

Internati
onal

Total

United
States

Internati
onal

Total

United
States

Internati
onal

Total

United
States

Internati
onal

Total

Revenues by Technology:













Minimal-Invasive

85

80

83

84

75

82

87

76

83

84

73

80

Hands-Free

11

4

9

13

8

11

10

5

8

13

7

11

Non-Invasive

4

16

8

3

17

7

3

19

9

3

20

9


100

100

100

100

100

100

100

100

100

100

100

100

 

INMODE LTD.


RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF


 INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(U.S. dollars in thousands, except for per share data)


(Unaudited)





Three months ended September 30, 2023

Three months ended September 30, 2022



GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP


REVENUES

123,112

-

123,112

121,232

-

121,232


COST OF REVENUES

20,136

(572)

19,564

18,765

(554)

18,211


GROSS PROFIT

102,976

572

103,548

102,467

554

103,021


OPERATING EXPENSES:








Research and development

3,268

(729)

2,539

3,166

(857)

2,309


Sales and marketing

50,819

(4,787)

46,032

43,062

(5,879)

37,183


General and administrative

2,479

(476)

2,003

2,494

(567)

1,927


TOTAL OPERATING
EXPENSES

 

56,566

 

(5,992)

 

50,574

 

48,722

 

(7,303)

 

41,419


INCOME FROM OPERATIONS

46,410

6,564

52,974

53,745

7,857

61,602


Finance income, net

 

4,953

 

-

 

4,953

 

189


 

189


INCOME BEFORE TAXES

51,363

6,564

57,927

53,934

7,857

61,791


INCOME TAXES

4,843

-

4,843

5,145

-

5,145


NET INCOME

46,520

6,564

53,084

48,789

7,857

56,646










NET INCOME PER SHARE:








Basic

0.56


0.63

0.59


0.69


Diluted

0.54


0.61

0.58


0.66


WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING USED IN
COMPUTATION OF NET INCOME
PER SHARE (in thousands)








Basic

83,703


83,703

82,306


82,306


Diluted

85,970


86,333

84,823


85,453


 

INMODE LTD.

RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF

 INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

(U.S. dollars in thousands, except for per share data)

(Unaudited)



Nine months ended September 30, 2023

Nine months ended September 30, 2022

GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP

REVENUES

365,267

-

365,267

320,700

-

320,700

COST OF REVENUES

60,444

(1,473)

58,971

52,483

(1,364)

51,119

GROSS PROFIT

304,823

1,473

306,296

268,217

1,364

269,581

OPERATING EXPENSES:







Research and development

9,937

(1,987)

7,950

9,164

(2,248)

6,916

Sales and marketing

143,591

(12,556)

131,035

113,564

(12,233)

101,331

General and administrative

6,879

(1,262)

5,617

7,533

(1,459)

6,074

TOTAL OPERATING EXPENSES

160,407

(15,805)

144,602

130,261

(15,940)

114,321

INCOME FROM OPERATIONS

144,416

17,278

161,694

137,956

17,304

155,260

Finance income (expense),net

12,687

-

12,687

(350)

-

(350)

INCOME BEFORE TAXES

157,103

17,278

174,381

137,606

17,304

154,910

INCOME TAXES

14,349

-

14,349

13,794

-

13,794

NET INCOME

142,754

17,278

160,032

123,812

17,304

141,116








NET INCOME PER
SHARE:







Basic

1.71


1.92

1.50


1.71

Diluted

1.66


1.86

1.45


1.65

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING USED IN
COMPUTATION OF NET INCOME
PER SHARE (in thousands)







Basic

83,423


83,423

82,494


82,494

Diluted

85,814


86,154

85,120


85,667

 

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