Q4 2021 Inmode Ltd Earnings Call
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Speaker 1: Good day and welcome to the in mode LPD fourth quarter and full year 2021 earnings results conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Good day and welcome to the <unk> L. P D fourth quarter and full year 2020 earnings results Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero.
Speaker 1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw from the question queue, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Mary Seagal from MSIR. Please go ahead. Thank you, operator.
After todays presentation ever be an opportunity to ask questions to ask a question you May Press Star then one on your touch count them to withdraw from the question to you. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mary Seagull from M. S. IR. Please go ahead.
Thank you operator, and everyone for joining us today welcome to <unk> fourth quarter and full year 2021 earnings call before we begin I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe Harbor statement.
Speaker 2: Welcome to InMode's fourth quarter and full year 2021 earnings call. Before we begin, I would like to remind our listeners that certain information...
Outlined in todays earnings release also pertains to this call. If you have not received a copy of the release. Please go to the Investor Relations section of the company's website change.
Speaker 2: Changes in business, competitive, technological, regulatory, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today.
<unk> business competitive technological regulatory and other factors could cause actual results to differ materially from those expressed by the forward looking statements made today, our historical results are not necessarily indicative of future performance.
We can give no assurance as to the accuracy of forward looking statements and assume no obligation to update them, except as required by law.
With that I'd like to pass the call over to MS. Chamois, Rafi, Chairman and CEO Michelle <unk>. Please go ahead.
Speaker 3: Thank you, Miri, and thank you all for joining our fourth quarter and full year 2021 Earning Call. With me today are Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer, Yair Malka, our CFO , Shakil Akani, our President in North America, Dr. Spiro Teodoro, our Chief Medical Officer, and Rafael Dichaman, our VP of Finance.
Thank you Amy and thank you all for joining our fourth quarter and full year 2021 .
With me today are Doctor Microcline, do <unk> co founder and Chief Technology Officer, <unk> <unk>, our CFO Shakil Lakhani, our president in North America doctors fewer doors, our chief Medical Officer, and Rafael <unk>, our VP of finance.
Speaker 3: We will all be available for Q&A session after our prepared remarks.
We will all be available for Q&A session. After our prepared remarks.
Speaker 3: Once again we have the pleasure of announcing a record quarter with revenue of 110.5 million dollars and 357.6 million dollars for a full year an increase of 47 percent and 73 percent compared to the same period last year
Once again, we have the pleasure of announcing a record quarter with revenue of $110.5 million and $357 6 million for a 40 or an increase of 47% and 73% compared to the same period.
Last year.
Speaker 3: Crossing the $100 million quarterly revenue mark a symbolic and meaningful achievement for outcome
We're seeing the $100 million quarterly revenue, Mark a symbolic and meaningful achievement for our company.
Speaker 3: We continue to achieve strong profitable growth. Net income for the quarter was a gap basis was 52.7 million and 55.2 million on a non-gap basis.
We continued to achieve strong positive profitable growth net income for the quarter was a GAAP basis was $52 7 million and 55 point to me than on a non-GAAP on a non-GAAP basis in.
Speaker 3: In the full year 2021, net income reached $165 million on a GAAP basis and $176.3 million on a non-GAAP basis.
In the full year 2021, net income reached 165 million on a GAAP basis, and $176 3 million on a non-GAAP basis as.
Speaker 3: As a result of our strategy to focus on selling more systems globally, sales of capital equipment represent 89% of our total revenue in the fourth quarter. Sales from consumables and services increased significantly and reached record volume every quarter. This sale accounted for 11% of total in the fourth quarter and in the full year 2021.
As a result of our strategy to focus on selling more system globally sales of capital equipment represent 89% of our total revenue in the fourth quarter set a strong consumable and services increased significantly and reached record volume every quarter.
You said accounted for 11% of total in the fourth quarter and in the four year 2021.
Speaker 3: By launching new platforms and innovative modalities and growth and growing our install base in the US and globally, we expect consistent growth in consumable revenue will become a more significant part of our revenue mix.
By launching new platforms and innovative modalities.
And growth and growing our installed base in the U S and globally, we expect consistent growth in consumable revenue will become a more significant part of our revenue mix.
Speaker 3: I would like to highlight the ongoing growth from our minimal invasive and ablative technologies, which now account for 73% of our revenue, compared with 65% last year. Hand-free devices generated 17% of our revenue, and non-invasive RF and laser platforms represent the remaining 10%.
I would like to highlight the ongoing growth from our minimally invasive and ablative technologies, which now account for 73% of our revenue compared with 65% last year.
Free devices generated 17% of our revenue and noninvasive RF and laser platforms represent the remaining 10% dip.
Speaker 3: The product line mix for the full year was 72% for Minimal Invasive, 20% for Handfree and 8% for Non-Invasive RF and Laser Plots.
The board our client mix for the full year was 72% for minimally invasive 20% for hands free and 8% for noninvasive RF and laser platforms.
Speaker 3: Looking at the international side of the business, fourth quarter sales outside the US accounted for $36.3 million, a 69% increase compared to the same quarter last year.
Looking at the international side of the business fourth quarter sales outside the U S accounted for $36 $3 million, a 69% increase compared to the same quarter last year full year results reached $120 million $123 million.
Speaker 3: full year results reach 120.3 million dollars, a 112% increase compared to 2020.
112% increase compared to 2020.
Speaker 3: These figures represent 34% of our total revenue of all 2021 and 33% of our total revenue for the fourth quarter.
These figures represent 34% of our total revenue of all 2021 and 33% of our total revenue for the fourth quarter Emo currently operating 71 countries, having added 17 countries more in 2021, we also expanded our existing operation.
Speaker 3: EMOC currently operates in 71 countries, having added 17 countries more in 2021.
Speaker 3: We also expanded our existing operation in Italy by establishing a subsidiary there. We see most of the growth coming from regions where we are already involved. Yes, there is opportunity in a new territory.
And in Italy by establishing a subsidiary there we see most of the growth coming from region, where we are always be invoked yet there was opportunity in the new territories.
Speaker 3: Furthermore, despite facing serious global supply chain obstacle in 2021, we successfully delivered every system within 10 days of receiving the order. We would not have done that without our hardworking and dedicated employees and partners. We value their contribution and thank them for it.
Furthermore, despite facing serious global supply chain obstacle in 2020 . One we successfully deliver every system within 10 days of receiving then Aldo we would we would not have done that without our hardworking and dedicated employees and partners we value.
<unk> contribution and thank them for it.
Speaker 3: As for 2022, we are continuing to evaluate the impact of the Omicron and the BA2 COVID variant on our business that we do in every territory. We hope that current wave of COVID will pass and will be the last one, so that business across the world will return to normal soon. Now, I would like to turn the call over to Shaquille, our President of America. Shaquille?
For 2022, we're continuing to evaluate the impact of the omicron and to be a two COVID-19 variance on our business that we do in every territory. We hope the current wave of Covid will pass and we will be the last one so that the business across the world will return to normal soon.
Now I would like to turn the call over to Shaquille, our president in North America Shaquille.
Thanks, everyone for joining us in mode ended the fourth quarter and 2021 was another record performance and the successful launches of the evolving your ball backs and empower RF platforms.
Speaker 4: Thanks, M'Shea, and everyone for joining us. InMode ended the fourth quarter in 2021 with another record performance and the successful launches of the EvolveX and EmpowerRF cloud.
Speaker 4: Sales from Capital Equipment were the main contributor to our quarterly revenues with 98.6 million in Q4 and 319.2 million for all of 2021 with an install base of 11,600 units.
From capital equipment were the main contributor to our quarterly revenues with $98 6 million in Q4, and $319 2 million for all of 2021 with an installed base of 11600 units. Additionally, as most of you mentioned as our installed base grows and our systems are used more frequently the number of deaths.
Speaker 4: Additionally, as Moshe mentioned, as our install base grows and our systems are used more frequently, the number of disposables continues to reach.
<unk> continues to reach.
New records as well the U S remains the leading markets and was the biggest contributor to our top line with the total fourth quarter sales amounting to $74 2 million compared to $53 7 million in the same quarter of 2020, 38% increase despite new COVID-19 variance, causing another surge across North America.
Speaker 4: The US remains the leading market and was the biggest contributor to our top line, with the total fourth quarter sales amounting to $74.2 million, compared to $53.7 million in the same quarter of 2020, a 38% increase. Despite new COVID variants causing another surge across North America, physician offices in the fourth quarter were the busiest they've been in all of 2021. Demand for minimally invasive technologies has been steadily increasing, supporting our growth in the US and the world.
<unk> offices in the first quarter, where the busiest they've been in all of 2021 demand for minimally invasive technologies has been steadily increasing supporting our growth in the U S and globally.
Speaker 4: With the launch of EmpowerRF, we've seen significant interest by physicians in the women's health space. Currently, our focus is on North America. However, we will gradually expand to the rest of the world.
With the launch of empower RF, we've seen significant interest by physicians in the women's health space. Currently our focus is on North America. However, we will gradually expand to the rest of the world.
Speaker 4: We plan to continue hiring new sales staff for the North American market, which will increase top-line growth as proven in previous years. We're very grateful to our team and their continued commitment. We would not be as successful as we are without each and every individual. I will now hand over the call to Yair for review of the financial results in more detail. Yair? Yes, on Vespa. Euphoria Springs.
We plan to continue hiring new sales staff from the North American market, which will increase topline growth as proven in previous years, we're very grateful to our team and their continued commitment we would not be as successful as we are without each and every individual.
I'll hand over the call to your ear for review of the financial results in more detail.
Thanks, again and good day everyone.
Speaker 3: Now I'd like to break down the numbers for the quarter and the year in greater detail.
Now I'd like to break down the numbers for the quarter and the year in greater detail.
Speaker 3: Total revenue in the fourth quarter of 2021 increased 47% year over year to $110.5 million, with a gross margin of 85% on a gap basis.
Total revenue in the fourth quarter of 2021 increased 47% year over year to $110 $5 million.
Gross margin of 85% on a GAAP basis.
For full year, 2020 , one revenue totaled $357 $6 million, an increase of 73% compared to 2020.
Speaker 3: For full year 2021 revenue total $357.6 million, an increase of 73% compared to 2020.
Speaker 3: spells of minimally invasive and subdermal ablative technologies in the fourth quarter of 2021 go 64% year over year
Sales of minimally invasive and sub dermal ablative technologies in the fourth quarter of 2021 grew 64% year over year.
Speaker 3: The geographical revenue mix in Q4 was 67% in the US and 33% internationally, compared to 71% and 29% for the same quarter in 2020.
The geographical revenue mix in Q4 was 67% in the U S and 33% internationally compared to 71% and 29% for the same quarter in 2020, respectively.
Speaker 5: International sales increased year over year by 69%
International sales increased year over year by 69%.
Capital equipment in the fourth quarter it accounted for 89% of our revenue and consumable and service revenues are presented the remaining 11%.
Speaker 5: Capital equipment in the first quarter accounted for 89% of our revenue and consumable and service revenues are presented the remaining 11% identical to the ratio
Denticle two the ratio for the full year.
Speaker 5: Gap operating expenses in the fourth quarter were $39.5 million and $136.5 million for the full year of 2021.
GAAP operating expenses in the first quarter were $39 5 million Donuts, and Honda and $36 $5 million for the full year of 'twenty, 'twenty, one and 35% and 33% increase year over year, respectively.
Speaker 5: 35% and 33% increase your view respect
Speaker 5: phase and marketing expenses increased 40% in Q4 compared to the fourth quarter of 2020 and 38% for the full year 2021 compared to last year.
Sales and marketing expenses increased 40% in Q4 compared to the fourth quarter of 2020, and 38% for the full year 2021 compared to last year.
Speaker 5: This is a result of the improvement in the COVID status in certain countries and regions around the world, especially in the US where we saw an increase in in-person marketing events.
This is a result of the improvement in the Covid status in certain countries and regions around the world, especially in the U S, where we saw an increase in in person marketing events.
Share based compensation decreased to $3 1 million daus in the fourth quarter of 2021 compared to $3 2 million daus in the fourth quarter of 2020.
Speaker 5: Sharebase compensation decreased to $3.1 million in the fourth quarter of 2021 compared to $3.2 million in the fourth quarter of 2020.
Speaker 5: and to $12 million for all of 2021 from $12.8 million in all of 2020
And $212 million for all of 'twenty or 'twenty, one from $12 8 million and do it all in all of 2020.
Speaker 5: On a non-GAAP basis, operating expenses totalled approximately $37.5 million in Q4 of 2021 compared to operating expenses of $26 million in Q20, an increase of 44%.
On a non-GAAP basis operating expenses totaled approximately $37 $5 million in Q4, 2021 compared to operating expenses of 26 million daus in the same quarter of 2020, an increase of 44%.
non-GAAP operating expenses for the full year of 2021, with Honda and $26 4 million compared.
Speaker 5: non-GAAP operating expenses for the full year of 2021 were $126.4 million compared to $90 million in the full year of 2020, a 40% increase in the total operating expenses for the full year.
Compared to $19 million in the full year of 2020, a 40% increase.
GAAP operating margin was 49% in the fourth quarter and 47% for all of 'twenty, 'twenty, one compared to 47% and 35% for the same periods in 2020.
Speaker 5: Gap operating margin was 49% in the fourth quarter and 47% for all of 2021 compared to 47% and 35% for the same periods in 2020.
Speaker 5: Nanogap operating margin was 51% in the fourth quarter and 50% for all of 2021, compared to 51% and 42% for the same periods in 2020.
non-GAAP operating margin was 51% in the fourth quarter and 50% for all of 2021 compared to 51% and 42% for the same periods in 2020.
Speaker 5: Her profitability in the quarter and you in 2021 was remarkable.
Our profitability in the quarter and doing 2021 what does the market bid.
Speaker 5: GAAP diluted earnings per share for Q4 2021 was $0.61 compared to $0.43 per diluted share in the fourth quarter of 2020.
GAAP diluted earnings per share for Q4, 2021 with 61 cents compared to 43 cents per diluted share in the fourth quarter of 2020.
Speaker 5: and $1.92 for the full year of 2021 compared to 89 cents excuse me for the
And $1.92 for the full year of 2021 compared to 89 cents.
Excuse me for the full year of 2020.
Speaker 5: NANGAB diluted earnings per share for Q4 2021 were $0.64 compared to $0.47 per diluted share in Q4 2020.
non-GAAP diluted earnings per share for Q4, 2021, with 64 cents compared to 47 cents per diluted share in the fourth quarter of 2020.
Speaker 5: and $2.05 for the full year of 2021 compared to $1.06 for the full year of 2020. We ended 2021
And $2.05 for the full year 2021 compared to $1.06 for the food you have 2020.
We ended 2021 was a very strong balance sheet.
Speaker 5: As of December 31st, 2021, the company had cash and cash equivalents, marketable securities and deposits of $415.9 million. On the cash flow front, the company generated $52.9 million from operating activities for the fourth quarter and $174.9 million for all of 2021. I will now turn over the recording.
As of December 31st 2021, the company had cash and cash equivalents marketable securities and deposits of $415 $9 million.
On the cash flow front, the company generated $52 $9 million from operating activities for the fourth quarter and $174 9 million daus for all of 2021 .
I will now turn over the call back to Ms. Shang.
Yes.
Speaker 3: Thank you everybody. I believe we now open the Q&A session. Operator,
Thank you everybody I believe we now open the Q&A session operator.
Thank you Leland.
Speaker 1: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the key. To withdraw from the question, Q, please press star then.
I'll begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw from the question queue. Please press Star then two.
Speaker 1: Our first question today comes from Matt Taylor with UBS. Please go ahead.
Our first question today comes from Matt Taylor with UBS. Please go ahead.
Speaker 6: Good morning. Thanks for taking on a question. So I wanted to start off. You mentioned Omicron in the press release and in your comments, and I guess I just wanted to get some thoughts from you about how disruptive that has been in Q1. Has that had any impact on your views for the rest of the year and just any color on recent...
Hi, good morning, Thanks for taking the question so.
So.
I wanted to start off you mentioned Mccann and in the press release and in your comments and I guess I just wanted to get some thoughts from you about how disruptive that has been in Q1.
Has that had any impact on your views for the rest of the year and just any color on recent.
Okay.
Speaker 3: Yeah, this is Moshe Haimat. Well, I cannot answer what would be the effect on the full year.
Yeah, Yeah yeah.
And then this is more say hi, Matt.
Well I cannot answer what would be the effect on the full year.
Speaker 3: But one thing I can tell you that right now there are some countries which are properly closed.
But one thing I can tell you that right now there are some countries, which are totally close and we have some slowdown for example in China.
Speaker 3: and we have some slowdown for example in China.
Speaker 3: I'm sure you know that they have adopted a zero cases program. They don't allow people to travel even within their territory. They don't allow people to travel between cities.
You know that they have adapted zero cases program are they don't allow people to travel even within their territory. They don't allow people to travel between cities. So I will set us people are in China right now are very limited in the way they can they can do business.
Speaker 3: So our salespeople in China right now are very limited in the way they can do business. They try to overcome it.
Are they trying to overcome it and also in Europe DAU countries under Lockdown, like Netherlands, and Austria are where our where hopefully soon they will get out of it.
Speaker 3: Also in Europe there are countries under lockdown like Netherlands and Austria.
Speaker 3: where hopefully soon they will get out of it.
Speaker 3: I believe that sometime in February or maybe early March, business will go back to normal. But we continue, as I said, to evaluate the situation country by country, territory by territory Columbia.
I believe that sometime in February or maybe early March our business will go back to normal.
But we continue as I said to evaluate the situation country by country territory by territory how are you.
Speaker 3: You know, we are lucky that it is not affecting the United States as of now. But you know, with the Omicron and the new variant that just came, we are looking at
No we are lucky that a it is not affecting the United States as of now.
But you know what.
The Army Corps and the new variant that would just came which create another you know feel in some countries are we will do we will see what will happen.
Speaker 3: which create another, you know, fear in some countries, we will see what will happen.
Okay. Thanks, Moshe just to clarify I mean, you guys are now in dozens of countries. You just mentioned a few what what percentage of your revenue base.
Speaker 6: Okay, thanks Moshe. Just to clarify, I mean, you guys are now in dozens of countries, you just mentioned a few. What percentage of your revenue base is in these that are actually having more severe lock?
There are actually having more severe lockdowns.
Speaker 3: Well, China is one of our growth engines. And I believe that in the first quarter we will do less than what we did on the fourth quarter, hopefully not much less. I would say that 10 percent of the countries where we sell will be some effect. Other than that, we need to wait and see what will happen in the next few weeks.
Well, China is a GOR is one of our growth engine.
And I believe that in the first quarter, we will do less than what we did on the fourth quarter hopefully not much less.
I'd say that 10% of the countries, where we sell our will be some effect.
Other than that Oh, we need to wait and see what will happen.
In the next few weeks.
Okay, great. Thanks for that.
Speaker 6: And then I just want to ask one about margins and supply chain. It seems like you've been doing a good job, you know, managing through these challenges, keeping your margins really high here. Is there anything that investors should be concerned about in terms of disruption or increased costs and how conservative are you being on your margin guidance for 2020?
And then I just wanted to ask one about margins in supply chain. It seems like you've been doing a good job managing through these challenges keeping your margins really high here is there anything that investors should be concerned about in terms of disruption or increased cost and how conservative are you being on here.
Margin guidance for 2022.
Speaker 3: Well, we managed very well the situation in 2021 as we go to the supply chain.
Ah well, we managed really well the situation in 2020 , one as we go through the supply chain.
Speaker 3: I'm sure you know that we have established a red team in Israel, but every time we had a problem with component and with sub-assembly, we managed to overcome it because we have more than one supplier per each component and each sub-assembly.
I'm sure you know that are you know some we haven't we have established a red team in Israel, but every time, we had the problem with component and we sub assembly, we managed to overcome it because we have more than one supplier spell out each component in each sub assembly.
Speaker 3: Things are not getting better, that's something that I can tell you right away. The supply chain is not improving. I don't say it's getting worse, but as we see now the beginning of 2022, we still see some difficulties and we foresee that during 2022 it will continue. I can give you an example of logistics. A container from Israel to North America used to cost $3500, now the cost is $12000.
Things are not getting better that's something that I can tell you right away are the supply chain is not improving I don't say it will it's getting worse, but as we see now the beginning of 2022, we still see some difficulties and we foresee that during 2022 it will continue.
Give you an example of logistic a container from Asia to North America used to cost $3500 now the cost is $12000.
Speaker 3: But we managed to overcome it by doing some kind of special shipping in the lower cost.
But we managed to overcome it by doing some kind of a special shipping in a low cost.
Speaker 3: I believe we will overcome the supply chain like we did in 2021, and we deliver everything within a week or 10 days of every order. We do our best, but I know from some of our competitors and some of other companies in the medical field, that they are giving now delivery time to customers of six and nine months.
Well I believe we will overcome the supply chain like we did in 2021 and will deliver everything within a week or 10 days off every older We'll do our best.
But I know from some of our competitors in some of other companies in the medical field that they are giving now you know delivery time to customers for six to nine months we.
Speaker 3: We did not do that. But we are flexible and I would say that hopefully it will not affect us.
We did not do that but yeah.
Well, we're flexible and I would say that hopefully it will not affect us.
Okay, maybe I'll just ask one more I'd like to ask one on the pipeline and more of our clinical and in for Spiro I would just love some thoughts on empower.
Speaker 6: Okay, maybe just ask one more. I'd like to ask one on the pipeline and more of a clinical one maybe for SPHERO. We just left some thoughts on EMPOWER. If you're still feeling like 20 million or 25 million, I think you talked about is a good number for 22, and maybe talk about some of the data that you're generating around it and whether that could develop into, you know, more kind of medical applications from SPARR in the future.
You'll still feeling like $20 million or 25 million I think you've talked about is a good number for 'twenty, two and maybe talk about some of the data that you're generating around it and whether that could develop into more more kind of medical applications for empower in the future.
Okay.
Yeah.
I'll, let moshe handle the first part of that question Chuck.
Speaker 3: Well, if the question is whether or not we will do what we anticipated for 2022, which is worldwide the $20 million, I think yes, I think we will do it. North America and we intend to introduce the platforms in other parts or other territories as well. But I think, Spiro, what Matt asked is about the clinical data. Sure. Thank you.
Well if the question is whether or not we will do what we anticipated for 2022, which is a worldwide the $20 million.
Yes, I think we will do it.
North America, and we intend to introduce the platforms.
Our other powerful I distill, it always as well.
But I think Oh.
What I meant to ask is about the clinical data.
Sure.
Great question.
Speaker 4: We're always very conservative when we're discussing female health and wellness because obviously the standards there as opposed to aesthetics are a little different. However, we did do a soft launch and we're getting feedback continuously across the country for a number of your gynecologists and gynecologists.
We're always very conservative when we're discussing.
Female health and wellness, because obviously the standards there as regard as opposed to a fedex or a little different. However, we did do a soft launch and we're getting feedback continuously across the country for a number of Youre going to college isn't gonna colleges as you know Youre going to college has started the are the group that is probably the most critical in the toughest group to penetrate just as it was in plastic.
Speaker 7: As you know urogynecologists are the group that is probably the most critical and the toughest group to penetrate just as was in plastic surgery. And this is where we started and because we believe we have a product that has a lot of staying power and we wanted them to buy in and adopt and help us and sort of guide us through this process. And I can tell you right now that the results have been very very encouraging.
<unk>.
And this is where we started and because we believe we have a product that has a lot of staying power and we wanted them to buy in and adopt and help us in sort of guide us through this process and I can tell you right now that the results have been very very encouraging there.
Speaker 7: They're extremely excited. We have ways to go, absolutely. But the preliminary data that's coming back is pretty remarkable. Typically, we look at a number of treatments and some of the data that shows that we go one to three treatments typically for what this new device is doing, especially as it regards to intravaginal microneedling.
We're extremely excited.
We used to go absolutely, but the preliminary data that's coming back is pretty remarkable.
Typically we look at a number of treatments and some of the data that shows that.
We go one to three treatments typically for what this new device is doing especially as it regards to vaginal and trabecular micro needling.
Speaker 7: And we wanted to see how far we can push things just with one treatment. And we saw that the results are very, very strong.
And we wanted to see how far we can push things just with one treatment and.
And we saw that the results are very very strong.
Speaker 7: And we're very, very happy to see that our preliminary results are coming back in this fashion. Now —
And we're very very happy to see that our preliminary results are coming back in this fashion now.
Speaker 7: As you know, Matt, this is a marathon, and we're always very conservative on the way we look at our data and the way we present it. But I can tell you right now the excitement is palpable. And I'm very, very happy to say that, and Chuck can probably reiterate the same thing, that feedback and the excitement across the board is something that...
As you know Matt. This is not this is a marathon and we're always very conservative on the way, we look at our data and the way we presented but I can tell you right now the excitement is palpable and I'm very very happy to say that and Chuck can probably reiterate the same thing that feedback and excitement across the board is something that.
Speaker 7: we're very very happy to have and i'll leave it at that for now but because a lot of the things that we're doing in the midst of publication as you know so everything we do is peer reviewed everything we try to put out there is going to be published
We're very very happy to have and I'll leave it at that for now, but because a lot of the things that we're doing in their midst of publication as you know so everything we do is peer reviewed everything we tried to put out there is going to be published and our adoption rate for our Kols is we always take the hard way first as you know and that pays us a dividend so you're gonna colleges are tough.
Speaker 7: and our adoption rate for k well is we always take the hard way first as you know and that pays us in dividends so uh... you're gonna colleges uh... toughest group we have some of the top k l leaders in the country workers continuing to study with them and opening the doors with these with this group and uh... i can tell you right now they're very excited so uh... i can leave
This group, we have some of the top kols leaders in the country and we're just continuing doing studies with him and opening the doors with these with this group.
And I can tell you right now they're very excited so I can leave it at that.
Thank you very much guys.
Right.
Speaker 1: The next question comes from Kyle Rose with Canaccord. Please go ahead.
The next question comes from Kyle Rose with Canaccord. Please go ahead.
Speaker 8: Great, thank you for taking the questions. You know, Moshe, you talked to, and Yair, you talked a lot about, you know, the growth in the consumable side and with the installed base, you have expectations for that to continue to grow. Can you maybe just kind of...
Great. Thank you for taking the questions.
Moshe you talked to any of your you talked a lot about you know them.
The growth in the consumable side and with the installed base you have expectations for that to continue to grow can you maybe just kind of.
Speaker 8: Help us flesh that out a little bit more. I mean, does that mean you expect to see consumables and service revenues go from 11 to 12% next year? Does that mean it could be see it move closer towards 15%? Just trying to really understand what that looks like now that you've got over 11,000 systems placed globally.
Help us flush that out a little bit more to I mean does that mean, you expect to see consumables and service revenues go from 11% to 12% next year does that mean it could we see you know move closer towards 15% just trying to really understand what that looks like now.
Now that you've got over 11000 systems placed globally.
Well I can tell you that hi. This is Michelle I can tell you that in the last quarter, we sold 132000 disposables.
Speaker 3: Well, I can tell you that... Hi, this is Moshe. I can tell you that in the last quarter we sold 132,000 disposals.
Speaker 3: compared to the third quarter where we sold only 94,000 so this is growing.
Compared to the third quarter, where we sold only 94000. So this is growing.
Speaker 3: But as long as we continue to install or to enlarge our install base, and by the way, in the fourth quarter, we sold more than 1,300 systems.
Ah, but there's as long as we continue to install oh to enlarge our install base and by the way in the fourth quarter, we sold more than 1300 system.
Speaker 3: So it went up from 10 to 11 percent.
So it's went up from 10% to 11%.
Speaker 3: With the install base of 11600 system, that's what we have right now on the market.
With the installed base of 11 11600 <unk> system, that's what we have right now on the market.
Speaker 3: we have something like, I would say, close to more than 500,000 disposable every year. And don't forget, not all the systems that we sell need the disposable. I would say that a little bit more than 50 or 55, maybe 60% are using disposable and go all the way to the subdermal fat. As we grow, all of our new...
We we have something like a I would say close to a more than 500000 disposable every year and don't forget not all of the system that we sell needed disposable I would say that a little bit more than 50 or 55, maybe 60% are using disposable and go all the way to the <unk>.
Abdominal fat as we grow all of our new platforms are designed to have disposable we will not design additional platforms without any disposables. So in the future. Once the installed base will get I would say to 20000 or 25000 I assume that the.
Speaker 3: are designed to have disposable we will not design additional platforms without any disposable
Speaker 3: So in the future, once the install base will get, I would say, to 20,000 or 25,000, I assume that the disposable will grow to a neighborhood of, I would say, 14, 50% of the total revenue.
Rosebel will grow to a neighborhood of I would say, 40%, 50% of the total revenue, but again I would like to say it again, we're not always though anyways. The ablate company, we do not sell the system for less although we do not give the system for free just to charge a high price for disposable.
Speaker 3: But again, I would like to say it again, we are not a razor and razor blade company.
Speaker 3: We do not sell the system for less or we do not give the system for free just to charge high price for disposable.
Speaker 3: We know that some companies in the medical aesthetic did it in the past and they failed. And therefore we charge for the system and we price the disposable in a reasonable price in order to encourage doctors to use more and more and to have more treatment. I think this is the right approach and the right philosophy and this is basically our strategy.
Know that some companies in the medical aesthetic did in there in the past and they failed and therefore, we charge for the system and we priced the disposable in the reasonable price in order to encourage doctors to use more and more and to have more treatment. I think this is the right approach and the right philosophy and this is <unk>.
Basically our strategy.
Great I appreciate the color there and.
Speaker 8: Great, I appreciate the color there. And I think we've already gotten some good insights on Empower. Maybe I wondered if we could get some commentary on just the launch of EvolveRx and just what you're seeing there, whether it's upgrades from existing customers or continued penetration from new customers there. Maybe just commentary on that launch would be helpful.
Yes, I think we've already gotten some good insights unempowered, maybe I wondered if you could get some commentary on just the launch of evolve Rx.
What youre seeing there whether it's you know.
Upgrades from existing customers or continued penetration from from new.
Or is there maybe just commentary on that launch would be helpful.
Chuck here can you answer that yes.
Speaker 4: Yeah, sure, absolutely. So we've actually seen some, you know, a combination of RF.
Yes sure absolutely.
So we've actually seen some cough.
A combination of RF and you know in EMS type of device, we're basically seeing them a very it's not I know you had mentioned that if it was existing customers or not you know there are some that are where we're going to be doing some upgrades for some of our existing customers. So they have the latest and greatest technology, but in.
Speaker 4: and EMS type of device, we're basically seeing a very
Speaker 4: It's not, I know you had mentioned that if it was existing customers or not. You know, there are some that are, we're going to be doing some upgrades for some of our existing customers so they have the latest and greatest technology. But in terms of the newer business with the market, we have an extremely aggressive plan put in place.
Some of the newer business with the market, we have an extremely aggressive plan put in place.
Speaker 4: As you know, as Spiro even just mentioned, with Empower and also with Evolve, we always kind of slow both things to make sure that things are ready to...
For you know as you know a squirrel, even just mentioned with with empower and also with the ball. We we always kind of slow both things to make sure that things are ready ready to.
To excel from an efficacy standpoint safety standpoint, and also from a result standpoint, so now that we're very comfortable with that.
Speaker 4: Excel from an efficacy standpoint, a safety standpoint, and also from a results standpoint. So now that we're very comfortable with that, although we use the word launches for both Empower and for EvolveX, now we're going into the hard launch phase, which we feel pretty optimistic about, both from the business perspective for.
Although we use the word launches for both empower and for all banks now we're going into the hard launch phase, which are which we feel pretty optimistic about both from a business perspective for our customers and also from from our standpoint as well. So we do see we'd see some some excitement there.
Speaker 4: our customers and also from our standpoint as well. So we do see, we've seen some excitement. The results so far have been, you know, Spero can elaborate a little more, but the results so far have been very impressive. Safety has been very impressive. So overall, we're feeling pretty good.
<unk> so far have been Spiro can you elaborate a little more but the results so far have been very impressive.
Safety has been very impressive so overall, we're feeling pretty good about it.
Yeah.
Speaker 7: Scott, did you want to talk a little bit about what you're trying to do? Yeah, I mean, sure. Look, when you look at incontinence in these things and you look at the standard that's been up to now, sort of if you could get a 50% improvement at three months, I think that that benchmark is quite low and that's just a function of what the technology is out there currently. 50% improvement being like, you know, a woman that loses urine and does these things, that's what she can expect.
Greg did you want to talk a little bit yeah, I mean sure look.
When you look at our incontinence in these things and you look at the standard that's been up to now sort of if you could get a 50% improvement.
At three months.
That that benchmark is quite low and that's just a function of what's the technologies out there currently.
50% improvement being like you know a woman that loses urine and do these things that's what you can expect.
Speaker 7: And I think that if we took that as a goal and we went after that as a goal to hit that sort of 50% benchmark at three months, I don't think we would be in business.
And I think that if we took that as a goal and then we went after that is the goal to hit that sort of 50% benchmark three months I don't think we wouldn't be in business.
Speaker 7: you know we're taking everything that we do from the aesthetics and Mishka will also say the following that we will not go to market unless we have something that could produce a 85-90% clinical result because simply put people will not pay cash for it and we're in the cash business.
We're taking everything that we do from the aesthetics and Michigan will also see the following that we will not go to market unless we have something that could produce and 80, 590% clinical result, because simply put the people will not pay cash for it and we were the cash business. So we're taking all of that model, we're taking all of that sort of thought process and we're applying it to.
Speaker 7: So we're taking all that model, we're taking all that sort of thought process and we're applying it to the female health and wellness sector. So we need to, and I can tell you right now our preliminary results are blowing past that number. So past the 50% of three months which is currently out there. So we're very, very encouraged in that respect. But that is our standard. We need to be able to say if someone's coming in for a clinical treatment that is not currently covered by insurance and is paying...
To the female health and wellness sector. So we need to and I can tell you right. Now are preliminary results are blowing passed that number so past the 50% of the three months, which is currently out there. So we're very very encouraged.
Respect, but that is our standard we need to be able to say if someone's coming in for a clinical treatment that is not currently covered by insurance and it's paying cash for it that patient needs to be able to say, okay, I havent, 80% to 90% improvement in I can tell you right now that's the area. We're looking at and that's what we're getting right now is a feedback from our doctors anywhere.
Speaker 7: That patient needs to be able to say, okay, I have an 80 to 90% improvement. And I can tell you right now, that's the area we're looking at and that's what we're getting right now is feedback from our doctors and we're looking at the data and we're very excited that we're actually blowing past that benchmark.
Looking at the data.
We're very excited that we're actually blowing past that benchmark.
Speaker 7: I'm very cautious always because these things are numbers, but so far that's the range that we're getting. It's really high, it's comparable to what we get in aesthetics. And I'm excited to keep on moving this direction. So we thank Moshe for the support he's giving us. But that is our benchmark. And we want to redefine the way things are being addressed in the space in female health and wellness. And we're well off on the road to do that.
I'm very cautious as always because these things are numbers, but so far that's the range that we're getting are really high as comparable to what we get into statics and.
I'm excited to keep on moving this direction, so take Moshe for the support you're giving us but that is our benchmark and we want to redefine the way things are being addressed in this space and female health and wellness and I think we're well off on the road to do that.
Can you talk a little bit of mix.
Speaker 7: Sure. So, I mean, it's important to understand that
Oh sure so I mean, it's.
To understand that.
Speaker 7: when it comes to radio frequency and heating and muscle and all that sort of thing, we were the first to actually look at that space and I can tell you this much, you know, Shaq and I were talking about this and he was like, well, you know, how about we were preheating the muscle just as you work out.
When it comes to.
Radio frequency and heating and muscle and all that sort of thing we were the first to actually look at that space and I can tell you. This much shock and I were talking about this and he was like well you know how about we were preheating. The muscle just as you work out in and Theres, a whole history of heating the muscle and rehabilitation for athletes engine athletes. So.
Speaker 7: And there's a whole history of heating the muscle and rehabilitation for athletes, injured athletes. So the ability to be able to preheat the muscle and then activate it with EMS is something that we started doing early on. And we did that because it's a function of our different hand pieces, right? We have.
The ability to be able to preheat the muscle and then activated with CMS is something that we started doing early on and we did that because it's a function of a different hand pieces right. We have a R. S hand piece that we have E. M. S. N piece, so so taking that ability and bringing it over achieve all that and saying okay. Now we have a hand piece that can do both at the same time is great.
Speaker 7: RF handpiece, so we have EMS handpiece. So taking that ability and bringing it over to evolveX.
Speaker 7: and say okay now we have a hand piece that can do both at the same time is great but you could also uncouple it what does that mean well not everybody's different everyone's requirement is different so having the ability
But you could also uncoupled it what does that mean well not every every bodies different everyone's requirement is different so having the ability to change things around to be able to come in and say well what do you want do you want it you don't want your muscles bigger or you want to <expletive> on because there are people, who say, okay. I don't need a thought all this fat or I don't want to lose volume in my blood.
Speaker 7: to change things around, to be able to come and say, well, what do you want? Do you want to, you know, want your muscles bigger or you want the fat gone? Because there are people who say, okay, I don't need a fat, all this fat, or I don't want to have lose volume in my butt, for example. So all these things.
For example, so all these things the more.
Speaker 7: The more any device or any platform that respects the individuality and the change in the body habitus of every patient and you're able to change things around like that is great, right? Because everyone is sort of unique.
Device or any platform that respects, the individuality and the change in our body habitus of every patient and you were able to change things around like that is great right. Because everyone is sort of unique transform and evolve X does that so I could I could do RF with E. M. S. Preheat, the muscle and then activate it could do M. S N itself.
Speaker 7: Transform and EvolveX does that. So I could do RF with EMS, preheat the muscle, and then activate it. I could do EMS on itself. I could do RF on itself.
I can do us in itself. So that is sort of the way we look at things in plastic surgery. When we do minimally invasive invasive surgery, and we brought that over to noninvasive and that ability to change things around to a couple uncouple is sort of something that mischka was greater delivery and we find a big residents in our customer base to be able.
Speaker 7: So that is sort of the way we look at things in plastic surgery, when we do minimally invasive and invasive surgery, and we brought that over to non-invasive.
Speaker 7: And that ability to change things around, to couple, uncouple, is sort of something that Mishka was great at delivering and we find a big resonance in our customer base.
Speaker 7: uh... to be able to do that as well could have mimicking you realize in the way clinical results are being addressed
To do that as well because it's mimicking real life in the way of clinical results are being addressed.
Thank you very much for taking the questions not at all.
Speaker 1: Next question comes from Michael Matheson with Needham and Company. Please go ahead.
Next question comes from Michael Matson with Needham and company. Please go ahead.
Speaker 8: Yeah, thanks. You know, I wanted to ask about the EPS guidance. You know, by my math, it seems to, I understand there's a tax rate headwind, but it does seem to apply that there's an operating margin decline in 2021. I'm sorry, I'm from 2021, if my math is correct. So, is there any reason to expect that or just being conservative on your part?
Yeah. Thanks, you know what.
To ask about the EPS guidance.
By my math, it seems to I understand there's a tax rate headwind, but it does seem to imply that there's a operating margin decline in 2020 one.
Sorry from 2021, if my math is correct.
So is there any reason to expect that are just being conservative on your part.
So.
Speaker 5: We always try to be conservative, as you know. In addition, we do plan to invest more in sales and marketing and some more marketing activities, as well as clinical studies.
We are always trying to be conservative as you know in addition, we do plan to invest more in.
It says in marketing and some more marketing activities as well as the clinical studies.
Speaker 5: So this year we expect to have a slightly higher operating expenses.
So this year, we expect to have.
Any signs of any higher and.
Operating expenses, but.
Speaker 5: But overall, we're looking at 48% operating margin. It's still quite remarkable. And adding to that, around 2022 going to be the first year, as you know, that we start paying taxes after 10 year break.
But overall, we're looking at a 48, 2% operating margin is still quite remarkable and adding to that around a 2022 going to be the first year. As you know that we start paying taxes. After 10 you break.
Speaker 5: and that would come out to be around 10% we estimated at this point at least. And as I mentioned we always tend to be conservative when we can.
And that should come out to be at around 10%. We we estimated at this point at least.
As I mentioned, we always tend to be.
A conservative win when we can.
Speaker 8: Okay, got it. And then your cash balance continues to grow here. The stock has pulled back quite a bit, arguably overvalued. Sorry, undervalued maybe when you look at it on a PE basis. So would you be open to doing a share repurchase?
Okay got it.
And then your cash balance continues to grow here you know the stock has pulled back quite a bit.
Arguably overvalued, sorry under Italian maybe when you look at it on a P basis. So would you be open to doing a share repurchase.
Speaker 3: Well, Mike, we did. So far we did close to one and a half million shares that we bought back in the last, I would say, less than a year. We still have a way to go. The board of the rector gave us the permission to continue to buy back shares and we will continue. I'm not saying that we will spend 200 million dollars for that but we'll do it on a daily basis.
Well, Mike we do so far we did close to one and a half million shares that we bought and we bought back in the last I would say less than a year.
Are we still have a way to go.
The board of directors gave us permission to continue to.
To buy back shares and we will continue.
I'm, not saying that we will spend $200 million for that but we'll do it we'll do it on a on a daily basis.
Speaker 3: Yes, you're right, we have more than $400 million in cash, close to $420 million in cash. We are exploring some opportunities for M&A, but we did not find anything that will fit our portfolio yet.
Yes, you're right, we have more than $400 million in cash close to $420 million in cash.
Hum.
We are exploring some opportunities for M&A.
But we didn't we did not find anything that will feed our portfolio yet one thing I can tell you as we said before we will not buy a laser company because laser was becoming a commodity in the medical aesthetic we need to find something that will complement our portfolio either in technology marketing on now.
Speaker 3: One thing I can tell you, as we said before, we will not buy a laser company because laser is becoming a commodity in the medical aesthetic.
Speaker 3: we need to find something that will complement our portfolio, either in technology, marketing, sales networks, something that will 2 plus 2 will equal 5.
This network something that will two plus two will equal five.
Speaker 3: But nowadays it's very difficult to find something with a reasonable price.
But in nowadays is very difficult to find something when would a reasonable price.
Speaker 3: But we have a very robust R&D pipeline, close to 15 projects, and we are releasing two projects every year. So the organic growth will continue to be the most, I would say, growth engine for e-mode at least in the next two years.
But we had we have a very robust R&D pipeline close to 15 project and we're releasing two project every year. So that organic growth will continue to be the most I would say growth N. Gen. Four involved in that at least in the next two years.
Speaker 8: Okay, got it. And then just looking at the different product categories, you know, the hands free
Okay got it and then just looking at the different product categories. You know the hands free it looks like it's been down year over year for two quarters in a row I mean, I would assume that's mainly just due to the comps from from Covid.
Speaker 8: looks like it's been down year over year for two quarters in a row. I mean, I would assume that's mainly just due to the comps from COVID, where that was kind of benefiting back in 2020. And conversely, non-invasive has been strengthening recently. Maybe that's a similar issue in kind of opposite directions, just easier comps. But I was just curious if there's anything else going on there, aside from the comps in those two categories.
Covid, where that was kind of benefiting back in 2020.
Conversely, noninvasive been strengthening recently, maybe that's a similar issue in kind of opposite direction, just easier comps, but I was just curious if there's anything else going on there aside from the comps in those two categories.
Speaker 3: Well, the hands-free, when we came up with the hands-free to the market, we knew that this is not going to be more than 20% of our business. Our main category is Minimal Invasive and Ablate.
Well the hands free.
When we when we came up with the hands free to the market. We knew that this is not going to be more than 20% of our business.
Our main category is minimally invasive and ablative well, we can take operations from the surgical.
Speaker 3: where we can take operations from the surgical, from the full surgery and the full anesthesia and bring it to the doctor office. This is exactly what empowers.
From the full shell jewelry, and a full anesthesia and bring it to the Doctor office. This is exactly what they empower is doing and empower is a minimally invasive because your basic penetrate the skin and you do some fractional RF as well and.
Speaker 3: And then power is minimally invasive because you basically penetrate the skin and you do some fractional arrest as well. And we will continue to develop product that will have on one hand will be more surgical than non-surgical and on the other hand will have some disposable as well. So the Handfree is a complementary technology for us. It is not going to be 50% of our business.
We will continue to develop product that will have on one hand will be more surgical and nonsurgical and on the other end, we'll have some some disposable as well so the hands free is a complementary technology for us it.
It is not going to be 50% of the fall business.
Speaker 3: The non-invasive RF and the laser...
That that non invasive noninvasive RF and the laser.
Speaker 3: which I call it as a commodity category. We have a lot of competition for many companies. This is not the main category for us, and it is good because it's a very competitive market with very low gross margin.
Which I call it as a commodity category, we have a lot of competition for many companies. This is not the main category for us and it is good because.
It's a very competitive market with a very low gross margin are with overcapacity.
Speaker 3: with over capacity, with price per unit, which is much lower than what we can charge.
With the.
Price per unit.
Which is a much lower than what we can charge without any IP protection.
Speaker 3: without any IP protection. Laser are invented 40 something years ago. There was no IP protection anymore. And therefore we try to concentrate on where we have competitive advantage.
Laser are invented 40 something years ago, there was no IP protection anymore, and therefore, we try to concentrate on where we have competitive advantage and this is and this is basically a the surgical part of our business.
Speaker 3: And this is basically the surgical part of our business.
Speaker 3: And I believe that we're very happy with the breakdown on the category where more than 70% are in the area where we can protect the technology and get nice prices for the system. 20% will be the hand free and I hope it will continue. We're going to bring to the market the second generation of the hand free devices.
And and I believe that that what we're very happy with that with the breakdown of the category well seven more than 70% are in the areas, where we can protect the technology and and and get a nice prices for the system, 20% will be the hands free.
And I hope it will continue we're going to bring to the market second generation of the hand free devices and the laser and the regular the regular I'll ask their noninvasive ours will continue to be between 8% to 10% of our business that's kind of break it down it will be continue in the future.
Speaker 3: And the laser and the regular RF, the non-invasive RF, will continue to be between 8% to 10% of our business. That kind of breakdown will be continuing in the future.
Okay got it thank you.
Yeah.
Yeah.
Speaker 1: The next question comes from Jeff Johnson with Baird. Please go ahead.
The next question comes from Jeff Johnson with Baird. Please go ahead.
Speaker 9: Thank you, good morning guys. Maybe just a couple clarifying or follow-up questions on things that have been discussed so far. So Moshe, just your comments there on the hands-free, I mean, and trying to put that together with, I think it was Shaq's comments on EvolveX. You know, has EvolveX hopefully ramped some this year? Does hands-free continue to decline year-over-year for the next couple quarters until we kind of anniversary through those four really, really tough comps? Or just how to think about the year-over-year performance of hands-free just in the next couple few quarters?
Thank you. Good morning, guys. So maybe just a couple of clarifying or follow up questions on things that have been discussed so far so moshe just your comments there on the hands free I mean, and trying to put that together with I think it was Jack's comments and evolve that.
You know has evolved back hopefully ramp some this year does hands free continued to decline year over year for the next couple of quarters until we kind of anniversary through those four really really tough comps or just how to think about the year over year performance of hands free just in the next couple of few quarters.
Speaker 3: No, we did not say that this will go down. The only thing I said, it will remain something like between 18 to 20 percent of our total business. But as the business will grow, the hand free will also will grow. I mean, the Transform and Evolve X is the second generation of the Evolve. And hopefully in 2022, we will bring second generation for the Evoque, for the face hand free as well, just to maintain the competitive advantage.
No we did not say that it will go down the only thing. They said, it's really remained something like between 18% to 20% of our total business, but as the business will grow the hands free will also would grow I mean, thats one the transform and evolve X is the second generation of the volt and hopefully in 2022, we will bring.
Second generation for the vote for the face hand free as well just to maintain the competitive advantage.
Speaker 3: I mean, the fact that we came up with EMS and RF combined in the same modality give us a major competitive advantage vis-a-vis all the other companies that in the hand-free currently. So I don't think the hand-free will go down. It will continue to be a complementary technology for the doctors.
The fact that we came up with E. M. S. N RF combined in the same modality gave us a major competitive advantage vis vis all of the other companies that in the hands free.
Currently so I don't think the handful will go down it will continue to be a complementary technology for the doctors, but to tell you that that will be more than 20% of our total business.
Speaker 3: but to tell you that that will be more than 20% of our total business.
Speaker 3: I would say I don't think it will be. It will maintain the same level and the same, I would say, percentage as part of the total portfolio.
I I would say I don't think it will be it will maintain the same level and the same I would say percentage as part of the total portfolio.
Speaker 9: Okay, that's helpful. Thank you. And just going back on empower, you know, look, I understand you guys are a cash paid business, it's a fantastic place to be from a consumer facing standpoint, things like that. But it but it's some of those urinary incontinence and urinary loss, or urine loss.
Okay. That's helpful. Thank you and just pulling back on empower.
Look I understand you guys are a cash pay business, it's a fantastic place to be from a consumer facing standpoint things like that but he but if some of those urinary incontinence and urinary loss or you're in loss numbers are as good as they are and even if the path might be extended a couple a few years it would take to get actual reimbursement would there ever be a reason.
Speaker 9: numbers are as good as they are and even if the path might be extended you know a couple few years it would take to get actual reimbursement would there ever be a reason to go down the path of trying to get a reimbursement code it would seem like it would open the market up so much more and if the effect is so strong it would seem like it would be good for the patient as well so just how to think about reimbursement you know commercial pay government pay versus cash pay for something like an empowered procedure on UI.
Go down the path of trying to get a reimbursement code. It would seem like it would open the market up so much more and if the effect is so strong it would seem like it would be good for the patient as well. So just how to think about reimbursement commercial pay government pay versus cash pay for something like an empower procedure on UI.
Let me try to answer and I will hand, it out to Spiro, maybe it will elaborate more we're not against reimbursement, we never said that.
Speaker 3: Let me try to answer, then I will hand it out to Spiro, or maybe he will elaborate more. We are not against reimbursement.
Speaker 3: I mean in the future we will continue to develop some indications for women health which might need reimbursement.
I mean in the future we will continue to develop some indication for women health, which which might needing bell reimbursement as of today the empower with the four modalities.
Speaker 3: As of today, the Empower with the four modalities, the Formavi, the Morpheus 8V, the Veton and the Aviva, we feel like private money is the best, I would say, business model for this platform.
The former V. The Morpheus ATV the V zone, and Veeva, we feel like private money. It's the best I would say business model for these platforms to.
Speaker 3: To tell you that in the future we will not go into reimbursement indication, we might go and we are developing some indication like that today.
To tell you that in the future we will not go into reimbursement indication, we might go and we're developing some indication like that today.
Hi, Moshe that's a great question by the way so.
Speaker 7: A lot of companies will spend a lot of time going down the reimbursement pathway and not having any revenue at all and at one point hoping that at some point after they burn through all that cash that at some point they're able to go down that route.
A lot of companies will spend a lot of time going down the reimbursement pathway and not having any revenue at all in one point, hoping at some point after the burn through all that cash that at some point, you're able to go down that route and and you know weather and getting breakthrough designation as we all know it's very hard to do but I can tell you. This much that absolutely we are.
Speaker 7: and getting breakthrough designation, as we all know, is very hard to do. But I can tell you this much, that absolutely, we want to change the way women's health is being done, and we're in the unique position to have cash-based procedures that do support our research, do support indications, do support FDA, all those things, that we can do this in parallel. And that's a unique position to be in. All this data that we're collecting.
Want to change the way women's health has been done and we have we're in a unique position to have to be at two to have cash based procedures that do support our research to support indications to support 58, all of those things that we can do this in parallel and that's a unique position to be in all.
All this data that we're collecting everything that we're looking at the types of Kols, who are bringing aboard the type of academic establishment said, we're engaging its all in building the foundation for the future. So yes, we're not opposed on the contrary you wanted to be able to open the market, but we're in a unique position to be able to do these things with a cash based.
Speaker 7: everything they were looking at, the type of KOLs we're bringing aboard, the type of academic establishments that we're engaging, it's all in building the foundation for them in the future. So, yes, we're not opposed. On the contrary, we wanted to be able to open the market, but we're in the unique position to be able to do these things with a cash-based foundation, which is quite different than most companies out there. It's sort of a pass or fail as far as when they're doing this.
A foundation, which is quite different than most companies out there sort of pass or fail and then as far as when they're doing these sort of things does that answer your question.
Speaker 9: It does, thank you, that's helpful. And the last one I promised, just you know on the competition side, Mose, I mean I totally agree with you, you know, docs do not like paying click fees or per use fees. I think the model as much as investors want to see more recurring revenue, I totally get the model of charging a full, you know, market price for the system itself and lower price for the consumables. That's surely what those doctors appreciate. But on the competitive side, you know, there is some noise out there from a company that has some good skin tightening data, but they are charging a very high consumable price as well. So one, you know, just kind of help us understand the competition in MI.
It does thank you that's helpful. And then last one I promise just on the competition side, let's say I mean I totally agree with you you know docs do not like paint click fees or per use fees I think the model as much as investors want to see more recurring revenue I totally get the model of charging a poll.
Price for the system itself and and lower price, but the consumables that's surely what those doctors appreciate but on the competitive side. You know there is some noise out there from a company that has good skin tightening data, but they are charging a very high consumable prices as well so one get all or just kind of help us understand the competition in M. I.
Speaker 9: skin tightening right now with this newer competitor that has good skin tightening data like but the consumables are high.
Skin tightening right now you know with this newer competitor that has good skin tightening data, but the consumables are high.
Well I I assume you'll talk about too much.
Speaker 3: Well, I assume you talk about too much.
Speaker 3: which is with Solta, which they just announced that they're going public, and they released their prospectus. And in their prospectus, yes, they have three quarters, something like, I don't know, 75% disposable and 25% platforms. But don't forget, Tumaj is a 25 years old company. They are on the market for a long time. We are on the market.
Which is with Salta would they just announced that they're going to public.
And they released their their prospectus and then they'll prospectus yes.
They have a three quarter was something like I don't know, 75% disposable and 25% platforms, but don't forget too much is it 25 years old company.
Now in the market for a long time, we are on the market only five or six years, 20% of the time off that after 25 years. The DAU. So they have a bigger installed base and they said less platforms and they sell more consumable I think that one day, we will sell more consumable and it will be.
Speaker 3: 20% of the time of the 25 years that they are. So they have a bigger install base and they sell less platforms and they sell more consumables.
Speaker 3: I think that one day we will sell more consumables and it will be much higher than 10%.
Higher than 10%, but it takes time to build the installed base worldwide. Once the installed base will be much larger than what we have today and as you can tell much has much more than 10000 systems worldwide installed, especially in Asia, especially in Asia, where they have very strong 70% of the business is in Asia.
Speaker 3: but it takes time to build the install base worldwide. Once the install base will be much larger than what we have today, and I assume Teramage has much more than 10,000 systems worldwide installed, especially in Asia, especially in Asia where they are very strong, 70% of the business is in Asia. I believe that we will also see some, that our disposable proportion of the total revenue will be higher.
I believe that we will also.
See some of that Oh disposable.
A proportion of the total revenue will be higher but right now we're still a young company and as a young company with only 11000 system installed.
Speaker 3: But right now we're still a young company. And as a young company with only 11,000 system installed, I mean, the revenue coming from the disposable is growing and it's growing. It's went from 10 to 11 percent. But don't expect that to go to 20 percent over three quarters.
The revenue was coming from the disposable is growing and it's growing it's went from 10% to 11%, but don't expect that to grow to 20% over three quarters.
Speaker 3: It will go slowly, but it will go nicely. We see more and more treatment are being done. We see more and more disposable are being bought from us. But in the same time, we see a lot of new platforms that we install in the market, and the new doctors need some time before they start doing 10 cases per week.
It will go slowly, but it will go nicely, we see more and more treatments are being done we see more and more disposable are being both from us but at the same time, we see a lot of new platforms that we install in the market and the new doctors need some time before they start doing 10 10 10.
10 cases per week. So this is a learning curve with all.
Speaker 3: So this is the learning curve, we're all right on the learning curve and one day we will be not, I don't want to say like salt and like too much, but the disposal will be a bigger part of our learning.
All right on the learning curve and one day, we will be not I don't want to say like solta and like so much but the disposal will be will be a bigger part of our revenue.
Speaker 9: Thanks, and maybe we can take it offline in the follow-up call. Moshe, I was actually referring to a different company, the Renubian Helium procedure, but again, maybe in the interest of time we can just talk offline. Thank you. We're happy to send you an article where we did a comparison study with them. So it just got published last week. Yeah, yeah, of course. So we'll send it, we'll tossed, we'll do the same research, we'll run an update and then close it, if that's okay.
Thanks, and maybe we can take it offline and the follow up call, mostly I was actually referring to a different company a renewed and helium procedure, but again, maybe in the interest of time. We can just talk offline. Thank you were we're happy to send you an article where we did a comparison study with them. So that just got published last week, Yeah, Yeah of course.
Of course.
Oh, he's talking about J plasma I understand okay.
Speaker 1: This concludes our question and answer session. I would now like to turn the conference back over to Mosey Mazare for any closing remarks.
This concludes our question and answer session I would now like to turn the conference back over to MS. Amazon Ray for any closing remarks.
Speaker 3: Thank you operator, thank you. Thank you all for joining our fourth quarter 2021 and a full year 2021 earning call. I want to take the opportunity to thank all of our people around the world in all of the 72 countries, 71 countries that we operate in. I want to thank the salespeople, I want to thank the engineering team for working very hard.
Thank you operator, thank you thank.
Thank you all for joining our fourth quarter 2021, and the full year 2021 earning call I want to take the opportunity to thanks, all of all our people around the world in all of the 72 countries 71 countries that we operate in I want to thank the sense people I want to take the engineering.
Team for walking very hard, especially tanks for the logistic and manufacturing and the supply chain people that manage the supply everything on time and a tough year like 2021, and I'm sure that they will continue to do that thanks.
Speaker 3: Special thanks for the logistics and manufacturing and the supply chain people that managed to supply everything on time in a tough year like 2021 and I'm sure that they will continue to do that. Thank you all and see you soon in the next Learning Call.
Thank you all and see you soon in the next earning call.
Speaker 1: This conference is not concluded. Thank you for attending today's presentation. You may now just...
This conference has now concluded. Thank you for attending today's presentation you may now.
Yeah.
Yeah.