Q2 2023 InMode Ltd Earnings Call
The option.
Sure.
Good morning, and welcome to the in the second.
Second quarter 2023 earnings results conference call.
All participants will be listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zebra.
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M S. I R. Please go ahead.
Thank you operator and to everyone for joining us today welcome to in N out second quarter 2023 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 outlined.
In today's 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 web site.
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 are historical results are not necessarily indicative of future performance.
Such we can give no assurance as to the accuracy of our 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 too Mushy, Mizrahi, Chairman and C. O Mashai. Please go ahead.
Thank you Mary and to everyone for joining us where with me today, a doctor Microcline, then Oh cofounder and Chief Technology Officer, Yeah, you and Monica Oh shoot financial office shell shocked he like Connie how pleasure than in North America Dr. <unk>.
Oh, Chief Medical Officer, and what finally come on O V feel finance following the prepared that we <unk>, we will be available to answer your question.
We're happy to report at Waco quarter on all fronts, we announced record revenue $136.1 million an increase of 20%.
The second quarter of 2022.
This form all platforms reach over 1600 unit and the numbers of disposable so the thoughts held over 270000, they're mostly in our company history is part of our ongoing global expansion during the second quarter, we established two new.
She's the only one in Japan, and one in Germany, establishing subsidiaries in countries, where we believe we should be sending directly and not true distribute there he's our philosophy and strategy.
Currently enrolled is one of the only the only companies in the space.
Where it found there are still actively involved in the management and the ownership and I believe that our strong involvement and commitment he's part of involved the D N a.
He loved innovation support al Groh and lead to associate the brand recognition within highly competitive aesthetic industry to federal secure our competitive advantage in the next 12 months, we intend to invest heavily on further development and two lounge.
And your minimally invasive technology and platform.
But I did morpheus a technology with new features.
And new hands free family of platforms Full-faced and body.
And your multi application applicator platforms with new technologies. In addition, we plan to secure additional indication Cleveland by Dam D. A doubt currently eight M. B a studies in process within the next 12 months in the portfolio.
Of platforms to any indication will be completely new and upgraded.
And we will continue aggressively enhance and protect our I P and patent lastly, well happy to report that just last month. It must become part of the last year 2000 Index D. C Index is most widely quoted measure of the overall performance of.
More camp and mid cap stocks now I would like to tell them to call to Shaquille O President any North America Shaquille.
Thanks, Mike Shea and everyone for joining us we're happy to report a record second quarter, while also seeing significant broken consumable sales.
Revenue from consumables in service reach nearly 44% year over year growth.
This is a strong indication that are black ones are being used more frequently signifying continued demand and increase brand recognition.
And vision are non-surgical Bowman platform is getting significant traction in North America.
We plan to continue hiring product specific sales reps to expand penetration into the ophthalmology market.
Morpheus eight continues to be our leading technology overall, the branding patient demand an excellent results puts this product in a class of its own lastly, I'd like to thank her entire north American T for their continued hard work.
Now hand over the call to your review of a financial results in more detail.
Thanks, again and Hello, everyone.
Against joining us.
Email generated a wreck with revenue of $136.1 million in the second quarter of 2023, representing a 20 per cent yoga you increase the gross margin of 84 per cent on it got basically.
They can quarter-phase outside of the U S accounted for 49.5 medium thought out <unk>.
Compared to $41.2 million and Q2 lost Ya.
We continued to Hugo was coming from different regions around the world and in Q2 days from Asia eat in your record.
Just the both of them Croatians and growth emailed now operates in a total of 92 countries with the same theme of more than 260 food there <unk> says right and 81 distributors worldwide.
Capital equipment in the second quarter represented 84% of revenue welcomes human beings and service revenues accounted for the remaining 60.
10%.
As in Monkey didn't expenses increased to $51.1 million in the second quarter compared to $39.7 million in the same period last year.
This increase is attributed to the addition of new says representatives.
What is your investment in direct to consumer advertising campaigns, and I was thinking person events.
Company <unk>.
Sure I bet compensation accounted for $6.5 million in the second quarter of 2023.
A slight increase compared to six point, forming in Philadelphia in the second quarter of 2022.
Yeah upgrading expenses in the second quarter of 157 medium dog.
26 per cent increase you won't go to Ya.
Under non-GAAP bases operating expenses 151.1 million in Philadelphia in the second quarter.
Good to talk to an extent the $9.5 million in the same quarter of 2022.
Presenting a 29% increase.
Yep operating margin for the second quarter of 2023.
He was 42 per cent compared to an upgrade to the magenta 43 per cent in the second quarter of 2022.
<unk> operating margin for the second quarter of 2023 47 per cent compared to 49% for the second quarter of 2022.
Yeah, but they looked at the earnings per share for the second quarter, whereas 65 cents compared to 52 cents, but they get to true in Q2 of 2022.
None got but they do to the earnings per share for the school to record 72 cents compared to 59 cents, but that needs a chair in the second quarter of 2022.
Once again, we ended the quarter with a strong balance sheet.
June 30th 2023, the company had the cash in case, you can refinance mortgage securities and the policy of 629 point form you can fill it out.
Before he turned to call back to make sure to take your questions I'd like to eat the rate of increase the guidance.
Two three.
Revenue between $530 million and $540 million.
Gross margin between 83 per cent and 95 per cent.
None got the income cooperation between $258 million and 243 magenta now.
<unk> between $2.62 and $2.66.
We now turn over the call back to make sure.
Thank you. Thank you Yeah, you think you should kill and thanks to all the following employee around the world I'm sure that most of them and some of them are listening to us today, it's important operator, well ready for Q&A session.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad, if you're using a speaker phone. Please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then too.
At this time, we will pause momentarily to assemble our roster.
The first question is from Matt Taylor with Jeffries.
Please go ahead.
Good morning. This is Mike Sarcone on for Matt. Thanks for taking my questions and and congrats on a nice Florida.
I just first wanted to start with you know you continue to have very strong growth and consumables.
Talk about you know how you view the sustainability of that demand, particularly in the event of any macroeconomic headwinds and and maybe you can comment on what you're seeing so far for July .
Well Hi, this is Michelle.
As far as false consumable and the use of consumable that the beginning of this squad looks strong although I have to say that we have seasonality and al business and people, sometimes do not like to do aesthetic procedure in the summertime they do.
Before the stomach that and this is why cute too was very strong as far as users, so disposable, which mean more procedural with them but.
But as of now almost the end of the month of July .
We don't see a slow down we seats continues to grow that to mean that the doctor was so still promoting Ah Ah the minimally invasive and the ablative the Morpheus Oh very strongly Ah.
And it also depends on the numbers of Morpheus and and minimally invasive system that we said which is willing to sweat.
So we might have Ah Ah Ah Ah Ah nice number in Q3, but I can assure you that Q4 would be much higher than what we see today.
Got it. Thank you. That's that's really helpful and are you talking about the the number of system do sell was hoping you can also give us an update on you know.
How the capital equipment environment is holding up made me just coming out what you're saying in terms of trends in demand and did you see any changes on the margins in terms of you know doctor.
Doctor has the ability to finance these systems, particularly as rates continue to increase.
Okay, I will have Iraq shops to answer for North America, and then I will I will add someone W shop. Please.
Yeah, Hey, good morning, Mike. So you know, we we definitely see industry wide.
You know that that rates, obviously have increased.
Increased we haven't seen much of an impact on demand.
Which is good but we've we've gotten a little creative in terms of getting a couple of other sources. We were trying to get ahead of the game. We've seen this happen you know every four or five years something comes to come up like this but it's how do we navigate around it. So we definitely have looked at some other sources, which is not slow things down dramatically <unk>.
Things are a little you know.
A lot of the financing companies are looking for a little more information.
Things that we wouldn't have done in the past we've already implemented a process. So that we can kind of keep.
Keep the keep the ship <unk>.
Mmm ceiling, so would that being said you know ended over to Munster, but from my perspective in North America, you know, we definitely seen some things, but we've been able to adapt to the environment.
Oh, Okay in in L. A W that the numbers of Ah Ah Ah doctors, so by our system with the least package is not as high as I as in India. When I had to stay but what we managed to do from the beginning of the year we have.
We have one bank in Europe Ah was now walking with the country by country in order to put together a Alicia plan lease package plan for each country, we started with Spain, and we're going to Italy and to all of our succeed and we might have.
Some will follow the stupid does is wet.
So you know the Internet W. ER grew this this this quarter of 21% compared to the second quarter and 20 twenty-two and I believe that financing is still an issue, especially with the I interest rate, but we manage very what.
Okay, great. Thank you so much for taking my question.
The next question is from Matt mix sick with Barclays. Please go ahead.
Great. Thanks for taking the question can you hear me Okay, yes.
Yes.
Terrific. So a couple of a couple of questions. If I could just firstly image to follow up on sort of the town.
One of the market, but more specifically kind of a seasonal.
Kids for the backup in terms of the gyms, if our system sales. If you can maybe give us any sense of whether you know the strength and U two eases your Q3 and yeah rallies in queue core or you know any any color either regionally or or across you do.
Assistance.
That.
That that you could provide as well as on some.
Some of the spending and investment that you're making and.
<unk> for example, and sort of you know entering new specialty areas is that.
Is that.
No I'm talking about 2024 detail I'm sure, but should be expect those spending levels to continue through your engine instead of 2024 or any color you can provide on that and I have I have one quick follow up if I could.
Yeah well.
That that the Mexican aesthetic and aesthetic surgical industry is ER some seasonality.
Well the dough in 2021 and 2020, just because of the Covid. We did not see the same seasonality for example in 2020, the Kyoto was a very tough quarter because of the Covid and we didn't do well, but everything when we start when the markets open and killed three which is where the.
Family should be the summer time, which is slower we so you know a big jump in the same in 2020 2022 Ah just because of the Covid when did not experience the same seasonality and that's something we need to say, but all the water in 2023 I believe.
The seasonality will come back and this is not as seasonality and medical aesthetic is kewanee is usually a Q is Q soft.
So skill Kyoto is relatively strong feel free because of the somehow you're up and also the United States Europe , and the United States isn't it a bit slower or the Dow Asia and Latin America are not experiencing exactly the same seasonality for them killed three is relative.
Really strong and kill for is a strong core therefore everywhere.
And all the territories.
And in 20th plenty.
20, 2020th 2021, we experience increase compared to 22 second too cute too in a in a indoor Avenue, we don't have enough information to judge right now what will happen in a no Q3 20 twenty-three worldwide.
Ah from what we see we started very nicely with all the territory's what's what happened in the months of August which is usually the stuff for months is yes, yet to see Ah now Schipke do you want to have something on North America.
Yeah sure. So you know as most of it was saying you know Q3, typically you know once we clara or <unk>.
You know the first couple of weeks in July and of course basically the first two to four weeks of July or spend you know starting to build it back up the pipeline. So would that being said is mostly I mentioned, it's a little hard for us to give you any indication of how things are going this is what we <unk>.
Many of US on the management team of experience for over 15 20 years in the industry. So we're kind of used to it but you just you know like it was mostly said with Covid. We didn't know what to expect that three was stronger than can do which I don't think it's really happened in many places, but we we feel like the the demand overall at least in North America is stronger than ever as I'm.
Mentioned before.
The product and brand awareness is definitely helping and and you know you you'd ask a question in terms of envision and I'm continuing to to spend no motion doesn't like using the word spend he'd like to using the word investing it makes them feel better but.
But would that'd be said you know, we're definitely going to invest in that market and you know as I mentioned earlier in hiring new challenge as well, but also and penetrating more of those specific to that vertical itself.
Does that make sense.
Yeah, Yeah, no. That's helpful and just you know it sounds like you should expect those things to kind of continue behind those businesses into 2024 understanding.
Not getting an absolutely absolutely.
Okay, great uncle, good that that that ophthalmology platforms was introduced in Canada and now soft launch in the U S. But we have not started in R. O W. Not in the other day with those who are waiting.
Got it Super helpful. That'll be apologist is on you you you've talked before about the competitive environment would love to get your you know an update as to what you're seeing what you would expect to see if there's demand.
Having to wait for it any more or less than you did a year or two ago any color you sure there'll be be helpful.
[noise] squirrel I I believe you should answer that.
I'm not sure <unk> I think he was a connection problem. So I'll I'll handle that in terms of competition. Yeah in terms of competition, Yeah, I wouldn't say it was ever easy or I don't think it'll ever be and et cetera.
Happens I'm sure, we'll all be pretty happy about that but you know we've definitely as I mentioned in terms of us and the best thing and.
In brand awareness things like that it's it's made it a little easier I would say.
You know a lot of the competitors you know, they're gonna have different strategies and everyone's gonna continue to salt.
Accomplishing breeds awareness, so we're world the philosophy that.
I'm doing well in our business is better for everybody you know rather than taking a different approach trying to to take down a giant which a lot of the competitors try to do but that's just that's not how we approach them. So from our perspective, the better the industry does the better it is and we feel like <unk>, you know consumer demand, but also coupled with physician demand for.
The need to actually incorporate some of these technologies into their practices you know for for additional revenue income so on and so forth is gonna continue driving this business and you know it's on us to continue innovating and providing them with the appropriate tools and technology, so that they're able to do that and you know that's going to differentiate things.
We have a user meeting coming up in August in Chicago, and I think we have over 600 practices signed up every year. It's great. We we we try to you know.
Give them the ammunition that they need as part of their practices.
Along with our <unk> support team who've done an incredible job. So we <unk> you know we tried to equip our people with what they.
Our customers with what they what they need from a technology perspective, but also from the marketing perspective, and how to help them be successful we try our best bet at least you can't guarantee anything.
You know as far as the competitive landscape goes.
Think it's pretty strong right now demand wise I don't know some of our competitors are made some of the changes that they may have needed to you in terms of financing and and how to handle that but you know we're we're we're a few steps ahead I believe.
Okay. Thank you.
Sure.
The next question is from Caitlin Cronan with Kenneth card <unk> Canaccord Genuity. Please go ahead.
Hi, This is Caitlin <unk> and congrats on a great quarter.
Just a couple of questions starting with in power House that I continue bunch selling in any updates to expectations and have you begun hiring any empowered specific rats.
<unk> approval standpoint on that.
I have a follow up.
Okay, well I believe I believe the damn power is growing the empower status is growing we will not release numbers exactly because it's it's not we're not ready to do it but we see some some girl found out on the power plants.
But as well regarding regarding their indication four issue I, we have a discussion with the F D. A on the protocol.
Ask us to do some additional proof of concept study, which was doing right now in Colombia, we will come back to them would they always adds to finalize the the protocols.
Oh, hopefully before the end of the year.
And then we will file an I O b to do the study in the United States, We'd winter of course approval of the F. D. A we will conduct a study. So I believe we should not see we will not see any clearance before sometime towards the end of 2024.
But we do have clearance on <unk> for for all kind of women have indication on the platforms and currently we're marketing the platforms Windows indication. In addition, Ah we're developing additional out of hand peaceful there for that.
For the <unk> for the for the empower which again now we're doing some proof of concept study after that we will do or where to study approved by the F. D. A this is a little bit longer process with the women health, but we're spending a lot of money and investing in this technology.
And Caitlin just to add to that to what most of them were saying you know the one thing that we have noticed is that a lot of the competitors F. You know and we've talked about this in the past, but they they've kind of drawn out of the market. So we we do see that as soon as a nice little opening where we're trying to capitalize on that but again.
Doing it the right way is mostly had mentioned.
Awesome and then just a quick question on is that could be launched the next generation of the product yet.
Yeah.
Yeah, Yeah, we develop we develop the next generation.
When the additional power and additional I would say energy different energy, it's not yet on the market well.
Well now finalizing the last I would say fine tune of the product hopefully we'll go to production this quota.
And we probably will launch it sometime toward the end of the year.
[noise]. The next question is from Jeff Johnson with Bird. Please go ahead.
Thank you guys are just maybe if I could check through two or three quick ones here. The international unit sales at 966 number it was definitely a strong number anything in there one time in nature, you know you weren't directing it sounded like Japan, and I think you said one other market that I wrote down, but I forget now, but when was that did that have any staff.
In order to it were there any new distributor backing or is that 966, a clean number.
And if it is you know we tend to think of fourth quarter being the peak every year should we think that you can still sell more than 966 units as we get into the fourth quarter of this year again, a strong number here in a second alright.
Right.
What the in the Internet. The you know the international is not one market.
On the international market, the Dow twenty-seven languages and more than 27 regulatory bodies.
That we need to deal with it.
And you know some claim on one country, we are not applicable to another country and some products need to do some modification because frankly little issue. So the billing would that dealing with the international market is country by country until he's totally bites territory.
Well currently heavily investing in Asia.
With a lot of marketing activity and a lot of training and this is the reason why we opened a subsidiary in Japan.
Cause we believe Japan should be a good market for it's usually a good market for medical aesthetic and now the stupid, though in Japan, They did with it but not as as not according to our expectation.
So Japan would be another country in addition to.
Kinda, China is opening up again.
And and do you know as you know we have a company in China in Guangzhou, which we have established before the COVID-19, but we did not operate that because of the carpet nobody could have gone down and visit to China. So now we're considering to see how we can go the work. In addition to what we do with distribute those because in China.
You cannot use only one way of distribution.
It's a very complicated country depends on the territory you know even in China, you'll need to know five different languages and five different put tomatoes, so, but we're going closely Latin America again, Ah well, we're investing in <unk> in the inside and all the countries.
This year, we would have the first use of meeting in Latin America in San Paolo in October 500, doctors, which is very important Ah we're covering all the country right now nine countries in Latin America, we signed the last contract the months ago, and we were walking on regulation again.
Country by country, because the regulation in Brazil wishes and visa is not the same regulation in Colombia, and and you'll have to deal with enjoy that regulatory ER organizational regulatory body.
Ah Ah Ah bite says in Europe as I said in my in my speech, we just establish a subsidiary in Germany, and we intend to stop operating the subsidiary sometime in the fourth quarter, we hired a managing director Ah Ah Ah.
And and hopefully hopefully we will stop interviewing some they worked Saturday people.
By the way when I go when we go day way, sometimes we don't sell more system, but we recognized twice as much Donald because when you go to Iraq to recognize the full value and not the transfer price and that's important and also important when you go to the West you fill the market you talked with the Doctor you'll know what.
They want what I'll do I'll Miss needs and it's easier so I'm not suggesting that we will go were selling in 92 countries will will go directly 92 countries.
Certain countries, we have a distributor that he's doing a good job.
Future, we might offer them to become policy no 51%. So we can work together, but slowly and gradually we are improving our position in Latin America, Europe and Asia.
I I I would like to add that it usually takes some times from the moment, we open a subsidiary until the moment to restart your significant contribution.
Drive.
And there was no one time is in the international markets or thrown in in queue to it <unk>. It was all normal close of business.
Of course, good yeah no. That's that's helpful. Both of you. Thank you and I'll get a very solid number so congrats on that and then yeah. I don't know if it's it's zero it was able to reconnect your doctor crackdown maybe this for you I'm not sure, but I just want to make sure I'm understanding the women's health care strategy here I feel like my understanding is gone back and forth a couple of different times.
Yes, I thought would we spoke in Miami, just a month or two ago <unk>.
The focus was gonna remain primarily on kind of cash pay women's health care.
Reimburse side, you know I I know you've got now this proof of concept study Goin' on S. U Y you obviously acquired the bite. These patents one I guess yeah here for you can we stay some 3% or a D. As a percentage of revenue. If if we go into these more formalized maybe bigger clinical trial.
Is that three and a half $4 million a quarter celebrate run rate for R&D spend as we get into 2024, but more importantly, you are are are you gonna pursue some of these may be costlier.
Both are higher risk, but but at least more reimbursed side of women's health care indications or is the focus primarily gonna stay on kind of that rejuvenation wellness. The non reimbursed cash pay side of what women's health care. Thanks.
I will answer that I will answer that this is Michelle definitely we want to go to some indication that we can we can use the reimbursement, but it's a process. The reason why we're doing Ah Ah Ah, we're trying to do but it's a long process to get F. D. A approval for urine incontinence.
When all the companies until now failed, including regime after $250 million of spending they bankrupt and we are buying we just bought the deal I P. The reason why we're doing it is because this is the first stage told getting reimbursement code at all.
Okay. The reimbursement code, you'll need to be F. D. A approved you'll need to wait you'll need to publish five studies five independent studies and you'll need to go and negotiate with the insurance companies were in the early stages of that but that's one of all I would say strategic.
Long term.
[laughter].
Mostly I just finally started the 250 million <unk> I mean again, you're spending I don't have your model in front of me, but like $15 million a year on our handy.
Is there a number that has to be a heck of a lot bigger.
And 15 million, even if it's at 215 and my wife are asking why or it can just be done you know somewhere in that low to mid single digit percentage of revenue for our D spend over the next few years, we do not save money on a windy, we do not save money on a windy Ah we spend as much as needed.
Man Irene twenty-five engineers I will not give a small productivity we have that great.
Yeah, an engineering team in Israel covering.
Electronic engineering software engineering clinical engineering mechanical engineering regular regulation in cetera, and you know you can judge by yourself in the last in the last two years, we have lounge to the market more than the entire industry altogether.
And we're coming with two platforms. If we are and as I said in my speech in the next 12 months, we will come up with for new technologies on existing technologies upgrade or some new and we will continue to do it I I'm not I'm I I do not understand why people.
Measuring R M D by spending or percentage of says that's little device measurement the measurement of phone and they should be on the productivity of Dowling D and I think the same on pulls itself and the last I would take for five years coming to the market with the basketball that we did not fail even.
One of them are in the market successfully without would need that we have so just say hey, please increase your on the form 3% of revenue to 7% of revenue will not make a difference.
It's gonna create some kind of a mess we know how to manage all N D. It's done in Israel.
I believe we have the best I'll N D team in this industry worldwide worldwide.
And and the prophets and the bullying look at look at this point is this world coming with and we are looking at the success of them look how people are happy with them.
For example function at all at small views.
He was in the market.
270000 disposable in the last quarter.
I mean, it it will not happen unless you have good R&D team pulled back then and the definition what do you want to develop his wife.
I mean, not just develop something I'm looking when I will compare to those and I'm and I'm and I and I see that the new what is the date came to the market. Some of them are buying products from Korea, just give us a new name and bring it to the United States and some of them are repackaging all the technology.
G as in a nice box as a new product.
We are coming with the new indication yeah, although you either.
Either a platform.
He's a combination and federer and that's that's the competitive advantage of anymore.
[laughter].
Understood Milkshake, I don't mean to get you on your soapbox and it wasn't meant as a critique I'm trying to understand we're already is going longterm and and how you can continue to innovate at these levels. So it's more understanding that and and applauding that critiquing.
Critiquing that but thank you for that I'll, just yeah just emotionally.
Wanted to pay a bill.
One more thing I wanted to tell you on this is I'm in coming with new products to the market do you need to take into consideration your existing portfolio, you don't want to cannibalize it too fast.
So ah it all depends what do you bring and what kind of a new new indication of new procedure, how it will be in the phone portfolio system does a lot of issues to be discussed and sit in decide before you define what part of that if you want to develop.
Hey, just trying to add some color here a check you know obviously you could tell that she spent a lot of passion for the schools and engineer by trade and so what are you, saying essentially that we'll do what we need to do in order to get what we.
I need to get however, the measure as you mentioned you shouldn't be from from you know how much we're gonna spend it's more about what are we gonna do what do we need to do I think there's a lot of companies that get into this and you know there's a reason that we were able to scoop up some bad people there'll be bright cause there are no longer here, but I think for us we've.
Always been about staying power and longevity and so you know our engineering teams, obviously strong, but we're not gonna just you know multiply spending I told I tried to warn you guys are mostly has a problem with the word spending versus investing [laughter]. So it must be a little wholeheartedly into that when something makes sense and that's what we plan on doing in a woman's health and wellness market.
Thanks.
The next question is from Matt Excuse me, Mike Mattson with Needham and company. Please go ahead.
Yeah. Thanks, just on and vision I think you talked about the dry I F D a clearance for coming in.
Third quarter can you just give us an update on that and then you know how important it is to driving sales in the division.
Ah well you're right. We thought that we would have started this study on the third quarter I hope it will be willing to very loud the stage of the of the F. D. A approval of the of the protocol. We had we did the pre submission to the M.
D. A would well we suggested that this was the protocol we had a long we end the long zoom call with all the team in the in the F D. A ophthalmology department.
We agreed on few things they ask us to send and and and the second version of the of the of the.
The protocol, which were preparing right now and I'll, probably by the end of this month.
Will be filed with them and then doing an I O b. So some time in the middle of this quarter, we already have the Doctor that will do the study pilot study was done in Israel and other countries. We know that we know that it is walking and and we'll take it from there and once.
Finish this study would submit to the F D. A hopefully before the end of the year.
Okay got it and I mean, <unk> <unk> do you think that that's an important feature too to the ophthalmologist when they're concerned whether or not to buy the product and I mean are they willing to cut you know by now with the knowledge that that's you know got a <unk>.
Habit at some point you know on those six to 12 month period or something.
So what what what we've typically seen in the past with with all of these technologies not even just specific to be ophthalmology community is that if you have physicians who are getting good results. They have happy patients and they're generating some good revenue from it.
They do the selling for us and and it's just simply because they believe in it they're doing well and as long as they're getting the results, which we are seeing 100 per cent. They will they will do the job for us so seeing that it's a little earlier, we do anticipate continuing some of the.
Revenue growth and <unk>.
Using it as a driver obviously here, but that's that's kind of the most important thing when you. When you think about this is okay. If we do launch something before you know something like that that we were talking about you know we're in the process of working on getting blowing do.
Do we have those those other check mark.
That we can put into place and as of this point and I only see it getting better we do.
Yeah, one more one more thing one more thing I wanted to add here, which is important and at the end of the day well Inaesthetic company. So every platform, including dental vision.
He will have some pieces to do a static so the ophthalmologist can do apparently old little wrinkles with Morpheus.
It can do skin tightening of full scale and Juvin nation with little Mecca, which are approved indication by a day.
So for him. He has one modality to do dry eye and two or three mom would that'd be on the same platform to get more money from the customer's private money on you know skin rejuvenation full of facial Juvin Asian barely over the wrinkles and Sandra.
At the end of the day, it's a money machine.
Yeah, Okay, I understand and then just one of the things he called out in terms of the increased sounds Martin spending was T. T C.
He kept paying I guess so.
Maybe just talk about that and kind of where where you're spending I mean is it is it how 'bout social media is that right.
Celebrity endorsement.
I don't think you're doing any T V advertising, but maybe it maybe at this.
Everywhere everywhere all the way from Billboard the social media our website, a b two b b two C. A meeting with doctors semi now <unk> Doctor Conference as you know study public.
<unk> everything.
Okay Brenda.
No T V No T V advertisement.
Yeah, <unk>, we typically we <unk>. We typically you know we typically choose to diversify when we do these things and then we get them metrics based on.
Where where we try and attempt to track what's being successful in and where you know money is not being sent the right way and then we doubled down in areas, where we're seeing a good return.
Okay that would do it.
And we do have random breath of those work.
[laughter] alright.
Okay.
[noise]. The next question is from Ryan Bronchus with S. D. B Securities. Please go ahead.
Hey, This is Ryan broke his from UBS Entre Danielle today, thanks for taking our questions. So first one from US here is on capital allocation. So congrats on the recent acquisitions of Ivy patterns, just wanted to get an update on your capital allocation priorities as a whole is your appetite still at times, it's been in recent quarters. Despite these patent acquisitions and.
Can we expect more I P and smaller type deals or is it still possible, we see a larger size deal in the near future.
Well I would say two things one even the opportunity will present itself to buy more I P, which relates to our business.
In in hand, so I P portfolio position, we will do it.
We did one license with the University of California on something which also relate to women health, we bought the entire portfolio of <unk> not for a big money. So I mean, it's not something that we need 10 of tens of millions of dollars. So we will not.
Well not that spend that time now regarding regarding capital a location. We are exploring all of this time M&A opportunities were calling con to walking with few banks none of them exclusively.
None of them exclusive we open it to every every bank will can come up with something.
We do a quick check and if something looks okay to us we will we will continue to search and explore and do some detergents I cannot report on something that would happen in the next month or two but this is the plan.
Great. Thanks motion and then one last one for me on the capital environment and potential upgrades for new technology for your customers. So we've heard from other capital intensive companies highlight higher mix of leasing as a per cent of their system placements. Just curious if you're seeing the same dynamic and then with the new technologies for your customers <unk>.
Leasing arrangements or their technology obsolescence pauses doesn't allow customers to upgrade to your new technology over the next 12 months or but this just be a simple software update on existing systems in the field for our customers to access this new technology. Thanks. So much sure sure. So you know we we haven't you know as far as the the environment goes from that earlier.
From releasing perspective, nothing's really changed in terms of what percentages financed or leasing companies versus you know cash deal. So on and so forth, it's pretty much status quo. So I'll go to bed handled that better for Ya, but when it comes down to the actual.
The actual leasing side of things you know your average least is about five years on average and so by that time, because you know as much as I mentioned earlier, we introduce you know we're trying to introduce at least two platforms are upgrades to the market every year, where will ahead of that in terms of devices that physicians currently owner.
Currently least we've actually been the one company that you know at least to my knowledge. That's that's gone in several times we provided.
Certain upgrades for software at no cost things like that you know if there's hardware we might have a certain costs to it but we're we're very thoroughly price levels based on.
The history of this market so from that perspective, when you look at the recent side of things you know.
Thankfully the way that makes good on his engineering team design these things there.
They're pretty stable. So you know at least for my service standpoint, it's it's not an issue but in terms of obsolescence, there's always a way for us to upgrade or add on but as I mentioned.
I'm a physician was done with our five year lease, they're they're ready to move on to another piece of technology. In our goal is obviously you as I mentioned earlier provide them with the tools of new technologies and innovations that they can actually add into their practices to better their treatment outcomes and revenue results from these devices does that make sense.
Yeah, great. Thanks, so much sure.
This concludes the question and answer session I would like to turn the conference back over to Mashai <unk>.
Chairman and C E O for any closing remarks.
Thank you all right though.
Thanks to all of the the team that were with me in this call I want to thanks again to all of our employees and their families around the world I want to take God to thanks, all of all shareholders or some of them being with us for many years, we really appreciate that.
I want to thank sort of a supply of subcontract those everybody to talk with us that brings us to this this success without them we cannot do it hopefully we'll see all of you in the next earning call. Thank you and goodbye.
The conference has now concluded.
And thank you for attending today's presentation you may now disconnect.