Q3 2025 InMode Ltd Earnings Call
Good day and welcome to in modes, third quarter, 2025 earnings results conference call. All participants will be in listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero.
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I would now like to turn the conference over to Mary sigal CEO of msir. Please go ahead.
Thank you, operator, and everyone for joining us today. Before we begin, I would like to remind our listeners that certain information needed on this call, may contain forward-looking statements and the Safe Harbor statement. Outlined in today's earnings release. Also pertains to this call.
Not received the copy of the release, please visit the investor relations section of the company's website.
I was looking statements made today. Our historical results are not necessarily indicative of future performance as 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 turn the call over to Motion in modes. CEO Moshe, please go ahead.
Thank you, Mary. And to everyone for joining us.
With me today. Our Dr. Michael Kindle, our co-founder and chief technology officer Chief Financial Officer in Rafael Leman, our VP of Finance.
Following our prepared remark, we will all be available to answer your question.
The third quarter progressed in line with our expectation. Even as we navigated a complex environment in in V complex, economic environment, our performance this quarter reflect the strength and our Diversified portfolio and the discipline execution of our strategy. We remain focused on expanding our presence in high growth market and position the company well into the future.
This quarter, we expanded our Global footprint with opening a new subsidiary in Argentina.
An important Milestone, our regional growth strategy, establishing a local presence. In this key Market will allow us to better serve customers through direct engagement and localized support. We are now focused on obtaining final, clinical clearances and expect to begin generating, internal initial Revenue by the end of 2025.
Following the earlier launch of our subsidiary. In in Thailand, we are actively building strong. Local team to drive sales, laying the groundwork for sustainable growth, across both region.
As we noted in our Q2 update, we conducted a soft Lounge of the men. Wellness platforms to introduce it to selected user and early adopters. So we can gather initial clinical feedback. The full commercial rollout event took place during the third quarter and we expect the beginning of Revenue contribution, toward the end of the year.
Finally, I'm excited to share some important news about a key leadership. Addition to our team, we recently appointed Michael Dennison as our president of North America.
Michael is an entrepreneur driven and award-winning sales leader who has built an impressive career in the medical aesthetic device industry, holding holding nearly every cell wall among the along the way.
With over close to decade at inward, Michael advance from district sales manager to Vice, President of Sales, helping to grow Revenue, nationally, expand market, share, and build a strong, distribution Network across North America.
Looking ahead. We recognize the challenges in the marketplace but remain confident in our competitive advantages, including our strong financial position diverse and Innovative portfolio and trusted.
Global brand these Trends position us as the global leader in the minimal invasive. Aesthetic and wellness industry.
Now, I would like to turn the call over to your ear. Our Chief Financial Officer. Yeah, you please.
Thank you. And hello everyone. Thank you for joining us.
I would like to review our Q3 2025 Financial results in more detail.
In more generated revenues of 93.2 million.
As a reminder, when comparing your results, last year's quarterly revenue of 130.2 million included 31.9 million in pre-order sales.
Even with the traditional Q3 seasonality, consumables and service revenues were 19.9 million up 26% year-over-year.
In consumers, was driven primarily by markets outside of the US.
Our minimally invasive platforms, accounted for 75% of total revenues this quarter.
Sales outside of the US increased slightly to 40 million dollars or 43% of overall sales at 10% increase year-over-year.
Growth Revenue, contributor, reaching 53.2 million.
Gaap and non-gaap goes, margins in Q3 were 78% down from 82%, reported in Q3 2024. As expected our third quarter gross margins were lower due to anticipated the anticipated impact of terrorists.
Which we had incorporated into our Outlook.
As part of our Global expansion, we currently have 284 direct sales reps.
And Distributors coverage in more than 73 countries.
president marketing expenses, decreased to 44.951%
Do you decrease primarily reflect the reduction in cells between the 2 periods?
Gap. Operating expenses in the third quarter were 51.4 million.
And 11% year-over-year, decrease.
Operating expenses were 49.1 million. This this quarter down from 54.4 million at 10%, decrease year-over-year.
In margin was 22% down from 37% in the third quarter of 2024.
On Ananda basis. Operating margin reached 25% compared to 40% last year.
Gaap. Net income was 21.8 million down from 50.9 million in the third quarter of 2024.
On a nanga basis.
Net income was 24.5 million down from 54.9 million.
Gap diluted and exp per share for the third quarter. We have 34 cents down from 65 cents in Q3 of 2024
Non-gaap diluted earnings per. Share was 38 cents down from 70 cents per diluted share in the third quarter of 2024.
Share-based compensation declined to $2.7 million from $3.9 million in the third quarter of 2024.
We ended the quarter with a strong balance sheet. As of September 30, 2025, the company had cash and cash equivalents, marketable securities, and deposits of $532.3 million.
This quarter in more, generated 24.5 million in cash from operating activities.
Before I turn the call back to Moshe, I would like to reiterate our guidance for 2025.
Revenues to remain between 365 million to 375 million.
Non Gap. Go margins to remain between 78 to 80%.
Non-gaap income from operations to remain between 93 million and 98 million dollars. Nand m, is further to cheer to remain between $1.55 to $159
I will now turn over the call back to Moshe.
Thank you. Ah, thank you very much. Uh, operator. We are ready for the Q&A session, please.
To ask a question. You may press star then 1 on your telephone keypad. If you are using a speaker-phone you can pick up your handset before pressing the keys at any time. Your question has been addressed and you would like to withdraw your question, please press star. Then 2 at this time we will pause momentarily to assemble our roster.
Our first question comes from Danielle and toy with the UBS, please go ahead.
Yeah, good morning guys, thanks so much for taking the question. Congrats on a, on a good quarter here. Um, just curious. Uh, yeah, here is as you look at the Q4, the implied Q4 guidance based on what you've provided at the midpoint, um, you did beat Q3. Um, so it implies a little bit of a lower Q4 number, but I was wondering if you could level set a sort of, as we think about the exit rate here in 2025, and look ahead to 2026. Um, how we should be thinking about
Consensus is sort of in the the mids single digit range.
Hey, Danielle. I, I think it is a little bit too early for us to discuss guidance to 2026. We would like to see how Q4 plays out before we discuss 2026. I think we would want to be someone's conservative, when we go into next year because of all the uncertainties as you have mentioned. That's all I can say about the 2026 at the at the moment.
Q3 International was was weaker us. Um, not as not as weak but in the US, specifically, you know, we we are in an environment now where interest rates are are coming down. I mean, does this make you a little bit more optimistic? As we look ahead to 2026? Appreciating you want a conservative starting off point but just maybe comment on um, hearing from customers. Is there increased interest now to purchase uh Capital Equipment because as interest rates come down. Thanks so much.
So the interest rate has has come down but not enough to see that trickling in a meaningful way into uh the financing of the Capital Equipment in in the US as hopefully it will continue to come down and then we will start seeing more meaningful impact and then hopefully this will translate to additional or increase in Capital Equipment Sales and Musha go ahead.
No, what I wanted to say, it's not just in the United States. Uh, we don't see the the light at the end of the tunnel as regard to financing Capital Equipment, especially medical equipment to clinics
I'm not talking.
In hospital is probably different. But as far as clinics were buying Capital Equipment like for medical aesthetic or any other medical community. I mean, the interest rate on listing are still very high. I know that the interest rate went down, uh, twice in the United States have half a percent in Europe. Has not yet. So we believe that sometime in 2026 when the US will lead the reduction of interest rate, it will come up to other territories but we don't see it yet.
Understood, thank you.
Again, if you have a question please press star. Then 1 your next question comes from Matt, mix with Barclays. Please go ahead.
Hey uh, thanks so much for taking the questions. Um,
I had 1, 1 question on the Ophthalmology. Uh, you know, initiative that you've been you've been sort of pushing forward over the over the last couple years, it ran into some of your folks at at AO and, you know, the, you know, General sentiment around the conference and around. Those Specialties is, is significant upswing in, in dry eye treatment and significant. Um,
You know, interest particularly in the optometrist Channel. I'm just wondering um you know any color or updates you have on your strategy there, the progress, um you know contribution if you want to go there and then I had 1 quick follow-up.
Okay. Uh hi hi. This is mushe. Uh well let me answer your question on uh um cover 2, things 1. Uh as we go to Commercial and sales people.
We are separating the salespeople for the envisioned from the rest of the aesthetic and starting 2026. It will be managed by, uh, director who's responsible, only for The Envision, and the sales team will sell only to Envision to optometrist. And also, to Opthomologist, we are making some progress with the American optometrist Association. We have some agreement with them on to, uh, to do together some Workshop in different state. And uh, we started at uh, at the second quarter. We continue on the third quarter and we have at least 3 event coming on the fourth quarter.
Is um, as you probably know, we still do not have the final clearance from the FDA to say that we're treating uh, uh, dry. I uh, we hopefully will start was still, we negotiated with the FDA, I don't want to call it. Negotiated, it was, you know, discussion with FDA as regard to the protocol that we will do during the study to get the indication where in the last stage, we're doing some safety test right now on rabbit. Hopefully they will approve it before the end of the year and we will start studying next year. It's not going to be a very long study because it's you need to show some immediate effect. Hopefully, sometime toward the second quarter of 2026. We will finalize the results of the study submit the FDA. So sometime to the second half of 2026. We will, we will be
Able to clear the indication and claim dry eye. But right now not only in the United States, we have enough data that show, uh, the significant competitive advantage of any other, uh, you know, modalities that deal with the, with dry eye. Uh, and we sell it without the clearance. Uh um, just because we're explaining how it's worked. We do have we do have the FDA clearance to the hand.
Is either the Luma the IPL or the bipolar RF, the 2 hand pieces are already approved. So we sell it without the pure, the clear indication. But we have enough clinical data to show to the doctors and to the optometrist that also doctors. But they are all these uh, to show them that to show them the advantage. And uh, we we are making progress and hopefully next year, once we have a distinguished and separated sales team, we will show better momentum.
That's very helpful. Just 1, um, maybe zooming out for the broader business and and Aesthetics. Um, you know, is similar similar kind of question, you know, when we all sort of, I think have a sense of where you think the market is, and, and waiting for sort of like this, this General sort of uptick or upswing in the cycle and the US. Um, but in terms of new products, uh, anything that you would call out, in addition to this initiative and, and follow through and Uptown Optometry and Opthalmology that that, um,
Could start to kind of Drive incremental growth uh, you know, in to early, first half of 26 back, half of 26. Any color on the pipeline would be super helpful. Thanks.
Well, we have some product coming to the, we will launch early next year.
Mainly in the aesthetic uh um some new lasers that uh that we bring to the market. I don't want uh just to reveal the the type of lasers and what exactly these lasers do, but they are very, uh, complimentary to our aesthetic. Uh, I would say portfolio. 2 of them will be introduced during the national sales meeting in the US sometime. At the end of, uh, of, uh, at the end of January 26th, we will also present those 2 devices at Incas, uh, which is the main conference in Europe again, sometime in the beginning of February. Next year. Yes, we currently have enough uh, project on the R&D pipeline aesthetic and non and wellness. And we will we will launch them 2 at the time.
Very helpful. Thanks so much.
in your next question comes from Caitlyn Roberts with canaccord genuity
Please go ahead.
Hi guys, it's Michaela on for Caitlyn. Thanks for taking the questions. Um, can you maybe talk more about your rationale for picking Michael, Dennis for the new role of President of North America and what he is working to drive in the early days, in the new position?
Yeah, my my work with us for more than 10 years.
And before that, he used to work for Sinosure, which is another major company in medical aesthetics.
We we nominated him is because we didn't have we didn't want to have the East and West in the US. We want to combine all the territories under 1 management, uh, and we thought, Michael is the right guy to do it, to do it for inmode, uh, and therefore, right now, we are combining all the territories under 1 Manor, including Canada, including Canada, um and uh and and anything else that you want to know about him. I mean, he's well known in all the market in all the doctors, he know uh everything about sales and marketing many years of experience. Uh, as part of his taking the position of presidents to VPS left. 1 was the VP West which wanted to be a president but we had to select and, and only 1 and also the VP.
Of Canada. Uh, and were not hiring another VP for the west and VP for for Canada. Uh, we rather have some sales director in every territory. We divide the us into 6, territories and Canada, is the seventh 1 and they all report to Michael at this point next year, we might, uh, we want, we might appoint, uh, some other, uh, uh, position for strategic planning.
And other, but we want to keep the entire North America under 1 roof.
That's great. Thanks.
And uh, maybe
pass on Urology. Uh, how did the user meeting in late August? Go on the Urology side and have you begun rolling out the products or seeing Revenue contribution and then, uh, any
Commentary or directionality. You could give us your expectations for the Urology business in 2026.
Um,
You want to G? Um, I understand you mean the man Wellness. Uh, yes. I mean, the August. The August, uh, event was, uh, uh, a user meeting that we had, uh, uh, in Chicago. And it was with something like 800 doctors.
Uh, and we introduced that with the 2 lectures and presenting some clinical data.
That we had at that time. Uh, which was good? Good, good good, uh, good, clinical results. And, uh, now we are launching it. And, uh, every every, uh, aesthetic, every aesthetic rep, can sell these devices as well. We are not separating yet. Uh, we want to see, what will be the results until the end of the year and the beginning of 2026 and we'll make the decision later.
Great. Thank you.
In your next question, comes from Sam Eber btig. Please go ahead.
Hey, it's Alex on for Sam. Um, so I just had a quick question on the OS business. And so you mentioned that, um, you guys opened a new subsidiary in Argentina, this quarter and also um, have been
Um, expanding your efforts in Thailand. So can you just talk more about the strength in Q3 this quarter and how can we think about it moving forward?
You mean about the 2 Subs that we opened this year?
And just oh Us in general like what are the trends there? Like how should we think about it? Like for the end of the year and going into 2026? Like will it be more of the same or different?
Oh, okay. If you're talking about all U.S. markets in general, currently we are selling in 88 to 90 countries.
Out of which uh in Europe, we have 5 subsidiaries that cover 10 countries, Italy Spain that cover uh Portugal as well. Germany cover Australia as well. France is covering uh Belgium as well. And UK is covering Ireland and Scotland.
And the base. We're building. Argentina is also responsible to manage all the distributors in Latin America. Uh, as far as managed
In Europe, Middle East and Africa. We have a based in London with the VP sitting there and he's responsible for all of this area in North America. You know, we have Michael Dennis on managing all the North American operation Canada in the US.
And Israel is also uh, a country where we are. Considering now going direct. We used to have 2 Distributors, but we want to go direct starting 2026 because it's a home base and we want to sell direct here. It's important for us. Um,
I don't know, which country will will develop in 2026 to become direct operation. We have not yet decided we have several Alternatives and we're exploring several opportunities, but
we are just now focusing in the last 2 that we established in the last 6 months.
In your next question comes from Mike Matson with nem. Please go ahead.
Hey, Moshe. Yeah. Here um, this is Joseph on from Mike. Um, I guess apologies if this was already uh, asked as hop hopped on from a different call, but just looking at uh, non-invasive growth obviously, you guys had a really large, um,
Quarter in the second quarter and um, it dropped back back down this quarter. I'm just kind of wondering how should we think about the lumpiness of this division is?
You know, was there just large orders in the second quarter? And it's, um, you know, more stabilized from here out? Um, yeah. Any color there would be helpful.
You mean on the n n? Non invasive. And non-ablative that? Correct? Yes.
Okay, let me say something before, uh, I would say that uh um except 1 or 2 platforms that we sell almost every platforms that we sell has at least 1, invasive or ablative handpiece.
Either move fails body face or the ignite or the body type, uh, uh, what we sell, uh, uh, non-invasive. It's what we call the commodity type product, like, all the other competitors diode. Laser, uh, IPL
Non-invasive RF henfrey devices. Uh, we don't have we are we have a competitive advantage in this field and we would like it to grow because we want to be 1-stop shop to every doctor. So if the doctor need a compliment with technology to our minimal invasive and ablative, we wanted to buy it from us.
So, this is the and currently we're developing.
New lasers, which are non-invasive so this doesn't mean that we are now, uh, doing only things that are relative and invasive. Everything is getting uh, the same attention and we're developing the non-invasive as well. I I don't know if I answer your question but
I believe that that, uh, I I I would like to add that this year. Uh, Joseph, we the the the 2 new products that we added happened to be non-invasive the CO2 that we added in the beginning of the year and then the men else that we added the after. And so this is the reason for the increase. But uh, you see in the, in the non-invasive category for us,
I see so, um, you know, just a lot of orders for, uh, customers that were waiting for those those new platforms and a lot of that was realized in in the second quarter. Um, no, that's that's, that's helpful. Um, and then maybe just just 1 quick 1 just touching on the consumables growth. Um, I'm curious how many hand pieces you guys sold on the quarter and just how you're thinking about growth there and and procedures.
230,000 disposable which mean, 1, time, use tips either for minimum invasive or native
Okay great. That's helpful. So it looks like a a sequential um increase in in the quarter. Um okay yeah that's all very helpful. Thank you very much for taking our questions.
This concludes our question and answer session. I would like to turn the conference back over to Moshe, Miss Rahi in mode, CEO for any closing, remarks.
Thank you, operator. And thank you. Uh everybody who uh attended this uh this call. Uh I want to thank the Eno team uh uh especially uh and all the territories and uh
We hope that, you know, the fourth quarter will always be the strongest one, and we're looking forward to 2026. Thank you very much.
The conference is now concluded.
Thank you for attending today's presentation. You may now disconnect