InMode Ltd. Q3 FY2024 earnings call

• Macroeconomic headwinds impacted performance in Q3, leading to lower sales in consumables and platforms. - Reorganized corporate structure, including management changes in the US, UK, Spain, and France. - Segmented the North American market into separate roles for US and Canada. - Optimistic about new platforms IgniteRF and Optimus Max, expecting better adoption as macroeconomic conditions improve. - Production challenges in Israel due to the situation, but employees worked longer shifts to meet customer commitments.

In the third quarter of 2024, InMode generated total revenue of $130.2 million. $31.9 million was from preorders received in the first half of 2024. International sales accounted for $36.4 million, which is 28% of total sales. GAAP gross margin in Q3 was 82%, non-GAAP operating margin was 40%. GAAP diluted earnings per share for the third quarter was $0.65, and non-GAAP diluted earnings per share was $0.70.

• Revised full-year 2024 revenue to between $410 million and $420 million, down from prior guidance of $430 to $440 million. - Non-GAAP gross margin expected to be between 81% and 82%, down from prior guidance of 82% to 84%. - Non-GAAP income from operations to be between $140 million and $145 million, down from prior guidance of $150 million to $155 million. - Non-GAAP diluted earnings per share remains the same at $1.92 to $1.96.

• Macroeconomic headwinds continuing to impact performance. - Slowdown in platform sales and minimally invasive treatments affecting sales. - Difficulty in getting faster financial approval from leasing companies impacting adoption of new platforms. - Production challenges in Israel due to the ongoing situation.

Q: Matt Miksic asks about full year EPS guidance and impact of buyback, and cost controls.

A: Moshe Mizrahy states there was no cost cutting in Q3, manufacturing costs increased due to the war in Israel, and the slowdown hasn't improved.

Q: Unidentified Analyst inquires about rate cuts, leasing, and gross margin.

A: Moshe Mizrahy says lease interest rates are still high and gross margin won't return to the mid-80s.

Q: Caitlin Cronin asks about US consumables growth and operations away from Israel.

A: Moshe Mizrahy mentions US consumables are down and they're exploring European manufacturing but have no other alternatives.

Q: Tommy Han asks about US systems installation and ASP.

A: Moshe Mizrahy and Yair Malca discuss preorders delivered in Q3 and ASP increase due to new platforms.

Q: Sam Eiber asks about commercial organization changes and early feedback on new products.

A: Moshe Mizrahy talks about realignment in Europe, US management changes, and early feedback on new platforms.