InMode Ltd. Q2 FY2025 earnings call

Key Points

• Market Challenges: Navigated a challenging medical aesthetic market, especially in North America, due to reduced personnel spending, fewer treatments, and less capital investment from physicians.
• Restructuring and Expansion: Restructured sales team, appointed specialized manager and team for Envision platforms in ophthalmology, and expanded global footprint with direct operations in Thailand and Argentina.
• Upcoming Events: Hosting user meeting in late August to launch new wellness platforms for urology focused on blood circulation and pain relief.
• Financials: GAAP gross margin was 80%, GAAP operating margin 24%, GAAP net income $26.7 million, and cash and cash equivalents totaled $510.7 million as of June 30, 2025.

In the second quarter, InMode generated revenues of $95.6 million. The minimally invasive platforms accounted for 84% of total revenues, amounting to approximately $80.3 million. Noninvasive platforms showed growth, driven by the OptimasMAX platform with new IPL and laser for hair removal and blood vessels.

Guidance Details

• Revised 2025 revenue guidance to $365 million to $375 million (down from previous $395 million to $405 million).
• Non-GAAP gross margins expected to be between 78% and 80% (same as previous guidance).
• Non-GAAP income from operations projected at $93 million to $98 million (down from $101 million to $106 million).
• Non-GAAP diluted EPS expected between $1.55 and $1.59 (down from $1.64 to $1.68).

Risks

• Tariff Impact: If U.S. tariffs remain at 10%, gross margins could be impacted by approximately 2% to 3%.
• Market Uncertainty: Challenging medical aesthetic market with reduced personnel spending, fewer treatments, and less capital investment continuing to affect results.

Q: Matt Miksic asked about Q1 and Q2 dynamics, cadence of buying behavior A: Yair Malca mentioned Q1 and Q2 were below expectations, with market uncertainty and challenging environment continuing.

Q: Danielle Antalffy inquired about capital allocation, noninvasive strength A: Moshe Mizrahy discussed capital allocation options, no acquisitions on pipeline, noninvasive growth due to cheaper procedures and successful OptimasMAX platform.

Q: Michael Sarcone sought guidance clarification A: Moshe Mizrahy explained lower guidance due to slow third quarter and slowdown in market, affecting full-year expectations.

Q: Caitlin Cronin asked about urology market, OUS vs U.S. mix A: Moshe Mizrahy talked about urology platform regulatory processes, OUS mix built into guidance.

Q: Jeffrey Johnson on Envision contribution, behavior trends A: Yair Malca discussed Envision contribution, separation of capital equipment and consumables trends.

Q: Mike Matson on tariff impact, urology system labeling A: Moshe Mizrahy explained tariff situation and urology system labeling in regulatory process.

Q: Sam Eiber on Europe growth, U.S. upgrade cycle A: Yair Malca talked about Europe growth sustainability, Moshe Mizrahy on U.S. upgrade cycle starting in Q3.