Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- InMode Ltd (INMD, Financial) successfully launched two new advanced platforms, IgniteRF and Optimus Max, which are expected to contribute significantly to future growth.
- The company reported strong demand for its new platforms, with deliveries of preorders expected to be completed by the end of the year.
- InMode Ltd (INMD) maintains a strong balance sheet with cash and cash equivalents, marketable securities, and deposits totaling $729.2 million as of June 30, 2024.
- The company continues to invest in research and development to provide medical professionals with advanced technologies.
- InMode Ltd (INMD) completed a share repurchase program, acquiring 8.37 million shares, reflecting confidence in its financial position.
Negative Points
- InMode Ltd (INMD) faced a challenging second quarter with a major decrease in demand for treatments, particularly in the US market.
- The company reported a decline in international sales, with a 17% decrease compared to Q2 of the previous year.
- GAAP operating margin decreased significantly to 21% from 42% in the second quarter of 2023.
- The company lowered its full-year 2024 revenue guidance from $485 million-$495 million to $430 million-$440 million.
- InMode Ltd (INMD) experienced a 30% decrease in disposable sales in the US, indicating reduced procedural demand.
Q & A Highlights
Q: Looking ahead to 2025, is a return to double-digit growth feasible even if the market doesn't turn around?
A: Moshe Mizrahy, CEO: It's too early to predict 2025. We have two quarters ahead, and the third quarter is usually soft. We hope the fourth quarter will be strong post-election in the US. Interest rates need to decrease to encourage system purchases. We also need to see how our new platforms perform in the market.
Q: How should we think about potential drivers of margin improvement going forward? Are new platforms accretive to margins?
A: Moshe Mizrahy, CEO: Every product is designed with high margins in mind. We won't develop products with low margins. Despite sales declines, we maintain high margins and continue investing in R&D.
Q: Can you provide more color on why the environment was worse this quarter compared to prior ones?
A: Moshe Mizrahy, CEO: The main reason is macroeconomic factors, with people saving money and undergoing fewer treatments. We saw a 30% decrease in disposable sales in the US, indicating reduced procedure demand.
Q: Are the new systems, like Optimus Max and IgniteRF, expected to drive upgrade demand or new system sales?
A: Moshe Mizrahy, CEO: We focus on new system sales. IgniteRF offers different technology, complementing existing systems. Optimus Max has new features and handpieces, and while some trade-ins may occur, most sales will be new systems.
Q: What are your thoughts on the laser and IPL market, and how does it fit into your business?
A: Moshe Mizrahy, CEO: The Optimus Max is more powerful and offers new procedures compared to the previous Optimus. It includes advanced features and handpieces, making it the most comprehensive and complicated system we've manufactured.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
