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InMode Reports Third Quarter 2022 Financial Results; Record Quarterly Revenue of $121.2 M, Represents 29% Year-Over-Year Growth

YOKNEAM, Israel, Oct. 27, 2022 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced its consolidated financial results for the third quarter ended September 30, 2022.

InMode Logo
InMode Logo

Third Quarter 2022 Highlights:

  • Record quarterly revenue of $121.2 million, an increase of 29% compared to the third quarter of 2021: InMode's proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments represented 82% of quarterly revenues, while 11% came from InMode's hands-free platforms and 7% from InMode's traditional laser and non-invasive RF platforms.

  • GAAP net income of $48.8 million, compared to $44.7 million in the third quarter of 2021; Record *non-GAAP net income of $56.6 million, compared to $47.9 million in the third quarter of 2021.

  • GAAP diluted earnings per share of $0.58, compared to $0.52 in the third quarter of 2021; Record *non-GAAP diluted earnings per share of $0.66, compared to $0.55 in the third quarter of 2021.

  • Quarterly revenues from consumables and service of $13.9 million, an increase of 53% compared to the third quarter of 2021.

  • Total cash position of $486.4 million as of September 30, 2022, including cash and cash equivalents, marketable securities, and short-term bank deposits.

U.S. GAAP Results

(U.S. dollars in thousands, except for per share data)


Q3 2022

Q3 2021

Revenues

$121,232

$94,176

Gross Margins

85 %

85 %

Net Income

$48,789

$44,718

Earnings per Diluted Share

$0.58

$0.52

*Non-GAAP Results

(U.S. dollars in thousands, except for per share data)


         Q3 2022

Q3 2021

Gross Margins

85 %

86 %

Net Income

$56,646

$47,910

Earnings per Diluted Share

$0.66

$0.55

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP financial results exclude share-based compensation adjustments.

Management Comments

"Once again, we reported a record quarter with 29% top line growth and high profitability. Demand has remained strong despite the anticipated seasonality and the return of summer travel, and this positive momentum continues into Q4. We're very happy with the successful market endorsement of our strategy as we expand from aesthetics into wellness and improved quality of life categories. We started with the EmpowerRF and we will continue with other categories such as ophthalmology, ENT and others. The EmpowerRF platform for women's health has exceeded our optimistic expectations, which leads us to increase its revenue target yet again by 33% to $40 million for this year. In addition, we will continue to expand globally and plan on opening two new subsidiaries in Asia and Europe by mid 2023," said Moshe, Mizrahy, Chairman and Chief Executive Officer.

Shakil Lakhani, President of InMode North America, commented on the financial results: "Our performance in North America continues to be the major growth engine for the company, with an emphasis on the Morpheus 8 becoming one of the most popular minimally invasive procedures. We've continued to invest in increasing our brand awareness, including adding Eva Longoria as our new brand ambassador, which is another sign of our commitment to customers and to positive consumer perception."

"We've seen growing adoption of our EmpowerRF platform by an increased number of women's health and wellness physicians across the U.S. and Canada. The success in improving women's quality of life is meaningful to InMode, and we intend building on its momentum as we capture more share in this important market", said Dr. Spero Theodorou, Chief Medical Officer.

Third Quarter 2022 Financial Results

Total revenues for the third quarter of 2022 reached $121.2 million, an increase of 29% compared to the third quarter of 2021.

"Sales of disposables continued to grow year over year and contributed more to the revenue mix, as our platforms are being used more frequently by our customers. Additionally, we successfully increased our gross margins back to the 85% target range," said Yair Malca, Chief Financial Officer.

GAAP gross margin for the third quarter of 2022 was 85%, like in the third quarter of 2021. *Non-GAAP gross margin for the third quarter of 2022 was 85% and 86% for the third quarter of 2021.

GAAP operating margin for the third quarter of 2022 was 44%, compared to a gross operating margin of 48% in the third quarter of 2021. *Non-GAAP operating margin for the third quarter of 2022 and for the third quarter of 2021 was 51%. The decrease in GAAP operating margin is primarily attributable to change in share-based compensation expense.

InMode reported GAAP net income of $48.8 million, or $0.58 per diluted share, in the third quarter of 2022, compared to $44.7 million, or $0.52 per diluted share, in the third quarter of 2021. On a *non-GAAP basis, InMode reported net income of $56.6 million, or $0.66 per diluted share, in the third quarter of 2022, compared to $47.9 million, or $0.55 per diluted share, in the third quarter of 2021.

2022 Financial Outlook

Management provided an outlook for the full year of 2022, ending Dec. 31, 2022. Based on current estimates, management expects:

  • Revenue between $445 million and $450 million

  • *Non-GAAP gross margin between 83% and 85%

  • *Non-GAAP income from operations between $214 million and $217 million

  • *Non-GAAP earnings per diluted share between $2.28 and $2.30

This outlook is not a guarantee of future performance and stockholders should not rely on such forward-looking statements. See "Forward-Looking Statements" for additional information.

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP financial results exclude share-based compensation adjustments.

Use of Non-GAAP Financial Measures

In addition to InMode's operating results presented in accordance with GAAP, this release contains certain non-GAAP financial measures including non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP operating margin. Because these measures are used in InMode's internal analysis of financial and operating performance, management believes they provide investors with greater transparency of its view of InMode's economic performance. Management also believes the presentation of these measures, when analyzed in conjunction with InMode's GAAP operating results, allows investors to more effectively evaluate and compare InMode's performance to that of its peers, although InMode's presentation of its non-GAAP measures may not be strictly comparable to the similarly titled measures of other companies. Schedules reconciling each of these non-GAAP financial measures are provided as a supplement to this release.

Conference Call Information

Mr. Moshe Mizrahy, Chairman and Chief Executive Officer, Dr. Michael Kreindel, Co-Founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer, Mr. Shakil Lakhani, President of North America, and Dr. Spero Theodorou, Chief Medical Officer, will host a conference call today, Oct. 27, 2022, at 8:30 a.m. Eastern Time to discuss the third quarter 2022 financial results.

The Company encourages participants to pre-register for the conference call using the following link:

https://dpregister.com/sreg/10171927/f4b117e67a

Callers will receive a unique dial-in number upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

For callers that opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call 10 minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number.

U.S. Toll-Free Dial-in Number: 1-833-316-0562
Israel Toll-Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5736

Webcast URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=pOSyfnXi

At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time

The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/events-presentations/. A replay of the conference call will be available from October 27, 2022, at 12 p.m. Eastern Time to November 02, 2022, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:

Replay Dial-in U.S TOLL-FREE: 1-877-344-7529
Replay Dial-in Canada TOLL-FREE: 855-669-9658
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 8851334

To access the replay using an international dial-in number, please select the link below:

https://services.choruscall.com/ccforms/replay.html

A replay of the conference call will also be available for 90 days on InMode's website at https://inmodemd.com/investors/.

About InMode

InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio frequency ("RF") technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically accepted minimally invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com.

Forward-Looking Statements

The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the future performance described above under the heading titled "2021 Financial Outlook." Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategic plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, including with respect to the impact of the COVID-19 global outbreak. Consequently, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 10, 2022, as well as risk factors relating to the COVID-19 global outbreak and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which pertain only as of the date of this press release.

INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except for per share data)
(Unaudited)


Three months ended
September 30,

Nine months ended
September 30,


2022

2021

2022

2021

REVENUES

121,232

94,176

320,700

247,025

COST OF REVENUES

18,765

13,943

52,483

36,745

GROSS PROFIT

102,467

80,233

268,217

210,280

OPERATING EXPENSES:





Research and development

3,166

2,248

9,164

7,004

Sales and marketing

43,062

30,835

113,564

84,067

General and administrative

2,494

2,132

7,533

5,884

TOTAL OPERATING EXPENSES

48,722

35,215

130,261

96,955

INCOME FROM OPERATIONS

53,745

45,018

137,956

113,325

Finance income (expenses), net

189

(65)

(350)

407

INCOME BEFORE TAXES

53,934

44,953

137,606

113,732

INCOME TAXES

5,145

235

13,794

1,343

NET INCOME

48,789

44,718

123,812

112,389

Add: Net income attributable to non-controlling interests

-

-

-

(103)

NET INCOME ATTRIBUTABLE TO INMODE LTD.

48,789

44,718

123,812

112,286






NET INCOME PER SHARE:





Basic

0.59

0.54

1.50

1.39

Diluted

0.58

0.52

1.45

1.31

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF
NET INCOME PER SHARE (in thousands)





Basic

82,306

82,705

82,494

80,843

Diluted

84,823

86,264

85,120

85,802

 

INMODE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for per share data)
(Unaudited)


September 30,

2022

December 31,

2021

Assets



CURRENT ASSETS:



Cash and cash equivalents

77,048

68,136

Marketable securities

334,934

294,530

Short-term bank deposits

74,405

53,248

Accounts receivable, net of allowance for doubtful accounts

28,056

20,236

Other receivables

13,730

12,938

Inventories

35,810

21,026

TOTAL CURRENT ASSETS

563,983

470,114

NON-CURRENT ASSETS:



Accounts receivable

3,766

768

Deferred income taxes, net

3,255

1,334

Operating lease right-of-use assets

5,191

4,321

Property and equipment, net

2,189

1,404

Other investments

600

600

TOTAL NON-CURRENT ASSETS

15,001

8,427

TOTAL ASSETS

578,984

478,541

Liabilities and shareholders' equity



CURRENT LIABILITIES:



Accounts payable

13,296

8,779

Contract liabilities

12,450

13,805

Other liabilities

32,181

29,266

TOTAL CURRENT LIABILITIES

57,927

51,850

NON-CURRENT LIABILITIES:



Contract liabilities

3,647

2,751

Other liabilities

5,450

4,831

Operating lease liabilities

3,657

3,307

TOTAL NON-CURRENT LIABILITIES

12,754

10,889

TOTAL LIABILITIES

70,681

62,739




TOTAL SHAREHOLDERS' EQUITY

508,303

415,802

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

578,984

478,541

 

INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands, except for per share data)
(Unaudited)



Three months ended
September 30,

Nine months ended
September 30,


2022

2021

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:





Net income

48,789

44,718

123,812

112,389

Adjustments required to reconcile net income to net cash provided by operating activities:





Depreciation and amortization

169

136

462

378

Share-based compensation expenses

7,857

3,192

17,304

8,838

Allowance for doubtful accounts

50

48

402

375

Loss on marketable securities, net

12

26

49

33

Finance expenses, net

586

789

1,527

1,598

Deferred income taxes, net

9

(189)

156

(391)

Changes in operating assets and liabilities:





Increase in accounts receivable

(6,926)

(4,403)

(11,220)

(12,478)

Decrease (increase) in other receivables

887

(4,101)

(706)

(4,418)

Increase in inventories

(6,050)

(1,784)

(14,784)

(4,195)

Increase in accounts payable

1,463

1,161

4,517

2,474

Increase in other liabilities

4,136

11,157

3,366

16,194

Increase (decrease) in contract liabilities

(5,390)

(277)

(459)

1,195

Net cash provided by operating activities

45,592

50,473

124,426

121,992

CASH FLOWS FROM INVESTING ACTIVITIES:





Investment in short-term deposits

(48,090)

(25,090)

(93,701)

(66,090)

Proceeds from short-term deposits

30,090

24,090

73,090

62,180

Purchase of fixed assets

(387)

(254)

(1,247)

(757)

Purchase of marketable securities

(58,982)

(77,547)

(97,736)

(203,274)

Proceeds from sale of marketable securities

21,236

30,660

48,395

78,642

Net cash (used in) investing activities

(56,133)

(48,141)

(71,199)

(129,299)

CASH FLOWS FROM FINANCING ACTIVITIES:





Repurchase of ordinary shares

-

-

(42,637)

(11,921)

Exercise of options

550

5,200

915

19,803

Net cash provided by (used in) financing activities

550

5,200

(41,722)

7,882

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(1,365)

(376)

(2,593)

(585)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(11,356)

7,156

8,912

(10)






CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

88,404

61,772

68,136

68,938

CASH AND CASH EQUIVALENTS AT END OF PERIOD

77,048

68,928

77,048

68,928

 

INMODE LTD.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(U.S. dollars in thousands, except for per share data)
(Unaudited)


Three months ended September 30,

Nine months ended September 30,

2022

2021

2022

2021

Revenues by Category:


















Capital Equipment revenues - United States

72,920

60 %

56,284

60 %

180,640

57 %

144,614

58 %

Capital Equipment revenues - International

34,383

28 %

28,783

30 %

97,126

30 %

76,030

31 %

Total Capital Equipment revenues

107,303

88 %

85,067

90 %

277,766

87 %

220,644

89 %

Consumables and service revenues

13,929

12 %

9,109

10 %

42,934

13 %

26,381

11 %

Total Net Revenue

121,232

100 %

94,176

100 %

320,700

100 %

247,025

100 %













 


Three months ended September 30,

Nine months ended September 30,

2022

2021

2022

2021


%

%

%

%


United States

International

Total

United States

International

Total

United States

International

Total

United States

International

Total

Revenues by Technology:













Minimally Invasive

84

75

82

73

73

73

84

73

80

70

74

71

Hands-Free

13

8

11

25

5

18

13

7

11

28

7

21

Non-Invasive

3

17

7

2

22

9

3

20

9

2

19

8


100

100

100

100

100

100

100

100

100

100

100

100

 

 

INMODE LTD.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF
 INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(U.S. dollars in thousands, except for per share data)
(Unaudited)


Three months ended September 30, 2022

Three months ended September 30, 2021

GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP

REVENUES

121,232


121,232

94,176

-

94,176

COST OF REVENUES

18,765

(554)

18,211

13,943

(301)

13,642

GROSS PROFIT

102,467

554

103,021

80,233

301

80,534

OPERATING EXPENSES:







Research and development

3,166

(857)

2,309

2,248

(425)

1,823

Sales and marketing

43,062

(5,879)

37,183

30,835

(2,208)

28,627

General and administrative

2,494

(567)

1,927

2,132

(258)

1,874

TOTAL OPERATING
EXPENSES

48,722

(7,303)

41,419

35,215

(2,891)

32,324

INCOME FROM OPERATIONS

53,745

7,857

61,602

45,018

3,192

48,210

Finance income (expenses), net

189

-

189

(65)

-

(65)

INCOME BEFORE TAXES

53,934

7,857

61,791

44,953

3,192

48,145

INCOME TAXES

5,145

-

5,145

235

-

235

NET INCOME

48,789

7,857

56,646

44,718

3,192

47,910








NET INCOME PER
SHARE:







Basic

0.59


0.69

0.54


0.58

Diluted

0.58


0.66

0.52


0.55

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF
NET INCOME PER SHARE (in thousands)







Basic

82,306


82,306

82,705


82,705

Diluted

84,823


85,453

86,264


86,494

 

INMODE LTD.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF
 INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(U.S. dollars in thousands, except for per share data)
(Unaudited)


Nine months ended September 30, 2022

Nine months ended September 30, 2021

GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP

REVENUES

320,700

-

320,700

247,025

-

247,025

COST OF REVENUES

52,483

(1,364)

51,119

36,745

(804)

35,941

GROSS PROFIT

268,217

1,364

269,581

210,280

804

211,084

OPERATING EXPENSES:







Research and development

9,164

(2,248)

6,916

7,004

(1,112)

5,892

Sales and marketing

113,564

(12,233)

101,331

84,067

(6,154)

77,913

General and administrative

7,533

(1,459)

6,074

5,884

(768)

5,116

TOTAL OPERATING
EXPENSES

130,261

(15,940)

114,321

96,955

(8,034)

88,921

INCOME FROM OPERATIONS

137,956

17,304

155,260

113,325

8,838

122,163

Finance income (expenses), net

(350)

-

(350)

407

-

407

INCOME BEFORE TAXES

137,606

17,304

154,910

113,732

8,838

122,570

INCOME TAXES

13,794

-

13,794

1,343

-

1,343

NET INCOME

123,812

17,304

141,116

112,389

8,838

121,227

Add: Net Income attributable to non-controlling interests

-

-

-

(103)

-

(103)

NET INCOME ATTRIBUTABLE TO INMODE LTD.

123,812

17,304

141,116

112,286

8,838

121,124








NET INCOME PER
SHARE:







Basic

1.50


1.71

1.39


1.50

Diluted

1.45


1.65

1.31


1.41

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF
NET INCOME PER SHARE (in thousands)







Basic

82,494


82,494

80,843


80,843

Diluted

85,120


85,667

85,802


86,059

 

Company Contact:
Yair MalcaChief
Financial Officer
Phone: (949) 305-0108
Email: Yair.Malca@inmodemd.com

Investor Relations Contact:
Miri Segal
MS-IR LLC
Phone: (917) 607-8654
Email: ir@inmodemd.com

Cision
Cision

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SOURCE InMode Ltd.