InMode’s Earnings Call: Mixed Sentiment Amid Challenges

Inmode ((INMD)) has held its Q4 earnings call. Read on for the main highlights of the call.

InMode’s recent earnings call presented a mixed sentiment, reflecting both optimism and caution. The company emphasized its ongoing commitment to innovation and shareholder value through new platform launches and significant share repurchases. However, the earnings call also revealed challenges, such as declining revenue and operating margins, particularly in the U.S. market, compounded by supply chain issues. While InMode is hopeful about future growth and market recovery, current economic and industry challenges pose significant hurdles.

Launch of New Platforms

In 2024, InMode introduced two new platforms, IgniteRF and OptimasMAX. Although these platforms are in the early stages of revenue generation, they have garnered positive feedback from doctors worldwide. This positive reception suggests a potential for increased adoption in the coming year, contributing to InMode’s strategic focus on innovation.

Strong Cash Generation and Shareholder Returns

Highlighting its financial strength, InMode returned over $285 million to shareholders through share repurchases, representing nearly 19% of its share capital in 2024. The company has also announced a new share repurchase program, aiming to buy back up to 10% of share capital within the next 3 to 6 months, demonstrating its commitment to returning value to shareholders.

High Gross Margins

Despite facing various challenges, InMode successfully maintained high gross margins, reporting a non-GAAP gross margin of 80% for Q4 and 81% for the full year 2024. This achievement underscores the company’s operational efficiency and ability to sustain profitability even in difficult times.

Revenue Decline

InMode experienced a 20% decline in total revenue for 2024 compared to the previous year. The fourth quarter of 2024 saw revenue at $97.9 million, with a notable decline in international sales, which fell by 23% from Q4 2023. This downturn highlights the significant challenges InMode faces in maintaining its revenue streams.

Decreased Operating Margins

The company’s operating margins also saw a decrease, with GAAP operating margins at 28% for both Q4 and the full year 2024. The non-GAAP operating margins were slightly better, at 32% and 33%, respectively, but still reflected a decline from the previous year’s 45%.

Challenges in the U.S. Market

InMode’s sales outside the U.S. decreased by 19% for 2024 compared to 2023, with the U.S. market particularly impacted by high interest rates and a reduced number of patients seeking minimally invasive procedures. This situation has contributed to the company’s overall revenue decline.

Supply Chain and Macroeconomic Challenges

The broader macroeconomic landscape has posed significant challenges for InMode, with high interest rates affecting leasing costs for doctors in the aesthetic industry. These supply chain and economic hurdles have intensified the difficulties faced by the company in sustaining its market position.

Forward-Looking Guidance

Looking ahead, InMode projects revenue between $395 million and $405 million for 2025, with a non-GAAP gross margin ranging from 80% to 82%. The company anticipates non-GAAP income from operations to be between $130 million and $135 million, and non-GAAP earnings per diluted share between $1.95 and $1.99. Despite the challenges of 2024, InMode remains optimistic about its innovative product launches and new platforms planned for 2025, which are expected to drive future growth.

In summary, InMode’s earnings call provided a balanced view of the company’s current situation, highlighting both its strengths in innovation and shareholder returns and the challenges posed by revenue declines and macroeconomic factors. The company remains hopeful for recovery and growth, supported by its strategic initiatives and forward-looking plans.