InMode(US:INMD)2022-05-02 11:00InMode First Quarter 2022 Financial Results Financial Highlights InMode reported strong Q1 2022 results with 31% revenue growth to $85.9 million and 16% GAAP net income increase Q1 2022 vs Q1 2021 Financial Highlights | Metric (U.S. dollars in thousands, except per share) | Q1 2022 | Q1 2021 | Change YoY | | :--- | :--- | :--- | :--- | | GAAP Results | | | | | Revenues | $85,921 | $65,524 | +31% | | Gross Margin | 83% | 85% | -2 p.p. | | Net Income | $30,975 | $26,643 | +16% | | Diluted EPS | $0.36 | $0.31 | +16% | | Non-GAAP Results | | | | | Gross Margin | 83% | 85% | -2 p.p. | | Net Income | $34,069 | $29,341 | +16% | | Diluted EPS | $0.40 | $0.34 | +18% | * Record quarterly revenues from consumables and service reached $14.0 million, a significant increase of 79% compared to the first quarter of 20216 * The company's total cash position, including cash, cash equivalents, marketable securities, and short-term bank deposits, was $399.5 million as of March 31, 20226 * Minimally invasive and subdermal ablative treatment platforms constituted 80% of quarterly revenues6 Management Commentary Management expressed confidence, highlighting supply chain mitigation, reaffirmed 2022 guidance, and ongoing R&D * CEO Moshe Mizrahy stated that 2022 started strongly despite global market uncertainty and that the company successfully mitigated the impact of supply chain challenges and shipment price increases on gross margins5 * CTO Dr. Michael Kreindel confirmed continued R&D investment in new features for existing platforms and development in new categories such as women's health, ENT, and ED7 * President of North America, Shakil Lakhani, reported record consumable sales, indicating a growing platform utilization rate, and anticipates North America will remain the main revenue contributor8 * CMO Dr. Spero Theodorou noted that the innovative EmpowerRF platform is receiving positive feedback, supporting the company's expansion into the women's health market8 Detailed Financial Results Q1 2022 revenue grew 31% YoY to $85.9 million, with GAAP gross margin slightly decreasing to 83% * Total revenues for Q1 2022 reached $85.9 million, a 31% increase compared to Q1 20219 * Revenues outside the U.S. grew 51% year-over-year and represented 38% of total revenues910 * GAAP gross margin for Q1 2022 was 83%, down from 85% in Q1 2021, attributed to increased international distributor sales, higher consumable sales, and increased freight costs11 * GAAP operating margin was 41% in Q1 2022, consistent with Q1 2021, while Non-GAAP operating margin was 44% compared to 45% in Q1 202112 2022 Financial Outlook InMode management reiterated its full-year 2022 guidance, projecting revenues of $415-425 million Full Year 2022 Guidance | Metric | Expected Range | | :--- | :--- | | Revenues | $415 million - $425 million | | *Non-GAAP Gross Margin | 84% - 86% | | *Non-GAAP Income from Operations | $199 million - $204 million | | *Non-GAAP Earnings per Diluted Share | $2.06 - $2.11 | Consolidated Financial Statements This section provides detailed unaudited consolidated financial statements for Q1 2022 Condensed Consolidated Statements of Income For Q1 2022, InMode reported total revenues of $85.9 million and net income of $31.0 million Condensed Consolidated Statements of Income (Unaudited, U.S. dollars in thousands) | | Three months ended March 31, | | :--- | :--- | :--- | | | 2022 | 2021 | | REVENUES | 85,921 | 65,524 | | COST OF REVENUES | 14,772 | 10,079 | | GROSS PROFIT | 71,149 | 55,445 | | TOTAL OPERATING EXPENSES | 36,141 | 28,674 | | INCOME FROM OPERATIONS | 35,008 | 26,771 | | INCOME BEFORE TAXES | 35,387 | 26,815 | | NET INCOME ATTRIBUTABLE TO INMODE LTD. | 30,975 | 26,643 | | Diluted EPS | $0.36 | $0.31 | Condensed Consolidated Balance Sheets As of March 31, 2022, InMode reported total assets of $464.5 million, with cash and equivalents at $399.5 million Condensed Consolidated Balance Sheets (Unaudited, U.S. dollars in thousands) | | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | TOTAL CURRENT ASSETS | 454,848 | 470,114 | | TOTAL ASSETS | 464,466 | 478,541 | | TOTAL CURRENT LIABILITIES | 49,818 | 51,850 | | TOTAL LIABILITIES | 61,148 | 62,739 | | TOTAL SHAREHOLDERS' EQUITY | 403,318 | 415,802 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 464,466 | 478,541 | Condensed Consolidated Statements of Cash Flows For Q1 2022, net cash from operations was $31.9 million, with significant cash used in financing activities Condensed Consolidated Statements of Cash Flows (Unaudited, U.S. dollars in thousands) | | Three months ended March 31, | | :--- | :--- | :--- | | | 2022 | 2021 | | Net cash provided by operating activities | 31,853 | 24,766 | | Net cash (used in) investing activities | (12,692) | (37,608) | | Net cash provided by (used in) financing activities | (42,476) | 9,028 | | NET DECREASE IN CASH AND CASH EQUIVALENTS | (23,466) | (4,037) | | CASH AND CASH EQUIVALENTS AT END OF PERIOD | 44,670 | 64,901 | Financial Highlights by Geography, Category, and Technology In Q1 2022, the United States accounted for 62% of revenue, with capital equipment and minimally invasive platforms as primary drivers Revenues by Geography (Q1 2022 vs Q1 2021) | Geography | Q1 2022 Revenue (U.S. dollars in thousands) | % of Total | Q1 2021 Revenue (U.S. dollars in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | United States | $53,606 | 62% | $44,065 | 67% | | International | $32,315 | 38% | $21,459 | 33% | | Total | $85,921 | 100% | $65,524 | 100% | Revenues by Category (Q1 2022 vs Q1 2021) | Category | Q1 2022 Revenue (U.S. dollars in thousands) | % of Total | Q1 2021 Revenue (U.S. dollars in thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Capital equipment | $71,943 | 84% | $57,731 | 88% | | Consumables and service | $13,978 | 16% | $7,793 | 12% | | Total | $85,921 | 100% | $65,524 | 100% | Reconciliation of GAAP to Non-GAAP Statements of Income This table reconciles GAAP to Non-GAAP financial measures for Q1 2022, primarily adjusting for share-based compensation GAAP to Non-GAAP Reconciliation for Q1 2022 (U.S. dollars in thousands) | | GAAP | Share Based Compensation | Non-GAAP | | :--- | :--- | :--- | :--- | | GROSS PROFIT | 71,149 | 314 | 71,463 | | INCOME FROM OPERATIONS | 35,008 | 3,094 | 38,102 | | NET INCOME ATTRIBUTABLE TO INMODE LTD. | 30,975 | 3,094 | 34,069 | | Diluted EPS | $0.36 | | $0.40 |