Summary of InMode Conference Call Company Overview - **Company**: InMode - **Industry**: Medical Technology, specifically in energy-based, minimally invasive surgical aesthetic and medical treatment solutions Key Points and Arguments Market Conditions - The aesthetic market has been experiencing a slowdown since summer 2023, attributed to macroeconomic factors and softening demand [4][6] - InMode has a strong financial position, being debt-free with a solid cash balance, which allows it to navigate the current market challenges [9] Financing and Credit - Approximately 90% of InMode's capital equipment sales are financed through third-party leasing companies [6] - Rising interest rates have increased monthly payments for customers, leading to tighter credit conditions and more rigorous approval processes [6][7] Product Strategy - InMode has opted not to lower prices, believing it would be detrimental in the long run [16] - The company is expanding its product offerings to include lasers and other technologies, aiming to become a one-stop shop for customers [16][17] Market Penetration - InMode has achieved about 25-30% penetration in the plastic surgeon community but only 5-7% in dermatology, indicating significant growth potential in the latter [20][22] - The company is focusing on upgrading existing customers to newer technologies, which could enhance penetration further [22][32] Patient Demand - There has been a decline in patient demand over the last couple of years, impacting capital equipment sales [58] - Recent months have shown signs of stabilization in demand, although it remains below previous levels [61][63] International Growth - InMode has seen a return to double-digit growth in international markets, attributed to leadership changes and direct operations in countries like Germany and Japan [81][82] - The company is working with a distributor in China and is awaiting approvals for more products, which could enhance sales in that market [87][90] Tariff Impact - The company anticipates a 200-300 basis point headwind from tariffs, with ongoing supply chain adjustments aimed at mitigating this impact [64][70] - Future guidance on tariffs will depend on the success of these adjustments and potential treaties between Israel and the U.S. [69] Future Outlook - InMode is cautiously optimistic about achieving 5-6% revenue growth in the coming years, which would add $25-30 million to the top line annually [94][96] - The company expects new product launches to contribute positively to revenue growth [94] Additional Important Information - The aesthetic space is cyclical, and down cycles typically do not last more than two to three years [12] - The company is actively pursuing opportunities in women's health, which is seen as a significant growth driver [54][56] - InMode is also developing a standalone team focused on ophthalmology, which is expected to boost growth once FDA approvals are secured [53][54]

Financial Data and Key Metrics Changes - Evolus reported global net revenue of $68.5 million for Q1 2025, representing a 15.5% increase compared to Q1 2024, supported by a strong commercial engine [6][15][12] - The company achieved a gross margin of 68.1% and an adjusted gross margin of 69.2% for the first quarter [18] - Non-GAAP operating loss for Q1 was $500,000, an improvement from a loss of $900,000 in Q1 2024, with expectations of achieving profitability in Q4 2025 [21][28] Business Line Data and Key Metrics Changes - Product revenue accounted for approximately 94% of total sales, with a customer reorder rate of about 70% [15] - The company added 675 new purchasing accounts, bringing the total to over 16,000, indicating strong market penetration [7] - The loyalty program saw over 220,000 redemptions, with 65% from existing consumers, highlighting high consumer satisfaction [8] Market Data and Key Metrics Changes - Evolus gained a 14% market share by the end of 2024, exceeding initial guidance, and continued to gain share in Q1 2025 [17] - International revenue contribution increased and is expected to outpace U.S. growth, validating the strong growth trajectory of the toxin business outside the U.S. [16] - The company reduced its toxin market growth expectation to low single digits for 2025, reflecting a more conservative outlook [6][17] Company Strategy and Development Direction - Evolus is transitioning into a multiproduct company with the launch of Evolisse, aiming to redefine the category and capture market share [8][11] - The company is focused on building long-term customer relationships and deepening its presence within existing accounts [11] - Evolus aims to achieve total net revenue of at least $700 million by 2028, with a compounded annual growth rate of 27% from 2024 [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging market environment while maintaining growth [14][12] - The early success of Evolisse is seen as a momentum builder, reinforcing growth across the portfolio [12] - Management reiterated full-year revenue guidance of $345 million to $355 million, projecting continued growth above 30% [27][28] Other Important Information - The company has taken proactive steps to strengthen its balance sheet through debt refinancing, reducing interest expenses and increasing cash generation [22][23] - Evolus is closely monitoring tariff impacts on its products, with limited exposure expected for 2025 [18][19] Q&A Session Summary Question: Market trends and demand changes - Management indicated that both macroeconomic factors and negative sentiment around the term "filler" are impacting demand, but they see an opportunity to revive the market segment [30][32] Question: Impact of AbbVie's loyalty program changes - Management acknowledged the impact of AbbVie's loyalty program changes on market dynamics but believes they continue to gain share despite this [44][46] Question: Confidence in 2025 revenue guidance - Management reiterated confidence in 2025 guidance due to accelerated share uptake despite slower market growth [54][56] Question: Early adopters of Evolisse - The initial adoption of Evolisse is primarily among existing customers, with high interest in trialing the product [65][66] Question: Seasonality and market softness - Management noted a consistent seasonal pattern but acknowledged slight slowing in new patient starts, impacting overall market dynamics [70][78]

Financial Data and Key Metrics Changes - Evolus reported global net revenue of $68.5 million for Q1 2025, representing a 15.5% increase compared to Q1 2024 [15][26] - The gross margin for Q1 was reported at 68.1%, with an adjusted gross margin of 69.2% [18] - Non-GAAP operating loss for Q1 was $500,000, an improvement from a loss of $900,000 in Q1 2024 [21] Business Line Data and Key Metrics Changes - Product revenue accounted for approximately 94% of total sales, with a customer reorder rate of about 70% [15][16] - The company added 675 new purchasing accounts, bringing the total to over 16,000 [7] - The repeat treatment rate for Jeuveau indicates strong consumer loyalty, with over 220,000 redemptions in the loyalty program, 65% from existing consumers [7] Market Data and Key Metrics Changes - Evolus gained a 14% market share by the end of 2024, which is 1% above the initial guidance for 2025 [17] - International revenue contribution is increasing and is expected to outpace U.S. growth [16] - The company has reduced its toxin market growth expectation to low single digits for 2025 [6][17] Company Strategy and Development Direction - Evolus is transitioning into a multiproduct company with the launch of Evolisse, aiming to redefine the market narrative around fillers [8][11] - The company is focused on building long-term customer relationships and deepening its presence within existing accounts [11] - Evolus is reaffirming its full-year revenue guidance of $345 million to $355 million, targeting over 30% growth for the sixth consecutive year [12][26] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious market environment but expressed confidence in the company's ability to capture market share and drive growth [6][12] - The early success of Evolisse is seen as a momentum builder for the company, reinforcing growth across its product portfolio [12] - Management remains optimistic about achieving at least $700 million in net revenue by 2028, with a target of 20% non-GAAP operating income margin [26][83] Other Important Information - The company has taken proactive steps to strengthen its balance sheet through debt refinancing, reducing interest expenses and increasing cash generation [14][22] - The impact of tariffs on the injectable hyaluronic acid gel is estimated to be less than $2 million for 2025, and the company has incorporated this into its planning [18][19] Q&A Session Summary Question: Market trends and demand changes - Management indicated that both macroeconomic factors and negative sentiment around the term "filler" are impacting demand, but they see an opportunity to revive the market segment with their new product [30][32] Question: Impact of AbbVie's loyalty program changes - Management acknowledged the impact of AbbVie's loyalty program changes on market dynamics but emphasized that they continue to gain market share despite these challenges [42][45] Question: Confidence in 2025 revenue guidance - Management reiterated confidence in the 2025 revenue guidance due to accelerated share uptake and strong performance in a challenging market [49][51] Question: Early adopters of Evolisse - The early adopters of Evolisse include existing customers, with a high interest in trialing the product, indicating strong initial feedback [58][59] Question: Seasonal market trends - Management noted a consistent seasonal pattern in the market, with Q4 typically being the strongest quarter, and they expect a bounce back in Q2 [62][65] Question: Broader market softness - Management reported slight slowing in new patient starts but noted that existing patients continue to engage with the product [71][73]