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]

Summary of InMode (INMD) FY Conference Call - August 12, 2025 Company Overview - InMode is a leading player in the global energy-based aesthetic treatments market [1] Key Financial Performance - Q2 performance was described as "okay," not as strong as hoped, but not a terrible quarter [3] - There was a decline in the U.S. market, offset by record performance in Europe and growth in Asia Pacific [4] - Continued challenges include low patient demand and higher interest rates affecting capital equipment investments [5] - Q2 guidance was lowered by $5 million due to underperformance in both Q1 and Q2 [7] Market Dynamics - The revenue mix has shifted to approximately 50% from the U.S. and 50% from outside the U.S., compared to a previous 65% U.S. and 35% OUS [15] - The U.S. market is seen as more profitable, and recovery in consumer confidence is anticipated to improve this mix [15] - The entire energy-based device industry is facing similar challenges, with declines in sales reported across competitors [17] Product Development and Trends - There is an increasing trend in non-invasive platform treatments, particularly combination treatments like Morpheus8 with CO2 laser procedures [10] - Demand for new platforms like Optimus Max and Ignite has been weaker than expected due to economic conditions [19] - A new wellness platform for erectile dysfunction is set for a full launch soon, with current sales based on FDA clearance for improved blood circulation [23] Research and Development Strategy - InMode plans to continue introducing new products in both aesthetic and wellness areas, focusing on minimally invasive and non-invasive procedures [26] - The company is exploring the development of products targeting cheaper, non-invasive procedures [26] Management and Organizational Changes - Changes in the management structure were made to adapt to accelerated growth, including promotions and new hires in various regions [28] - The sales team is being reorganized to create specialties for different product lines [31] Capital Allocation Strategy - InMode has repurchased 27% of the company for approximately $400 million and is considering further buybacks, dividends, and M&A opportunities [36][37] - The company is open to various cash allocation strategies to support future growth [37] Tariff Impact - The company estimates an average tariff impact of 10%, which could affect gross margins by 2-3% annually [39] Conclusion - InMode is navigating a challenging market environment but remains focused on product innovation, strategic management changes, and capital allocation to drive future growth [1][28][37]

Core Viewpoint - DOMA Perpetual Capital Management LLC urges InMode Ltd.'s Board to resume and accelerate stock buybacks and replace CEO Moshe Mizrahy due to concerns over capital allocation strategy and declining stock performance [1][2][3]. Capital Allocation Strategy - The letter emphasizes the need for the Board to act on behalf of shareholders by resuming the share repurchase program and returning cash to shareholders, as the current cash on the balance sheet is not generating earnings [3][4]. - InMode's stock price is viewed as undervalued, with approximately 60% of its market cap in cash, and the company maintains no debt while generating free cash flow [4][7]. CEO Performance and Leadership Concerns - CEO Moshe Mizrahy's management style is criticized as reckless and antagonistic, contributing to the company's underperformance and negative public perception [2][5]. - The letter highlights that Mizrahy has consistently lowered guidance and made poor management decisions, such as firing the US Head of Sales before a critical quarter [5][6]. Financial Performance and Valuation - As of May 7, 2025, InMode's market capitalization, excluding cash, is approximately $375 million, which does not reflect the company's strong business fundamentals, including gross margins near 80% [7][8]. - The letter argues that the current valuation is disconnected from the reality of InMode's business, which includes valuable assets like inventory, global distribution, and unique intellectual property [7][8].

Company Overview - InMode is a leading global provider of minimally-invasive aesthetic and wellness solutions[4] - The company has a broad radiofrequency (RF) based portfolio, including capital equipment and consumables[4] - InMode sells in 90 countries[6] - The company has 641 employees worldwide, including 281 direct sales reps[11] Q1 2025 Financial Highlights - Q1 2025 revenue was $77.9 million[6] - Q1 2025 Non-GAAP net income was $21.4 million[6] - Q1 2025 Non-GAAP gross margin was 79%[6] - Q1 2025 Non-GAAP diluted earning per share was $0.31[6] Technology and Market - InMode addresses the "Treatment Gap" between laser procedures and plastic surgery with minimally-invasive technologies[17, 18] - Clinical studies demonstrate RFAL technology can achieve up to 40% contraction of the heated tissue volume[32]