InMode(INMD) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - InMode generated record revenue of $40 million in Q3 2019, a 57% increase from the same period in 2018 [25] - Net income increased by 87% year-over-year to $16.2 million in Q3 2019, up from $8.6 million in the same period in 2018 [26] - Gross margin for the quarter was 87%, with operating margin at 40%, compared to 33% for the same period in 2018 [29][30] - Earnings per share were $0.42 per diluted share, compared to $0.26 in the previous year, an increase of 62% [30] Business Line Data and Key Metrics Changes - Most revenue in the quarter was generated from BodyTite, Embrace, Optimas, and Votiva, indicating a diversified product portfolio [27] - The Evolve platform, launched in the U.S., contributed approximately $3.7 million to Q3 revenue, accounting for 9% of the business in the fourth quarter [58] Market Data and Key Metrics Changes - The company established fully owned sales and marketing subsidiaries in India and Australia, with plans for further expansion into Europe and Asia [11][12] - As of September 30, 2019, the total employee count was 232, with 107 direct salespeople [15] Company Strategy and Development Direction - InMode aims to expand its direct operations in eight territories by the end of 2020, including the U.S., Canada, Spain, the U.K., India, Australia, and two additional countries [12] - The company focuses on maintaining a competitive advantage through strong intellectual property, clinical research, and a robust branding strategy [19][24] Management's Comments on Operating Environment and Future Outlook - Management raised the 2019 revenue target to between $150 million and $152 million, up from the previous target of $146 million to $148 million [36] - The company expects to maintain gross margins between 85% and 87% moving forward, depending on product mix and market conditions [41][86] Other Important Information - InMode is currently managing five regulatory processes around the world, with pending approvals expected in 2020 [14][15] - The company has a strong balance sheet with cash and cash equivalents totaling $166.3 million as of September 30, 2019 [30] Q&A Session Summary Question: Expectations for additional sales hires in the U.S. and international growth efforts - Management plans to grow North American direct sales reps from 96 to between 110 and 115 in 2020, with an increase in international sales personnel as well [35] Question: Demand for the BodyTite family and AccuTite launch impact - Demand remains strong across all segments, with the AccuTite launch contributing positively to BodyTite placements [37][38] Question: Factors contributing to gross margin performance - Management emphasized that maintaining a gross margin above 85% is essential for profitability and investment in growth [39][41] Question: Pipeline for new product launches - The Evolve platform was successfully launched in the U.S., with plans for further international rollout in 2020 [50][54] Question: Feedback from user meetings and market opportunities - The user meeting was well-attended and provided valuable insights for product development and market strategy [66] Question: Capital deployment strategy moving forward - The company plans to invest in subsidiaries, potential acquisitions, and increased manufacturing capacity [69][71]