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InMode Reports First Quarter 2025 Financial Results; Quarterly Revenue of $77.9 Million Represents 3% Year-Over-Year Decrease

1. InMode's Q1 2025 revenue decreased to $77.9 million, down 3%. 2. Gross margins fell to 78%, impacting profitability compared to last year. 3. Six million share repurchase completed, returning significant capital to investors. 4. International sales grew, especially in Europe, amidst challenging U.S. market conditions. 5. Management forecasts lower revenue and profit for 2025 due to macroeconomic pressures.

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Why Bearish?

The decline in revenue and profits, alongside lowered guidance, suggests potential investor uncertainty. Historical trends show that shared repurchase often fails to counterbalance fundamental weaknesses.

How important is it?

The article's financial results and future projections will likely influence investor sentiment and stock price significantly.

Why Short Term?

Immediate market reactions to poor earnings and outlook affect short-term stock performance; historical patterns indicate significant volatility post-announcement.

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In April 2025, Completed Recent Share Repurchase Program of 6.95 Million Shares  , /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced its consolidated financial results for the first quarter ended March 31, 2025. First Quarter 2025 Highlights: Quarterly GAAP revenues of $77.9 million, compared to $80.3 million in the first quarter of 2024. Quarterly revenues from consumables and service of $20.2 million, a decrease of 10% compared to the first quarter of 2024. GAAP operating income of $15.6 million, *non-GAAP operating income of $18.1 million. Total cash position of $512.9 million as of March 31, 2025, including cash and cash equivalents, marketable securities and short-term bank deposits. In April 2025, completed the repurchase of 6.95 million ordinary shares, returning $127 million of capital to shareholders year-to-date through a share repurchase program. U.S. GAAP Results (U.S. dollars in thousands, except for per share data) Q1 2025 Q1 2024 Revenues $77,874 $80,284 Gross Margins 78 % 80 % Net Income $18,201 $23,696 Earnings per Diluted Share $0.26 $0.28 *Non-GAAP Results (U.S. dollars in thousands, except for per share data)   Q1 2025 Q1 2024 Gross Margins 79 % 80 % Net Income $21,395 $27,679 Earnings per Diluted Share $0.31 $0.32 *Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation and related tax adjustments. Management Comments "In Q1 2025, our performance reflected continued pressure from a challenging macroeconomic environment and weakened consumer demand," said Moshe Mizrahy, Chief Executive Officer of InMode. "While these external factors impacted results, we remain focused on executing our strategy. This includes driving operational excellence, investing in innovation, and pursuing disciplined capital allocation." "We are pleased with our international performance in Q1, particularly in Europe, where we achieved record revenue despite ongoing market headwinds. Looking forward, we believe the recent launch of our OptimasMAX, and Ignite platforms reinforces our commitment to innovation while offering the gold standard technology in aesthetics," Mizrahy concluded. Yair Malca, Chief Financial Officer of InMode, added, "Our strong balance sheet provides the stability and flexibility to navigate near-term challenges while continuing to invest in our long-term growth and recruit the best talent in the industry. We're pleased to report that, earlier this month, we completed our fifth share repurchase program of 6.95 million shares approved by our board of directors in February 2025, for a total of $127 million, underscoring our commitment to disciplined capital allocation and returning value to shareholders. In fact, our total capital return to shareholders in the past 12 months was more than $412 million, executed via share repurchases representing approximately 27% of our share capital. "As always, we continue to explore all avenues for disciplined capital allocation, including additional share repurchases, potential dividends, and strategic M&A opportunities. Our approach remains focused on maximizing long-term shareholder value while maintaining a strong and flexible balance sheet. In addition, international markets accounted for a larger share of total revenue while the U.S. continued to experience challenging headwinds, resulting in a 4%–5% decline in operating margins. We anticipate this trend will persist through the end of the year. Lastly, with U.S. tariffs at their current levels at 10%, we expect an impact of approximately 2%–3% on gross margins," Malca concluded. First Quarter 2025 Financial Results Total GAAP revenues for the first quarter of 2025 were $77.9 million, a decrease of 3% compared to $80.3 million in first quarter of 2024. GAAP gross margin for the first quarter of 2025 was 78%, compared to a gross margin of 80% for the first quarter of 2024. *Non-GAAP gross margin for the first quarter of 2025 was 79%, compared to a gross margin of 80% for the first quarter of 2024. GAAP operating margin for the first quarter of 2025 was 20%, compared to 23% in the first quarter of 2024. *Non-GAAP operating margin for the first quarter of 2025 was 23% compared to 27% for the first quarter of 2024. This decrease was primarily attributable to the increase in cost of goods and marketing activity due to launch of new products. InMode reported GAAP net income of $18.2 million, or $0.26 per diluted share, in the first quarter of 2025, compared to $23.7 million, or $0.28 per diluted share, in the first quarter of 2024. On a *non-GAAP basis, InMode reported net income of $21.4 million, or $0.31 per diluted share, in the first quarter of 2025, compared to $27.7 million, or $0.32 per diluted share, in the first quarter of 2024. As of March 31, 2025, InMode had cash and cash equivalents, marketable securities and short-term bank deposits of $512.9 million. 2025 Financial Outlook Management provided an outlook for the full year of 2025 ending December 31, 2025. Based on our current estimates, management expects: Revenues between $395 to $405 million *Non-GAAP gross margin between 78% and 80%, compared to previous guidance of 80% to 82% *Non-GAAP income from operations to be between $101 million and $106 million, compared to previous guidance of $130 million to $135 million *Non-GAAP earnings per diluted share between $1.64 to $1.68, compared to previous guidance of $1.95 to $1.99 This outlook is not a guarantee of future performance, and stockholders should not rely on such forward-looking statements. See "Forward-Looking Statements" for additional information. *Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation and related tax adjustments. The Current Situation in Israel Regarding the current situation in Israel, Israel and Hamas agreed to a ceasefire agreement; the first phase of such ceasefire began in January 2025. During March 2025, the ceasefire collapsed. Since its collapse, fighting has been carried out at low intensity, amid international attempts to end the war. We remain confident in our ability to continue our R&D and manufacturing activities while maintaining the safety and well-being of our employees. Use of Non-GAAP Financial Measures In addition to InMode's operating results presented in accordance with GAAP, this release contains certain non-GAAP financial measures including non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin. Because these measures are used in InMode's internal analysis of financial and operating performance, management believes they provide investors with greater transparency of its view of InMode's economic performance. Management also believes the presentation of these measures, when analyzed in conjunction with InMode's GAAP operating results, allows investors to more effectively evaluate and compare InMode's performance to that of its peers, although InMode's presentation of its non-GAAP measures may not be strictly comparable to the similarly titled measures of other companies. Schedules reconciling each of these non-GAAP financial measures are provided as a supplement to this release. Conference Call Information Mr. Moshe Mizrahy, Chief Executive Officer, Dr. Michael Kreindel, Co-Founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer will host a conference call today, April 28, 2025, at 8:30 a.m. Eastern Time to discuss the first quarter 2025 financial results. The Company encourages participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10198516/fede138cb8. Callers will receive a unique dial-in number upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time. For callers who opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call 10 minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number. U.S. Toll-Free Dial-in Number: 1-833-316-0562Israel Toll- Free Dial-in Number: 1-80-921-2373International Dial-in Number: 1-412-317-5736Webcast URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=jNwaTGkHAt:8:30 a.m. Eastern Time5:30 a.m. Pacific Time The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/events-presentations/. A replay of the conference call will be available from April 28, 2025, at 12 p.m. Eastern Time to May 12, 2025, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:  Replay Dial-in U.S TOLL-FREE: 1-877-344-7529Replay Dial-in Canada TOLL-FREE: 1-855-669-9658Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088Replay Pin Number: 3039661 To access the replay using an international dial-in number, please select the link below: https://services.choruscall.com/ccforms/replay.html A replay of the conference call will also be available for 90 days on InMode's website at https://inmodemd.com/investors/. About InMode InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio frequency ("RF") technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically accepted minimally invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com. Forward-Looking Statements  The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the 2025 revenue projection described above. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategic plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Consequently, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 4, 2025, and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which pertain only as of the date of this press release. Company Contact: Yair Malca Chief Financial Officer Phone: (949) 305-0108 Email: [email protected] Investor Relations Contact: Miri Segal MS-IR LLC Email: [email protected] INMODE LTD. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended March 31, 2025 2024 REVENUES 77,874 80,284 COST OF REVENUES 16,963 16,365 GROSS PROFIT 60,911 63,919 OPERATING EXPENSES: Research and development 2,895 3,518 Sales and marketing 39,727 39,795 General and administrative 2,671 2,514 TOTAL OPERATING EXPENSES 45,293 45,827 OPERATIONS INCOME 15,618 18,092 Finance income, net 6,859 7,984 INCOME BEFORE INCOME TAXES 22,477 26,076 INCOME TAXES 4,276 2,380 NET INCOME 18,201 23,696  EARNINGS PER SHARE: Basic 0.26 0.28 Diluted 0.26 0.28 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF EARNINGS PER SHARE (in thousands) Basic 68,760 84,523 Diluted 69,435 85,965 INMODE LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except for per share data) (Unaudited) March 31, 2025 December 31, 2024 Assets CURRENT ASSETS: Cash and cash equivalents 145,948 155,329 Marketable securities 224,457 267,688 Short-term bank deposits 142,520 173,455 Accounts receivable, net of allowance for credit losses 32,367 36,335 Prepaid expense and other receivables 25,564 22,097 Inventories 63,781 59,548          TOTAL CURRENT ASSETS 634,637 714,452     NON-CURRENT ASSETS: Accounts receivable, net of allowance for credit losses 2,694 3,176 Deferred income tax asset 55,338 56,285 Operating lease right-of-use assets 9,133 8,732 Property and equipment, net 2,233 2,322 Other investments 700 700 TOTAL NON-CURRENT ASSETS 70,098 71,215 TOTAL ASSETS 704,735 785,667 Liabilities and shareholders' equity CURRENT LIABILITIES: Accounts payable 15,052 13,782 Contract liabilities 15,861 16,755 Other liabilities 41,745 39,314 TOTAL CURRENT LIABILITIES 72,658 69,851     NON-CURRENT LIABILITIES: Contract liabilities 3,393 3,336 Other liabilities 3,668 3,356 Operating lease liabilities 5,588 5,311 TOTAL NON-CURRENT LIABILITIES 12,649 12,003 TOTAL LIABILITIES 85,307 81,854 TOTAL SHAREHOLDERS' EQUITY 619,428 703,813 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 704,735 785,667 INMODE LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 18,201 23,696 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 174 165 Share-based compensation expenses 2,518 3,983 Change in allowance for credit losses of trade receivable (94) 187 Loss (gains) on marketable securities, net (2) 29 Finance income, net (1,574) (4,757) Deferred income taxes, net 896 (37) Changes in operating assets and liabilities: Decrease in accounts receivable 4,544 9,308 Increase in other receivables (3,532) (2,669) Increase in inventories (4,233) (6,507) Increase (decrease) in accounts payable 1,270 (743) Decrease in other liabilities (3,287) (7,803) Increase (decrease) in contract liabilities (current and non-current) (837) 9,262 Net cash provided by operating activities 14,044 24,114 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in short-term deposits - (31,297) Proceeds from short-term deposits 31,297 - Purchase of fixed assets (85) (112) Purchase of marketable securities (20,877) (121,564) Proceeds from sale of marketable securities 3,003 13,465 Proceeds from maturity of marketable securities 62,147 92,118 Net cash provided by (used in) investing activities 75,485 (47,390) CASH FLOWS FROM FINANCING ACTIVITIES:   Repurchase of ordinary shares (99,960) -   Exercise of options 494 234 Net cash provided by (used in) financing activities (99,466) 234 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 556 (439) NET DECREASE IN CASH AND CASH EQUIVALENTS (9,381) (23,481) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 155,329 144,411 CASH AND CASH EQUIVALENTS AT END OF PERIOD 145,948 120,930 INMODE LTD. CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended March 31, 2025 2024 Revenues by Category: Capital Equipment revenues - United States 29,542 38 % 30,859 38 % Capital Equipment revenues - International 28,133 36 % 26,923 34 % Total Capital Equipment revenues 57,675 74 % 57,782 72 % Consumables and service revenues 20,199 26 % 22,502 28 % Total Revenue 77,874 100 % 80,284 100 % Three months ended March 31, 2025 2024 % % United States International Total United States International Total Revenues by Technology: Minimally Invasive 93 79 87 87 80 84 Hands-Free 3 2 3 8 3 5 Non-Invasive 4 19 10 5 17 11 100 100 100 100 100 100 INMODE LTD. RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended March 31, 2025 Three months ended March 31, 2024 GAAP Share Based Compensation Non-GAAP GAAP Share Based Compensation Non-GAAP REVENUES 77,874 - 77,874 80,284 - 80,284 COST OF REVENUES 16,963 (310) 16,653 16,365 (409) 15,956 GROSS PROFIT 60,911 310 61,221 63,919 409 64,328 OPERATING EXPENSES: Research and development 2,895 (222) 2,673 3,518 (428) 3,090 Sales and marketing 39,727 (1,763) 37,964 39,795 (2,883) 36,912 General and administrative 2,671 (223) 2,448 2,514 (263) 2,251 TOTAL OPERATING EXPENSES 45,293 (2,208) 43,085 45,827 (3,574) 42,253 OPERATIONS INCOME 15,618 2,518 18,136 18,092 3,983 22,075 Finance income, net 6,859 - 6,859 7,984 - 7,984 INCOME BEFORE INCOME TAXES 22,477 2,518 24,995 26,076 3,983 30,059 INCOME TAXES 4,276 (676) 3,600 2,380 - 2,380 NET INCOME 18,201 3,194 21,395 23,696 3,983 27,679 EARNINGS PER SHARE: Basic 0.26 0.31 0.28 0.33 Diluted 0.26 0.31 0.28 0.32 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF EARNINGS PER SHARE (in thousands) Basic 68,760 68,760 84,523 84,523 Diluted 69,435 69,611 85,965 86,563 Logo - https://mma.prnewswire.com/media/1064477/InMode_Logo.jpg SOURCE InMode Ltd. 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