InMode Reports Fourth Quarter and Full Year 2024 Financial Results; Board of Directors Has Approved a New Share Repurchase Program

Quarterly GAAP revenues of $97.9 million and full year revenue of $394.8 million Returned $285.4 million of capital to shareholders in full year 2024 Together with new 10% program, represents repurchase of approximately 27% of shares outstanding within 15 month timeframe, with the potential of substantial additional capital return in 2025 , /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced its consolidated financial results for the fourth quarter and full year 2024. Fourth Quarter 2024 Highlights: Quarterly GAAP revenues of $97.9 million, compared to $126.8 million in the fourth quarter of 2023. Quarterly revenues from consumables and service of $19.9 million, a decrease of 3% compared to the fourth quarter of 2023. GAAP operation income of $27.9 million, *non-GAAP operation income of $31.3 million. Returned $119.8 million of capital to shareholders through repurchase of ordinary shares. Total cash position of $596.5 million as of December 31, 2024, including cash and cash equivalents, marketable securities and short-term bank deposits. Full Year 2024 Highlights: Full year revenues of $394.8 million, a year-over-year decrease of 20%. Full year revenues from consumables and service of $79.3 million, a decrease of 1% compared to 2023. GAAP operation income of $112.5 million, compared to $195.7 million in 2023; record *non-GAAP operation income of $129.1 million, compared to $219.3 million in 2023. Returned $285.4 million of capital to shareholders through repurchase of ordinary shares. U.S. GAAP Results (U.S. dollars in thousands, except for per share data) Q4 2024 Q4 2023 FY 2024 FY 2023 Revenues $97,853 $126,781 394,818 $492,048 Gross Margins 79 % 84 % 80 % 84 % Net Income $82,771 $55,165 $181,275 $197,919 Earnings per Diluted Share $1.14 $0.64 $2.25 $2.30 *Non-GAAP Results (U.S. dollars in thousands, except for per share data) Q4 2024 Q4 2023 FY 2024 FY 2023 Gross Margins 80 % 84 % 81 % 84 % Net Income $31,081 $61,487 $142,707 $221,519 Earnings per Diluted Share $0.42 $0.71 $1.76 $2.57 *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 included in this release. Non-GAAP results exclude share-based compensation and tax benefit adjustments. Management Comments "While we have a solid market position, our fourth quarter results were impacted by stronger than expected headwinds in the aesthetics industry that were intensified by broader macroeconomic challenges," said Moshe Mizrahy, Chief Executive Officer of InMode. "We have taken decisive actions to navigate this environment, and also ensure we're well positioned to benefit when market conditions recover. To that end, we remain committed to leading through innovation. Our recently launched Ignite and OptimasMAX platforms are in the early stages of generating revenue, and we expect to see greater traction from customers as the year progresses. In 2025, we also plan to launch two new platforms targeting the medical aesthetic and wellness markets, where we see opportunity. Thanks to the efforts of our global team, we remain steadfast in delivering excellent support and innovative technologies to our customers." Yair Malca, Chief Financial Officer of InMode, added, "The strength of our balance sheet provides us the financial flexibility to evaluate the optimal path to allocate capital to drive enhanced shareholder value. We are pleased to report that during the fourth quarter of 2024, we completed our fourth share repurchase program that was originally announced in September 2024, repurchasing 7.68 million shares for $135 million, out of which $120 million was repurchased during the fourth quarter of 2024. Our total capital return to shareholders for fiscal year 2024 was more than $285 million, executed via share repurchases representing approximately 19% of our share capital and more than double our fiscal year 2024 free cash flow. On February 3rd, our Board of Directors approved another tax-efficient share repurchase program of up to 10% of our total shares outstanding, expected to be executed over the next three to six months. Together with our 2024 share repurchases, this represents approximately 27% of share capital to be bought within less than 15 months. Given the strength of our free cash flow and confidence in our business, we are also exploring, in consultation with financial, legal and tax advisors, returning significant additional capital by the end of the year to create further shareholder value. We will continue to carefully review and evaluate our approach to capital allocation, with a focus on ensuring we deliver enhanced value for all shareholders and will continue our dialogue with shareholders on this important process." Fourth Quarter and Full Year 2024 Financial Results Total GAAP revenues for the fourth quarter of 2024 were $97.9 million, a decrease of 23% compared to $126.8 million in the fourth quarter of 2023. Total revenues for 2024 were $394.8 million, a decrease of 20% compared to 2023. GAAP gross margin for the fourth quarter of 2024 was 79%, compared to 84% for the fourth quarter of 2023. *Non-GAAP gross margin for the fourth quarter of 2024 was 80%, compared to 84% for the fourth quarter of 2023. GAAP gross margin for 2024 was 80%, compared to 84% for 2023. *Non-GAAP gross margin for 2024 was 81%, compared to 84% for 2023. GAAP operating margin for the fourth quarter of 2024 was 28%, compared to 40% in the fourth quarter of 2023. *Non-GAAP operating margin for the fourth quarter of 2024 was 32%, compared to 45% for the fourth quarter of 2023. GAAP operating margin for 2024 was 29%, compared to 40% in 2023. *Non-GAAP operating margin for 2024 was 33%, compared to 45% in the full year of 2023. This decrease was primarily attributable to higher sales and marketing expenses, primarily a result of recent management changes, as well as additional investments in trade shows and workshop activities. InMode reported GAAP net income of $82.8 million, or $1.14 per diluted share, in the fourth quarter of 2024, compared to $55.2 million, or $0.64 per diluted share, in the fourth quarter of 2023. On a *non-GAAP basis, InMode reported net income of $31.1 million, or $0.42 per diluted share, in the fourth quarter of 2024, compared to $61.5 million, or $0.71 per diluted share, in the fourth quarter of 2023. GAAP net income was $181.3 million, or $2.25 per diluted share, in 2024, compared to GAAP net income of $197.9 million, or $2.30 per diluted share, in 2023. On a *non-GAAP basis, InMode reported net income of $142.7 million, or $1.76 per diluted share, in the full year of 2024, compared to net income of $221.5 million, or $2.57 per diluted share, for the full year in 2023. As of December 31, 2024, InMode had cash and cash equivalents, marketable securities and short-term bank deposits of $596.5 million. As of December 31, 2024, the Company's U.S. subsidiary has an accumulated federal tax loss carryforward of approximately $203 million and a state tax loss carryforward of approximately $165.5 million, primarily arising from employee stock option exercises that generated tax deductions exceeding recognized compensation expenses. After assessing cumulative income in recent years and the realizability of deferred tax assets, the Company released a valuation allowance related to its U.S. net deferred tax assets, and as a result recorded a deferred tax asset of $55.1 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 80% and 82% *Non-GAAP income from operations to be between $130 million and $135 million *Non-GAAP earnings per diluted share between $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 tax benefit adjustments. However, these estimates are based on management's current estimates, which may be updated. The Current Situation in Israel Regarding the current situation in Israel, Israel and Hamas recently agreed to a ceasefire agreement, the first phase of such ceasefire began on January 19, 2025. With the ceasefire agreement in place, 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 and Mr. Yair Malca, Chief Financial Officer, will host a conference call today, February 4, 2025, at 8:30 a.m. Eastern Time to discuss the fourth quarter and full year 2024 financial results. The Company encourages participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10195703/fe3de01ec4. 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=4AkhyaPz At: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 February 4, 2025, at 12 p.m. Eastern Time to February 13, 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: 855-669-9658Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088Replay Pin Number: 4023671 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 04, 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 December 31, Year Ended December 31, 2024 2023 2024 2023 REVENUES 97,853 126,781 394,818 492,048 COST OF REVENUES 20,216 20,264 77,752 80,708 GROSS PROFIT 77,637 106,517 317,066 411,340 OPERATING EXPENSES: Research and development 2,667 3,473 13,137 13,410 Sales and marketing 44,653 49,451 181,366 193,042 General and administrative 2,453 2,349 10,032 9,228 TOTAL OPERATING EXPENSES 49,773 55,273 204,535 215,680 OPERATIONS INCOME 27,864 51,244 112,531 195,660 Finance income, net 4,346 8,920 30,938 21,607 INCOME BEFORE INCOME TAXES 32,210 60,164 143,469 217,267 INCOME TAXES BENEFIT (EXPENSES) 50,561 (4,999) 37,806 (19,348) NET INCOME 82,771 55,165 181,275 197,919 EARNINGS PER SHARE: Basic 1.15 0.66 2.29 2.37 Diluted 1.14 0.64 2.25 2.30 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF EARNINGS PER SHARE (in thousands) Basic 71,874 83,862 79,306 83,534 Diluted 72,787 85,835 80,597 85,954 INMODE LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except for per share data) (Unaudited) December 31, 2024 December 31, 2023 Assets CURRENT ASSETS: Cash and cash equivalents 155,329 144,411 Marketable securities (amortized cost of $268,129 and $375,829, as of December 31, 2024 and 2023, respectively) 267,688 373,647 Short-term bank deposits 173,455 223,547 Accounts receivable, net of allowance for credit losses of $1,825 and $1,538, as of December 31, 2024 and 2023, respectively 36,335 42,362 Prepaid expense and other receivables 22,097 16,268 Inventories 59,548 45,095 TOTAL CURRENT ASSETS 714,452 845,330 NON-CURRENT ASSETS: Accounts receivable, net of allowance for credit losses of $924 and $716 as of December 31, 2024 and 2023, respectively 3,176 3,670 Deferred income tax asset 56,285 1,506 Operating lease right-of-use assets 8,732 9,698 Property and equipment, net 2,322 2,382 Other investments 700 700 TOTAL NON-CURRENT ASSETS 71,215 17,956 TOTAL ASSETS 785,667 863,286 Liabilities and shareholders' equity CURRENT LIABILITIES: Accounts payable 13,782 13,966 Contract liabilities 16,755 10,923 Other liabilities 39,314 39,247 TOTAL CURRENT LIABILITIES 69,851 64,136 NON-CURRENT LIABILITIES: Contract liabilities 3,336 3,766 Other liabilities 3,356 1,399 Operating lease liabilities 5,311 6,613 TOTAL NON-CURRENT LIABILITIES 12,003 11,778 TOTAL LIABILITIES 81,854 75,914 TOTAL SHAREHOLDERS' EQUITY 703,813 787,372 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 785,667 863,286 INMODE LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended December 31, Year EndedDecember 31, 2024 2023 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 82,771 55,165 181,275 197,919 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 248 122 728 623 Share-based compensation expenses 3,447 6,322 16,569 23,600 Change in allowance for credit losses of trade receivable 158 355 572 1,020 Loss (Gain) on marketable securities, net (3) - 167 - Finance expenses (income), net 1,533 (1,581) (4,401) (4,714) Deferred income tax assets, net (55,121) (30) (55,179) (184) Changes in operating assets and liabilities: Decrease (increase) in accounts receivable (current and non-current) 4,025 377 5,949 (16,084) Decrease (increase) in other receivables 1,879 3,143 (5,698) (2,224) Increase in inventories (1,264) (5,106) (14,453) (5,198) Increase (decrease) in accounts payable (531) 1,633 (184) (2,276) Increase (decrease) in other liabilities (4,243) 204 1,917 (12,588) Increase (decrease) in contract liabilities (current and non-current) (457) 562 5,402 (3,068) Net cash provided by operating activities 32,442 61,166 132,664 176,826 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in short-term deposits (3,500) (67,101) (168,187) (233,241) Proceeds from short-term deposits 67,100 - 218,740 85,090 Purchase of fixed assets (234) (21) (669) (705) Other investments - (100) - (100) Purchase of marketable securities (59,708) (52,527) (336,221) (245,337) Proceeds from sale of marketable securities 21,146 5,000 90,754 5,000 Proceeds from maturity of marketable securities 53,012 63,159 357,789 253,229 Net cash provided by (used in) investing activities 77,816 (51,590) 162,206 (136,064) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchase of ordinary shares (119,849) - (285,385) - Exercise of options 1,420 275 2,614 5,504 Net cash provided by (used in) financing activities (118,429) 275 (282,771) 5,504 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1,338) 827 (1,181) 605 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (9,509) 10,678 10,918 46,871 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 164,838 133,733 144,411 97,540 CASH AND CASH EQUIVALENTS AT END OF YEAR 155,329 144,411 155,329 144,411 INMODE LTD. CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (U.S. dollars in thousands, except for per share data) (Unaudited) Three months ended December 31, Year ended December 31, 2024 2023 2024 2023 Revenues by Category: Capital Equipment revenues - United States 53,128 55 % 69,253 55 % 204,520 52 % 260,801 53 % Capital Equipment revenues - International 24,836 25 % 37,004 29 % 111,027 28 % 151,288 31 % Total Capital Equipment revenues 77,964 80 % 106,257 84 % 315,547 80 % 412,089 84 % Consumables and service revenues 19,889 20 % 20,524 16 % 79,271 20 % 79,959 16 % Total Revenue 97,853 100 % 126,781 100 % 394,818 100 % 492,048 100 % Three months ended December 31, Year ended December 31, 2024 2023 2024 2023 % % % % United States International Total United States International Total United States International Total United States International Total Revenues by Technology: Minimal-Invasive 93 76 86 84 80 83 92 80 87 86 77 83 Hands-Free 5 3 5 12 4 9 6 3 5 11 5 8 Non-Invasive 2 21 9 4 16 8 2 17 8 3 18 9 100 100 100 100 100 100 100 100 100 100 100 100 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 December 31, 2024 Three months ended December 31, 2023 GAAP Share Based Compensation Tax benefit (1) Non-GAAP GAAP Share Based Compensation Non-GAAP REVENUES 97,853 - - 97,853 126,781 - 126,781 COST OF REVENUES 20,216 (472) - 19,744 20,264 (573) 19,691 GROSS PROFIT 77,637 472 - 78,109 106,517 573 107,090 OPERATING EXPENSES: Research and development 2,667 (300) - 2,367 3,473 (665) 2,808 Sales and marketing 44,653 (2,360) - 42,293 49,451 (4,611) 44,840 General and administrative 2,453 (315) - 2,138 2,349 (473) 1,876 TOTAL OPERATING EXPENSES 49,773 (2,975) - 46,798 55,273 (5,749) 49,524 OPERATIONS INCOME 27,864 3,447 - 31,311 51,244 6,322 57,566 Finance income, net 4,346 - - 4,346 8,920 - 8,920 INCOME BEFORE INCOME TAXES 32,210 3,447 - 35,657 60,164 6,322 66,486 INCOME TAXES BENEFIT (EXPENSES) 50,561 - (55,137) (4,576) (4,999) - (4,999) NET INCOME 82,771 3,447 (55,137) 31,081 55,165 6,322 61,487 EARNINGS PER SHARE: Basic 1.15 0.43 0.66 0.73 Diluted 1.14 0.42 0.64 0.71 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF EARNINGS PER SHARE (in thousands) Basic 71,874 71,874 83,862 83,862 Diluted 72,787 73,139 85,835 86,196 (1) Tax benefit recorded during the year ended December 31, 2024, as a result of a release of valuation allowance on our deferred tax assets in the United States as it is more likely than not that our net deferred tax assets will be realized given our expectation of profitability in future periods. Year Ended December 31, 2024 Year Ended December 31, 2023 GAAP Share Based Compensation Tax benefit (1) Non-GAAP GAAP Share Based Compensation Non-GAAP REVENUES 394,818 - - 394,818 492,048 - 492,048 COST OF REVENUES 77,752 (1,833) - 75,919 80,708 (2,046) 78,662 GROSS PROFIT 317,066 1,833 - 318,899 411,340 2,046 413,386 OPERATING EXPENSES: Research and development 13,137 (2,177) - 10,960 13,410 (2,652) 10,758 Sales and marketing 181,366 (11,367) 169,999 193,042 (17,167) 175,875 General and administrative 10,032 (1,192) - 8,840 9,228 (1,735) 7,493 TOTAL OPERATING EXPENSES 204,535 (14,736) - 189,799 215,680 (21,554) 194,126 OPERATIONS INCOME 112,531 16,569 - 129,100 195,660 23,600 219,260 Finance income, net 30,938 - - 30,938 21,607 - 21,607 INCOME BEFORE INCOME TAXES 143,469 16,569 - 160,038 217,267 23,600 240,867 INCOME TAXES BENEFIT (EXPENSES) 37,806 - (55,137) (17,331) (19,348) - (19,348) NET INCOME 181,275 16,569 (55,137) 142,707 197,919 23,600 221,519 EARNINGS PER SHARE: Basic 2.29 1.80 2.37 2.65 Diluted 2.25 1.76 2.30 2.57 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF EARNINGS PER SHARE (in thousands) Basic 79,306 79,306 83,534 83,534 Diluted 80,597 80,943 85,954 86,177 (1) Tax benefit recorded during the year ended December 31, 2024, as a result of a release of valuation allowance on our deferred tax assets in the United States as it is more likely than not that our net deferred tax assets will be realized given our expectation of profitability in future periods. 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InMode Reports Fourth Quarter and Full Year 2024 Financial Results; Board of Directors Has Approved a New Share Repurchase Program

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