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01/11 16:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a decline in financial performance, with reduced revenue and EPS guidance, and lower operating margins. Despite new product launches, management's conservative stance on future sales and lack of detailed guidance for 2026 indicate uncertainties. The Q&A session highlights concerns about interest rates and noninvasive growth, with management providing limited clarity. The market cap indicates a small-cap stock, which may react strongly to these negative factors. Overall, the sentiment leans negative, with potential stock price decline in the range of -2% to -8%.
Revenue InMode generated revenues of $93.2 million, compared to $130.2 million in Q3 2024. The decrease is attributed to the $31.9 million in preorder sales included in last year's revenue.
Consumables and Service Revenues Consumables and service revenues were $19.9 million, up 26% year-over-year. This growth was primarily driven by markets outside of the U.S.
Sales Outside the U.S. Sales outside of the U.S. increased to $40 million, representing 43% of overall sales, a 10% increase year-over-year.
Gross Margins GAAP and non-GAAP gross margins were 78%, down from 82% in Q3 2024. The decrease was due to the anticipated impact of tariffs.
Sales and Marketing Expenses Sales and marketing expenses decreased to $44.9 million from $51.9 million in Q3 2024, reflecting the reduction in sales between the two periods.
Operating Expenses GAAP operating expenses were $51.4 million, an 11% year-over-year decrease. Non-GAAP operating expenses were $49.1 million, down from $54.4 million, a 10% decrease year-over-year.
Operating Margin GAAP operating margin was 22%, down from 37% in Q3 2024. Non-GAAP operating margin was 25%, down from 40% last year.
Net Income GAAP net income was $21.8 million, down from $50.9 million in Q3 2024. Non-GAAP net income was $24.5 million, down from $54.9 million.
Earnings Per Share (EPS) GAAP diluted EPS was $0.34, down from $0.65 in Q3 2024. Non-GAAP diluted EPS was $0.38, down from $0.70.
Share-Based Compensation Share-based compensation declined to $2.7 million from $3.9 million in Q3 2024.
Cash and Cash Equivalents As of September 30, 2025, the company had cash and cash equivalents, marketable securities, and deposits of $532.3 million.
Cash from Operating Activities InMode generated $24.5 million in cash from operating activities this quarter.
Men's wellness platform: Soft launch conducted earlier, full commercial rollout completed in Q3. Revenue contribution expected by year-end.
Argentina subsidiary: New subsidiary opened to expand global footprint and serve customers locally. Revenue generation expected by end of 2025.
Thailand subsidiary: Building a strong local team to drive sales and ensure sustainable growth.
Revenue: Generated $93.2 million in Q3 2025, with $19.9 million from consumables and services, up 26% year-over-year.
Sales outside U.S.: Increased to $40 million, accounting for 43% of total sales, a 10% year-over-year growth.
Gross margins: GAAP and non-GAAP gross margins were 78%, down from 82% in Q3 2024 due to tariffs.
Operating expenses: GAAP operating expenses decreased by 11% year-over-year to $51.4 million. Non-GAAP operating expenses decreased by 10% to $49.1 million.
Leadership addition: Michael Dennison appointed as President of North America to strengthen sales and market share.
Economic Environment: The company is navigating a complex economic environment, which could impact its performance and strategic objectives.
Tariffs Impact: Gross margins were lower due to the anticipated impact of tariffs, which could continue to affect profitability.
Revenue Decline: Year-over-year revenue decreased significantly, with GAAP net income and operating margins also declining compared to the previous year.
Seasonality: Traditional Q3 seasonality affected revenues, which may pose challenges in maintaining consistent financial performance.
Regulatory Approvals: The company is awaiting final clinical clearances for its new subsidiary in Argentina, which could delay revenue generation.
Market Challenges: Acknowledged challenges in the marketplace, which could include competitive pressures and economic uncertainties.
Revenue Guidance: Revenues for 2025 are expected to remain between $365 million to $375 million.
Gross Margins: Non-GAAP gross margins are projected to remain between 78% to 80% for 2025.
Income from Operations: Non-GAAP income from operations is expected to remain between $93 million and $98 million for 2025.
Earnings Per Share: Non-GAAP earnings per diluted share are projected to remain between $1.55 to $1.59 for 2025.
Regional Revenue Contribution: Initial revenue generation from the new subsidiary in Argentina is expected by the end of 2025. Revenue contribution from the men wellness platforms is anticipated to begin toward the end of 2025.
The selected topic was not discussed during the call.
The earnings call reveals a decline in financial performance, with reduced revenue and EPS guidance, and lower operating margins. Despite new product launches, management's conservative stance on future sales and lack of detailed guidance for 2026 indicate uncertainties. The Q&A session highlights concerns about interest rates and noninvasive growth, with management providing limited clarity. The market cap indicates a small-cap stock, which may react strongly to these negative factors. Overall, the sentiment leans negative, with potential stock price decline in the range of -2% to -8%.
The earnings call reveals several challenges: reduced guidance, market slowdown, and margin pressures. Although there are positive aspects like share buybacks and product launches, the overall sentiment is negative due to lowered guidance, challenges in key markets, and unclear timelines for regulatory approvals. The market cap suggests a moderate reaction, aligning with a 'Negative' sentiment prediction.
The earnings call reveals several negative factors: revenue and earnings guidance have been revised downward, gross margins and operating margins are declining, and macroeconomic uncertainties are affecting consumer demand. Although there are positives like a strong cash position and continued shareholder returns, the negative financial trends and lack of clarity on new product launches outweigh these. The market cap suggests a moderate reaction, but given the negative guidance and margin pressures, a stock price decline is likely in the range of -2% to -8%.
The earnings call reveals a challenging environment for InMode with declining financial metrics, including reduced revenue and EPS guidance, and pressure on margins due to tariffs and macroeconomic factors. Despite a strong shareholder return program, the negative sentiment is compounded by management's unclear responses in the Q&A, especially regarding new product launches and economic impacts. Given the small-cap nature of the company, these factors are likely to result in a negative stock price movement of -2% to -8% over the next two weeks.
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