InMode Ltd (INMD) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic Adjustments

GuruFocus.com10-31

Total Revenue: $130.2 million in Q3 2024. Net Sales: $98.3 million in Q3 2024. Gross Margin: GAAP and non-GAAP gross margins at 82% in Q3 2024. International Sales: $36.4 million, representing 28% of ...

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GuruFocus has detected 4 Warning Signs with INMD.\n\nRelease Date: October 30, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nInMode Ltd (NASDAQ:INMD) generated $130.2 million in total revenue for Q3 2024, with a strong GAAP gross margin of 82%.\nThe company successfully launched two new platforms, IgniteRF and Optimus Max, which have received early endorsements.\nInMode Ltd (NASDAQ:INMD) ended the quarter with a robust balance sheet, holding $684.9 million in cash, cash equivalents, marketable securities, and deposits.\nThe company has a large sales team with over 250 direct representatives and 83 distributors worldwide, supporting its international operations.\nInMode Ltd (NASDAQ:INMD) maintained a strong non-GAAP diluted earnings per share of $0.70, up from $0.61 in the same quarter last year.\n\n Negative Points \n\nMacroeconomic headwinds, including high interest rates, negatively impacted sales, leading to a revision of the full-year guidance.\nThere was a 19% decrease in international sales compared to Q3 last year, reflecting challenges in global markets.\nThe company experienced a slowdown in minimally invasive treatments and platform sales, affecting overall performance.\nInMode Ltd (NASDAQ:INMD) had to reorganize its corporate structure, including management changes in the US, UK, Spain, and France, due to unsatisfactory results.\nThe ongoing war in Israel posed challenges to production, leading to increased manufacturing costs and impacting gross margins.\n\n Q & A Highlights \nQ: Can you discuss the impact of the buyback on full-year EPS guidance and any cost control measures? A: Moshe Mizrahy, CEO: In Q3, we did not implement cost-cutting measures. We continued business as usual in R&D and marketing, and did not lay off employees. We spent more on manufacturing due to the war in Israel, which required overtime. The structure of our profitability remains, though gross margin and EBIT slightly decreased due to the slowdown and the war.\nQ: Any insights on when you expect improvement in end markets, particularly in the US? A: Moshe Mizrahy, CEO: We initially expected relief in the third quarter, but unfortunately, we haven't seen changes in the slowdown or interest rates on lease packages. We hope for improvement next year, but it's uncertain when it will happen.\nQ: How have interest rate cuts affected leasing in your business, and what is the outlook for 2025? A: Moshe Mizrahy, CEO: Interest rate cuts have not yet affected lease interest rates, which remain high. The process takes longer as leasing companies are cautious. We don't foresee immediate changes and can't predict when rates will decrease.\nQ: What are your expectations for returning to mid-80s gross margins? A: Moshe Mizrahy, CEO: Achieving mid-80s gross margins will be difficult. We expect margins to remain between 80% and 82% due to increased transportation costs and challenges from the war in Israel. We don't anticipate reaching 85% in the near future.\nQ: Can you provide more details on the changes to your commercial organization and any shifts in strategy? A: Moshe Mizrahy, CEO: In Europe, we changed management in Spain, UK, and France due to unsatisfactory results. In the US, we realigned territories and management, with Canada and US VPs reporting directly to me. This is part of a strategy to better align with our portfolio and market needs.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2479418721"}