InMode (INMD) Jefferies Global Healthcare Conference summary

Company background and technology

• Focuses on radiofrequency-based, minimally invasive treatments for aesthetics, differentiating from traditional laser energy approaches.

• Bipolar radiofrequency technology enables targeted skin tightening and collagen retraction at specific temperatures, forming the core of their patented offerings.

• Holds strong intellectual property protection and a significant barrier to entry, supported by extensive peer-reviewed publications.

• Maintains high gross margins (83%-85%) due to efficient technology and IP, enabling substantial investment in sales and marketing.

• Business model leverages third-party leasing, with typical five-year terms, facilitating product upgrades and refresh cycles.

Product innovation and pipeline

• BodyTite and FaceTite platforms are undergoing a major second-generation refresh, with new features and improved technology.

• Morpheus platform enhancements now better serve skin of color, addressing the fastest-growing segment in aesthetics.

• Quantum, a new internal bipolar RF device for superficial skin tightening, is in soft launch pending FDA approval, expected to drive value in Q3/Q4.

• Upgrades reduce treatment time for doctors, increasing practice efficiency and revenue potential.

• Empower platform targets women's health, with ongoing studies in overactive bladder and HPV, and strong adoption in gynecology practices.

Financial performance and outlook

• Experiencing headwinds from reduced demand for aesthetic procedures, tighter financing conditions, and higher interest rates, especially in North America.

• Product refresh cycle expected to start slow, focusing on new customer sales in 2024, with upgrades building over time.

• Supply chain challenges delayed shipments of new products, with catch-up expected by end of Q3 or possibly Q4.

• Pro forma revenue reflects closed business, while GAAP revenue is recognized upon shipment; no annual difference expected between the two.

• Record Q1 in Europe, with international markets showing growth despite macro headwinds.