InMode’s Earnings Call: Mixed Sentiments Amid Growth

Inmode ((INMD)) has held its Q3 earnings call. Read on for the main highlights of the call.Meet Your ETF AI Analyst Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow. InMode’s recent earnings call revealed a mixed sentiment, with positive developments in international expansion and consumables growth being overshadowed by significant declines in revenue, gross margins, operating margins, and net income compared to the previous year. Expansion in Emerging Markets InMode has made strategic moves to expand its global presence by opening a new subsidiary in Argentina and previously in Thailand. These expansions are anticipated to generate initial revenue by the end of 2025, marking a significant step in the company’s international growth strategy. Strong Consumables and Service Revenue Growth The company reported a 26% year-over-year increase in consumables and service revenues, reaching $19.9 million. This growth was primarily driven by markets outside of the U.S., highlighting the strength of InMode’s international operations. Strong Financial Position InMode ended the quarter with a robust financial standing, holding cash, cash equivalents, marketable securities, and deposits totaling $532.3 million. The company generated $24.5 million in cash from operating activities during this quarter, underscoring its solid financial health. Significant Revenue Decrease The quarter’s revenue was reported at $93.2 million, a significant decrease from $130.2 million in the same period last year. This drop was largely attributed to the absence of $31.9 million in preorder sales, indicating challenges in maintaining previous sales momentum. Decline in Gross Margins InMode’s gross margins saw a decline, with GAAP and non-GAAP gross margins at 78%, down from 82% in Q3 2024. This decrease was impacted by anticipated tariffs, affecting the company’s profitability. Decreased Operating Margins The company’s GAAP operating margin fell to 22%, down from 37% in the third quarter of 2024. Similarly, the non-GAAP operating margin decreased to 25% from 40% last year, reflecting operational challenges. Decline in Net Income and EPS InMode’s GAAP net income dropped to $21.8 million from $50.9 million in Q3 2024. Non-GAAP net income was $24.5 million, down from $54.9 million. The GAAP diluted EPS was $0.34, a decrease from $0.65, and non-GAAP EPS was $0.38, down from $0.70, indicating a significant impact on shareholder returns. Forward-Looking Guidance InMode’s guidance for the third quarter of 2025 emphasized strategic expansion and financial performance. The company projected revenues between $365 million and $375 million, with non-GAAP gross margins between 78% and 80%, and non-GAAP earnings per diluted share between $1.55 and $1.59. Strategic initiatives, such as the opening of a new subsidiary in Argentina and the appointment of Michael Dennison as President of North America, are expected to position the company for future growth despite a competitive market landscape. In summary, InMode’s earnings call highlighted a mix of strategic growth initiatives and financial challenges. While the company is making strides in international expansion and consumables growth, it faces significant declines in revenue and profitability. The forward-looking guidance suggests a focus on strategic positioning and financial resilience to navigate the competitive market environment.