InMode Reports Fourth Quarter and Full Year 2022 Financial Results; Record Quarterly Revenue of $133.6M Represents 21% Year-Over-Year Growth

YOKNEAM, Israel, Feb. 14, 2023 /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 ended December 31, 2022.

Fourth Quarter 2022 Highlights:

• Record quarterly revenue of $133.6 million, an increase of 21% compared to the fourth quarter of 2021. InMode's proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments represented 83% of quarterly revenues, while 9% came from InMode's hands-free platforms and 8% from InMode's traditional laser and non-invasive RF platforms.
• GAAP net income of $37.7 million, compared to $52.7 million in the fourth quarter of 2021; record *non-GAAP net income of $66.4 million, compared to $55.2 million in the fourth quarter of 2021.
• GAAP diluted earnings per share of $0.44, compared to $0.61 in the fourth quarter of 2021; record *non-GAAP diluted earnings per share of $0.78, compared to $0.64 in the fourth quarter of 2021.
• Record quarterly revenues from consumables and service of $17.1 million, an increase of 43% compared to the fourth quarter of 2021.

Full Year 2022 Highlights:

• Record full year revenues of $454.3 million, an increase of 27% as compared to 2021; 81% of revenues derived from our proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, 10% from our hands-free platforms and 9% from our traditional laser and non-invasive RF platforms
• GAAP net income of $161.5 million, compared to $165 million in 2021; record *non-GAAP net income of $207.5 million, compared to $176.3 million in 2021
• GAAP diluted earnings per share of $1.89, compared to $1.92 in 2021; record *non-GAAP diluted earnings per share of $2.42, compared to $2.05 in 2021
• 29% increase in international (non-U.S.) revenues as compared to 2021

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. Non-GAAP financial results exclude share-based compensation and certain tax adjustments. The Company applied the provisions of the amendment to the Investment Law to its exempt profits accrued prior to 2020 and made a one-time payment of $12.0 million to the Israeli Tax Authority. In addition, the Company reached agreement with the Israeli Tax Authority under which the Company paid during January 2023 approximately $14.3 million on its undistributed exempt income for the year ended December 31, 2021. As a result, approximately $313.2 million of the Company's undistributed exempt income for years 2012 through 2021 may be distributed or used by the Company without being subject to additional corporate tax.

Management Comments

"We are happy to report another record revenue year and continuously high profitable growth as we scale globally and reach a yearly revenue run rate nearing $500 million. We are also very happy with the successful launch of the Empower RF, and we remain focused on expanding into additional aesthetic and wellness categories. We are proud to have successfully navigated through the worldwide supply chain challenges in 2022, therefore fulfilling customer orders on time," said Moshe Mizrahy, Chairman and Chief Executive Officer.

Shakil Lakhani, President of InMode North America, commented, "This year demonstrated InMode's ability to expand into new categories and solidified our leadership position in the aesthetics and wellness markets. As our platform sales benefit from a strengthening brand awareness, we also experienced a significant increase in our consumable sales, having sold over 230,000 consumables in the fourth quarter. To further support this market demand, we continue adding talent to our team in North America this year."

"The solid endorsement of the EmpowerRF platform significantly surpassed our most optimistic expectations for the year. Currently, we are conducting six clinical studies focusing on how this technology can positively impact a wide range of health issues for women. In addition, as we continue our strategy and expand into new areas of wellness, we plan to launch the Envision platform for the ophthalmology market during the first half of 2023, followed by the second generation of our hands-free platform for face treatments during the latter half of the year," said Dr. Spero Theodorou, Chief Medical Officer.

Fourth Quarter 2022 Financial Results

Total revenues for the fourth quarter of 2022 reached $133.6 million, an increase of 21% compared to the fourth quarter of 2021.

"We are proud to report another record quarter and year for total revenue, while again maintaining the target gross margin range of over 84%. This derives from our ability to control expenses during global supply chain constraints, while decisively responding to high demand and ensuring orders are delivered on time. Once again, we saw strength from our international operations in the quarter, and we expect that this trend will continue," said Yair Malca, Chief Financial Officer.

InMode applied the provisions of the amendment to the Investment Law to its exempt profits accrued prior to 2020 and made a one-time payment of $12.0 million to the Israeli Tax Authority. In addition, the Company reached agreement with the Israeli Tax Authority under which the Company paid during January 2023 approximately $14.3 million on its undistributed exempt income for the year ended December 31, 2021.

"I am very pleased that as a result, approximately $313.2 million of the Company's undistributed exempt income for years 2012 through 2021 may be distributed or used without being subject to additional corporate tax," Malca concluded.

GAAP gross margin for the fourth quarter of 2022 was 84% compared to a gross margin of 85% in the fourth quarter of 2021. *Non-GAAP gross margin for the fourth quarter of 2022 and 2021 was 85%.

GAAP operating margin for the fourth quarter of 2022 was 45%, compared to an operating margin of 49% in the fourth quarter of 2021. *Non-GAAP operating margin for the fourth quarter of 2022 was 50% and for the fourth quarter of 2021 was 51%. The decrease in GAAP operating margin is primarily attributable to change in share-based compensation expense.

InMode reported GAAP net income of $37.7 million, or $0.44 per diluted share, in the fourth quarter of 2022, compared to $52.7 million, or $0.61 per diluted share, in the fourth quarter of 2021. On a *non-GAAP basis, InMode reported net income of $66.4 million, or $0.78 per diluted share, in the fourth quarter of 2022, compared to $55.2 million, or $0.64 per diluted share, in the fourth quarter of 2021. The decrease in GAAP net income is primarily attributable to undistributed exempt income.

Full Year 2022 Financial Results

Total revenues for 2022 were $454.3 million, an increase of 27% as compared to 2021. This increase was primarily attributable to strong demand for our minimally invasive platforms. In addition, InMode gained traction in international markets, with international revenues growing 29% year over year.

GAAP gross margin for 2022 was 84%, and the gross margin in 2021 was 85%. *Non-GAAP gross margin for 2022 was 84% and the gross margin in 2021 was 85%.

GAAP operating margin for 2022 was 44%, compared to the operating margin of 47% in 2021. *Non-GAAP operating margin for 2022 was 49%, compared to the operating margin of 50% in the full year of 2021. The decrease in GAAP operating margin is primarily attributable to a change in share-based compensation expense.

InMode reported GAAP net income attributable to InMode Ltd. of $161.5 million, or $1.89 per diluted share, in 2022. This is compared with GAAP net income attributable to InMode Ltd of $165 million, or $1.92 per diluted share, in 2021. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $207.5 million, or $2.42 per diluted share, in the full year of 2022, compared to net income attributable to InMode Ltd. of $176.3 million, or $2.05 per diluted share, in the full year of 2021.

As of December 31, 2022, InMode had cash and cash equivalents, marketable securities, and short-term bank deposits of $547.4 million.

2023 Financial Outlook

Management provided an outlook for the full year of 2023 ending December 31, 2023. Based on current estimates, management expects:

• Revenue between $525 million and $530 million
• *Non-GAAP gross margin between 83% and 85%
• *Non-GAAP income from operations between $236 million and $238 million
• *Non-GAAP earnings per diluted share between $2.58 and $2.60

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. Non-GAAP financial results exclude share-based compensation and certain tax adjustments. The Company applied the provisions of the amendment to the Investment Law to its exempt profits accrued prior to 2020 and made a one-time payment of $12.0 million to the Israeli Tax Authority. In addition, the Company reached agreement with the Israeli Tax Authority under which the Company paid during January 2023 approximately $14.3 million on its undistributed exempt income for the year ended December 31, 2021. As a result, approximately $313.2 million of the Company's undistributed exempt income for years 2012 through 2021 may be distributed or used by the Company without being subject to additional corporate tax.

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, and 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, Chairman and Chief Executive Officer, Dr. Michael Kreindel, Co-Founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer, Mr. Shakil Lakhani, President of North America, and Dr. Spero Theodorou, Chief Medical Officer, will host a conference call today, February 14, 2023, at 8:30 a.m. Eastern Time to discuss the fourth quarter 2022 financial results.

The Company encourages participants to pre-register for the conference call using the following link: 
https://dpregister.com/sreg/10174372/f5819ac374
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: 1-833-316-0562
Israel Toll- Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5736
Webcast URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=JnMDK7VQ
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel 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 14, 2023, at 12 p.m. Eastern Time to February 28, 2023, 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: 1-877-344-7529
Replay Dial-in Canada TOLL-FREE: 855-669-9658
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 3700075

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 future performance described above under the heading titled "2021 Financial Outlook." 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, including with respect to the impact of the COVID-19 global outbreak. 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 10, 2022, as well as risk factors relating to the COVID-19 global outbreak 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.

INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except for per share data)
(Unaudited)

INMODE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

INMODE LTD.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

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)

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)

SOURCE InMode LTD