Inmode ((INMD)) has held its Q1 earnings call. Read on for the main highlights of the call.
InMode’s recent earnings call revealed a challenging quarter, marked by declining revenue, reduced margins, and the adverse effects of U.S. tariffs. Despite successfully completing a significant share purchase program and achieving strong international sales, the overall financial performance was disappointing, prompting a reduction in guidance for 2025.
Shareholder Return Program
InMode has demonstrated a commitment to returning value to its shareholders, completing its fifth share purchase program this month. The company purchased 6.95 million shares, amounting to $127 million. Over the past year, InMode has returned over $412 million to shareholders through share purchases, representing approximately 27% of its total capital.
Strong International Sales
International sales have been a bright spot for InMode, with first-quarter sales outside the U.S. reaching $38 million, accounting for 49% of total sales. This marks a 1% increase compared to the same period last year, with Europe emerging as the largest revenue contributor outside the U.S., achieving record sales numbers.
Revenue Decline
The company reported a total revenue of $77.9 million for Q1 2025, reflecting a 3% decrease compared to the first quarter of 2024. This decline underscores the challenges InMode faces in maintaining its revenue growth.
Decreased Gross Margins
InMode’s gross margin on a GAAP basis was 78%, down from 80% in Q1 2024. The non-GAAP gross margins also saw a decline, dropping from 80% to 79% compared to the same period last year.
Operating Margin Decline
The company’s GAAP operating margin fell to 20% in Q1 2025, down from 23% in Q1 2024. Similarly, the non-GAAP operating margin decreased to 23% from 27% in the first quarter of 2024, indicating increased operational challenges.
Reduced Earnings per Share
InMode’s GAAP diluted earnings per share for Q1 2025 were $0.26, compared to $0.28 in Q1 2024. Non-GAAP diluted earnings per share also saw a slight decrease, from $0.32 to $0.31.
Impact of U.S. Tariffs
The ongoing U.S. tariffs, currently at 10%, are anticipated to impact InMode’s gross margins by approximately 2% to 3%. The company is closely monitoring the situation, as there is potential for tariffs to increase further.
Guidance Reduction
InMode has revised its guidance for 2025, now expecting revenues between $395 million to $405 million, down from the previous guidance of $400 million to $410 million. The non-GAAP gross margin guidance has also been adjusted to 78%-80%, compared to the prior guidance of 80%-82%.
In summary, InMode’s earnings call highlighted a quarter fraught with challenges, including declining revenue and margins, and the impact of U.S. tariffs. Despite these hurdles, the company remains committed to shareholder returns and strong international sales. However, the reduced guidance for 2025 reflects the ongoing macroeconomic pressures and operational challenges that InMode faces.