InMode : Reports Second Quarter 2022 Financial Results; Record Quarterly Revenue of $113.5M, Represents 30% Year-Over-Year Growth - Form 6-K

InMode Reports Second Quarter 2022 Financial Results; Record Quarterly Revenue of

$113.5M, Represents 30% Year-Over-Year Growth

YOKNEAM, Israel, July 28, 2022--InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced its consolidated financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights:

•	Record quarterly revenues of $113.5 million, an increase of 30% compared to the second quarter of 2021: InMode's proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments represented 80% of quarterly revenues, while 11% came from InMode's hands-free platforms and 9% from InMode's traditional laser and non-invasive RF platforms.
•	GAAP net income of $44.0 million, compared to $40.9 million in the second quarter of 2021; *non-GAAP net income of $50.4 million, compared to $43.9 million in the second quarter of 2021.
•	GAAP diluted earnings per share(1) of $0.52, compared to $0.48 in the second quarter of 2021; *non-GAAP diluted earnings per share(1) of $0.59, compared to $0.51 in the second quarter of 2021.
•	Record quarterly revenues from consumables and service of $15.0 million, an increase of 59% compared to the second quarter of 2021.
•	Total cash position of $443.6 million as of June 30, 2022, including cash and cash equivalents, marketable securities, and short-term bank deposits.

U.S. GAAP Results (U.S. dollars in thousands, except for per share data)
	Q2 2022	Q2 2021
Revenues	$113,547	$87,325
Gross Margins	83%	85%
Net Income	$44,048	$40,925
Earnings per Diluted Share(1)	$0.52	$0.48

*Non-GAAP Results (U.S. dollars in thousands, except for per share data)
	Q2 2022	Q2 2021
Gross Margins	84%	86%
Net Income	$50,401	$43,873
Earnings per Diluted Share(1)	$0.59	$0.51

*Please refer to "Use of Non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP financial results exclude share-based compensation adjustments.

(1) The GAAP and non-GAAP earnings per diluted share have been adjusted retroactively for a 1-for-2 stock split of InMode shares by way of an issuance of bonus shares that occurred pursuant to a resolution of our board of directors dated September 14, 2021.

Management Comments

"We are pleased to report another record-setting quarter, with growth and solid profitability across all key metrics," said Moshe Mizrahy, Chairman and Chief Executive Officer of InMode. "The growing demand for InMode platforms in the U.S. and globally led us to increase our guidance for the full year of 2022 to an unprecedented range of $425 million to $435 million."

Shakil Lakhani, President of InMode North America, said, "Once again, we saw a robust demand for InMode's innovative platforms, resulting in another record revenue quarter as well as record sales from consumables and service."

"We recently received the endorsement of Health Canada for our EmpowerRF platform designed for women's health," added Dr. Spero Theodorou, Chief Medical Officer. "In addition to this certification, we continue to receive positive feedback from both patients and physicians in the U.S."

Second Quarter 2022 Financial Results

Total revenues for the second quarter of 2022 reached $113.5 million, an increase of 30% compared to the second quarter of 2021.

"We are proud to deliver record revenue in the second quarter," said Yair Malca, Chief Financial Officer. "Despite the global supply chain constraints, InMode was able to successfully manage and control expenses while improving our margins compared to the previous quarter."

GAAP gross margin for the second quarter of 2022 was 83%, compared to a gross margin of 85% in the second quarter of 2021. *Non-GAAP gross margin for the second quarter of 2022 was 84% and 86% for the second quarter of 2021. This decrease was primarily due to the inflationary pressure on our raw materials and increased level of consumable sales as part of the revenue mix.

GAAP operating margin for the second quarter of 2022 was 43%, compared to a gross operating margin of 48% in the second quarter of 2021. *Non-GAAP operating margin for the second quarter of 2022 was 49% compared to the operating margin of 51% in the second quarter of 2021. The decrease in GAAP operating margin is primarily attributable to change in share-based compensation expense, and the decrease in *non-GAAP operating margin is primarily attributable to change in gross margin.

InMode reported GAAP net income of $44.0 million, or $0.52 per diluted share, in the second quarter of 2022, compared to $40.9 million, or $0.48 per diluted share⁽¹⁾, in the second quarter of 2021. On a *non-GAAP basis, InMode reported net income of $50.4 million, or $0.59 per diluted share, in the second quarter of 2022, compared to $43.9 million, or $0.51 per diluted share⁽¹⁾, in the second quarter of 2021.

(1) The GAAP and non-GAAP earnings per diluted share have been adjusted retroactively for a 1-for-2 stock split of InMode shares by way of an issuance of bonus shares, that occurred pursuant to a resolution of our board of directors dated September. 14, 2021.

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2022 Financial Outlook

Management provided an outlook for the full year of 2022, ending Dec. 31, 2022. Based on current estimates, management expects:

●	Revenues between $425 million and $435 million

●	*Non-GAAP gross margin between 83% and 85%

●	*Non-GAAP income from operations between $204 million and $209 million

●	*Non-GAAP earnings per diluted share between $2.11 and $2.16

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. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP financial results exclude share-based compensation adjustments.

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, July 28, 2022, at 8:30 a.m. Eastern Time to discuss the second quarter 2022 financial results.

The Company encourages participants to pre-register for the conference call using the following link:

https://dpregister.com/sreg/10167933/f33d3a2e75

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 that 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=CU9qrvpT

At:

8:30 a.m. Eastern Time

5:30 a.m. Pacific Time

3:30 p.m. Israel Time

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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 July 28, 2022, at 12 p.m. Eastern Time to August 11, 2022, 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: 7761650

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.

Company Contact: Yair Malca Chief Financial Officer Phone: [phone] Email: [e-mail]

Investor Relations Contact: Miri Segal MS-IR LLC Phone: [phone] Email: [e-mail]

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INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(U.S. dollars in thousands, except for per share data)

(Unaudited)

		Three months ended June 30,			Six months ended June 30,
		2022			2021			2022			2021
REVENUES			113,547				87,325				199,468				152,849
COST OF REVENUES			18,946				12,723				33,718				22,802
GROSS PROFIT			94,601				74,602				165,750				130,047
OPERATING EXPENSES:
Research and development			3,183				2,455				5,998				4,756
Sales and marketing			39,653				28,670				70,502				53,232
General and administrative			2,562				1,941				5,039				3,752
TOTAL OPERATING EXPENSES			45,398				33,066				81,539				61,740
INCOME FROM OPERATIONS			49,203				41,536				84,211				68,307
Finance income (expense), net			(918	)			428				(539	)			472
INCOME BEFORE TAXES			48,285				41,964				83,672				68,779
INCOME TAXES			4,237				1,039				8,649				1,108
NET INCOME			44,048				40,925				75,023				67,671
Add: Net income attributable to non-controlling interests			-				-				-				(103	)
NET INCOME ATTRIBUTABLE TO INMODE LTD.			44,048				40,925				75,023				67,568
NET INCOME PER SHARE (1):
Basic			0.54				0.50				0.91				0.85
Diluted			0.52				0.48				0.88				0.79
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands) (1)
Basic			82,216				81,700				82,590				79,894
Diluted			84,663				85,762				85,236				85,451

(1) The number of shares have been adjusted retroactively for a 1-for-2 stock split of InMode shares by way of an issuance of bonus shares that occurred pursuant to a resolution of our board of directors dated September 14, 2021.

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INMODE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

		June 30, 2022			December 31, 2021
Assets
CURRENT ASSETS:
Cash and cash equivalents			88,404				68,136
Marketable securities			299,322				294,530
Short-term bank deposits			55,913				53,248
Accounts receivable, net of allowance for doubtful accounts			21,261				20,236
Other receivables			14,548				12,938
Inventories			29,760				21,026
TOTAL CURRENT ASSETS			509,208				470,114
NON-CURRENT ASSETS:
Accounts receivable			3,685				768
Deferred income taxes, net			2,737				1,334
Operating lease right-of-use assets			5,004				4,321
Property and equipment, net			1,971				1,404
Other investments			600				600
TOTAL NON-CURRENT ASSETS			13,997				8,427
TOTAL ASSETS			523,205				478,541
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Accounts payable			11,833				8,779
Contract liabilities			18,102				13,805
Other liabilities			28,054				29,266
TOTAL CURRENT LIABILITIES			57,989				51,850
NON-CURRENT LIABILITIES:
Contract liabilities			3,385				2,751
Other liabilities			5,339				4,831
Operating lease liabilities			3,678				3,307
TOTAL NON-CURRENT LIABILITIES			12,402				10,889
TOTAL LIABILITIES			70,391				62,739
TOTAL SHAREHOLDERS' EQUITY			452,814				415,802
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			523,205				478,541

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INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

		Three months ended June 30,			Six months ended June 30,
		2022			2021			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			44,048				40,925				75,023				67,671
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			155				128				293				242
Share-based compensation expenses			6,353				2,948				9,447				5,646
Allowance for doubtful accounts			142				287				352				327
Loss on marketable securities, net			23				3				37				7
Finance expenses, net			851				404				941				809
Deferred income taxes, net			169				(101	)			147				(202	)
Changes in operating assets and liabilities:
Increase in accounts receivable			(8,247	)			(3,506	)			(4,294	)			(8,075	)
Decrease (increase) in other receivables			(398	)			1,063				(1,593	)			(317	)
Increase in inventories			(4,660	)			(1,694	)			(8,734	)			(2,411	)
Increase in accounts payable			2,292				313				3,054				1,313
Increase (decrease) in other liabilities			4,105				5,832				(770	)			5,037
Increase in contract liabilities			2,148				151				4,931				1,472
Net cash provided by operating activities			46,981				46,753				78,834				71,519
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in short-term deposits			(22,500	)			(20,000	)			(45,611	)			(41,000	)
Proceeds from short-term deposits			23,000				19,090				43,000				38,090
Purchase of fixed assets			(561	)			(338	)			(860	)			(503	)
Purchase of marketable securities			(17,545	)			(63,482	)			(38,754	)			(125,727	)
Proceeds from sale of marketable securities			15,232				21,180				27,159				47,982
Net cash used in investing activities			(2,374	)			(43,550	)			(15,066	)			(81,158	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of ordinary shares			-				(11,057	)			(42,637	)			(11,921	)
Exercise of options			204				4,711				365				14,603
Net cash provided by (used in) financing activities			204				(6,346	)			(42,272	)			2,682
EFFECT OF EXCHANGE RATE CHANGES ON CASH			(1,077	)			14				(1,228	)			(209	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			43,734				(3,129	)			20,268				(7,166	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			44,670				64,901				68,136				68,938
CASH AND CASH EQUIVALENTS AT END OF PERIOD			88,404				61,772				88,404				61,772

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INMODE LTD.

CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

	Three months ended June 30,			Six months ended June 30,
		2022			2021			2022			2021
Revenues by Category:
Capital Equipment revenues - United States			62,960				56	%			49,812				57	%			107,720				54	%			88,330				58	%
Capital Equipment revenues - International			35,560				31	%			28,034				32	%			62,743				31	%			47,247				31	%
Total Capital Equipment revenues			98,520				87	%			77,846				89	%			170,463				85	%			135,577				89	%
Consumables and service revenues			15,027				13	%			9,479				11	%			29,005				15	%			17,272				11	%
Total Net Revenue			113,547				100	%			87,325				100	%			199,468				100	%			152,849				100	%

	Three months ended June 30,			Six months ended June 30,
		2022			2021			2022			2021
		%			%			%			%
		United States			International			Total			United States			International			Total			United States			International			Total			United States			International			Total
Revenues by Technology:
Minimal-Invasive			84				74				80				69				73				71				84				72				79				67				75				70
Hands-Free			14				5				11				29				10				22				13				6				11				31				8				23
Non-Invasive			2				21				9				2				17				7				3				22				10				2				17				7
			100				100				100				100				100				100				100				100				100				100				100				100

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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)

	Three months ended June 30, 2022			Three months ended June 30, 2021
		GAAP			Share Based Compensation			Non-GAAP			GAAP			Share Based Compensation			Non-GAAP
REVENUES			113,547				-				113,547				87,325				-				87,325
COST OF REVENUES			18,946				(496	)			18,450				12,723				(274	)			12,449
GROSS PROFIT			94,601				496				95,097				74,602				274				74,876
OPERATING EXPENSES:
Research and development			3,183				(866	)			2,317				2,455				(386	)			2,069
Sales and marketing			39,653				(4,459	)			35,194				28,670				(2,014	)			26,656
General and administrative			2,562				(532	)			2,030				1,941				(274	)			1,667
TOTAL OPERATING EXPENSES			45,398				(5,857	)			39,541				33,066				(2,674	)			30,392
INCOME FROM OPERATIONS			49,203				6,353				55,556				41,536				2,948				44,484
Finance income (expense), net			(918	)			-				(918	)			428				-				428
INCOME BEFORE TAXES			48,285				6,353				54,638				41,964				2,948				44,912
INCOME TAXES			4,237				-				4,237				1,039				-				1,039
NET INCOME			44,048				6,353				50,401				40,925				2,948				43,873
NET INCOME PER SHARE (1):
Basic			0.54								0.61				0.50								0.54
Diluted			0.52								0.59				0.48								0.51
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands) (1)
Basic			82,216								82,216				81,700								81,700
Diluted			84,663								85,366				85,762								86,160

(1) The number of shares have been adjusted retroactively for a 1-for-2 stock split of InMode shares by way of an issuance of bonus shares that occurred pursuant to a resolution of our board of directors dated September 14, 2021.

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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)

	Six months ended June 30, 2022			Six months ended June 30, 2021
		GAAP			Share Based Compensation			Non-GAAP			GAAP			Share Based Compensation			Non-GAAP
REVENUES			199,468				-				199,468				152,849				-				152,849
COST OF REVENUES			33,718				(810	)			32,908				22,802				(503	)			22,299
GROSS PROFIT			165,750				810				166,560				130,047				503				130,550
OPERATING EXPENSES:
Research and development			5,998				(1,391	)			4,607				4,756				(687	)			4,069
Sales and marketing			70,502				(6,354	)			64,148				53,232				(3,946	)			49,286
General and administrative			5,039				(892	)			4,147				3,752				(510	)			3,242
TOTAL OPERATING EXPENSES			81,539				(8,637	)			72,902				61,740				(5,143	)			56,597
INCOME FROM OPERATIONS			84,211				9,447				93,658				68,307				5,646				73,953
Finance income (expense), net			(539	)			-				(539	)			472				-				472
INCOME BEFORE TAXES			83,672				9,447				93,119				68,779				5,646				74,425
INCOME TAXES			8,649				-				8,649				1,108				-				1,108
NET INCOME			75,023				9,447				84,470				67,671				5,646				73,317
Add: Net Income attributable to non-controlling interests			-				-				-				(103	)			-				(103	)
NET INCOME ATTRIBUTABLE TO INMODE LTD.			75,023				9,447				84,470				67,568				5,646				73,214
NET INCOME PER SHARE:
Basic			0.91								1.02				0.85								0.92
Diluted			0.88								0.98				0.79								0.85
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands)
Basic			82,590								82,590				79,894								79,894
Diluted			85,236								85,786				85,451								85,803

(1) The number of shares have been adjusted retroactively for a 1-for-2 stock split of InMode shares by way of an issuance of bonus shares that occurred pursuant to a resolution of our board of directors dated September 14, 2021.

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