InMode’s Q4 Revenue Rises, But Full-Year Sales Still Fall

Date of Call: Feb 10, 2026

Financials Results

• Revenue: Q4 2025: $103.9M, up from $97.9M YOY; Full year 2025: $370.5M, a 6% decrease compared to 2024.
• EPS: GAAP diluted EPS Q4 2025: $0.42, compared to $1.14 YOY; Full year GAAP: $1.43, compared to $2.25 YOY. Non-GAAP diluted EPS Q4 2025: $0.46, compared to $0.42 YOY; Full year: $1.60, compared to $1.76 YOY.
• Gross Margin: GAAP gross margin Q4 2025: 78%, compared to 79% in Q4 2024; Non-GAAP gross margin Q4 2025: 79%, same as Q4 2024. Full year Non-GAAP gross margin: 79%.
• Operating Margin: GAAP operating margin Q4 2025: 25%; Full year GAAP: 23%. Non-GAAP operating margin Q4 2025: 27%, compared to 32% in Q4 2024; Full year Non-GAAP: 26%, compared to 33% in 2024.

Guidance:

• Revenue for 2026 expected to be between $365M-$375M.
• Non-GAAP gross margin expected to be between 75%-77%.
• Non-GAAP operating income expected to be between $87M-$92M.
• Non-GAAP EPS expected to be between $1.43-$1.48.

Business Commentary:

Revenue Trends and Industry Challenges:

• InMode reported total revenue of $103.9 million in Q4 2025, a 6% increase from $97.9 million in Q4 2024, but full-year revenue decreased by 6% to $370.5 million compared to 2024.
• The company faced ongoing challenges due to higher interest rates and softer customer demand in the aesthetic space.

International Revenue Growth:

• Sales outside the U.S. totaled $48.5 million in Q4 2025, representing 47% of total sales and a 38% increase compared to Q4 2024.
• This growth was driven primarily by Europe, which had a record revenue quarter.

Product Innovation and Launch Strategy:

• InMode launched its CO2 laser platforms in 2025, expanding its portfolio, and plans to introduce two new platforms in 2026: a Korean-made Pico laser device and a device combining new Morpheus technology with Erbium YAG laser.
• These launches are part of a strategy to innovate and enhance the company's value proposition, with plans to launch two new platforms each year.

North American Operations and Leadership Changes:

• InMode unified its North American operations under a single organization in 2025, appointing Michael Dennison as president of North America.
• This restructuring is expected to deliver tangible results in 2026, following a leadership change that had a limited impact on Q4 results.

Margin and Financial Guidance:

• Non-GAAP gross margins were 79% for both Q4 2025 and the full year of 2025, while Non-GAAP operating margin for Q4 2025 was 27%, down from 32% in Q4 2024.
• The company attributed the margin changes to higher sales and marketing expenses and the launch of new products like lasers, which have lower gross margins.

Sentiment Analysis:

Overall Tone: Neutral

• "The fourth quarter was slightly better than expected, even as our industry continued to face ongoing challenges." "We view 2026 as a stabilization year for the business following a prolonged period of industry softness." "We see meaningful interest across our existing customer base and in new ones, and we believe this product will improve our overall value proposition."

Q&A:

• Question from Various Analysts (Barclays, UBS, Jefferies, etc.): What, if anything, are you seeing that would suggest things are starting to perk up a little bit?
  Response: Early, very soft signs include declining interest rates on leases, a slight increase in procedure numbers, and more sales in consumables, along with a slight revenue increase in Europe.

• Question from Various Analysts (Barclays, UBS, Jefferies, etc.): What can you tell us about the process and timing for strategic alternatives?
  Response: The board is evaluating strategic alternatives with Bank of America; management is not involved. A press release about a potential buyout was unaffiliated and not acknowledged.

• Question from Various Analysts (UBS): What are the different levers to drive gross margin leverage, and how conservative is the guidance?
  Response: Guidance is conservative; lower margins are due to new laser launches (Pico and Erbium YAG) which have inherently lower gross margins and are purchased from external suppliers.

• Question from Various Analysts (UBS): How much does launching lasers open up the market incrementally?
  Response: Lasers are the 'bread and butter' of medical aesthetics; while they expand the portfolio and create synergy, they are a saturated market with lower margins compared to InMode's minimally invasive offerings.

• Question from Various Analysts (Jefferies): Can you help us on the quarterly phasing for top line and margins through the year?
  Response: Quarterly distribution is expected to be very similar to 2025.

• Question from Various Analysts (Jefferies): What is baked into the guidance from the two new launches?
  Response: The two 2026 launches (a new Morpheus combo platform and a Pico laser) are not yet providing specific financial contribution estimates, but marketing will be intensive.

• Question from Various Analysts (Needham): Is the growth in non-invasive procedures driven by new product launches or industry shifts?
  Response: Non-invasive procedures are typically lower-cost and more accessible. The number of procedures sold did not grow significantly in 2025 despite new systems added, and GLP-1 use may shift demand long-term.

• Question from Various Analysts (Needham): What countries were entered, and is the focus on direct sales?
  Response: New subsidiaries in Argentina and Thailand were established, and direct sales are emphasized (80% of revenue is direct). Expansion into smaller countries is ongoing but does not significantly affect top line.

• Question from Various Analysts (Canaccord Genuity): What are you specifically seeing in Europe, and do you expect international mix to increase?
  Response: Europe had a record revenue quarter. International growth is expected, but North America is also a focus with reorganization; no definitive outlook on mix comparison.

• Question from Various Analysts (Canaccord Genuity): How should we think about R&D and sales & marketing spend in 2026?
  Response: R&D spending will increase due to new clinical studies (~$2M-$4M each). Marketing spend as a percentage will be similar, but more focused on specific activities related to new products and market conditions.

• Question from Various Analysts (BTIG): What is the update on capital allocation priorities and FDA approval for dry eye indication?
  Response: Board is evaluating capital allocation alongside strategic alternatives. FDA approval for dry eye indication using bipolar RF is in process, with study expected through 2026 into Q1 2027, and potential clearance in Q2 2027.

• Question from Various Analysts (Baird): How to reconcile growth in system placements with decline in systems revenue?
  Response: System placements in North America were about 200 units below 2024 due to competitive pricing pressure (average selling price down 9%). 2026 is viewed as a stabilization year, not growth.

• Question from Various Analysts (Baird): What is the feedback on the ApexRF platform, and is there a specialized sales force?
  Response: ApexRF is being sold by the general team without a specialized focus. A dedicated team is being built for the Envision platform starting in 2026.

Contradiction Point 1

Outlook on 2026 Financial Guidance and Strategic Focus

Contradiction on readiness and tone regarding 2026 financial guidance.

What indicators suggest improvement, and what is the process and timing for strategic alternatives given the company's valuation? - Matt Miksic (Barclays)

2025Q4: Regarding strategic alternatives, the board is evaluating options with the help of Bank of America. Management is not involved in the strategic review process. - Moshe Mizrahy(CEO)

How should we assess the 2025 exit rate and 2026 sales growth outlook based on Q4 guidance and lingering uncertainties? - Danielle Antalffy (UBS Investment Bank)

2025Q3: It is too early to discuss 2026 guidance. The company will want to see how Q4 plays out first. For 2026, they would want to be conservative due to all the uncertainties in the market. - Yair Malca(CFO)

Contradiction Point 2

Strategic Focus on New Product Launches and Market Expansion

Contradiction on the level of detail and certainty regarding new product launches and geographic expansion plans for 2026.

What is the quarterly phasing for 2026 and the expected financial contribution from the two new product launches? - Matt Taylor (Jefferies)

2025Q4: The 2026 launches (a new Morpheus8-Erbium YAG combo platform and a Pico laser from a Korean company) are expected to be well-accepted but specific financial contributions were not provided. - Moshe Mizrahy(CEO)

Outside of the ophthalmology initiative, what new products or pipeline developments could drive growth in H1 or H2 2026? - Matthew Miksic (Barclays Bank PLC)

2025Q3: The company has new laser products in development for the aesthetic portfolio. Two of these will be launched early next year and introduced to the market at key conferences... The R&D pipeline remains robust with projects in both aesthetic and wellness areas. - Moshe Mizrahy(CEO)

Contradiction Point 3

Outlook on U.S. Market and Revenue Growth

Contradiction on U.S. market performance and growth expectations between quarters.

How do you reconcile year-over-year growth in U.S. system placements with a double-digit decline in U.S. systems revenue, and what is the feedback and sales force alignment for the new ApexRF (men's wellness) platform? - Dane Reinhardt (Baird)

2025Q4: 2026 is viewed as a stabilization year, not a growth year. - Moshe Mizrahy(CEO)

How did Q1 and Q2 results compare to expectations, particularly regarding March and April uncertainties, and what is the guidance strategy and timing for a potential market upswing? - Matthew Miksic (Barclays)

2025Q2: The full-year guidance was lowered from $400M to $365M-$375M, reflecting this weakness. The company remains positive long-term and is continuing to invest in global expansion and sales restructuring. - Moshe Mizrahy(CEO)

Contradiction Point 4

Capital Allocation Strategy

Contradiction on the timing and specificity of capital allocation decisions.

What are the capital allocation priorities in 2026? Any updates on clinical progress and FDA approval timelines for the dry eye indication? - Sam Eiber (BTIG)

2025Q4: The board is evaluating all capital allocation alternatives alongside strategic reviews. Updates will be shared as available. - Yair Malca(CFO)

What are the capital allocation priorities with the large cash balance, and what drove the strong growth in non-invasive procedures? - Danielle Antalffy (UBS)

2025Q2: A decision on further capital allocation is expected in the next six months. - Moshe Mizrahy(CEO)

Contradiction Point 5

Capital Environment and System Sales Financing

Contradiction on the impact of interest rates on equipment financing and demand.

What signs indicate improvement? Can you comment on the process and timing for strategic alternatives given the attractive valuation? - Matt Miksic (Barclays)

2025Q4: Early signs of potential stabilization include declining interest rates (which may lower equipment leasing costs)... - Moshe Mizrahy(CEO)

How is the capital equipment environment holding up, particularly demand trends and financing systems amid rising interest rates? - Matt Taylor (Jefferies)

2023Q2: Increased interest rates have had minimal impact on demand. The company has adapted by exploring alternative financing sources... - Shakil Lakhani(President, North America)