InMode (NASDAQ:INMD) executives outlined the operational challenges of running the business amid continued geopolitical instability in Israel, while also discussing capital return plans, market conditions for aesthetics, organizational changes, and product strategy during an Oppenheimer conference discussion led by analyst Suraj Kalia.
Operations in Israel: reduced capacity and logistics constraints
CEO Moshe Mizrahy said the company is operating in a “challenging time,” noting that InMode’s facilities are located in northern Israel, where threats from Iran and the Lebanese border have created recurring disruptions over the past several years. He said the company is currently operating at roughly 60% capacity, citing employee availability issues due to school closures and the need to intermittently shut down manufacturing during threat events.
Mizrahy said the company had built “safety inventory” of finished goods and components, a strategy that began during a prior conflict roughly two years ago. He said InMode shipped product to subsidiaries globally and is now shifting inventory between subsidiaries to help fill gaps because shipping directly from Israel is currently difficult. However, he cautioned that if conditions persist for another six months, inventory may not be sufficient, noting the company does not have inventory to last “until the end of the year.”
Share repurchases and capital allocation priorities
Mizrahy addressed the company’s share repurchase activity, stating that InMode is permitted to repurchase up to 10% per calendar year without the need to pay dividend tax, and that it has been using that authorization. He said the company has repurchased $508 million of shares to date and that the board recently approved an additional 6.4 million shares, which he estimated at roughly $85 million to $90 million. He said the total repurchases over the past 3.5 years would reach around $600 million and that the company intends to continue buying back stock.
While acknowledging debate over whether buybacks are the best method to return capital, Mizrahy said the board believes it is the appropriate approach. He also emphasized a desire to maintain flexibility for potential acquisitions. He said the company currently has about $550 million in cash and that completing the current repurchase program could leave around $450 million. He described InMode as still generating positive cash flow, but “not as positive as we used to be.”
Demand trends: stabilization, but limited visibility
On underlying demand, Mizrahy reiterated comments previously made about stabilization in treatment activity. He said that in the current quarter the company is seeing a similar trend: “We’re not growing, but we’re not coming down,” particularly on the disposable side.
He also discussed the impact of financing conditions on platform purchases. Mizrahy described leasing interest rates as “very high,” saying leasing packages can carry rates around 14% to 15% for five years. He added that leasing companies are reluctant to take risk “because of the situation in Israel.” He said the company is trying to remain conservative and may adjust guidance at the end of the quarter if needed.
Looking further out, Mizrahy said he does not currently “see the light at the end of the tunnel.” He framed 2026 as a stabilization year and said he believes the company could show growth in 2027, citing “good stuff” coming out of the R&D pipeline.
Installed base and organizational changes in North America and beyond
Mizrahy said InMode has roughly 30,000 systems worldwide and estimated the company has been increasing its installed base by around 5,000 systems per year. He also described what he sees as a natural offset as physicians buy newer, more advanced systems and older platforms become idle. He said the company is seeing a “parity” between systems entering and leaving the market and tied that to the stabilization trend in disposables, which he characterized as holding around $200,000 plus or minus $10,000 per quarter for several quarters.
On North America, Mizrahy said InMode implemented a “major change” to unify the U.S. and Canada into one operation. Previously, the company operated with separate leaders for Canada, the East Coast, and the West Coast, under a president. Now, it has one North America president with territory managers (including one in Canada) reporting to him, along with a vice president of sales and a vice president of strategy. He said the company has replaced around 30 salespeople over the past year and early this year and is monitoring whether additional “fine-tuning” is needed.
He added that the company has also reorganized distribution more broadly, including establishing two new direct operations in Argentina and Thailand, dividing Europe into subsidiaries and distributors under separate managers, and replacing the leader responsible for Asia.
Product strategy: expanding lasers, dry eye program, and M&A interests
Management discussed the company’s growing contribution from non-invasive technologies and described it as a deliberate long-term strategy. Mizrahy said InMode historically focused on RF energy rather than laser energy, but has found that certain laser technologies can complement its RF-based procedures. He cited combination approaches such as pairing deeper RF-based treatments with CO2 laser for superficial results. He said the company is developing laser platforms including CO2, Pico, and Q-switched systems, while aiming for competitive advantages versus existing devices.
In dry eye, Mizrahy said InMode is not pursuing the pharmaceutical side of the market and is focused on its platform offering. He said the company has built a dedicated North America team specifically for the Envision platform—separate from the aesthetic team—and is also working toward an FDA study to treat dry eye using RF only. He said the company submitted an IDE protocol, received questions, and sent responses the prior week, expressing hope for approval to begin the study and a potential clearance “sometime early 2027.”
On M&A, Mizrahy said InMode is interested in larger acquisitions—generally $500 million to $1 billion in value—rather than several smaller deals. He said potential strategic fits could include injectables, referencing prior offers for Hugel and Prollenium that were not accepted. He also highlighted Asia as an area of opportunity, stating that InMode sells about $50 million per year in Asia and sees potential to grow that substantially. He said the company has subsidiaries in Australia, India, Japan, and Thailand and would like to establish operations in China and Korea, including through a possible acquisition with a strong distribution network.
CFO Yair Malca said gross margin performance is influenced by product mix and geographic mix. He noted that greater emphasis on selling laser-based devices—typically lower margin—can pressure gross margins, even as the company pursues a “one-stop shop” approach. He also said U.S. tariffs have been an additional headwind and that the company is still assessing longer-term effects. Malca added that because the U.S. has historically been InMode’s highest-margin region, a slowdown in the U.S. has also weighed on margins. He said management believes demand for aesthetic procedures will return and that an eventual recovery in U.S. growth could support margin improvement.
About InMode (NASDAQ:INMD)
InMode Ltd. (NASDAQ:INMD) is a medical technology company headquartered in Israel that develops, manufactures and markets devices for aesthetic and medical treatments. The company specializes in energy-based technologies, primarily radiofrequency platforms, designed to deliver minimally-invasive and non-invasive procedures.
InMode’s product portfolio encompasses a range of modular systems targeting body contouring, facial rejuvenation, skin tightening and other cosmetic applications. Key offerings include devices built on proprietary radiofrequency and radiofrequency-assisted lipolysis, enabling physicians to perform treatments such as tissue coagulation, skin resurfacing and subdermal volumizing with reduced downtime.
The company distributes its technologies through direct sales operations and distribution partners, serving medical professionals across multiple geographies including North America, Europe, Asia Pacific and Latin America.
