Dane Reinhardt

Dane Reinhardt noted that U.S. system placements grew year-over-year, but U.S. systems revenue declined double digits, asking if this was due to lower-priced new lasers/wands, RF devices, or discounting. He also inquired about feedback on the Apex RF men's wellness platform and if it has a specialized sales force, and asked for the number of consumable units sold in the quarter.

Answer

Moshe Mizrahy, CEO, clarified that North American platform sales in 2025 were about 2,100 systems, 200 below 2024, and the average selling price (ASP) was down 9% year-over-year due to market competition. He reiterated 2026 as a stabilization year. Mr. Mizrahy stated that Apex RF does not have a specialized sales team, unlike Envision, and its sales are not heavily pushed due to pending FDA indication. Yair Malca, CFO, reported 228 consumable units sold.

Dane Reinhardt asked about the discrepancy between year-over-year growth in U.S. system placements and the decline in U.S. systems revenue, exploring factors like new wands, lower-priced lasers, or discounting. He also inquired about feedback on the ApexRF men's wellness platform and whether it has a specialized sales force, and requested the number of consumable units sold in the quarter.

Answer

Moshe Mizrahy, InMode CEO, clarified that North American system sales in 2025 were about 2,100, which was 200 systems below 2024, and the average selling price (ASP) of a platform decreased by 9% year-over-year due to market competition. He stated that 2026 is anticipated as a stabilization year. Mr. Mizrahy confirmed that ApexRF does not have a dedicated sales team, unlike Envision, and is not heavily pushed due to pending FDA indication. Yair Malca, InMode CFO, stated that 228 consumable units were sold overall.

Dane Reinhardt from Baird asked for clarification on pricing, noting that ASPs appear to have increased with new platforms like OptimasMax. He also inquired about the sales cadence within Q1 in relation to weakening consumer confidence and asked about the tax implications of a potential dividend.

Answer

CEO Moshe Mizrahy clarified that new platforms like OptimasMax are priced higher than the older models they replace as part of a launch strategy, not a recent price hike due to tariffs. CFO Yair Malca explained that intra-quarter sales cadence is not a good indicator as most revenue is booked in the final month. Regarding dividends, Moshe Mizrahy stated that under Israeli law, a 20% tax is withheld by the company before distribution to shareholders.

Dane Reinhardt of Baird asked for an update on orthopedic end-market trends, noting the lighter U.S. Hip & Knee growth. He also questioned the updated financial impact of tariffs and whether the new CEO's focus on R&D would alter the company's long-term margin expansion targets.

Answer

CFO Ben Berry characterized the market as a 'post-COVID norm' with some vacation-related softness, but expects acceleration in the second half. On tariffs, he noted the 90-day China pause was helpful, but uncertainty remains. CEO Damien McDonald clarified that his focus on R&D is about reallocating resources to more effective programs, not increasing overall spend, and it should not change the company's margin expansion goals.

Dane Reinhardt asked for details on the CapEx outlook for this year and beyond, the timeline for reaching the long-term free cash flow conversion target, and a growth breakdown within extremities between shoulder and foot & ankle.

Answer

CFO Phillip Berry explained that CapEx is temporarily elevated for 1-2 years to support growth and integration synergies, after which it will normalize. He stated the company is on a clear path to its free cash flow conversion goals as one-time spending recedes. CEO Matthew Trerotola clarified that in Q1, shoulder drove extremities growth, while foot & ankle also grew above its market.