InMode - Q4 2022
February 14, 2023
Transcript
Operator (participant)
Good morning, and welcome to InMode fourth quarter and full year financial results conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I'd now like to turn the conference over to Miri Segal for MS-IR. Please go ahead.
Miri Segal (Founder and CEO)
Thank you, operator, and everyone for joining us today. Welcome to our conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and that the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please go to the investor relations section of the company's website. Changes in business, competitive, technological, regulatory and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today. Our historical results are not necessarily indicative of future performance. As such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them except as required by law. With that, I'd like to pass the call over to Moshe Mizrahy, Chairman and CEO.
Moshe, please go ahead.
Moshe Mizrahy (Chairman and CEO)
Thank you, Miri, and to everybody who's joining us. With me today are Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer, Yair Malca, our Chief Financial Officer, Shakil Lakhani, our President in North America, Dr. Spero Theodorou, our Chief Medical Officer, and Rafael Lickerman, our VP of Finance. Following our prepared remark, we will all be available to answer your question. We are pleased to report another record quarter with Q4 revenue of $133.6 million, and $454.3 million for the full year. Increase of 21% as compared to Q4 of 2021, and an increase of 27% compared to the full year of 2021. This is a record level of revenue for an aesthetic medical company, and especially remarkable and exciting since we are achieving this milestone during challenging global time.
We believe our unique technology, strong dedication to the highest industry standard, our employee commitment, focused growth strategy in the U.S. and globally, and our diversified portfolio all contribute to our leadership position in the market. We value the trust of physician and patient as we experience a growing demand across the board. The success of the EmpowerRF platforms in 2022 continued to exceed our expectation. In fact, revenue from these platforms exceeding $45 million in 2022, well above our original guidance of $20 million. As we mentioned last quarter, the Morpheus8 device is becoming the gold standard in the aesthetic category, and we believe that it will continue to be one of our biggest growth driver going forward. This play a major role in major platforms that we launch.
In 2022, we announced an exciting new addition to our portfolio, the Envision platforms for dry eye treatment, which received certification in Canada last November. InMode Envision is an innovative technology that deliver targeted bipolar radiofrequency energy to small dedicated ocular area. We plan to launch the Envision platforms in the U.S. in the first half of this year to focus on ophthalmology market, we are encouraged from the positive feedback that we have received from Canadian market. Additionally, the next generation of Evoke, our hands-free platforms for face treatment, is planned to be launched in the second half of 2023. As part of our growth strategy, we continue to innovate as we launch new platforms or modality every year, we continue to explore potential acquisition that could complement our presence in the aesthetic and wellness market.
I would like to turn the call over to Shakil, our President in North America. Shakil, go ahead.
Shakil Lakhani (President, North America)
Thanks, Moshe, and everyone for joining us. Once again, we are pleased to report another record quarter with continued positive momentum due to our diversified portfolio, growing market demand, and more frequent use of our platforms. InMode's growing install base and the increase in the number of treatments performed led to the increase in consumable sales that reached 230,000 units in the fourth quarter, and more than 749,000 in 2022. To support increased market demand, we continue to grow our sales team in North America and globally. In 2022, we enhanced our initiative to strengthen InMode's brand recognition. We sponsored several well-attended marketing events throughout the year and made a concentrated effort in expanding consumer awareness.
We can say with confidence that our strong brand recognition, especially in North America, leads to a new situation where our platforms are being sought after and bought rather than sold. We expect this paradigm shift to continue and support our future growth. As mentioned by Moshe, the EmpowerRF platform has once again outperformed our projections. We continue our strategy and expand into new areas of wellness, we plan on launching the Envision platform for the ophthalmology and optometry market during the first half of 2023, followed by the second generation of our hands-free platform for facial treatments during the latter half of the year. We believe that InMode's success in 2022 demonstrated our ability to expand into new categories and consolidated our leadership position in the aesthetic and wellness market.
Lastly, I'd like to thank our entire North American team for their continued hard work. I will now hand over the call to Yair for a review of the financial results in more detail. Yair.
Yair Malca (CFO)
Thanks, Shakil. Hello, everyone. Thank you for joining us. Starting with total revenue, InMode generated a record $133.6 million in the fourth quarter of 2022, representing a 21% year-over-year increase with a gross margin of 84% on a GAAP basis. For the full year of 2022, revenue totaled $454.3 million, an increase of 27% compared to 2021. Fourth quarter sales outside the U.S. accounted for $42.3 million or 32% of sales, compared to 33% in Q4 last year. For the full year of 2022, sales outside the U.S. accounted for $155.7 million, or 34% of sales, same as 2021.
We are seeing growth coming from many different countries. We are planning to establish at least one additional subsidiary later this year. To support our operations and growth, InMode now operates in total of 80 countries with a sales team of more than 220 direct reps and over 69 distributors worldwide. Moving on. Capital equipment in the fourth quarter represented 87% of total revenue, while consumables and service revenues accounted for the remaining 13%, identical to the ratio for the full year. GAAP operating expenses in the fourth quarter were $52.7 million and $183 million for the full year, a 33% and 34% increase year-over-year, respectively. Sales and marketing expenses increased slightly to $47 million in the fourth quarter, compared to $35.3 million in the same period last year.
Sales and marketing expenses for the full year of 2022 were $160.6 million compared to $119 million- $4 million for 2021. This increase is attributed to hiring more sales representatives, increasing our presence in the U.S. and globally. Next, we look at share-based compensation, which increased to $7.1 million in the fourth quarter of 2022, and $24.5 million in the full year of 2022. On a non-GAAP basis, operating expenses were $46.1 million in this quarter compared to a total of $37.5 million in the same quarter of 2021, representing a 23% increase. For 2022, non-GAAP operating expenses were $160.4 million compared to $126.4 million for 2021.
GAAP operating margin for Q4 was 45% and 44% for the full year of 2022. Non-GAAP operating margin for the fourth quarter of 2022 was 50% and 49% for the full year 2022. GAAP diluted earnings per share for the fourth quarter were $0.44 compared to $0.61 per diluted share in Q4 of 2021, and $1.89 in 2022 compared to $1.92 in 2021. Non-GAAP diluted earnings per share for this quarter were a record $0.78 compared to $0.64 per diluted share in the fourth quarter of 2021, and $2.42 for 2022 compared to $2.05 for 2021. Once again, we ended the quarter with a strong balance sheet.
As of December 31, 2022, the company had cash and cash equivalents, marketable securities and deposits of $547.4 million. This quarter, InMode generated $57.2 million from operating activities. I would like to mention that this quarter it is more important than ever to focus on our non-GAAP results, since in our GAAP P&L, we have recorded a couple of one-time tax entries that were adjusted for non-GAAP purposes. With regard to taxes, InMode applied the provisions of the amendment to the investment law to its exempt profits accrued prior to 2020, and made a one-time payment of $12 million to the Israeli Tax Authority.
In addition, the company reached an agreement with the Israeli Tax Authority, under which the company paid during January approximately $14.3 million on its undistributed exempt income for the year ended 31st, December 2021. As a result, we expect to save up to $28.5 million in potential future tax payments, and our entire cash balance is now free and clear of any additional corporate tax requirements. Before I turn the call back to Moshe, I'd like to reiterate our guidance for 2023.
Revenues between $525 million and $530 million. Non-GAAP gross margin between 83% and 85%. Non-GAAP income from operations between $236 million and $238 million. Non-GAAP earnings per diluted share between $2.58 and $2.60. I will now turn over the call back to Moshe.
Moshe Mizrahy (Chairman and CEO)
Thank you, Yair. Thank you, Shakil. Operator, we're ready for Q&A session. Hello? Operator?
Operator (participant)
Yes. We'll now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble the roster. First question will be from Matt Miksic of Barclays. Please go ahead, sir.
Matt Miksic (Senior Equity Research Analyst)
Hi. Thanks so much for taking the question. Can you hear me okay?
Moshe Mizrahy (Chairman and CEO)
Yes, we hear you okay.
Matt Miksic (Senior Equity Research Analyst)
Great. I have, you know, one question on the upcoming launches, then a sort of a follow-up on sort of the tone and flow of your current business in the U.S. On Envision, I'm curious, what sort of, what sort of uptake, you know, how should we think about the pace of that launch, and what sort of investments are you making behind it in terms of your field force or training, that might be notable here as you laid out your 2023 guide? I have one follow-up.
Moshe Mizrahy (Chairman and CEO)
Well, Envision, we're starting to launch it in the U.S., so I will ask Shakil to answer your question.
Shakil Lakhani (President, North America)
Sure. You know, we're gonna put some pretty substantial resources behind it. Obviously, as we've discussed in the past, ow, bifurcating the sales force is something that, we like to do a little different than what you'd expect. We will be building out specialty reps that are gonna be specifically focused on Envision. Obviously with the size of the market, the TAM for it is huge in terms of the ophthalmology and optometry world. We do see a large potential in terms of what we can kind of maximize out of this. Like anything else that we do, we're gonna roll it out slowly.
We're doing a soft launch to start, and then as we start, seeing proof of concept, in terms of, efficacy, in terms of marketing success for the practitioners, so on and so forth, we'll slowly start to invest further funds and resources into it.
Matt Miksic (Senior Equity Research Analyst)
Great. I mean, if there was one element as a guide, it seemed like there was a little bit of a lift in some of the OpEx lines compared to expectations for the coming year. I'm assuming that's, a factor in that dynamic. Is that fair?
Shakil Lakhani (President, North America)
I would say that's accurate.
Matt Miksic (Senior Equity Research Analyst)
Okay. great. Just on the tone and the flow of business in the U.S., if you could, we've gotten a couple of questions around sort of the mix of your I think everyone's curious about the sort of health and sustainability of the what's been a pretty strong U.S. business, in light of,, what might have been a spend-ahead environment a couple of years ago and what, you know, on the horizon could be some softening. I'd say that's consistent with any capital equipment market that we cover, is there's a nagging concern about, what if spending starts to ease here or we have to do some sort of demand catch-up.
Can you talk a little bit about the flow of that and in particular, some of the dynamics around the percentage of those businesses, of those capital equipment sales that are being financed, and how that has shifted, you know, over the past year or two?
Shakil Lakhani (President, North America)
Sure. We actually haven't seen. You know, it's actually gotten better. Funds have become a little easier. I mean, if you, if you look at some of the stats, even for the Super Bowl and the average spending per family, for people making, a certain amount of income per year, it all went up by like 20% or 30%. You know, hopefully with that, they'll keep eating and we'll be able to help them with some of their weight loss goals and things of that nature. You know, we've seen the U.S. market just as strong as it's ever been from our perspective. The way we finished it was extremely good. We've had a good start to Q1 so far.
We don't anticipate anything changing there in terms of, you know, the funding environment or the financing environment. We haven't seen much of a slowdown. We've got some really great partners, and we have some really good programs that are put together to help some of the physicians kind of get through. In terms of spending, we haven't seen anything cut down. You know, if, everyone's talking about a potential recession, if we haven't already been in one per se. As of now, we haven't seen anything. You know, if things change, we'll obviously keep you guys posted on that. Does that answer your question, Matt?
Matt Miksic (Senior Equity Research Analyst)
Great. Yes, it does. Thank you.
Operator (participant)
Thank you. Next question will be from Matt Taylor of Jefferies. Please go ahead.
Jon Lee (Equity Research Associate)
Hey guys, this is Jon Lee in for Matt. Thanks for taking our questions. Maybe wanted to hear a little bit more on the guidance, just the level of conservatism that's built in, any color on quarterly cadence we should expect. Can you talk about EmpowerRF growth or the dollars embedded within the guidance?
Moshe Mizrahy (Chairman and CEO)
Well, you know, as always, as every year, we try to be very conservative in the guidance. For example, last year the guidance was $2. We started with $220, we went all the way up to $455, $420 then. The guidance that we gave for 2023 is conservative. Is built bottom up, territory by territory. I believe that the final will be better than that, it all depend how 2023 will be as far as demand and other country like the international market, what will happen between Russia and Ukraine, how the market in China will evolve with all the COVID issue there, what will be all the supply chain.
I believe we are prepared, but the guidance that we gave this year is similar to other years, very conservative and we believe that, eventually, hopefully we will do better. Regarding the EmpowerRF, the embedded numbers is 20% higher than 2022.
Jon Lee (Equity Research Associate)
Okay, great. Anything on quarterly cadence we should be aware of?
Moshe Mizrahy (Chairman and CEO)
Usually we don't give quarterly guidance, but basically you can take the same seasonality like, in 2022 and apply the quality guidance. By the way, every quarter we will update the total guidance as we did in 2022 and as we did in 2021. Typically we are not giving guidance per quarter, Matt.
Jon Lee (Equity Research Associate)
Okay, great. Thank you. I guess, maybe just one follow-up just on the M&A environment. You know, you guys are definitely more focused on aesthetics and wellness. Was wondering if you can give us an update there, now that you've been a little bit more public on what you're looking for. You know, how's valuations, how's conversations with targets been?
Moshe Mizrahy (Chairman and CEO)
Well, currently we're exploring several opportunities. We're not yet in the stage of doing, official due diligence. We have not yet involved any legal team. We're looking into two, three companies in the wellness and aesthetic business, which complement our portfolio. We cannot give any timeline or any timetable to the process, but we're actually searching right now, and we're doing it very seriously.
Jon Lee (Equity Research Associate)
Very great. Thank you so much.
Operator (participant)
Thank you. Next question will be from Kyle Rose with Canaccord Genuity. Please go ahead.
Kyle Rose (Managing Director, Medical Technology)
Great. you know, good morning, everybody, and thank you for taking the questions. I just wanted to push back a little bit or just dig a little bit deeper into guidance for 2023. Particularly the prior comment about, you know, EmpowerRF being a 20% grower year-over-year. I mean, look, you came into the year, 2022 looking for that to be $20 million. You finished over $45 million. I guess that I know, I understand you're being conservative, but, you know, this seems to imply a slowdown in year two when I would think that it would accelerate in year two, just, given the focus you've had on rebuilding that market.
Can you maybe just help us understand how you're thinking about specifically EmpowerRF, in the women's health market as we move into 2023?
Moshe Mizrahy (Chairman and CEO)
Yes. We actually launched the EmpowerRF in Europe a few months ago. We're now working country by country to get the final regulation from the regulatory bodies in each country in order to be able to sell it there. Don't forget it's a women health product and it's need to get separate regulation. We did the same in Latin America in the fourth quarter, and we applied to regulation in Brazil, Mexico, Argentina, and also in Colombia. Hopefully, it will not take longer to get it. I assume that sometime toward the second half of this year of 2023, we will start seeing some results in these two markets.
I want to remind everybody that, this is something that relatively new to us, and we need to be very careful in the way we progress in this product to make sure that the doctors will be well trained, and it's entitled to build training centers in every country, have a luminary doctor, one or two or three in every country. It's a process. We try to be conservative in the guidance that we're giving, also in the U.S.. Yes, you're right. We gave a guidance of $20 million, and we did $45. This is great for us. Hopefully, the numbers that we will achieve in 2023 will be higher than 20% growth. Again, we try to be conservative and to see what will happen during the year.
Shakil Lakhani (President, North America)
Yeah. Okay.To add further to that, with any product launch, you're gonna have some low-hanging fruit to start. We tried to factor that in still being conservative. I think we'll have a better idea, you know, midway through the year how we're looking. You know, we feel good about the market. We've seen some good stuff. We're gonna penetrate the core specialties of that market a little further and continue to actually add on, very similar to what I mentioned with Envision, add on some specialty reps to that. You know, we do think that there's a bright future there, but again, factoring in some low-hanging fruit that, you know, from new buyers who are excited about newer technology.
Obviously, you know, like we talked about with BodyTite for years, where we wanna build longevity with a product. As we've seen with, you know, even Morpheus, it's become a brand and it's been growing like we didn't ever expect, and we're hoping to get the same here. We're still always cautious with how we kind of forecast things.
Kyle Rose (Managing Director, Medical Technology)
Yep, I can absolutely appreciate that. Let's kinda translate that to the Envision product. I mean, it sounds like you've got some early positivity or positive signals coming out of Canada. It's gonna be the first year of that product, you know, sometime in the first half. Is it fair to think about that as, you know, half of the initial guidance of what you thought EmpowerRF was? Like a $10 million-$20 million product. I mean, how should we think about that launch this year?
Moshe Mizrahy (Chairman and CEO)
Well, regarding the Envision, we decided not to give a guidance, but rather to launch it in the U.S. slowly, gradually. Again, this is a new market for us. Learn how the ophthalmologists and the optometrists are making decision, what kind of financing they can get. I mean, as we grow in this new category, we will be able to give a better guidance and a better view of the market. We're just in the starting point. We sold some system in Canada as a soft launch. And again, as I said, we have decided not to give a guidance on the Envision at that point.
Kyle Rose (Managing Director, Medical Technology)
Okay. Last question, and I'll hop back in queue is, how should we be thinking about the China business moving forward? I think historically you framed that, you know, as somewhere $2 million-$3 million, which can go to $4 million a quarter. Obviously COVID has had a major impact there. How do we think about those trends as we move into, you know, hopefully more of a reopening or less of a COVID headwind from China?
Moshe Mizrahy (Chairman and CEO)
Well, although China opened the doors and everybody can go to China and travel, but there are some restrictions in China for the local people, and we have difficulties to find doctors and trainer to go there because of the COVID situation now in China. I'm sure that everybody understands the situation when they have around 30 million every day infected. I believe that 2023 will see what will happen. We're still selling in between, as you said, $2 million-$3 million per quarter. Hopefully 2023 will be higher.
Right now, until we will understand what is the situation, we're not planning any marketing activity in China, bringing people and trainers from overseas to do some workshop and conferences, because we know that the local private clinics are closed because of the COVID. China is open, this is something that I don't understand what kind of philosophy and strategy is regard from the government of China. We'll, we'll, hopefully it will be cleared within, you know, the first quarter or the second quarter, and we'll be smarter to answer this question.
Kyle Rose (Managing Director, Medical Technology)
Thank you very much.
Shakil Lakhani (President, North America)
Thank you. Next question will be from Mike Matson, Needham & Company. Please go ahead.
Mike Matson (Senior Equity Research Analyst, Managing Director)
Yeah, thanks. I just wanna go back to the guidance for your OpEx or operating income, I guess maybe it's a better way to put it. You know, it sort of implies about a 4 basis point decline from around 49% operating margin in 2022 to 45% in 2023. Can you maybe just talk about, you know, why that's declining as much as it is and kind of where you're investing in 2023 to cause that?
Moshe Mizrahy (Chairman and CEO)
I mean, the gross margin basically will stay the same. The guidance for the gross margin will be between 83%- 85%. On average, it will be 84%. I believe it's a great achievement, taking into consideration the cost of electronic components and the supply chain, which is still broken. It's not yet, well, it's not yet back to normal. We have decided to spend more on marketing from 31% of revenue to 35% or 34.5% of revenue. We have decided to increase R&D and clinical work, especially in the women health and also in other elements.
Basically, we have decided to hire more people, and therefore, the EBIT will go down by 4.5%, almost for 49%-44.5%. We see that as an investment. We will invest heavily in 2023 on the EmpowerRF and also on the Envision, which are new territories for us. It's not like aesthetic, therefore we have decided we have the resources and we need to develop it. Although it's an expense, but we consider it as an investment.
Mike Matson (Senior Equity Research Analyst, Managing Director)
Okay, got it. I mean, this will be at least based on your guidance, the second year where your EPS growth has lagged your revenue growth. You know, just stepping back and looking a little longer term, I mean, can you get back to driving, you know, operating leverage or at least growing your earnings in line with revenue? Is this gonna be a continual theme where we see, you know, earnings growth slower than revenue growth because of these investments? You know, I'm talking in like 2024 and beyond.
Moshe Mizrahy (Chairman and CEO)
Well, I believe 2024 and beyond, once the EmpowerRF and the Envision will position themselves as leaders in the market, leader product in the market like all of our static portfolio, we will continue to bring product to the wellness in the ENT, urology, erection dysfunction and others. Therefore, I believe 2024 might be the same, because with new product and new category and new territories will require additional investment in marketing, R&D, et cetera. I don't think the numbers that we're investing on R&D on marketing are higher than any one of our competitors or any other company in the medical devices. I believe we're below the average. As far as G&A, you know, we're in between 1% and 2%. We're still keeping that. Try to be lean and mean.
Gross margin, I believe, will continue to be in the same range of 83%-85%. If you ask me about 2024, it probably will be similar to 2023.
Mike Matson (Senior Equity Research Analyst, Managing Director)
Okay. Thank you. Just on Envision. I think when I spoke to you guys at our growth conference earlier this year, you mentioned that the timing on the dry eye clearance was expected to be in the FDA clearance, sorry, was expected to be in the third quarter. It sounds like you're gonna be launching the product before you have dry eye cleared. Is that right? How big of a deal is that for the kind of initial quarter or two, you know, selling it without that? It seems like it's sort of a key feature on the product, but maybe the ophthalmologists or, you know, understand that, hey, if I buy this thing, I'll get this feature, you know, in a couple of months or whatever, but.
Moshe Mizrahy (Chairman and CEO)
Well, you are right. We're in a process to get indication from the FDA for dry eye. I have to say that the two hand pieces involved with the Envision, the Forma-I and the Lumecca, the IPL, they are cleared for other indication and also for around the eyes. We have the right to launch the product. In addition, we already have a study which was published, so we are showing some results, some good results to the doctor and to the optometrist. Hopefully in the third quarter, the third or the second half of the year, once we get the indication from the FDA, it will increase the momentum.
Mike Matson (Senior Equity Research Analyst, Managing Director)
Okay. All right. Got it. Thank you.
Operator (participant)
Again, if you have a question, please press star, then one. Next question will be from Jeff Johnson of Baird. Please go ahead.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Thank you. Good afternoon, guys, or good morning. Just a couple of questions here for me. One, Moshe, I just want to go back and clarify, as you were talking about 2024 operating margin or EBIT margin, you said kind of the same, but then you also talked about incremental investments. Do you feel like this 45% level that we're gonna be at in 2023, 44.5%-45%, that should stay consistent from here? When you say the same, is that kind of moving into 2024 can hold that mid 40% range? Just wanna make sure that's what you were meaning there.
Moshe Mizrahy (Chairman and CEO)
I believe for your financial model, if you use 45% EBIT for 2023 and 2024, that will be correct. I don't want to give any guidance to 2025 because this is too far away. This is two years away. We'll see how these two years will develop, and we'll give a guidance sometime in 2024.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Yeah, understood. That's helpful. Thank you. Yair, just, you know, now that the profits and all the cash on the balance sheet is unencumbered from a tax perspective and that, you know, just how to think about use of free cash flow. Obviously, I think you guys have talked here a little bit about some early stage looking at some M&A opportunities. Any other uses of cash there on buyback or anything else we should be thinking about? Thanks.
Yair Malca (CFO)
Now all the options are absolutely on the tables. We removed any restrictions or any tax additional tax requirement whatsoever. We are looking at all directions. The main thing we are looking right now, as Moshe Mizrahy mentioned, is some M&A opportunities, but buybacks or dividend or combination of buybacks with M&A is also always an option.
Moshe Mizrahy (Chairman and CEO)
We don't have.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
All right. Thanks.
Moshe Mizrahy (Chairman and CEO)
Any approved plan by the board right now to do any of the buyback or dividend. This is just ideas that in case we will not find any, you know, complement the acquisition, we will consider it, but it's not on the table right now for 2023.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Understood. Last question. I think I ask you guys this every year on the fourth quarter call, you know, historically, we've tried to track kind of your penetration rates in the U.S. plastics and derm markets, things like that. With the success you've had on EmpowerRF, that's getting harder to do. I think as the company has matured here, I don't know yet if you're in the stage of replacing some systems. When I look at that almost 8,000 placements cumulatively that you have in the U.S. now, any way to help us out on where you are penetration in kind of your core plastic and derm offices, how much penetration room do you think is left in those markets over the next several years?
Just help us think about kind of that core business on the AccuTite, BodyTite, FaceTite, Morpheus8 and all that. How much more can that penetrate into certain offices here in the U.S.? Thanks.
Moshe Mizrahy (Chairman and CEO)
I would defer this question to Shakil, and maybe I'll comment after.
Shakil Lakhani (President, North America)
Yeah, certainly. You know, again, we've talked about this before, but we still have a very large runway in terms of what we're looking at. Because we have so many different platforms, not every platform has been put into each office. As we continue to help our practitioners implement some of these devices into their practices and basically become successful with them, you know, we have a lot of, a lot of great traction in terms of return customers, buying their 2nd, 3rd, 4th unit, so on and so forth. I still think in terms of penetration, we have a long ways to go, a lot of physicians out there. Again, with EmpowerRF, I think we're gonna start seeing some more traction in the core markets as we put more focus on it.
You know, with the soft launch of Envision, to, you know, transitioning from the soft launch to a full launch, we'll start seeing some good upside there.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Hey, Shaq, can I put you on that? I mean, Sorry, Yair. As Shaq here on the call, would you put your penetration in core plastic and derm offices? Does it have a one handle on it, a two handle, a three handle, you know, 10%, 15%, 20%, 25%? Are we pushing 30% yet? Just of the offices you could go into there, you know, just help us ballpark kind of where you are.
Shakil Lakhani (President, North America)
Yeah. It's tough to say, it's not that I'm trying to dance around-
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Yeah.
Shakil Lakhani (President, North America)
what you're asking, but it's really hard to say. you know, each year, obviously there's newer doctors out there. We're in training programs with our technology, so they're very familiar with what we're offering. It's hard. I just don't want to give you a number and be totally way off to mess with your model. I do. As I said, I think we still have a really large runway for this.
Moshe Mizrahy (Chairman and CEO)
I mean, I would like to add to what Shakil said. If just for comparison, right now there are more than 30-35 thousand active laser equipment in the U.S., or even more than that. We're now in the range of 8,000. Just figure out that every doctor who are using laser for aesthetic future and eventually will use RF for aesthetic as well. We have long way to go.
Jeff Johnson (Managing Director and Senior Equity Research Analyst)
Fair enough. Thanks, guys.
Operator (participant)
Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Mr. Moshe Mizrahy, Chairman and CEO. Please go ahead.
Moshe Mizrahy (Chairman and CEO)
Thank you. Thank you, everybody, for joining us. I want to extend thanks to all employee of InMode around the globe. I want to thanks the management of InMode for the great year. We have finalized all the plans for 2023 and start working on another exciting year. I hope that 2023 will be another record year for us. Thank you all and see you soon in the end of the first quarter. Thanks.
Operator (participant)
Conference is now concluded. Thank Thank you for attending today's presentation. You may now disconnect.