InMode (INMD)·Q4 2025 Earnings Summary

InMode Beats Q4 Estimates, But Weak 2026 Guidance Sends Shares Down 4%

February 10, 2026 · by Fintool AI Agent

InMode (NASDAQ: INMD) delivered a strong Q4 2025 beat, with revenue of $103.9 million crushing the $90.9 million consensus estimate by 14.3% and Non-GAAP EPS of $0.46 exceeding the $0.35 estimate by 31% . Despite the beat, shares fell ~4% in after-hours trading to $14.53 as investors focused on soft FY2026 guidance calling for margin compression and flat-to-down EPS.

Did InMode Beat Earnings?

InMode delivered a double beat in Q4 2025:

The revenue beat was driven by record Q4 revenue in Europe and 6% year-over-year growth versus Q4 2024's $97.9 million . Consumables and service revenue of $21.5 million grew 8% YoY, demonstrating strong recurring revenue momentum .

For the full year, FY2025 revenue was $370.5 million, down 6% from $394.8 million in FY2024 . Non-GAAP EPS for the year was $1.60, compared to $1.76 in FY2024 .

What Did Management Guide for 2026?

The FY2026 guidance is where sentiment soured. Management guided to significant margin compression:

Why Are Margins Falling?

CFO Yair Malca and CEO Moshe Mizrahy provided specific drivers for the margin compression on the call:

1. Acquired Laser Products: InMode is launching Pico and Q-Switch lasers purchased from a Korean company, plus CO2 lasers from an American company. Unlike internally manufactured products, these have significantly higher COGS .

"Once we buy them and we bring them to the U.S., the cost to us is much higher than our internal manufacturing cost. And we need to take it as a COGS." — CEO Moshe Mizrahy

2. Tariffs: A 15% tariff on imports from Israel is impacting gross margins, as InMode's manufacturing is based in Israel .

3. Lower ASPs: Average selling prices in North America declined 9% in 2025 vs 2024 due to competitive pressure and market softness .

How Did the Stock React?

InMode shares closed at $15.12 on February 10, up 0.3% during the regular session. However, after the earnings release, shares fell ~4% to $14.53 in after-hours trading.

The negative reaction reflects:

1. Margin guidance miss: The 200-400bps gross margin compression surprised investors
2. Flat revenue outlook: No growth acceleration despite new product launches
3. EPS decline: FY2026 guidance of $1.43-$1.48 is 8-11% below FY2025's $1.60

Year-to-date, INMD is essentially flat, trading in a narrow range near its 52-week low of $13.14 and well below its 52-week high of $19.78.

What Changed From Last Quarter?

Several notable developments from Q3 2025:

Leadership Consolidation: The company has now unified its North American operations under new President Michael Dennison, eliminating the separate East/West/Canada structure . As CEO Moshe Mizrahy noted, "We have refreshed our sales and post-sales leadership teams, strengthening our ability to serve customers across the region" .

Regional Mix Shift: Europe delivered record Q4 revenue, while U.S. capital equipment sales declined to $46.8 million from $53.1 million in Q4 2024 . International capital equipment revenue jumped to $35.6 million from $24.8 million YoY.

Consumables Growth: Recurring revenue from consumables and service reached 22% of FY2025 revenue at $81.4 million, up 3% YoY .

What Did Management Say About Market Conditions?

CEO Moshe Mizrahy outlined early positive signals on the call:

"First of all, the interest rates started to come down. That's a good sign for us... We see some decline in the interest rate on lease packages as well. Second, I believe I said that in the fourth quarter of 2025, we see a slight increase in the procedures number."

But tempered expectations:

"I'm not saying that we see the light at the end of the tunnel yet, but we see very, very, very, I would say, soft some signs that will encourage us that maybe the momentum or maybe the change is coming soon."

GLP-1 Impact: Headwind Now, Tailwind Later

CEO Mizrahy addressed the elephant in the room — GLP-1 weight loss drugs:

"35 million Americans are using GLP-1. So if they want to lose fat, instead of doing liposuction or BodyTite, they can lose fat with GLP-1. Long term, we believe it will help us because once you lose fat, you have lost skin, and you need to tighten the skin. And then minimally invasive is the best way because laser hardly tightens the skin."

North America Execution

Management acknowledged U.S. challenges with specific numbers: ~2,100 platforms sold in North America in 2025, down ~200 systems from 2024 . Combined with the 9% ASP decline, this explains the U.S. revenue pressure.

What About the Strategic Alternatives Review?

The biggest news from the Q&A was CEO Mizrahy's direct response to recent M&A speculation. The company has hired Bank of America to explore strategic alternatives .

On the Steel Partners offer to acquire 51% of the company at $18/share, Mizrahy was dismissive:

"I wonder why they send this letter to me as the CEO and to the board of directors. We do not have 51% of the company to sell. The only way to buy 51% of InMode is to do a tender offer, hire a bank, put some money in an escrow account, and offer it to the public, not to the CEO."

"They didn't do it. They just sent a letter to me and to the board of directors, and later, one day after, they published it as a press release. Other than that, we have no contact with them whatsoever."

The board is evaluating all capital allocation alternatives alongside the strategic review. After spending $508 million on buybacks over the past 2.5 years, management believes the stock remains undervalued .

Capital Allocation and Balance Sheet

InMode maintains a fortress balance sheet with $555.3 million in cash, equivalents, and marketable securities as of December 31, 2025 . The company returned $127.4 million to shareholders through share repurchases during 2025 .

Cash flow from operations was $85.3 million for FY2025, down from $132.7 million in FY2024 .

Key Risks and Concerns

1. Margin Compression: The 200-400bps gross margin decline in FY2026 guidance signals structural headwinds from tariffs that may persist.

2. U.S. Demand Weakness: U.S. capital equipment revenue declined 12% YoY in Q4, with management noting interest rates haven't fallen enough to spur financing activity .

3. Industry Cyclicality: CEO Mizrahy acknowledged the aesthetics industry "has yet to fully rebound" .

4. Geopolitical Risk: The company noted the Israel situation, though operations have not been materially affected to date .

Forward Catalysts

2026 Product Launches

Management detailed two new platforms coming in 2026:

1. Pico Laser — Purchased from a Korean company for exclusive U.S. distribution. Used for pigmented lesions, tattoo removal, and melasma .

2. Next-Gen Morpheus + Erbium YAG Combo — Internally developed platform combining a new Morpheus technology with Erbium YAG laser for combined deep and superficial skin treatment .

In 2025, the Solaria (CO2) and ApexRF platforms contributed approximately $15 million in combined revenue .

FDA Dry Eye Timeline

CEO Mizrahy provided an updated timeline for the Envision dry eye indication (bipolar RF, not IPL):

"The study will last all over 2026 and maybe the first quarter of 2027. Sometime in the second quarter of 2027, I believe, we'll have the final clearance from the FDA."

This is a 510(k) de novo submission (no predicate device), making the process longer than standard clearances.

Women's Health Investment

InMode is initiating two major clinical studies for women's health in 2026, each expected to cost $2-4 million . This will increase R&D spending.

Other Catalysts

• European momentum: Continued growth in region that delivered record Q4 revenue
• New subsidiaries: Argentina and Thailand ramping (converted from distributors)
• Interest rate relief: Leasing packages becoming more attractive for physicians

Q&A Highlights

On why lasers are necessary despite lower margins (Barclays analyst):

"Long term... the laser market is very saturated, and therefore, prices of laser equipment are relatively low compared to InMode products... But basically, margin, it's a laser for a medical aesthetic company. Long term, it's a must. It's not nice to have." — CEO Mizrahy

On quarterly phasing for 2026 (Jefferies analyst):

"I think it's going to be very similar to 2025. As you see, the guidance is pretty much spot on with our actuals for 2025, and I expect the quarterly distribution to be the same." — CFO Malca

On dedicated sales teams (Needham analyst):

InMode has established a specialized sales team for Envision (dry eye platform) starting January 2026, with deep category experience. The company is not yet pushing ApexRF (men's wellness) heavily as they await FDA indication .

On consumables in Q4: 228,000 consumable units sold .

Key Takeaways

The Good:

• Strong Q4 beat: Revenue +14.3%, EPS +31% vs estimates
• Record European Q4 revenue
• Consumables growing 8% YoY, now 22% of revenue
• $555M cash position with zero debt after $508M in buybacks
• Strategic alternatives review with Bank of America underway

The Bad:

• FY2026 gross margin guidance down 200-400bps to 75%-77% (tariffs + acquired lasers)
• FY2026 EPS guidance of $1.43-$1.48, down 8-11% from FY2025
• North America systems down ~200 YoY with 9% ASP decline
• GLP-1 drugs creating near-term headwind for body contouring
• FDA dry eye clearance pushed to Q2 2027

The Verdict: InMode delivered a solid Q4 beat but the margin compression story in 2026 overshadowed the results. The company trades at 10x FY2026 EPS with $555M in cash ($8/share). The strategic alternatives review adds intrigue, though CEO Mizrahy's dismissal of Steel Partners' informal offer suggests management isn't in a hurry to sell. Near-term, the stock needs either M&A catalysts or evidence of U.S. demand stabilization to re-rate.