[Management View]
InMode's management emphasized the strength of its diversified portfolio and disciplined execution amid a challenging economic environment. Strategic priorities included expanding global presence through new subsidiaries in Argentina and Thailand, launching the men's wellness platform, and restructuring North American leadership under Michael Dennison. The company continues to invest in ophthalmology and R&D initiatives, targeting new product launches in 2026.

[Outlook]
Management provided full-year 2025 guidance, projecting revenue between $365 million-$375 million, non-GAAP gross margins of 78%-80%, non-GAAP operating income of $93 million-$98 million, and non-GAAP EPS of $1.55-$1.59. Expansion plans include direct sales in Israel starting in 2026 and continued focus on Latin America and Southeast Asia. The ophthalmology strategy aims for FDA dry eye indication clearance by late 2026, while two new aesthetic lasers are set for launch in early 2026.

[Financial Performance]
Revenue for Q3 2025 was $93.2 million, down from $130.2 million in Q3 2024, impacted by lower preorder sales. Consumables and service revenue grew 26% YoY to $19.9 million, driven by international markets. GAAP gross margins declined to 78% from 82% YoY due to tariff effects. GAAP operating margin fell to 22% from 37%, and GAAP net income dropped to $21.8 million from $50.9 million. Cash position remained strong at $532.3 million, with $24.5 million in operating cash flow generated during the quarter.

[Q&A Highlights]
Question 1: Danielle Antalffy (UBS) asked about Q4 guidance and sales growth expectations for 2026 given uncertainties.
Answer: Yair Malca stated it was too early to discuss 2026 guidance, emphasizing a conservative approach due to uncertainties. He noted interest rates have not decreased enough to significantly impact capital equipment financing, with potential improvements expected in 2026.

Question 2: Matt Miksic (Barclays) inquired about the ophthalmology initiative and dry eye treatment strategy.
Answer: Moshe Mizrahi detailed plans to separate Envision sales from aesthetics starting in 2026, with dedicated teams targeting optometrists and ophthalmologists. FDA clearance for dry eye treatment is anticipated by late 2026, with clinical studies underway. Current sales leverage existing FDA-approved handpieces without specific dry eye indication.

Question 3: Matt Miksic (Barclays) asked about new products driving growth in 2026.
Answer: Moshe Mizrahi revealed plans to launch two new aesthetic lasers in early 2026, complementing the existing portfolio. Product premieres are scheduled for domestic and international conferences.

Question 4: Mikaela (Canaccord Genuity) queried about Michael Dennison's appointment as President of North America.
Answer: Moshe Mizrahi highlighted Dennison's decade-long experience at InMode and rationale for consolidating U.S. and Canada operations under unified management. The restructuring aims to streamline operations and enhance strategic planning.

Question 5: Mikaela (Canaccord Genuity) asked about the men's wellness platform rollout and revenue expectations.
Answer: Moshe Mizrahi confirmed the platform's launch following positive clinical results presented at a user meeting. Sales reps are currently marketing the device, with revenue contribution expected by late 2025 or early 2026.

Question 6: Alex (BTIG) inquired about OUS business trends and subsidiary expansions.
Answer: Moshe Mizrahi outlined global operations across 90 countries, with recent subsidiaries in Argentina and Thailand driving regional growth. Direct sales in Israel are planned for 2026, with further expansion opportunities under evaluation.

Question 7: Joseph (Needham) asked about non-invasive growth and consumables sales.
Answer: Moshe Mizrahi attributed Q2 growth to new non-invasive product launches, including CO2 and men's wellness platforms. Approximately 230,000 disposable tips were sold in 2025, supporting recurring revenue.

[Sentiment Analysis]
Analysts maintained a cautious tone, focusing on uncertainties in macroeconomic conditions and capital equipment financing. Management expressed confidence in strategic initiatives and competitive advantages but acknowledged challenges in the marketplace.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|----------------------------|-----------------|-----------------|------------------|
| Revenue | $93.2M | $130.2M | -28.4% |
| GAAP Gross Margin | 78% | 82% | -4% |
| GAAP Operating Margin | 22% | 37% | -15% |
| GAAP Net Income | $21.8M | $50.9M | -57.2% |
| GAAP Diluted EPS | $0.34 | $0.65 | -47.7% |
| Cash Position | $532.3M | N/A | N/A |

[Risks and Concerns]
1. Tariff impacts on gross margins, reducing profitability.
2. Declining operating margins and net income, signaling operational challenges.
3. Uncertainty in capital equipment financing due to high interest rates.
4. Conservative guidance reflecting macroeconomic risks and market volatility.

[Final Takeaway]
InMode's Q3 2025 results reflect significant revenue and profit contraction, driven by lower preorder sales and tariff pressures. Despite these challenges, the company remains focused on strategic expansion, including new subsidiaries in Argentina and Thailand, and product innovation in ophthalmology and aesthetics. Management's cautious guidance underscores uncertainties in the macroeconomic environment, particularly in capital equipment financing. Investors should monitor the company's ability to execute on growth initiatives and navigate market headwinds effectively.