InMode up 188% since IPO

Moshe Mizrahy / Photo: Eyal Izhar, Globes

The medical esthetics company reported a $16 million profit on $40 million revenue in the third quarter.

Medical esthetics company InMode, co-founded and managed by former Syneron Medical CEO Moshe Mizrahy, already has a $1.3 billion market cap. The company's share price began to climb in anticipation of its third quarter reports, with the share rising 25% in the week preceding release. The share price maintained its level following the publication of the reports last week, before dropping 3% on Sunday.

InMode raised $70 million in its IPO on Nasdaq in August at a valuation of $480 million, after money. The return on the company's share since then is 188%.

InMode's revenue totaled $40 million in the third quarter of 2019, 57% more than in the third quarter of 2018. The company's net profit was $16.2 million, 87% more than in the corresponding quarter last year. The figures for the first nine months of the year are also positive: $109 million revenue, 53% more than in the corresponding period in 2018, and a $42 million net profit, 87% more than in the corresponding period last year.

In contrast to the comparison with the corresponding quarter last year, InMode's third quarter revenue was only 3% more than in the preceding quarter, while profit was flat.

Medical esthetics is a seasonal sector; growth from the second to the third quarter was also low in 2018, followed by a spurt in the subsequent quarters. The Christian holiday season usually has a positive impact on the sector's fourth quarter results.

InMode develops and markets medical esthetic devices, mainly for plastic surgeons. The company's flagship product is a minimally invasive system for searing deep skin layers in order to firm up the skin, using fiber optics. In its reports, the company said that the increase in its revenue had also resulted from 88% growth in activity in markets outside the US. The US market still accounts for 77% of InMode's revenue.

InMode's gross profit margin in the third quarter was 87%, the same as in the corresponding quarter last year, while its operating profit margin rose from 33% to 40%, despite the costs of running a public company. The company has $166.3 million in cash following its IPO. InMode's cash flow from current activity was $13 million.

Mizrahy says, "We are delighted to report stable and consistent growth in our revenue and profit. The demand for our special product is increasing, and we are planning to penetrate new markets, while maintaining growth and profit margins, and to launch innovative technological platforms." Following his company's IPO, Mizrahy told "Globes," "InMode was founded and reached its IPO with an investment of only $3 million. This was possible because we began selling as soon as possible, but also because of the way in which the company is managed. We have no hierarchy in which a manager has something important that others do not. We have no different parking for managers and secretaries, and we don't fly business."

Mizrahy and CTO Dr. Michael Kreindel founded InMode in 2008, together with the Israel Healthcare Ventures (IHCV) fund, managed by Dr. Hadar Ron, which achieved very fine results with its investment in Syneron Medical. Mizrahy, Kreindel, and Ron are the main shareholders in InMode: Mizrahi and Kreindel's holdings are worth $150 million on paper, while IHCV's stake is worth over $120 million.

Mizrahi told "Globes," "Even more than with Syneron, we have distributed InMode to the employees, who hold 30% of the shares (mainly through options that are in the money, G.W.). In other very successful Israeli companies, only a few managers and owners have benefited; with us, all of the employees are already partners in the successful IPO."

Published by Globes, Israel business news - en.globes.co.il - on November 12, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Moshe Mizrahy / Photo: Eyal Izhar, Globes
Moshe Mizrahy / Photo: Eyal Izhar, Globes
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