InMode Ltd. (INMD) Earnings Call Transcript & Summary

Good day, and welcome to InMode's First Quarter 2025 Earnings Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Miri Segal, CEO of MS-IR. Please go ahead.

Thank you, operator, and to everyone for joining us today. Welcome to InMode's First Quarter 2025 Earnings Call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and 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 these 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 turn the call over to Moshe Mizrahy, CEO. Moshe, please go ahead.

Thank you, Miri, and to everyone for joining us. With me today are Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer; Yair Malca, our Chief Financial Officer; and Rafael Lickerman, our VP of Finance. Following our prepared remarks, we will all be available to answer your questions. The medical aesthetic market continued to face headwinds, driven primarily by ongoing macroeconomic uncertainty and soft consumer demand. Effective -- elective procedures, particularly in the surgical aesthetic segment, are often among the first to be pulled back during period of economic slowdown. And we will -- and we have seen that reflected in recent quarters across the last 2 years. Patients are deferring treatment and providers are taking more cautious approach to capital investment. Despite this near-term pressure, we remain confident in the fundamental of our business. Consumer interest in minimally invasive aesthetic procedure continues to be solid, and we believe demand will return as macro conditions stabilize and consumer confidence start to grow. We made a [ deliverable ] decision as a company not to cut corners, not to reduce our workforce and to remain committed to leading the industry, because we believe that when the market rebounds and demand will return, we will be ready to lead and benefit as we have in the past following major challenges. Later this year, we plan to unveil a new platform designed for wellness market, further [ expecting ] the depth of our product portfolio. This addition reflects our ongoing strategy to diversify our offering and tap into a new segment. We look forward to sharing more detail as we approach the official launch. As stated in the press release, we are proud to have completed our fifth share repurchase program this month. Earlier this month, we purchased 6.95 million shares totaling $127 million. In fact, over the past 12 months alone, we have returned more than $412 million to the shareholders through share repurchase, representing approximately 27% of our total capital. Finally, despite the macroeconomic challenges, we believe InMode is uniquely positioned to lead through this cycle with a strong balance sheet, a diversified portfolio and industry-leading technology. Now, I'd like to turn the call over to Yair, our Chief Financial Officer. Yair?

Thanks, Moshe, and hello, everyone. Thank you for joining us. I would like to review our Q1 2025 financial results in more detail. Starting with total revenue, InMode generated $77.9 million in the first quarter of 2025, a decrease of 3% compared to the first quarter of last year. Gross margin was 78% on a non-GAAP -- on a GAAP basis, sorry, compared to 80% in Q1 2024. Non-GAAP gross margins were 79% in the first quarter compared to 80% in Q1 of 2024. In Q1, our minimally invasive platforms increased to be 87% of total revenues. Moving to our international operations. First quarter sales outside of the U.S. accounted for $38 million or 49% of sales, a 1% increase compared to Q1 last year. In Q1, Europe was the largest revenue contributor from outside the U.S. and reached a record sales number. To support our operations and growth, we currently have a sales team of more than 281 direct reps in 76 countries through distributors worldwide. GAAP operating expenses in the first quarter were $45.3 million, a 1% decrease year-over-year. Sales and marketing expenses decreased to $39.7 million in the first quarter compared to $39.8 million in the same period last year. Share-based compensation decreased to $2.5 million in the first quarter of 2025. On a non-GAAP basis, operating expenses were $43.1 million in the quarter compared to $42.3 million in the same quarter of 2024, representing a 2% increase. GAAP operating margin in Q1 was 20% compared to 23% in the first quarter of 2024, while non-GAAP operating margin in the first quarter was 23% compared to 27% in the first quarter of 2024. GAAP diluted earnings per share for the first quarter were $0.26 compared to $0.28 per diluted share in Q1 of 2024. Non-GAAP diluted earnings per share for this quarter were $0.31 compared to $0.32 per diluted share in the first quarter of 2024. Once again, we ended the quarter with a strong balance sheet. As of March 31, 2025, the company had cash and cash equivalents, marketable securities and deposits of $512.9 million. This quarter, InMode generated $14 million from operating activities. As Moshe mentioned, we remain committed to delivering shareholder value and returning capital to our investors in a disciplined and strategic manner. In addition, we continue to evaluate all avenues for capital allocation, including additional share repurchases, potential dividends and strategic M&A. Our approach remains focused on minimize -- on maximize long-term shareholder value, while preserving the strength and flexibility of our balance sheet. Looking ahead, we expect growing share of international markets, along with the continued pressure in the U.S. market, to reduce operating margins by around 4% to 5%. In addition, with U.S. tariffs at their current levels of 10%, we anticipate an impact of approximately 2% to 3% on our gross margins. As this situation remains fluid, we are closely monitoring developments and will adjust our forecast and strategy accordingly. Before I turn the call back to Moshe, I'd like to reiterate our guidance for 2025. Revenues between $395 million to $405 million. Non-GAAP gross margins between 78% to 80% compared to previous guidance of 80% to 82%. Non-GAAP income from operations between $101 million to $106 million compared to previous guidance of $130 million to $135 million. Non-GAAP earnings per diluted share between $1.64 to $1.68 compared to previous guidance of $1.95 to $1.99. I will now turn over the call back to Moshe.

Thank you, Yair. Operator, we are ready for Q&A session.

[Operator Instructions] Our first question comes from Matt Miksic from Barclays.

So maybe, Yair, just a follow-up on this dynamic of mix. If you could kind of walk through when that started to happen more significantly and how mix across some of your product lines or capital versus consumable is playing into the guide. And then I have one quick follow-up.

Well, I mean, the slowdown that we're experiencing today started in the middle of 2023. It's already almost 7 quarters. It started in the middle of 2023 when interest rate and inflation went up significantly in the United States. At that time, the leasing companies have raised the interest rate on leasing packages, which, as you know, is the main financing method for physicians, doctors and clinicians to buy our equipment. The typical interest rate was around 6%, 7% on 5 years lease package, and it went up to approximately 14% and 15%, which -- this started the slowdown in capital equipment expenditure -- capital equipment purchasing by doctor. In addition to that, the consumer confidence went down in the last year, which also brought down the numbers of procedures that are being performed by doctor. We have to remember that minimally invasive procedures are not the typical $300 to $400 laser treatment for hair removal or skin rejuvenation, it can cost thousands of dollars. I mean, if it's a minimally invasive RFAL, it can cost $4,000, $5,000 per treatment. And also on the Morpheus, it's not $300, $400. So people, when a slowdown occurs, they try to postpone treatment which are relatively expensive in the medical aesthetic, especially in the aesthetic surgical. And that also did not help us. I can give you the numbers. On Q1, we sold 237,000 disposables. Each disposable, it's probably maybe in some -- in most cases, is one treatment. And maybe in Latin America and other places, then they use it twice, but it's basically built to be a single-use disposable per treatment. At the same time, 2 years ago, at the end of the first quarter of 2023, we sold 240,000 or something like that. But we need to take into consideration that during the last 2 years, we have installed another close to 9,000 systems worldwide. That means that the average per doctor went down around, I would say, 30% uses or 30% less treatment, which are minimally invasive. And this is the main, I would say, factor that determine how many patients are basically considering doing minimally invasive. As of now, I have to say, based on the first quarter and the start of the second quarter, we don't see the light at the end of the tunnel. We don't see the slowdown coming with some new momentum. We have introduced 2 new platforms to the market. And usually, when we introduce 2 new systems to the market, we see a new momentum. Currently, since 2024, we do not see that yet. And that's the main reason why we are selling less than the first quarter in 2024, even more than the 80% versus 79% because on the first quarter '24, if everybody remember, we had the war in Israel, and that also suspended some of the sales. This quarter, we did not have any obstacle as a war to stop down or to slow that down. So the first quarter of 2025 is not a good quarter for us, I have to say. But we are confident that once everything will get back to normal, we will close the gap and go back to normal growth.

Got it. Now -- so the mix has been going on for a while, but now we're seeing kind of the pull-through of utilization mix that would account for the additional comments in the press release and the guide. Is that a fair way to...

Yes, if you're talking about geographic mix, if you look at 2023, 2024, U.S. usually accounted for 62%, 63% of the total revenue. And this quarter, it went down almost to 50%. So we definitely expect...

Right now, U.S. is 50% and RoW is 50%. But again, that's percentage-wise. The decline or the decrease in the U.S. market was much more than the rest of the world.

So the headwinds that we are experiencing in the U.S. are stronger, mainly because we are also one of the largest players in the U.S.

Right. Yes, that's very helpful color. Just one quick follow-up on the guide, as well as the shortfall in Q1 that you announced several weeks ago holding the guide. So where in that dynamic do you expect -- is it stronger trends OUS? Or is it some delayed deals in the U.S. that will come back that gets you to holding the guidance? What is the...

We're trying to be optimistic. And we try to think about the market in the U.S. that probably it will come back during 2024 -- 2025. But to be honest with you, it all depends how the results on Q2 will look like. If the results on Q2 will not be significantly higher than what we saw on Q1, we will have to lower the guidance. Because Q2 is much stronger than Q1 on a seasonality base, because Q1 after Q4 is always a slower quarter and Q2 is the strongest quarter. So we're waiting to see how Q2 will recover, if I can say it this way, from Q1. Usually, April is not the strongest month, so we don't see it yet. But May and June, hopefully, will be stronger. If we will do as we anticipate in Q2, we will maintain the guidance. If we'll not, we'll have to touch it.

Your next question comes from Danielle Antalffy from UBS.

Moshe, just to follow up on what you just said. Thanks for all the color you're giving. I mean, I guess, how much -- and it's hard, there's no real precedent for the current times that we're in. But I'm thinking less specifically about the tariff impact and things like that, but how you guys are factoring in things like potential weaker economic environment going forward? Or would that cause incremental downside pressure to the guidance? So thinking about will we or won't we go into a recession? I know these are all questions right now, but a little bit more color on sort of the macro environment that you're factoring into the guidance reiteration that would be helpful.

Well, I believe we say that. I mean we gave the guidance of $400 million, or $395 million to $405 million at the beginning of the year when we knew that the first quarter is usually 20% of the year. So, I mean, 20% of $400 million is $80 million. We did less. We did $77 million or $78 million, not far from the basic guidance that help us to guide the year. Typically, Q2 should be much higher, I would say at least 25% or more percent of Q1, because Q2 usually represents 25% or 26%, up to 27% of the total year. And then, Q3 is also a very slow one, and Q4 is the strongest. So based on that and the $77 million or $78 million that we did, we decided not to lower the guidance at this stage, hoping that we will see some momentum in the next 2 quarters. And I will say it again, if it will not happen in Q2, means that Q2 will not be 25% to 26% of the year, means that it will not be above $100 million, we will need to lower the guidance.

Okay. Got it. That's helpful. And just to confirm, I mean, I know you guys are still investing in the business, but how -- and I appreciate that strategy very much. But how are you keeping the sales force engaged at a time like this? And maybe you could talk a little bit about how you did it during COVID and what practices you're implementing here from your learnings then.

Well, the COVID time was totally different. In the COVID time, we stopped selling for almost 4 months, 0. And we took the risk because we said we are a growing company. We have a good sales team in the U.S., in Canada and in some countries where we started subsidiaries, and we said we don't want to lose them. Because it's all about people. I mean this is the talent. I mean if we lose them like the other company, fire them and rehire them when the COVID will disappear or [ with COVID ], then we might not be able to find them. They will go to other competitors. So we kept everybody and we took the risk. It cost us about $10 million a year. This time, we're still selling. We did not stop selling. There was a slowdown, of course. It's more than 25% of what we sold per quarter in 2023 and the profit went down 50%, not 25%, from $45 million a quarter to $21 million a quarter on a non-GAAP basis. That's a lot. But again, we have the resources, and we made the same decision, although it's hurting our profitability. We can cut costs some like $5 million, $6 million a quarter by firing some of the engineers and stop developing or get rid of some of their salespeople. This type of behavior or this type of philosophy communicates something that's not solid to the company. Because we're not a capital-intensive company, we're a people-intensive company. And that's why we're taking again the risk. Maybe it will hurt our profitability. But in the future, if everything will go -- and I said if, nobody knows when and how, how long it will take, we don't know, and we don't want to predict. We made the mistake in the middle of 2024 when we said that in the second half of 2024, the market will go back to normal, and it didn't. And we have to eat the statement that we said, and we don't -- we will not do it again. So right now, we continue to develop. We bring new product to the market, not in 2025. In 2025, we have probably another product to bring to the market. But in 2026, we'll see. One thing I want to say, we -- in 2024, in the middle of the slowdown, we decided to bring 2 new products to the market, the Ignite and the OptimasMAX. Now, this is because we thought maybe the market will get better. On a typical slowdown, it's not smart to bring your best products to the market, to launch them, you have to wait. But we did it. And we hope that when the market will recover, we'll do better again.

[Operator Instructions] Our next question comes from Matt Taylor from Jefferies.

So I did want to follow up on the guidance question and just ask more specifically what you're expecting for Q2 and the phasing for the rest of the year. And then my other question was on the tariffs, if you could be specific about where the impact is coming from in your tariff guidance?

Okay. Let's start with the guidance. We gave $400 million in the beginning of the year. We are -- this is based on $80 million in the first quarter -- or $81 million or $82 million, something similar to that, and $102 million on the second quarter. That's about, let's say, $185 million. And then another, I would say, $90 million on the third quarter and the rest of the fourth quarter. That's the typical seasonality of this industry. I know, in 2024, it did not happen. In 2023, the third and the fourth quarters behaved differently because that was the start of the slowdown. But if you go years ago, that was a typical seasonality for the medical aesthetic. Now -- and that's how we came up with the $400 million because we thought we want to stabilize the company. We did about close to $400 million in 2024, and we would like to repeat that number. And if the market will behave differently, then we'll see what to do. If Q1 -- if Q2 will be -- and I'll be honest, Q1 will be $90 million or $95 million, we will lower the guidance, absolutely. There's no other way. Because we know what can happen in the third and the fourth quarter. The third quarter is usually slow because it's summertime. People don't do aesthetic procedure in the summertime. They go to -- they go on vacation and they spend the money there. And the fourth quarter is the strongest one. But unfortunately, on Q4 2024, it was a very slowdown quarter. It did not help us. So this is how we calculate the guidance. And this is why we said, okay, we are less than what we anticipated in Q1, are we going to lower the market -- the target -- the guidance or not? And finally, we decided not to and wait for the second quarter. That was the internal decision that we made as a management. Now regarding the tariff, the tariff -- the original tariff that was imposed on Israel was 17%. Now, the business in the U.S. is 50%, and the transfer price on which we are paying the tariff, let's say, it's also 50%, so the tariff effect, 17% on 25%. You basically divide the tariff, the 17% by 4. That's a rough calculation, Matt. So if it's 17%, it should be above a 4% effect on the gross margin and also on the bottom line. If it remain -- not remain 17% and it will be 10%, like what is now because of the -- as you know, the President of the U.S. decided to give some kind of relief for 3 months before he imposed everything, then -- if it's 10%, then it's between 2% to 3%, something like 2.5% on the gross margin and on the bottom line. That's how we calculated that. But I want to tell you that everybody is confused, including the custom authorities in the United States. They don't know what to do. What is included, software and non-software. If we buy components from the U.S., can we deduct them or not deduct them? There is uncertainty right now. Nobody explained. There's no rules. Nobody published something. There -- we had discussed that with our PwC auditors, and they don't know. Everybody is guessing. So we need to wait and see for some clarification.

Maybe just one follow-up on the guidance. So it sounds like that you're really forecasting the market and the seasonality. I didn't hear anything about the new products. I mean do you expect the new products to contribute to the guidance? How important are they to getting to the $400 million?

Well, Matt, we are bringing a new product almost every year. And always, the new products are -- if we have like -- for example, like now, 10 platforms, the new products are not 20% of the total, the new products are more than 20%. And therefore, it's always -- the old products are less than 20% and the new products are a little bit more than 20%. But the total remains the same. When we're growing, then the new products are the winner and then contribute some of the growth. When we're not growing, we cannot anticipate that the new products will bring more than the average.

Your next question comes from Caitlin Cronin from Canaccord Genuity.

So I know you guys have noted expectations to maintain your sales force and spending. I mean any kind of updated guidance for OpEx this year, given the continued macro challenges?

The purchasing [indiscernible].

So you're talking about the guidance on the operating profit?

Which guidance did you talk about?

Yes, this is for operating expenses. I think you guys have talked about kind of maintaining -- not letting anyone go and maintaining your sales and marketing type spend. But I mean, any kind of updated expectations there?

So the expectation is that we'll continue to keep all the investment that we plan to do in the beginning of the year, including expansion of the teams, whether in the U.S. or internationally where we open new subsidiaries. This results in additional cost. And as I mentioned, regarding the change in the geographical revenue mix, with U.S. experiencing tougher headwinds than in the rest of the world, that would have additional impact on the profitability at the end of the day. And we are expecting roughly around 4% to 5% impact only from that.

Got it. Okay. And then any updates on the U.S. management structure, Moshe? I know you had been acting as the Interim President of U.S., North America. Any updates there?

We have not yet hired a new President for the U.S. or nominated somebody from within. I'm still the active, I would say, or the acting President of the U.S. I spend every month a few days in the U.S., and I'm doing it from Israel most of the time. But every month, I'm in the U.S. with the team.

Your next question comes from Mike Matson from Needham & Co.

Just one on the tariff. So it sounds like you're not assuming you're able to offset the tariff impact with price increases. So is that right? And I guess why not try to pass some of it through to your customers?

Well, we thought about it, Mike. But in a tough market like this, if we will go to the market and raise prices just because we are an Israeli company and not American company and explain that this is an import product and we have to raise prices, it will not help us. You're not raising prices in a market where the trend is down or where the slowdown -- and when the market is very sensitive to price, especially when the interest rate on the leasing packages are high and the monthly payments go higher as well because of the interest rate. So we have decided not to raise prices, not to raise prices because of the tariff. I mean, the only way -- the only time that we're raising prices is when we bring new product to the market. And if the new product is an upgrade for something similar that we sold, then maybe we can raise a little bit of price. But other than that, from a marketing and commercial point of view, I don't think it will be smart right now for InMode to go to the market and raise prices, let's say, by 10%. No, it will not help.

Okay. Yes, that makes sense. And then just the wellness platform that you mentioned, when do you expect to launch that? And given your commentary around kind of better to have launches during -- when the market is recovering or stronger, is that something where you're going to maybe hold off until you see signs of improvement in the market?

The 2 wellness products that we have today, one is the Empower for women's health, for SUI and some vaginal treatment; and the other one is Envision for dry eye and periorbital treatment. Both of them -- we're still selling both of them. And by the way, we started to hire specific salespeople just for this product, which are more medical than the others. But what we see now that those products -- the revenue from those products went down in the same 20% or 25% that we're experiencing on the entire portfolio.

Yes. Sorry, Moshe, I was referring to the -- I think you said earlier in the call that you were going to have a new platform for wellness coming out. I was asking about that. When will that...

Yes. Sorry, I didn't know. We have a new product that we will bring to the market for [ wellness ], and we will release the indication once we finish with the clinical study.

It's going to be later this year. We are not sure exactly when. We'll announce it once we decide.

The next question comes from Sam Eiber from BTIG.

Maybe I could just start on a clarifying question on the tariff impact. Is that 2% to 3% on a full year basis? So if we assume those go into effect maybe July 1, the impact would be closer to 1%. And then is that reflected in the 78% to 80% new gross margin guidance?

No, we did not take it into account yet.

Yes. Yes and yes. Yes on both.

On both?

Yes, on both questions. 2% to 3% on overall, assuming it remains 10%. If it goes back to 17%, we will need to get back and update the guidance. We really hope it's going to stay at 10%. But no one really knows what's going on, until the administration makes its final decisions. And yes, we did count it into the existing guidance to the -- assuming 10% tariffs from Q2 through Q4.

Okay. That's helpful. And then maybe I can use my follow-up on capital allocation. It sounds like more to come for the rest of the year. I guess, any way how you're thinking about prioritizing share repurchases, dividends, M&A? And then any more details in terms of the tax impact if you were to do an additional share repurchase program later this year?

Well, I will start from your last question. We are not considering right now to do another share repurchase. Now just to take you through the history, we started to do share buyback about 2.5 years ago. We started when the stock was $50 and $60, and we bought already stock for $500 million. By the way, $508 million. With the average price per share of -- altogether, all the packages or all the program, which was about 4 to 5 programs, the price per share that we purchased was close to $20 a share, which is just to be precise, $19.95. Now actually, from an investment point of view of the company, we actually invested $500 million, but it did not help the stock price. The stock price is around $15 today. So basically, it was not the best investment from the corporation point of view. And I'm sure it was not the best investment from the shareholders' point of view. So we need to think right now what to do. Because basically, we're left over with $500 million. We invested or spent $500 million for buyback with no results and -- to the shareholders and to the company. And if we want to do any acquisition, which we believe that's something that we're considering, we don't want to be left with no cash or no money to do it. So right now, at this point, after we bought 30% of the stock for $500 million, we are not considering another one in the near future.

Okay. That's helpful. And then maybe I could just squeeze a last one here, just because it hasn't been asked yet, about Europe and what you're seeing there that makes that market relatively stronger than maybe what you're seeing in the U.S. And I guess, how sustainable that strength is?

What -- in Europe? In Europe...

The subsidiaries we opened.

In Europe, the first quarter was better. As you know, we made a lot of changes in the management of our subsidiaries and it's worked well, and Europe now performing better than the U.S. per capita or per country. Prices in Europe are less than in the U.S. per system. And you have to take into consideration that in many countries in Europe, we still sell through distributors. So we are recognizing only the transfer price. We are not recognizing the full price. We just -- in Europe, the credit is getting tighter because there was sign of inflation in certain countries, which will not help us. And therefore, we had to open a pool with the leasing company to help to share the risk with them, like we do in the United States, the pool that we opened in 2024 for 6%. And we'll see. Hopefully, it will help and it will keep the momentum or will keep some kind of growth in Europe and -- through the distributors and through the subsidiaries.

Your next question comes from Dane Reinhardt from Baird.

Maybe a follow-up on, I think, Mike's question regarding pricing on the systems here. I know it sounds like you're not raising prices on kind of existing products, but you did mention that you would take price on the new products. And just kind of based on the math that you report out with systems revenue and new placements that you've installed kind of in the past few quarters, it does seem like there's been kind of a noticeable step-up in ASPs, particularly in the U.S. So have you raised prices on those new OptimasMAX and Ignite platforms? And how does that seem to be kind of being received by your customers at this point?

We did not raise prices on the Ignite. The prices that we set up for the Ignite and OptimasMAX in 2024, we did not change them because of the tariff. They are the same prices. What I said is, whenever we introduce a new system, like OptimasMAX to replace the Optimas, then the OptimasMAX is priced a little bit higher than the Optimas. When we launched the Ignite to replace the BodyTite -- not to replace, to complement the BodyTite, then we -- the price for the Ignite was higher than the BodyTite, the regular -- the BodyTite platforms. But when you bring new platforms on a new indication, then the prices need to be compatible to the market and not prices that you want. I mean, in certain technology, when we are unique, we can charge a little bit more. But this market right now, it's very competitive. And therefore, we see no way or no reason to raise prices in the middle of the slowdown or just because of the tariff.

Okay. Yes, I just clarifying that there was a price increase on like OptimasMAX relative to Optimas, so that's helpful. And then just my second follow-up, obviously, U.S. consumer confidence has kind of slowed here as we've -- throughout the first quarter. So just from a cadence perspective, I know what you laid out through kind of Q2 through Q4, but just within the first quarter itself, did you kind of see any worsening from January to March and into April just as those U.S. consumer confidence numbers have kind of weakened?

Well, the consumer confidence went down, isn't it?

Yes, it did. But especially when it comes to capital equipment, most of the revenue is anyway in March. January and February are slow anyway. So you cannot really make too much out of comparing the cadence of the consumer confidence index during January through March and expect to see an impact throughout the quarter. Most of the revenue -- every quarter, we generate most of the revenue in the last quarter of -- or in the last months of the quarter. So -- but it will be interesting to see how June and overall Q2 would look like comparing to Q1.

Dane, does that answer your question?

Yes, that does. I guess just maybe even one follow-up here, I'll tack on. I'm not sure if you answered it in the prior question. But can you just remind us what again potential tax implications would be if you did do any sort of dividend? Because I know you've kind of mentioned that, but it seems like buybacks are off the table, may be looking at M&A. But just remind us the tax implications if you did do a dividend now.

On the dividend, according to the Israeli tax law, you have to pay 20% dividend tax before you distribute the money. So for example, if you want to allocate $100 million for dividend, 20% check you send for the Israeli IRS and $80 million to the shareholders.

This concludes our question-and-answer session. I would now like to turn the conference back over to Moshe Mizrahy, InMode's CEO, for closing remarks.

Okay. Thank you, operator. Thank you, Miri. I want to thank first our team, InMode team worldwide, that worked very hard in the first quarter like always, knowing that there's a slowdown and that we have to perform. I want to thank all the shareholders for being with us in this earnings call. As we said, we'll meet again sometime in June -- in July. Hopefully, the market will improve by then and we will be a little bit more optimistic. Thank you all.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.