InMode Ltd. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing; the provided filing text does not give clear Q4-only financial results. Financial statements are prepared under U.S. GAAP.
Business context
InMode develops and sells energy-based medical aesthetic devices, principally radio-frequency platforms and related handpieces and consumables. Its offerings serve minimally invasive, non-invasive, hands-free and women’s-health procedures. The company reported a global installed base of about 17,000 platforms, 29 FDA clearances, and sales through a direct force of approximately 223 representatives and 54 distributors in 69 countries. The United States generated 66% of 2022 revenue.
Key financial metrics
| Metric | FY2022 | FY2021 | Change / context |
|---|---|---|---|
| Revenue | $454.3 million | $357.6 million | Up 27% |
| Gross profit / margin | $380.8 million / 84% | $304.0 million / 85% | Margin down 1 percentage point, mainly from higher material costs |
| Operating income / margin | $197.9 million / 44% | $167.5 million / 47% | Income up 18%; expenses grew faster than revenue |
| Net income | $161.5 million | $165.1 million | Down 2%; higher income taxes more than offset operating growth |
| Diluted earnings per share | $1.89 | $1.92 | Down 2% |
| Operating cash flow | $181.6 million | $174.9 million | Up about 4% |
| Capital expenditures | $1.6 million | $0.9 million | Primarily molds |
Revenue mix and growth drivers
- Minimally invasive platforms contributed 81% of revenue, versus 72% in 2021; sales rose about 44% to $369.0 million.
- Hands-free platform revenue fell about 38% to $45.2 million, or 10% of revenue. Non-invasive platform revenue rose about 39% to $40.1 million, or 9%.
- U.S. revenue increased 26% to $298.6 million; revenue outside the U.S. increased 29% to $155.7 million. Consumables and extended-warranty revenue grew 57%, supported by installed-base growth.
- Sales and marketing expense rose 35% to $160.6 million; R&D expense rose to $12.4 million from $9.5 million. Share-based compensation increased to $24.5 million from $12.0 million.
Liquidity, debt and investments
- At year-end, cash and cash equivalents were $97.5 million, marketable securities $374.6 million, and short-term bank deposits $75.3 million—$547.4 million combined, which the company identified as its primary liquidity source.
- Working capital was $547.4 million; total assets were $644.4 million and total liabilities $89.8 million. The company reported no outstanding borrowings and said it had not used bank debt financing.
- Operating cash flow was $181.6 million. Investing cash outflow was $109.5 million, mainly reflecting purchases of deposits and marketable securities; financing cash outflow was $41.1 million, principally share repurchases.
- Marketable securities had a $9.7 million net unrealized loss versus amortized cost at year-end, primarily attributed by the company to interest-rate changes and assessed as temporary. The company reported no impairment charge.
- Repurchases totaled $42.6 million in 2022; cumulative purchases under the programs were 2.56 million shares for $95.2 million. Year-end outstanding shares were 82.5 million, excluding 2.0 million treasury shares.
Material changes and unusual items
- Income tax expense rose to $39.9 million from $2.9 million. The increase included a $12.0 million one-time payment under an Israeli tax-law amendment and tax-assessment settlements, as well as the start of regular Israeli corporate tax payments. Net income therefore declined despite higher revenue and operating income.
- In January 2023, the company paid a further approximately $14.3 million to the Israeli Tax Authority for 2021 undistributed exempt income; the filing says the related income may subsequently be distributed or used without additional corporate tax. The company also committed to approximately $9 million of qualifying Israeli industrial investment over five years following its election under the tax amendment.
- Raw-material inventory costing changed from FIFO to moving average in 2022; management said the change was immaterial to the periods presented.
- The company acquired Home Skinovations’ spa-segment assets and an exclusive license to certain IP for $497,000. Disclosed 2022 related-party expenses included $723,000 for marketing services from a beneficial owner of a major shareholder and $100,000 for investment-management services from an entity connected to the CEO and chairman.
- Management and the auditor reported effective internal control over financial reporting; the auditor issued an unqualified opinion on the financial statements and controls.
Outlook, management commentary and risks
- No quantified revenue, earnings or margin guidance is provided in the filing text. Management expects revenue growth to be supported by expanding sales capacity, deeper penetration of existing customers, consumables and extended warranties, and new products and markets.
- Management anticipated 2023 capital expenditures of up to $3 million, to be funded from existing cash and cash equivalents. It expected working capital to be sufficient for present requirements.
- Pipeline plans included a platform for ophthalmology targeted for 2023, with a new dry-eye and periorbital-wrinkle handpiece in clinical trials. ENT products were at concept-design stage; an erectile-dysfunction device was in early development and required substantially more research and development. These plans and indications remain subject to development and regulatory requirements.
- Key risks include reliance on a small number of Israeli contract manufacturers and suppliers; elective-procedure demand and customer financing conditions; intense competition and rapid product innovation; sales-force execution; regulatory clearances and limits on marketing claims; product liability and misuse; IP disputes; cybersecurity and privacy compliance; currency and interest-rate exposure; and political, military, logistics and sanctions risks affecting Israel and international operations.
- The company relies on three Israeli manufacturing subcontractors, with substantial dependence on two. As of year-end, subcontractor finished goods, raw materials and open orders were approximately $46.3 million; termination could require compensation for certain non-returnable inventory and orders.
- Previously reported patent disputes were settled: the Syneron-Candela/MGH matter was resolved in 2019, and the company’s ITC dispute with ILOODA was settled in 2021. The filing notes that future legal claims could still arise; it does not identify a new material proceeding in the supplied text.
Most important facts for investors to verify
- Reconcile the 2022 tax provision and the separate payments and commitments under Israeli tax arrangements, including the January 2023 payment.
- Assess whether the shift toward minimally invasive platforms and the sharp decline in hands-free sales persist, and whether consumables and service revenue continue to grow.
- Monitor gross- and operating-margin trends as sales and marketing, share-based compensation, material and shipping costs increase.
- Review marketable-security maturities, unrealized losses and interest-rate exposure, alongside cash generation and ongoing buybacks.
- Evaluate manufacturing concentration, supplier capacity and Israel-related operational exposure, and track regulatory progress and commercial evidence for products in development.