InMode Ltd. (INMD) Q1 2025 Earnings Report, Transcript and Summary

Good day, and welcome to InMode's First Quarter 2025 Earnings Results Conference Call. All participants will be in listen-only mode. [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 be all be available to answer your question. The medical aesthetic market continue 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 pullback during period of economic slowdown. And we will and we have seen that reflected in recent quarters across the last two years. Patient are deferring treatment and provider 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 continue 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 rebound 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 platforms designed for wellness market, further expecting the depth of our product portfolio. This addition reflect 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 purchase 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 purchase representing approximately 27% of our total capital. Finally, despite the macroeconomics 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 would 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 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 and 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] (ph) 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 our revenues 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 we will adjust our forecast and strategy accordingly. Before I turn the call back to Moshe, I would 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.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Matt Miksic from Barclays. Please go ahead.

Hey, thanks. Good morning. Thanks for taking the questions. 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 new 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 seven 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 physician, doctors and clinician to buy our equipment. The typical interest rate was around 6%, 7% on five-years lease package and it went up to approximately 14% and 15%, which this start 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] (ph) could cost $4,000 -- $5,000 per treatment and also on the Morpheus it's not $300, $400. So people when a slowdown occur they try to postpone treatment which are relatively expensive in the medical aesthetic, especially in the aesthetic surgical and that's 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 most cases is one treatment, in maybe in Latin America and other places and they use it twice, but it's basically built to be a single use disposable per treatment. At the same time two years ago at the end of the first quarter of 2023, we sold [240] (ph) of something like that 1,000. But we need to take into consideration that during the last two years we have installed another close to 9,000 system worldwide. That mean that the average per doctor went down around I would say 30% users 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 two new platforms to the market and usually when we introduce two new system 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 [2020 – 2024] (ph), even more than [80 versus 79] (ph) because on the first quarter 2024 if everybody remember we had the war in Israel, as well and that's also suspended some of the sales. This quarter we did not have any obstacle as a war to stop down or to slow 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 it would account for the additional comments in the press release and the guide. Is that a fair way to assume that.

Yes. If you are 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 --.

Right now we use this 50% and [RW] (ph) 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.

The headwinds that we're experiencing in the U.S. are stronger, mainly because we are also the one of the largest players in the U.S. Right.

That's very helpful color. Just one quick follow-up on the guide as well as the shortfall in Q1 that you've announced several weeks ago, you've been 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?

We try to be optimistic and we try to think about the market in the U.S. that probably it will come back during 2024 -- but to be 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 significant 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 a strongest quarter. So we're waiting to see how Q2 will recover if I can say this way from Q1. Usually [Technical Difficulty] will is anticipating Q2, we will maintain the guidance. If we not, we'll have to touch it.

Understood. Thank you so much.

Thank you. Your next question comes from Danielle Antalffy from UBS. Please go ahead.

Hey, good morning. Good morning, guys. Thanks so much for taking the question. 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, like 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 there would be helpful. Thank you.

Well, I believe we say that. I mean, we gave the guidance of $400 million or [$395 million, $405 million] (ph) at the beginning of the year, when we knew that the first quarter is usually [80] (ph) -- 20% of the year. So, I mean, 20% of [$400 million] (ph) 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% -- 25% or more percent of Q1, because Q2 usually represent 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 in this stage, hoping that we will see some momentum in the next two quarters. If again, I will say it again, if it will not happen in Q2, mean that Q2 will not be 25% to 26% of the year, meaning 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, you know, 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? Thanks so much.

Well, the COVID time was totally different. In the COVID time we stopped selling for almost four months, zero. 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 we hire them when the COVID will disappear or when 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 helping 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 sales people. This type of behavior or this type of philosophy communicate something that not solid to the company, because we're not a capital intensive company, we're people intensive company and that's where 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 know when and how, how long it will take, we don't know and we don't want to predict. We made the mistakes in the middle of 2024 and we said that in the second half of 2024 the markets will go back to normal and it didn't. And we have to eat the statement that we said and 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 are -- in 2024 in the middle of the slowdown, we decided to bring two new product 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 product 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.

Got you. Thank you for that.

Thank you. Our next question comes from Matt Taylor from Jefferies. Please go ahead.

Hi. Thank you for taking the question. Sorry. 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, [$102] (ph) 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 a typical seasonality of this industry. I know in 2024 it did not happen. In 2023 the third and the fourth quarter behave differently because that was the start of the slowdown. But if you grow years ago that was the 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 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 slow down quarter, 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 Q2, 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 internal decision that we made as a management. Now regarding the tariff, the regional tariff that was imposed on Israel was 17%. Now the business in the U.S. is 50% and the transfer price on which we're paying the tariffs, let's say it's also 50%. So the tariff effect 17% on 25%. You basically divide the tariff, the 17% by four. That's a rough calculation, Matt. So if it's 17%, it should be above 4% effect on the gross margin and also on the bottom-line. If it's 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 three months before we 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 include software and non-software. If we buy component from the U. S., can we deduct them or not deduct them. There's uncertainty right now. Nobody explained, there's no rules, nobody published something. We had discussed that with our PwC auditors and they don't know, everybody is guessing. So we need to wait and see some for some clarification.

Thanks for that. Maybe just one follow-up on the guidance. So it sounds like 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 product to contribute to the guidance? How important are they to getting to the $400 million.

Well, Matt, we're bringing new product almost every year. And always the new product 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 product are a little bit more than 20%, but the total remains the same. When we're growing then the new product are the winner and then contribute some of the growth. When we're not growing, we cannot anticipate that the new product will bring more than the average.

Okay, great. Thanks for the color. I'll pass on to the next person.

Thank you. Your next question comes from Caitlin Cronin from Canaccord Genuity. Please go ahead.

Hi. Thanks for taking the question. So I know you guys have noted expectations to make --.

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

Yes, they're just the operating expenses. I think you guys have talked about kind of maintaining not letting anyone go and maintaining 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've 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 US. I spend every month for 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.

Got it. Thanks for taking questions.

Thank you. Your next question comes from Mike Matson from Needham and Co. Please go ahead.

Yes, thanks. Just one on the tariffs. 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 that 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're 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 are 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 again 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 waste a little bit the price. But other than that from the marketing and commercial point of view, I don't think it will be smart right now for InMode to go to the market and waste 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 off until you see signs of improvement in the market?

The two wellness products that we have today, one is the Empower for women health for SUI and some vaginal treatment and the otherwise 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 sales people just for this product, which was more medical than the others. But what we see now that those product, the revenue from those product 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.

Yes, yes. Sorry, I did not. We have a new product that we will bring to the market for [indiscernible] 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 announce it once we decide.

Okay, got it. Thank you.

Thank you. The next question comes from Sam Eiber from BTIG. Please go ahead.

Hey, good morning, everyone. Thanks for taking the questions here. 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 you assume those go into effect maybe July 1, the impact will 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 question. 2% to 3% on an overall assuming it remains 10%. If it go back to 17%, we will need to get back and update the guidance. We really hope it's going to stay 10%, but no one really knows what's going on. Until the administration makes his final decisions. And yes, we did count it into the existing guidance assuming 10% tariffs from Q2 through Q4.

Thanks for the clarification. Thank you. 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're not considering right now to do another share purchase. 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] (ph) 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 four to five program, the price per share that we purchased was close to $20 a share, which is just to be precise $19.95. Now actually from investment point of view of the company, we actually invested $500 million but it did not help with the stock price. The stock price is on [$15] (ph) 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 left over with $500 million. We invested five -- 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 that 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 the last one here just because it hasn't been asked yet about Europe and what you're seeing there that 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 to the distributors and to the subsidiaries.

Great. Thanks for taking the questions, sir.

Thank you. Your next question comes from Dane Reinhardt from Baird. Please go ahead.

Hey, guys. Thanks for the time here. 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 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 produce 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 body type, not to replace, to complement the body type, then the price for the Ignite was higher than the body type, the regular the body type 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, and certain technology when we are unique, we can charge a little bit more. But this price, 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, thanks. Just even clarifying that there was a price increase on like OptimasMAX 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? Thanks again.

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 -- in the last month of the quarter. So but it will be interesting to see how June and overall Q2 would look like compared to Q1.

Dane, does that answer your question?

Yes, that does. Thank you very much. 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 what 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, maybe looking at M&A. But just remind us the tax implications if you did do a dividend now thanks.

On a 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 sent for the Israeli [IRS and $80 million] (ph) to the shareholders.

Thank you. 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 was slowdown and that we have to perform. I want to thank all the shareholders for being with us in this earning call. As we said, we 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.