InMode Ltd. Annual Report Summary (Year Ended December 31, 2025)

Dive into InMode Ltd.'s performance and financial health for the fiscal year ended December 31, 2025. This summary offers key insights for retail investors, highlighting the company's strategic direction and market position.

1. Business Overview

InMode Ltd. stands as a leading global innovator in minimally invasive aesthetic medical technologies. Its product portfolio features advanced radiofrequency (RF)-based platforms, enabling a range of procedures from skin tightening and body contouring to hair removal. InMode serves a diverse clientele, including plastic surgeons, dermatologists, gynecologists, and aesthetic clinics, consistently aiming to enhance its technological leadership and expand its global market presence.

2. Financial Performance (Year Ended December 31, 2025)

InMode delivered a strong financial performance in 2025. The company reported total revenue of approximately $500 million, marking a 12% increase from the prior year. Net income reached $180 million, with Diluted Earnings Per Share (EPS) of $2.10. Gross margin remained robust at approximately 85%, underscoring the high value of its proprietary technology and efficient operations.

A significant portion of InMode's future revenue is already secured. As of December 31, 2025, the company's non-current deferred revenue—payments received for services or products yet to be fully delivered—is projected to be recognized primarily in 2027 (76%), with the remainder between 2028 and 2030. This substantial backlog offers strong revenue visibility for the coming years.

The company actively returned value to shareholders through its share repurchase program. InMode repurchased a total of 24,975,003 shares by the end of 2025, including activity in May and September 2024, and continuing in February and throughout 2025. This initiative reduced the outstanding share count and potentially boosted EPS.

3. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

In 2025, InMode continued its strong performance, driven by expanding its installed device base and growing consumable sales, as highlighted in the Financial Performance section. Management strategically focused on enhancing technological leadership and expanding global market presence.

Key Factors Affecting Results:

• Product Innovation: Launched two new platforms, "Morpheus8 Pro" and "Evoke 2.0", expanding treatment capabilities and addressing new market segments.
• Geographic Expansion: Expanded market penetration and revenue in regions like APAC and Latin America, diversifying the revenue base.
• Clinical Validation: Published several new peer-reviewed studies demonstrating the efficacy and safety of core technologies, reinforcing scientific leadership and market credibility.
• Challenges:
  • Increased Competition: Faced intensified competition from both established players and new entrants in the aesthetic device market, particularly in specific segments like body contouring.
  • Supply Chain Volatility: Minor supply chain disruptions for certain components led to slight delays in product delivery or increased operational costs.
  • Economic Headwinds: A challenging macroeconomic environment with fluctuating consumer spending on elective procedures in key markets required adaptive sales and marketing strategies.

Strategic Execution and Growth Initiatives: In 2025, InMode's stable leadership team ensured continuity in strategic execution. The company pursued a multi-pronged growth strategy focused on:

• Expanding the global installed base of InMode devices by driving sales of new platforms.
• Increasing recurring revenue from disposable handpieces and treatment tips.
• Targeting high-growth international markets for revenue diversification.
• Investing in R&D for next-generation technologies and expanded clinical applications.
• Committing to shareholder returns through the ongoing share repurchase program.

Market Trends and Regulatory Environment: The aesthetic medical market continues to benefit from several favorable trends, including an aging population, technological advancements, social media influence, and a strong preference for minimally invasive procedures.

The medical device regulatory landscape remains stringent. InMode continuously monitors and adapts to changes in FDA regulations in the U.S. and similar international bodies (e.g., CE Mark in Europe). While 2025 saw no significant adverse regulatory changes, ongoing compliance and potential future shifts remain a key company focus.

4. Financial Health (As of December 31, 2025)

InMode's financial health remains exceptionally strong. The company reported cash and cash equivalents of approximately $750 million with no long-term debt, underscoring robust liquidity and financial flexibility. This substantial cash position, coupled with the significant deferred revenue backlog, provides a solid foundation for future investments and shareholder returns. Its current ratio stood at 4.5x, demonstrating ample ability to cover short-term obligations. The ongoing share repurchase program further highlights its strong capital position and commitment to shareholder value.

5. Key Risk Factors

Investors should be aware of the following potential risks:

• Intense Competition: The aesthetic medical device market is highly competitive, marked by rapid technological advancements and new product introductions.
• Regulatory Changes: Changes in healthcare regulations, product approvals, or marketing restrictions could impact operations and profitability in key markets.
• Reliance on Key Personnel: The loss of key management, scientific, or sales personnel could adversely affect business performance.
• Product Liability: Product liability claims, inherent to medical device companies, could result in significant legal expenses or damages.
• Economic Downturns: Economic downturns could reduce demand for elective aesthetic procedures, as consumer spending is sensitive to economic conditions.
• Intellectual Property Protection: Protecting proprietary technology and defending against infringement claims is crucial for maintaining a competitive edge.
• Customer Concentration: While diversified (no single customer accounted for 10% or more of total revenue or outstanding payments in 2025), shifts in purchasing patterns by large distributor networks or key opinion leaders could still impact sales.

6. Competitive Position

InMode distinguishes itself with proprietary, minimally invasive RF technology, offering superior clinical outcomes and patient satisfaction compared to traditional methods. Its strong intellectual property portfolio, extensive clinical data, and growing installed base of devices create significant barriers to entry. The company's direct sales model in key markets, coupled with a diversified customer base, enhances market reach and reduces reliance on individual clients. Continuous innovation and a focus on physician training and education further solidify its competitive advantage.

7. Future Outlook

Looking ahead, InMode anticipates continued growth in the aesthetic medical market, driven by increasing consumer demand for non-invasive and minimally invasive procedures. For 2026, the company projects revenue in the range of $540 million to $560 million and diluted EPS between $2.25 and $2.40.

The substantial non-current deferred revenue, with 76% expected in 2027 and the remainder through 2030, offers strong visibility into future earnings. Management plans further investment in R&D, expansion of global sales and marketing efforts, and exploration of strategic partnerships or acquisitions to accelerate growth and maintain its leadership position.