InMode Ltd. (NASDAQ:INMD) Q4 2022 Earnings Call Transcript

InMode Ltd. (NASDAQ:INMD) Q4 2022 Earnings Call Transcript February 14, 2023

Operator: Good morning, and welcome to InMode Fourth Quarter and Full Year Financial Results Conference Call. All participants will be in a listen-only mode. Please note this event is being recorded. I’d now like to turn the conference over to Miri Segal, MS IR. Please go ahead.

Miri Segal: Thank you, operator and everyone, for joining us today. Welcome to our conference call. Before we begin, I would like to remind our listeners that certain information provided on this call may contain forward-looking statements, and that 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 those 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 pass the call over to Moshe Mizrahy, Chairman and CEO. Moshe, please go ahead.

Moshe Mizrahy: Thank you, Miri, and to everybody who joining us. With me today are Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer; Yair Malca, our Chief Financial Officer; Shakil Lakhani, our President in North America; Dr. Spero Theodorou, our Chief Medical Officer; and Rafael Likaman, our VP of Finance. Following our prepared remarks, we will all be available to answer your questions. We are pleased to report another record quarter with Q4 revenue of $133.6 million and $454.3 million for the full year, an increase of 21% as compared to Q4 of 2021, and an increase of 27% compared to the full year 2021. This is a record level of revenue for an aesthetic medical company, and was especially remarkable and exciting since we are achieving this milestone during challenging global time.

We believe our unique technology, strong dedication to the highest industry standard, our employee commitment, focused growth strategy in the U.S. and globally and our diversified portfolio, all contribute to our leadership position in the market. We value the trust of physician and patient as we experienced a growing demand across the board. The success of the EmpowerRF platforms in 2022 continued to exceed our expectations. In fact, revenue from this platform’s exceeding $45 million in 2022, well above our original guidance of $20 million. As we mentioned last quarter, the Morpheus8 device is becoming the gold standard in the aesthetic category, and we believe that it will be — it will continue to be one of our biggest growth driver going forward, this play a major role in major platforms that we launch.

In 2022, we announced an exciting new addition to our portfolio and the Envision platforms for dry eye treatment, which received certification in Canada last November. InMode Envision is an innovative technology that delivered targeted bipolar radio frequency energy to small dedicated ocular area. We plan to launch the Envision platforms in the United States in the first half of this year to focus on ophthalmology market, and we are encouraged from the positive feedback that we have received from Canadian market. Additionally, the next generation of Evoke, our hand-free platforms for face treatment, is planned to be launched in the second half of 2023. As part of our growth strategy, we continue to innovate as we launch new platforms or modality every year, and we continue to explore potential acquisitions that could complement our presence in the aesthetic and wellness market.

Now, I would like to turn the call over to Shakil, our President in North America. Shakil, go ahead.

Shakil Lakhani: Thanks, Moshe, and everyone, for joining us. Once again, we are pleased to report another record quarter with continued positive momentum due to our diversified portfolio, growing market demand and more frequent use of our platforms. InMode’s growing installed base and the increase in the number of treatments performed led to the increase in consumable sales that reached 230,000 units in the fourth quarter, more than 749,000 in 2022. To support increased market demand, we continue to grow our sales team in North America and globally. In 2022, we enhanced our initiative to strengthen InMode’s brand recognition. We sponsored several well-attended marketing events throughout the year and made a concentrated effort in expanding consumer awareness.

We can say with confidence that our strong brand recognition, especially in North America, leads to a new situation where our platforms are being sought after and bought rather than sold. We expect this paradigm shift to continue and support our future growth. As mentioned by Moshe, the EmpowerRF platform has once again outperformed our projections. In addition, as we continue our strategy and expand into new areas of wellness, we plan on launching the Envision platform for the ophthalmology and optometry market during the first half of 2023, followed by the second generation of our hands-free platform for facial treatments during the latter half of the year. We believe that InMode’s success in 2022 demonstrated our ability to expand into new categories and solidified our leadership position in the aesthetic and wellness market.

Lastly, I’d like to thank our entire North American team for their continued hard work. I will now hand over the call to Yair for a review of the financial results in more detail. Yair?

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Yair Malca: Thanks, Shakil, and hello, everyone. Thank you for joining us. Starting with total revenue, InMode generated a record $133.6 million in the fourth quarter of 2022, representing a 21% year-over-year increase, with a gross margin of 84% on a GAAP basis. For the full year of 2022, revenue totaled $454.3 million, an increase of 27% compared to 2021. Fourth quarter sales outside the U.S. accounted for $42.3 million or 32% of sales compared to 33% in Q4 last year. For the full year of 2022, sales outside the U.S. accounted for $155.7 million or 34% of sales, same as 2021. We are seeing growth coming from many different countries, and we are planning to establish at least one additional subsidiary later this year. To support our operations and growth, InMode now operates in total of 80 countries with a sales team of more than 220 direct reps and over 69 distributors worldwide.

Moving on, capital equipment in the fourth quarter represented 87% of total revenue, while consumables and service revenues accounted for the remaining 13%, identical to the ratio for the full year. GAAP operating expenses in the fourth quarter were $52.7 million and $183 million for the full year, a 33% and 34% increase year-over-year, respectively. Sales and marketing expenses increased slightly to $47 million in the fourth quarter compared to $35.3 million in the same period last year. Sales and marketing expenses for the full year of 2022 were $160.6 million compared to $119.4 million for 2021. This increase is attributed to hiring more sales representatives, increasing our presence in the U.S. and globally. Next, we look at share-based compensation, which increased to $7.1 million in the fourth quarter of 2022 and $24.5 million in the full year of 2022.

On a non-GAAP basis, operating expenses were $46.1 million in this quarter compared to a total of $37.5 million in the same quarter of 2021, representing a 23% increase. For 2022, non-GAAP operating expenses were $160.4 million compared to $126.4 million for 2021. GAAP operating margin for Q4 was 45% and 44% for the full year of 2022. Non-GAAP operating margin for the fourth quarter of 2022 was 50% and 49% for the full year 2022. GAAP diluted earnings per share for the fourth quarter were $0.44 compared to $0.61 per diluted share in Q4 of 2021 and $1.89 in 2022 compared to $1.92 in 2021. Non-GAAP diluted earnings per share for this quarter were a record $0.78 compared to $0.64 per diluted share in the fourth quarter of 2021, and $2.42 for 2022 compared to $2.05 for 2021.

Once again, we ended the quarter with a strong balance sheet. As of December 31, 2022, the Company had cash and cash equivalents, marketable securities and deposits of $547.4 million. This quarter, InMode generated $57.2 million from operating activities. I would like to mention that this quarter, it is more important than ever to focus on our non-GAAP results since, in our GAAP P&L, we have recorded a couple of one-time tax entries that were adjusted for non-GAAP purposes. With regard to taxes, InMode multiplied the provisions of the amendment to the investment law to its exempt profits accrued prior to 2020 and made a one-time payment of $12 million to the Israeli Tax Authority. In addition, the Company reached an agreement with the Israel Tax Authority under which the Company paid due in January approximately $14.3 million on its undistributed exempt income for the year ended December 31, 2021.

As a result, we expect to save up to $28.5 million in potential future tax payments, and our entire cash balance is now free and clear of any additional corporate tax requirements. Before I turn the call back to Moshe, I’d like to reiterate our guidance for 2023. We revenues between $525 million and $530 million, non-GAAP gross margin between 83% and 85%, non-GAAP income from operations between $236 million and $238 million. Non-GAAP earnings per diluted share between $2.58 and $2.60. I will now turn over the call back to Moshe.

Moshe Mizrahy: Thank you, Yair. Thank you, Shakil. Operator, we are ready for Q&A session. Hello, operator?

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Q&A Session

Operator: First question will be from Matt Miksic of Barclays. Please go ahead.

Matt Miksic: Can you hear me okay?

Moshe Mizrahy: Yes, we hear you okay.

Matt Miksic: Great. So I have one question on the upcoming launches and then sort of a follow-up on sort of the tone and flow of your current business in the U.S. On Envision, I’m curious what sort of uptake, how should we think about the pace of that launch? And what sort of investments are you making behind it in terms of your field force or training, might be notable here as you laid out your 2023 guide? And then I have one follow-up.

Moshe Mizrahy: Well, Envision, we’re starting to launch it in the U.S. So I will ask Shakil to answer your question.

Shakil Lakhani: Sure. So we’re going to put some pretty substantial resources behind it. Obviously, as we’ve discussed in the past, bifurcating the sales force is something that we like to do a little different than what you’d expect. So, we will be building out specialty reps that are going to be specifically focused on Envision. And obviously, with the size of the market, the TAM for it is huge in terms of the ophthalmology and optometry world. So, we do see a large potential in terms of what we can kind of maximize out of this, but like anything else that we do, we’re going to roll it out slowly. So, we’re doing a soft launch start. And then as we start seeing proof of concept in terms of efficacy, in terms of marketing success for the practitioners, so on and so forth, will slowly start to invest further funds and resources into it.

Matt Miksic: Great. And that — and I mean, if there was one element of the guide, it seems like there was a little bit of a lift in some of the OpEx lines compared to expectations for the coming year. And I’m assuming that, that that’s a factor in that dynamic. Is that fair?

Shakil Lakhani: I would say that’s accurate.

Matt Miksic: Okay. Great. And then just on the tone and the flow of business in the U.S. if you could — you’ve gotten a couple of questions around sort of the mix of your — I think everyone is curious about the sort of health and sustainability of what’s been a pretty strong U.S. business in light of what might have been a spend-ahead environment a couple of years ago and what on the horizon could be some softening. I’d say that’s consistent with any capital equipment market that we cover, is there’s a nagging concern about what if spending starts to ease here or we have to do some sort of demand catch-up. Can you talk a little bit about the flow of that, and in particular, some of the dynamics around the percent of those businesses of the capital equipment sales that are being financed and how that has shifted over the past year or two?

Shakil Lakhani: Sure. So, we actually haven’t seen that. It’s actually gotten better. Funds become a little easier. I mean, if you look at some of the stats, even for the Super Bowl and the average spending per family for people making a certain amount of income per year, it all went up by like 20% or 30%. So hopefully, with that, they’ll keep eating, and we’ll be able to help them with some of their weight loss goals and things of that nature. But it’s — we’ve seen the U.S. market just as strong as it’s ever been from our perspective, and the way we finished it was extremely good. We’ve had a good start to Q1 so far. So, we don’t anticipate anything changing there. In terms of the funding environment or the financing environment, we haven’t seen much of a slowdown.

We’ve got some really great partners, and we have some really good programs that are put together to help some of the physicians kind of get through. But in terms of spending, we haven’t seen anything cut down. If everyone is talking about a potential recession, if we haven’t already been in one per se, but we — as of now, we haven’t seen anything. If things change, we’ll obviously keep you guys posted on that. Does that answer your question?

Matt Miksic: Yes, it does. Thank you.

Operator: Thank you. Next question will be from Matt Taylor of Jefferies. Please go ahead.

Jon Lee: This is Jon Lee in for Matt. Maybe I wanted to hear a little bit more on the guidance. Just the level of conservatism that’s built in, any color on quarterly cadence, we should expect. And can you talk about Empower growth or the dollars embedded within the guidance?

Moshe Mizrahy: Well, as always, every year, we try to be very conservative in the guidance. For example, last year, the guidance was to — we started with 220 million, and we went all the way up to $455 million, $420 million that — the guidance we — the guidance that we gave for 2023 is conservative, is built bottom up, territory by territory. I believe that the final will be better than that, but it all depends how 2023 will be as far as demand and other country, like the international market, what will happen between Russia and Ukraine, how the market in China will evolve with all the COVID issue there, what will be with the supply chain. I believe we are prepared, but the guidance that we gave this year is similar to other years, very conservative. And we believe that eventually, hopefully, we will do better. Regarding the Empower, the embedded number is 20% higher than 2022.

Jon Lee: Okay. Great. Anything on quarterly cadence we should be aware of?

Moshe Mizrahy: Usually, we don’t give quarterly guidance. But basically, you can take the same seasonality like in 2022 and apply the quality guidance. By the way, every quarter, we will update the total guidance as we did in 2022 and as we did in 2021. But typically, we are not giving guidance per quarter, Matt.

Jon Lee: Okay. Great. I guess maybe just one follow-up, just on the M&A environment. You guys are definitely more focused on aesthetics and wellness. Was wondering if you can give us an update there now that you’ve been a little bit more public on what you’re looking for? How is valuation? How is the conversations with targets been?

Moshe Mizrahy: Well, currently, we are exploring several opportunities. We’re not yet in the stage of doing official due diligence, and we have not yet involved any legal team. But we’re looking into two, three companies in the wellness and aesthetic business, which complement our portfolio. We cannot give any time line or any timetable to the process, but we’re actually searching right now and we’re doing it very seriously.

Operator: Thank you. Next question will be from Kyle Rose with Canaccord Genuity. Please go ahead.

Kyle Rose: So, I just wanted to push back a little bit or just dig a little bit deeper into guidance for 2023, and particularly, the prior comment about Empower being a 20% grower year-over-year. I mean, look, we — you came into the year ’22, looking for that to be $20 million. You finished over $45 million. I guess I know you understand you’re being conservative, but it seems to imply a slowdown in year two. And I would think that it would accelerate in year two, just given the focus you’ve had on rebuilding that market. So can you maybe just help us understand how you’re thinking about specifically Empower in the women’s health market as we move into 2023?

Moshe Mizrahy: Well, yes, we actually launched the Empower in Europe a few months ago. And we’re now working country-by-country to get the final regulation from the regulatory bodies in each country in order to be able to sell it there. Don’t forget, it’s a woman health product and its need to get separate regulation. We did the same in Latin America in the fourth quarter, and we applied to regulation in Brazil, Mexico, Argentina, and also in Colombia. Hopefully, it will not take longer to get it. So, I assume that some time towards the second half of this year of 2023, we will start seeing some results in these two markets. I want to remind everybody that this is something that’s relatively new to us, and we need to be very careful in the way we progress in this product to make sure that the doctors will be well trained and it’s entitled to build training centers in every country, have a luminary doctor, one or two or three in every country.

It’s a process. We try to be conservative in the guidance that we’re giving, also in the United States. Yes, you’re right. We gave a guidance of $20 million and we did $45 million. This is great for us. Hopefully, the numbers that we will achieve in 2023 will be higher than 20% growth. But again, we try to be conservative and to see what will happen during the year.

Shakil Lakhani: I’ll just add further to that. With any product launch, you’re going to have some low-hanging fruit to start, and so we try to factor that in and still being conservative. I think we’ll have a better idea midway through the year of how we’re looking. But we feel good about the market. We’ve seen some good stuff. We’re going to penetrate the core specialties of that market a little further and continue to actually add on, very similar to what I mentioned with Envision, add on some specialty reps to that. So, we do think that there’s a bright future there. But again, factoring in some low-hanging fruit that from new buyers, we are excited about new technology, and then obviously, like we talked about with BodyTite for years, where we want to build longevity with the product.

And as we’ve seen with, even Morpheus, it’s become a brand, and it’s been growing like we didn’t ever expect, and we’re hoping to get the same here. But we’re still always cautious with how we kind of forecast things.

Kyle Rose: No, I can absolutely appreciate that. And then let’s kind of translate that to the Envision product. I mean, it sounds like you’ve got some early positivity or positive signals coming out of Canada. This is going to be the first year of that product sometime in the first half. Is it fair to think about that as half of the initial guidance of what you thought Empower was, so like a $10 million to $20 million product? I mean, how should we think about that launch this year?

Moshe Mizrahy: Well, regarding the Envision, we decided not to give a guidance, but rather to launch it in the United States slowly, gradually. And again, this is a new market for us, learn how the ophthalmology is and the optometrists are making decision, what kind of financing they can get. I mean, as we grow in this new category, we will be able to give a better guidance and a better view of the market. We’re just in the starting point. We sold some system in Canada as a soft launch. And again, as I said, we have decided not to give a guidance on the Envision at that point.

Kyle Rose: Okay. And then last question, and I’ll hop back in queue is how should we be thinking about the China business moving forward? I think historically, you framed that somewhere $2 million to $3 million, which can go to $4 million a quarter. But obviously, COVID has had a major impact there. How do we think about those trends as we move into, hopefully, more of a reopening or less of a COVID headwind from China?

Moshe Mizrahy: Well, although China opened the doors and everybody can go to China and travel, but there are some restrictions in China for the local people, and we have difficulties to find doctors and trainers to go there because of the COVID situation now in China. And I’m sure that everybody understands the situation when they have around 30 million every day infected. So, I believe that 2023, we’ll see what will happen. We’re still selling in between, as you said, $2 million to $3 million per quarter. Hopefully, 2023 will be higher. But right now, until we — we will understand what is the situation, we’re not claiming any marketing activity in China, bringing people and trainers from overseas to do some workshop and conferences because we know that the local private clinics are closed because of the COVID, although China is open.

This is something that I don’t understand what is — what kind of philosophy and strategy is as regard from the government of China. But we’ll — hopefully, it will be cleared within the first quarter or the second quarter, and we’ll be smarter to answer this question.

Operator: Thank you. Next question will be from Mike Matson Needham & Company. Please go ahead.

Mike Stephen: I just want to go back to the guidance for your OpEx or operating income, I guess, maybe it’s a better way to put it. So, it sort of implies about a 400 basis point decline from around 49% operating margin in 2022 to 45% in 2023. So can you maybe just talk about why that’s declining as much as it is and kind of where you’re investing in ’23 to cause that?

Moshe Mizrahy: Yes. I mean, the gross margin basically will stay the same. The guidance for the gross margin will be between 83% to 85%. So on average, it will be 84%. And I believe it’s a great achievement taking into consideration the cost of electronic components and the supply chain, which is still broken. It’s not yet back to normal. But we have decided to spend more on marketing, from 31% of revenue to 35% or 34.5% of revenue. We have decided to increase R&D and clinical work, especially in the women health and also in other elements. And basically, we have decided to hire more people. And therefore, the EBIT will go down by 4.5%, almost from 49% to 44.5%. But we see that as an investment. We will invest heavily in 2023 on the Empower and also on Envision, which are new territories for us. It’s not like aesthetic. And therefore, we have decided we have the resources and we need to develop it, although it’s an expense, but we consider it as an investment.

Mike Stephen: Okay. Got it. And I mean, this is — this will be, at least based on your guidance, the second year where your EPS growth has lagged your revenue growth. So just stepping back and looking a little longer term, I mean, can you get back to driving operating leverage or at least growing your earnings in line with revenue? Or is this going to be a continual theme, where we see earnings growth slower than revenue growth because of these investments. I’m talking in like ’24 and beyond.

Moshe Mizrahy: Well, I believe ’24 and beyond, once the Empower and the Envision will position themselves as leaders in the market, leader products in the market like all of our aesthetic portfolio, we will continue to bring product to the wellness in the ENT, urology, erection dysfunction and other. And therefore, I believe 2024 might be the same because with new products and new category and new territories will require additional investment in marketing, R&D, et cetera. I don’t think the numbers that we’re investing on R&D, on marketing are higher than any one of our competitors or any other company in the medical devices. I believe we are below the average. As far as G&A, we’re in between 1% and 2%. We’re still keeping that, try to be lean and mean. Gross margin, I believe, will continue to be in the same range of 83% to 85%. But if you ask me about 2024, it probably will be similar to 2023.

Mike Stephen: Okay. And then just on Envision. So I think when I spoke to you guys at our growth conference earlier this year, you mentioned that the timing on the dry eye clearance was expected to be in the — FDA clearance, sorry, was expected to be in the third quarter. So it sounds like you’re going to be launching the product before you have dry eye cleared. Is that right? And then how big of a deal is that for the kind of initial quarter or two, selling it without that? It seems like it’s sort of a key feature on the product, but maybe the ophthalmologists understand that, hey, if I buy this thing, I’ll get this feature in a couple of months or whatever. But…

Moshe Mizrahy: Well, you are right. We’re in the process to get indication from the FDA for dry eye. But I have to say that the two hand pieces involved with Envision, the Forma Eye and the Lumecca, the IPL, they are cleared for other indications and also for around the eyes. So, we have the right to launch the product. In addition, we already have a study which was published. So, we are showing some good results to the doctor and to the optometrist. And hopefully, in the third quarter, once we will return — or the second half of the year, once we get the indication from the FDA, it will increase the momentum.

Operator: Next question will be from Jeff Johnson of Baird. Please go ahead.

Jeff Johnson: Just a couple of questions here for me. One, Moshe, I just want to go back and clarify as you were talking about 2024 operating margin or EBIT margin, you said kind of the same, but then you also talked about incremental investments. So, do you feel like this 45% level that we’re going to be added in 2023, 44.5% to 45%, that should stay consistent from here? When you say the same? Is that kind of moving into 2024 can hold that mid-40% range? Just want to make sure that’s what you were meaning there.

Moshe Mizrahy: I believe, for your financial model, if you use 45% EBIT for 2023 and 2024 that will be correct. I don’t want to give any guidance to 2025 because this is too far away, this is two years away. We’ll see how these two years will develop, and we’ll give a guidance some time in 2024.

Jeff Johnson: Yes, understood. That’s helpful. And then Yair, just now that the profit and all the cash on the balance sheet is unencumbered from a tax perspective in that just how to think about use of free cash flow. Obviously, I think you guys have talked a little bit about some early stage looking at some M&A opportunities. Any other uses of cash there around buyback or anything else we should be thinking about?

Yair Malca: So, now all the options are absolutely on the table. We removed any restrictions or any tax — additional tax requirement whatsoever. We are looking at all directions. The main thing we are looking right now, as Moshe mentioned, is some M&A opportunities. But buybacks or dividend or combination of buybacks with M&As, they are always an option.

Moshe Mizrahy: But we don’t have any approved plan by the Board right now to do any of the buyback or dividend. This is just ideas that, in case we will not find any complement acquisition, we will consider it. But it’s not on the table right now for 2023.

Jeff Johnson: Understood. Last question. I think I asked you guys this every year on the fourth quarter call. And historically, we’ve tried to track kind of your penetration rates in the U.S. plastics and derm markets, things like that. With the success you’ve had on Empower, that’s getting harder to do. I think as the Company has matured here, I don’t know yet if you’re in the stage of replacing some systems. But when I look at that almost 8,000 placements cumulatively that you have in the U.S. now, any way to help us out on where you are, penetration in kind of your core plastic and derm offices? How much penetration room do you think is left in those markets over the next several years? Just help us think about kind of that core business on the AccuTite BodyTite, FaceTite, Morpheus8 and all that. How much more can that penetrate into certain offices here in the U.S.?

Moshe Mizrahy: I would defer this question to Shakil and maybe I’ll comment after.

Shakil Lakhani: Yes, certainly. So again, we’ve talked about this before, but we still have a very large runway in terms of what we’re looking at because we have so many different platforms. Not every platform has been put into each office. But as we continue to help our practitioners implement some of these devices into their practices and basically become successful with them, we have a lot of great traction in terms of returning customers, buying their second, third, fourth units, so on and so forth. So I still think in terms of penetration, we have a long ways to go, a lot of physicians out there. And then again, with Empower, I think we we’re going to start seeing some more traction in the core markets as we put more focus on it. And with the soft launch of Envision, transitioning from the soft launch to full launch, we’ll start seeing some good upside there.

Jeff Johnson: Shakil, can I push you on that? I mean just — sorry, but just a Shakil here on the call. Just — do you — would you put your penetration in core plastic and derm offices? Does it have a one handle on it? A two handle a three-handle, 10%, 15%, 20%, 25%? Are we pushing 30% yet? Just of the offices you could go into there, just help us ballpark kind of where you are.

Shakil Lakhani: It’s tough to say, and it’s not that I’m trying to answer on what you’re asking, but it’s really hard to say. Each year, obviously, there’s newer doctors out there. We’re in training programs with our technology. So, they’re very familiar with what we’re offering. It’s hard. I just don’t want to give you a number and be totally way off to mess with your model. But I do — as I said, I think we have — I think we still have a really large runway for this.

Moshe Mizrahy: I mean, I would like to add to what Shakil said, just for comparison, right now, there are more than 30,000, 35,000 active laser equipment in the United States, or even more than that. So we are now in the range of 8,000. So just figure out that every doctor who are using laser for static future and eventually will use RF for static as well. So we have a long way to go.

Operator: Thank you. This concludes our question-and-answer session. Now, I’d like to turn the conference back over to Mr. Moshe Mizrahy, chairman and CEO. Please go ahead.

Moshe Mizrahy: Thank you, everybody, for joining us. I want to extend thanks to all employees of InMode around the globe. I want to thank the management of InMode for the great year. We have finalized all the plans for 2023 and start working on another exciting year. I hope that 2023 will be another record year for us. Thank you all, and see you soon in the end of the first quarter. Thanks.

Operator: Conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.