InMode Q2 2025 Earnings Call Transcript

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Provided by Quartr
July 30, 2025

Key Takeaways

  • Negative Sentiment: InMode faced a challenging medical aesthetic market in Q2, with reduced treatment volume and capital investments leading to revenues below seasonal expectations.
  • Positive Sentiment: Delivered Q2 revenues of $95.6 million with a strong 80% GAAP gross margin, GAAP operating margin of 24%, and EPS of $0.42 GAAP / $0.47 non-GAAP.
  • Negative Sentiment: Lowered full-year 2025 guidance to $365 M–$375 M in revenue (from $395 M–$405 M), non-GAAP operating income of $93 M–$98 M, and EPS of $1.55–$1.59.
  • Positive Sentiment: Restructured the sales organization by appointing a specialized team for the Envision ophthalmology platform and opened direct operations in Thailand and Argentina to deepen global market penetration.
  • Neutral Sentiment: Soft-launched a new urology wellness platform focused on blood circulation and pain relief, with an official rollout at an August user meeting and initial revenue expected in Q4.
AI Generated. May Contain Errors.
Earnings Conference Call
InMode Q2 2025
00:00 / 00:00

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Operator

Good day, and welcome to InMode's Second Quarter twenty twenty five Earnings Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Miri Sigal, CEO of MS IR. Please go ahead.

Miri Segal-Scharia
Founder & CEO at MS-IR LLC

Thank you, operator, and everyone for joining us today. Welcome to InMode's second quarter twenty twenty five 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 visit 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.

Miri Segal-Scharia
Founder & CEO at MS-IR LLC

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 Mizrahi, InMode's CEO. Moshe, please go ahead.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Thank you, Miri, and to everyone for joining us. With me today, Doctor. Michael Quindel, our Co Founder and Chief Technology Officer Yair Malca, our Chief Financial Officer and Rafael Dikkaman, our VP of Finance. Following our prepared remarks, we will all be available to answer your question. In the second quarter, we continue to navigate a challenging medical aesthetic market, especially in North America due to reduced personnel spending.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

This environment result in fewer treatment and less capital investment from physicians, consistent with the macroeconomic trend of recent quarters. Building on the strategy we outlined last year, we have started restructuring key part of our sales team to drive deeper market penetration. We have began by appointing a specialized manager and dedicated sales team focused on the Envision platforms for the ophthalmology market. At the same time, we are strategically expanding our global footprint with new direct operation in Thailand and Argentina. These offices will enhance our local presence, improve customer support and streamline operation compared to working through distributors.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Looking ahead, we are hosting a user meeting in late August to officially launch our new platforms in the wellness space, focused on increased blood circulation and pain relief for the urology community. We conducted a soft launch during Q2 and began introducing the platforms to selected user and gathered early feedback. The full commercial rollout will take place at the August event and we anticipate initial revenue contribution in the fourth quarter. In closing, we will continue to navigate the current market challenges. We remain confident in in mode offering and brand recognition backed by strong balance sheet and diversified portfolio and cutting edge technology.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

We are well positioned to continue leading the minimally invasive aesthetic and wellness industry. Now I would like to turn the call over to Yair, our Chief Financial Officer. Yair? Thanks, Moshe,

Yair Malca
Yair Malca
CFO at InMode

and hello, everyone. Thank you for joining us. I would like to review our Q2 twenty twenty five financial results in more detail. Despite global headwinds and the challenging macroeconomic environment, Inmo generated revenues of $95,600,000 As a reminder, when comparing year over year results, last year's quarterly revenue of $86,400,000 excluded $16,200,000 in preorders for new platforms, which had not yet been delivered by 2024. Our minimally invasive platforms accounted for 84% of total revenues this quarter.

Yair Malca
Yair Malca
CFO at InMode

Sales outside of The U. S. Accounted for $45,000,000 or 48% of overall sales, an 11% increase year over year. Europe was the largest geographical revenue contributor, reaching a record of $23,000,000 Gross margin remained strong at 80% on a GAAP basis, consistent with Q2 twenty twenty four. These industry leading margins continue to underscore the unique value that our platforms provide.

Yair Malca
Yair Malca
CFO at InMode

Non GAAP gross margin were 80% in the second quarter compared to 81% in 2024. As part of our global expansion, we currently have a direct sales force of over two ninety seven representatives and distributors coverage in more than 74 countries. Sales and marketing expenses increased to $47,500,000 from $45,100,000 in the same period last year. The year over year increase reflects continued investment in our sales team, resulting in higher salaries and travel and entertainment costs. We also saw increased spending on trade shows and other marketing activities.

Yair Malca
Yair Malca
CFO at InMode

These were partially offset by lower share based compensation, which declined to $3,400,000 from $5,200,000 in the 2024. GAAP operating expenses in the second quarter were $53,600,000 a 5% year over year increase. On a non GAAP basis, operating expenses were $50,500,000 in the quarter, up from $46,300,000 a 9% increase year over year. GAAP operating margin was 24%, up from 21 in the 2024. On a non GAAP basis, operating margin reached 28% compared to 27% last year.

Yair Malca
Yair Malca
CFO at InMode

GAAP net income was $26,700,000 up 12% from $23,800,000 On a non GAAP basis, net income was $30,100,000 up from $29,000,000 GAAP diluted earnings per share for the second quarter were $0.42 a significant increase from $0.28 in 2024. Non GAAP diluted EPS was $0.47 up from $0.34 per diluted share in the 2024. We ended the quarter with a strong balance sheet. As of 06/30/2025, the company had cash and cash equivalents, marketable securities and deposits of $510,700,000 This quarter, Inmo generated $24,000,000 in cash from operation from operating activities. If current U.

Yair Malca
Yair Malca
CFO at InMode

S. Tariffs remain at 10%, we expect gross margins to be impacted by approximately 2% to 3%. We continue to closely monitor the situation and we'll adjust our forecast and strategy as needed. Before I turn the call back to Moshe, I'd like to reiterate our guidance for 2025. Assuming the slowdown in our industry continues and interest rates remain at current levels, we expect revenues between $365,000,000 to $375,000,000 compared to previous guidance of $395,000,000 to $4.00 $5,000,000 Non GAAP gross margins to be the same as in previous guidance between 7880%.

Yair Malca
Yair Malca
CFO at InMode

Non GAAP income from operations between 93,000,000 and $98,000,000 compared to previous guidance of $101,000,000 to $106,000,000 Non GAAP earnings per diluted share between $1.55 to $1.59 compared to previous guidance of $1.64 to $1.68 I will now turn over the call back to Moshe.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Thank you, Eir. Operator, we're ready for Q and A, please.

Operator

Certainly, thank you. We will now begin the question and answer session. The first question comes from Matt Miksic with Barclays. Please go ahead.

Matt Miksic
Equity Research Analyst at Barclays Investment Bank

Hi, thanks so much. Thanks for taking the question. Maybe if you could talk a little bit about two things. First, I think there were some dynamics in Q1 that drove, I think what you described at that time, slight nearly below expectation results for Q1 that didn't quite warrant a reduction. Some of that here continued in Q2.

Matt Miksic
Equity Research Analyst at Barclays Investment Bank

Just wanted to get a sense of the cadence of what that looked like. I think Q1, there was great yields of uncertainty towards the March may or may not have influenced buying behavior, timing of purchases or that sort of thing. Just wondering just qualitatively or if you can quantitatively describe how that compares to Q2 in the back end particularly in Q2 when you closed of your console deals? And then I have just one quick follow-up.

Yair Malca
Yair Malca
CFO at InMode

So as you remember, we discussed it after Q1. We did come a little below our expectation in Q1 And same thing happened here in Q2. So now we have already two quarters behind us and we kind of missed a little bit both of them, drastically, but definitely we saw some weakness in Q1 and also in Q2. So taking these things into consideration, looking ahead to the remainder of the year, with all the uncertainty that we are seeing, we thought it's the right thing to do to make this onetime adjustment to our guidance. Does that answer your question?

Matt Miksic
Equity Research Analyst at Barclays Investment Bank

Yes. I mean, partially, and thank you for that. I just was trying to get a sense of there seemed to be quite a bit more uncertainty in March and April than there is now, frankly, in terms capital purchases or business investment And I'm just wondering any of that came through or not in your in what you saw in the way the quarter shaped up even though both, at the face of it, slightly below expectations. Any difference in that way or is it they just look like two quarters that didn't quite hit what you hoped?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Well, this is Moshe. As you know, the business that we're in Medical Aesthetic has some seasonality effect. Typically, the first quarter is not very strong. I don't say it is like Q3, but it's not very strong. And Q2 is one of the strongest quarter.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

So I mean, according to the seasonality model of the medical aesthetic industry for many years, the first quarter is basically 20% and the second quarter should be 25%. So if the original guidance was $100,000,000 we were supposed to do $80,000,000 in the first quarter and $100,000,000 in the second quarter, but we missed both quarters. In the first quarter, we did only 77,000,000 and the second quarter 95,500,000.0 So the difference between the two of them, if you calculate the third and the fourth quarter bring us to the new guidance. But it's all estimation, if we do better, we'll improve the guidance. But we try to be conservative as usual in order not to promise something that we're not sure we can achieve.

Yair Malca
Yair Malca
CFO at InMode

At the moment, we don't see any change in behavior, if that's what you're looking for. If we see any change in behavior. So the answer is no, we do not see any change in behavior between Q2 and Q1. The market still continued to be challenging.

Matt Miksic
Equity Research Analyst at Barclays Investment Bank

That's helpful. And then just a quick one on guidance is that it seems like you're you have a you talked often about maintaining your organization in advance of in anticipation of a turn in the cycle. So, rather than top line coming down and tightening your belt to sort of hit a higher EPS number just for the sake of committing hitting that commitment, you're taking a view to get to sort of through this flat part of the cycle and into the upswing of the cycle to remain invested. Just if you could talk a little bit about that strategy, if that's changing at all, if you're still committed to that and any sense or ideas that you have on the timing of when we might start to see things pick up? Thanks.

Yair Malca
Yair Malca
CFO at InMode

Again, we remain positive on the long term potential of the market. Yes, we are experiencing a temporary weakness. How long it's going to last, we don't know, but we believe at some point the market will recover and will come back. In terms of making the necessary investment in some part of the world, we are expanding and going direct in more countries because we think that's the right thing to do. In The U.

Yair Malca
Yair Malca
CFO at InMode

S, we see that the headwinds are significantly stronger than what we experienced in Europe and Asia. We don't have any concrete plan or downsizing the company. We don't need to, but definitely we are looking to make sure we have the best structure in place to stay competitive.

Matt Miksic
Equity Research Analyst at Barclays Investment Bank

Fair enough. Thanks so much.

Operator

Thank you. Our next question is from Danielle Antalffy with UBS. Please go ahead.

Danielle Antalffy
Danielle Antalffy
Analyst at UBS Group

Yes. Hi, good morning, everyone. Thanks so much for taking the question. Just one question on capital allocation Moshe for you and then I have a specific question on non invasive and the strength we saw there. So on capital allocation Moshe, I know you guys have done some share repurchasing.

Danielle Antalffy
Danielle Antalffy
Analyst at UBS Group

I mean, you still have like $600,000,000 in cash on hand as of, I think, the June. So just maybe talk a little bit about where your priorities are, how they're changing, whether you're still exploring assets to potentially acquire? And then I'll ask my follow-up on non invasive. Thanks.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Okay. As far as capital allocation, I believe we're giving the same answer all the time. We $5.00 $8,000,000 of buyback in the last two years, which was a lot. I mean, we will do additional buyback in Israel, it will require requiring 20% dividend tax. So we're considering it.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

I'm not saying we're not. It's one of the option. So every type of capital allocation is considered all the time and it's on the table. We don't have any acquisition on the pipeline. So I cannot announce that we're doing any acquisition this year.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

As far as dividend, it might, but it also require dividend tax. So basically everything is possible. We will need to see how the continue of the year will go and probably we'll make a decision sometime in the next six months.

Danielle Antalffy
Danielle Antalffy
Analyst at UBS Group

Okay. Got you. And then one area of strength at least relative to what we were modeling, but also I think versus last year very strong growth in non invasive. Just wondering what's driving that? Is it a new product cycle?

Danielle Antalffy
Danielle Antalffy
Analyst at UBS Group

Is it just customer behavior? Is that something that's notable? Is it one time in nature? Maybe talk a little bit about that in the mix of non invasive versus minimally invasive? Okay.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Well, as you know, minimally invasive procedure are relatively expensive, either body type, face type, quantum, Morpheus, which can go up to eight millimeter. They are relatively expensive and they require local anesthesia either by blocking, tumescent and other type of local anesthesia. So the range of one treatment can be in between $1,500 and 4,005 thousand dollars The non invasive procedure are much cheaper, laser, IPL, non invasive RF. So we see some trend that the minimal invasive, which is relatively require more personal spending. I don't want to say go down, but the number of procedures are going down.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

And therefore, we see a little bit of a trend toward the non invasive handpieces and platforms. And that's what happened in the second quarter. In addition, we came up with the platforms which call Optimus Max. And Optimus Max has a new type of IPL, IPLPiC and a new type of laser for hair removal and also for blood vessels. And this platform is very successful.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

And therefore this part of the market is non invasive. Well, but yet the most the biggest part of our business is still invasive, penetrate the skin and either one is it's almost more than 80%. So it's a high number.

Danielle Antalffy
Danielle Antalffy
Analyst at UBS Group

Got you. Thank you, Moshe.

Operator

Thank you. Our next question comes from Michael Sarconi with Jefferies. Please go ahead.

Michael Sarcone
Michael Sarcone
Analyst at Jefferies

Hey, good morning and thanks for taking our questions. This is Mike on for Matt this morning. I guess just to start Moshe some clarifying questions around your commentary on guidance. I think you mentioned with that $400,000,000 original guide you were a little light in 1Q and 2Q. And to me it looks like you were maybe 7,000,000 or $8,000,000 light in the first half versus those original expectations.

Michael Sarcone
Michael Sarcone
Analyst at Jefferies

I think you also said that's kind of the reason you lowered the guide, you lowered it by about $30,000,000 at the midpoint. So could you talk could you just clarify that? Have you also lowered your outlook for the second half?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Well, as you know, the third quarter is usually a very slow quarter, especially in Europe because of the summertime and the vacations. In recent year, we see that effect also in The U. S. Market and also on the Canadian market. So basically in order to achieve the $400,000,000 we thought we will do $100,000,000 in the third quarter and $120,000,000 or 125,000,000 on the fourth quarter.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Based on the slowdown and the slow market that we experienced in the second quarter, we don't think that that is achievable $220,000,000 And this is why we reduced the budget at that target.

Michael Sarcone
Michael Sarcone
Analyst at Jefferies

Got it. That's very helpful. And then I guess, can you comment on any kind of contribution that you may have included from the urology end markets in the 4Q quarter?

Yair Malca
Yair Malca
CFO at InMode

It's minimal. I think it's going to be a minimal contribution. That's usually what we do with every new launch of a product. We don't count too much on contribution. It would be more symbolic than anything.

Yair Malca
Yair Malca
CFO at InMode

And again, if we'll be pleasantly surprised, we'll take it, but we don't count on it.

Michael Sarcone
Michael Sarcone
Analyst at Jefferies

Okay. Thank you.

Operator

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

Caitlin Cronin
Director at Canaccord Genuity Inc

Great. Thanks for taking the questions. I guess just to start and really expand on the urology question earlier. Just any more details on the urology market and the opportunity and if you'll use a dedicated sales team like you're going to do for the Envision platform?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Okay. Let's start the urologists. As you know, we're developing a platform for the erection dysfunction, but we don't have the indication from the FDA yet. So we're launching it on a pilot level for blood vessel blood circulation and pain relief. We're doing some clinical testing right now to prove the concept.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

And therefore this is although we are launching the platforms, but eventually once we have the FDA indication for erection dysfunction, these platforms will be much more will be successful. Right now we have to be very careful with how we do it and under IRB and other all kinds of regulatory procedures. Regarding the Envision, the Envision platforms is for dry eye and full face rejuvenation. Again, we don't have the FDA indication approval for the dry eye yet. It's in the process.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

We have submitted to the FDA the protocol and it's that we're going to prove it and start the study. We submitted all the pilot and all the clinical data that we had. Once we have the approval from the FDA for dry eye treatment with the bipolar RF, again, this platform will fly. And yet it's in early stage. We're not promoting it directly for dry eye because we cannot.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

And every test and every study that we do is under regulatory procedures like IRB, etcetera. And those two platforms in the wellness business, we're in the middle of regulatory procedures and regulatory submissions. Hopefully sometime next year they will be approved.

Caitlin Cronin
Director at Canaccord Genuity Inc

Great. And I think you talked about last quarter just given the relative strength OUS and Europe in particular, you were expecting somewhat of a larger skew in the mix to OUS versus U. S. I mean, that still something that's contemplated in your guidance for this year?

Yair Malca
Yair Malca
CFO at InMode

Yes. It is built into the guidance already. As you know, in previous years, the split between U. S. And OUS was about 60% to 65% U.

Yair Malca
Yair Malca
CFO at InMode

S. And the rest is OUS. Now it's more in Q1 and in Q2, it was more fifty-fifty split and that was the assumption. It will remain fifty-fifty for the rest of the year. And it's already built into the guidance.

Caitlin Cronin
Director at Canaccord Genuity Inc

Great. Thanks so much.

Operator

Yes. Thank you. Our next question comes from Jeff Johnson with Baird. Please go ahead.

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

Thank you. Good morning, guys. Moshe, maybe if I could follow-up on some of your Envision comments. We've been out there kind of doing some checks kind of have heard of a decent number, I would say, of Luminous account conversions and wins for you guys. Would it be crazy as Danielle asked about the non invasive number that was strong this quarter to think that Envision also contributed to that?

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

I know you're still waiting for the dry eye indication. But our back of the envelope math maybe it was as much as 5% or 10% of your U. S. System sales in 1Q in 2Q, I'm sorry, could have been envisioned. Would that be too high of a number? Thanks.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

10% to 15%, it's I relatively will say it's more like a 10% or a little bit less than that, but not more than that before we get the FDA. Now regarding Luminis, Luminis has the approval on the IPL and not on the RF. Everybody knows we also have IPL on the system on the Envision and doctors can use either the IPL, which is approved like Luminis or the RF. But the RF need to be done under regulatory procedures and local approvals.

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

All right. Fair enough. And my question was could it be 5% to 10% of your U. S. System sales not 10 to 15 So it sounds like you're saying yes there.

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

I just want to clarify you think 5% to 10% is a reasonable U. S. System revenue for Envision for this quarter?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Correct.

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

Okay, great. And then Moshe sorry, Yair, you talked about no change in behavior throughout the quarter. Would that comment be applicable to both kind of the doctor side of the equation on purchasing capital and on the patient side on the procedures and consumables side, that consumables number getting closer to flat, so maybe getting a little bit of improvement on the patient demand side. But just if you could disaggregate your comment on no change in behavior across both system purchases and or patient demand that would be helpful. Thanks.

Yair Malca
Yair Malca
CFO at InMode

Sure. Just one quick comment about your previous question. The CO2 device that we launched earlier this year, this one is also included in the non invasive and that's one of the reason why you see this jump. Regarding to your second question, yes, it might be better to separate between the two, the trends that we see in the capital equipment that this has stayed pretty similar for the last several quarter with the high interest rate and challenging with financing and uncertainty in the market, I think you see many doctors probably delaying their purchasing decisions on capital equipment. Consumers behave a little bit differently.

Yair Malca
Yair Malca
CFO at InMode

This is more subject to discretionary spending by consumers and we see some challenges there. But as you mentioned, it looks like that the decline kind of plateau. So I guess we can see it as a positive that we stopped the bleeding. And hopefully, things improve, we'll start seeing that climbing back up.

Jeffrey Johnson
Senior Research Analyst at Robert W. Baird & Co

Thank you.

Operator

Thank you. Our next question comes from Mike Matson with Needham and Company. Please go ahead.

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

Yes, thanks. So just a question on the tariff impact. So I think the press release mentioned the tariff rate of 10%. I thought the rate on Israel was 17%. Was that lower to 10%?

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

And then just the 2% to 3% that you're calling out impact to gross margin from tariffs, is that for the full year? Is that going to be is there any kind of timing there in terms of it hitting maybe more in the second half of the year or something?

Yair Malca
Yair Malca
CFO at InMode

So you're right. The original tariff was set at 17%. It was reduced to 10% on a temporary basis and it was extended. I'm sure there is some negotiation going on between Israel and the U. S.

Yair Malca
Yair Malca
CFO at InMode

Administration. And our assumption right now is that it's going to remain at around 10%. It can be higher. However, we are also working to see if we can make some strategy changes that would help us actually bring this even lower. So I think going with an average of 10% at this point is the right thing to do because this is what we are currently paying.

Yair Malca
Yair Malca
CFO at InMode

And once we have updates this way or another, we will provide an update. Regarding the 2% to 3% impact, that's on an annual basis. So probably in 2025, because we didn't have the tariffs from the beginning of the years and some of the inventory that we already have in The U. S. Was not subject to this tariff, the impact would be lower, probably half than that.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

We thought we basically thought that like Europe and other countries that Israel will reach an agreement before the end of the second quarter, but not yet. I believe that by the August, President Trump GAAP, that's the deadline. I believe by then it will be settled and probably it will be 10% or in Europe is 15%. I don't think we'll get to 15%, but it's all guessing.

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

Yes, I understand. Okay. It's pretty clear. So the 2% to 3% that's a fully annualized number in terms of what the impact would be if you were paying the 10% over the full year. Okay. And then just a question on the new urology system that you're launching.

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

Can you maybe just talk about the initial labeling that you're going to have there and how you're I guess for the urology specific treatments on it and how you're going to market that.

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

And then this user meeting, I assume that's focused on urologists, correct? You're going to be hosting group of urologists?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

This particular platforms, yes, it's for urologists. The development continue toward get an indication by the FDA for erection dysfunction. We're doing clinical study right now in a major hospitals and in a major clinic that deal with this indication in The U. S. In the meantime, the approval that we receive for these platforms, bipolar RF is basically for increased blood circulation, pain relief and also collagen building, which are the basic three elements for erection dysfunction.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Not yet with the final indication, hopefully in the future we have.

Mike Matson
MD - Senior Equity Research Analyst at Needham & Company

Okay. Got it. Thank you.

Operator

Thank you. Our next question comes from Sam Iber with BTIG. Please go ahead.

Sam Eiber
Vice President - Equity Research at BTIG

Hi, good morning. Thanks for taking the questions here. Maybe just coming back to Europe for a second. Two straight quarters here of growth in capital equipment outside The U. S.

Sam Eiber
Vice President - Equity Research at BTIG

So, we'd love to hear maybe is that a reflection more of a more stable environment? Are you launching new products there, taking price? And then how sustainable do you think some of those trends are?

Yair Malca
Yair Malca
CFO at InMode

I think they are very sustainable because just to remind everyone, we started in the early years with focusing on developing the North American market mainly. And we were a little bit late to the game in developing the OUS, the international markets, which is what we are doing right now. We used to be a smaller player in the international markets and that's definitely one of our growth engines in the year to come. So it's very sustainable.

Sam Eiber
Vice President - Equity Research at BTIG

Okay. That's helpful. And then moving to The U. S. Here, are we starting to see any kind of upgrade cycle with Ignite and Optimus Max?

Sam Eiber
Vice President - Equity Research at BTIG

I know it's a question we typically ask every quarter, but are you offering discounts yet for customers to upgrade? And is there any way to quantify that contribution?

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

We will probably start doing it on the third quarter trying to convert users to use the Optimus and the BodyType, which are both fully not similar, fully FDA approved with IGNITE, which is fully FDA approved and the Optimus MAX as well. We will probably start doing it in the third quarter. And at the same time, we're introducing those platforms in ROW as well.

Sam Eiber
Vice President - Equity Research at BTIG

Okay, helpful. Thanks for taking the questions.

Operator

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Moshe Mizrahi for any closing remarks.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Thank you everybody. Thank you for joining us today. I believe we covered all aspects of the financial results that we usually present. Hopefully, the market will improve in the next two quarters, especially on the fourth quarter, which usually the strongest quarter. We're going to be there.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

I know that one question was asked whether or not we are cutting down cost. We're a technology company. And if we will cut down costs, that's mean that we are we will fire engineering people and good salespeople. We don't want to do it. We're adjusting our cost in the manufacturing and the logistics, but all the rest we keep business as usual in order to jump on the market whenever the market will improve.

Moshe Mizrahy
Moshe Mizrahy
Chairman and CEO at InMode

Again, thank you for joining us. We'll see you again in the summary of the third quarter. Thank you everybody.

Operator

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

Executives
    • Moshe Mizrahy
      Moshe Mizrahy
      Chairman and CEO
    • Yair Malca
      Yair Malca
      CFO
Analysts
    • Miri Segal-Scharia
      Founder & CEO at MS-IR LLC
    • Matt Miksic
      Equity Research Analyst at Barclays Investment Bank
    • Danielle Antalffy
      Analyst at UBS Group
    • Michael Sarcone
      Analyst at Jefferies
    • Caitlin Cronin
      Director at Canaccord Genuity Inc
    • Jeffrey Johnson
      Senior Research Analyst at Robert W. Baird & Co
    • Mike Matson
      MD - Senior Equity Research Analyst at Needham & Company
    • Sam Eiber
      Vice President - Equity Research at BTIG
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