Inmode Ltd (INMD) 2019 Q3 法說會逐字稿

Welcome to the InMode Third Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.

歡迎參加 InMode 2019 年第三季財報電話會議。 （操作員指示）請注意，此事件正在記錄中。

I would now like to turn the conference over to Miri Segal of MS-IR. Please go ahead.

現在，我想將會議交給 MS-IR 的 Miri Segal。請繼續。

Thank you, operator, and good day to everybody. I would like to welcome all of you to InMode's Third Quarter 2019 Financial Results Conference Call. With us on the line today are Mr. Moshe Mizrahy, Chairman of the Board and CEO; Mr. Yair Malca, CFO; and Michael Kreindel, CTO.

謝謝接線員，祝大家有個愉快的一天。歡迎大家參加 InMode 2019 年第三季財務業績電話會議。今天與我們通話的有董事會主席兼執行長 Moshe Mizrahy 先生； Yair Malca 先生，財務長；以及首席技術長 Michael Kreindel。

Before we begin, may I 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 view it in the Investor Relations section of the company's website.

在我們開始之前，我想提醒我們的聽眾，本次電話會議中提供的某些資訊可能包含前瞻性陳述，並且今天的收益報告中概述的安全港聲明也適用於本次電話會議。如果您尚未收到該新聞稿的副本，請在公司網站的投資者關係部分查看。

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.

業務、競爭、技術、監管和其他因素的變化可能會導致實際結果與今天前瞻性陳述的結果有重大差異。我們的歷史表現不一定能代表未來的表現。因此，我們無法保證我們的前瞻性聲明的準確性，並且不承擔更新它們的義務，除非法律要求。

Moshe will begin the call with the business update followed by Yair with an overview of the financials. We will then open the call for the question-and-answer session.

Moshe 將在電話會議上首先介紹業務更新情況，隨後 Y​​air 將概述財務狀況。然後我們將開始問答環節。

I'll now hand over the call to Mr. Moshe Mizrahy, InMode's CEO. Moshe, please go ahead.

現在我將電話轉給 InMode 執行長 Moshe Mizrahy 先生。摩西，請繼續。

Thank you, Miri, and thanks to all of you for joining our third quarter financial results conference call. I would like to welcome everyone to our first quarterly earnings call as a public company since our IPO on -- which took place on August 8 of this year. I'm sure that many of you are already familiar with the InMode story from our road show presentation and from meetings with some of you. And for those of you who will hear the story for the first time today, I hope that we will communicate the message clearly.

謝謝你，Miri，也謝謝大家參加我們第三季的財務業績電話會議。歡迎大家參加我們自今年 8 月 8 日首次公開募股 (IPO) 以來作為上市公司的首次季度收益電話會議。我相信你們中的許多人已經從我們的路演演示和與你們中的一些人的會面中熟悉了 InMode 的故事。對於今天第一次聽到這個故事的人，我希望我們能夠清楚地傳達這個訊息。

Before I start, I want to present the team here around the table in our office in Israel. With me, of course, Dr. Michael Kreindel, Co-Founder, our CTO and also a member of the Board; Yair Malca, our CFO; Raffy Lickerman, our VP, Finance.

在我開始之前，我想先介紹一下我們以色列辦公室的團隊。和我一起的當然是公司聯合創辦人、技術長兼董事會成員 Michael Kreindel 博士； Yair Malca，我們的財務長；我們的財務副總裁 Raffy Lickerman。

I will start by updating you with the major developments that have positively affected our company since the IPO. As to first one, as presented in the road show, we launched the Evolve platform to the U.S. market. Evolve is the first hands-free platform with 3 treatment modalities: skin tightening, fat destruction and muscle stimulation, what we call EMS. Although the launch was only in the United States, but it was very successful in the fourth quarter.

我將首先向您介紹自首次公開募股以來對我們公司產生積極影響的主要進展。關於第一個目標，如路演中所介紹的，我們向美國市場推出了 Evolve 平台。 Evolve 是第一個具有 3 種治療模式的免持平台：緊緻皮膚、破壞脂肪和刺激肌肉，我們稱之為 EMS。雖然僅在美國推出，但第四季度取得了很大的成功。

Second, as part of our global expansion strategy, we have established 2 fully owned sales and marketing subsidiaries, 1 in India and 1 in Australia. We have already hired salespeople and management team in each of those 2 subsidiaries. This initiative will help us to sell our product portfolio directly to the doctor and not through distributors.

其次，作為我們全球擴張策略的一部分，我們已經建立了2家全資銷售和行銷子公司，1家在印度，1家在澳洲。我們已經在這兩家子公司分別招募了銷售人員和管理團隊。這項舉措將幫助我們直接向醫生銷售我們的產品組合，而不是透過經銷商。

Third, we established business plan and contacts in 2 other countries in Europe and Asia for establishing 2 additionally fully owned subsidiaries for marketing and sales in 2020. By the end of 2020, we would like to have full direct operation in 8 territories: the United States, Canada, Spain, the U.K., India, Australia and 2 more countries, as I said, 1 in Europe and 1 in Asia.

第三，我們在歐洲和亞洲的另外 2 個國家製定了業務計劃並建立了聯繫，以便在 2020 年建立另外 2 家全資子公司，負責營銷和銷售。

Sales. We are continuing to receive regulatory approval for our unique product line. We recently received approval in Canada, and we reported that for the Morpheus8, our second-generation fractional RF device and for our RFAL, radio frequency assisted lipolysis technology, which cover all the BodyTite, FaceTite, AccuTite application. We also received CE Mark approval in Europe for Morpheus8 and also for the Forma V for women's health application. In addition to that, we are currently managing 5 regulatory processes around the world: in Taiwan, TFDA; in Korea, KFDA; in Brazil, ANVISA; in China, CFDA; and in Singapore. And all this is in addition to 2 filings that we made recently with the FDA and additional 2 filings with the CE in Europe. So altogether, we have right now pending something close to at least 10 to 12 new approvals, which we expect to get from all regulatory bodies around the world. Hopefully, all of them will be in effect in 2020, okay? We are continuing to grow worldwide. As of September 30, our total employee was 232 people, excluding manufacturing, out of which 107 are direct salespeople.

銷售量。我們正在繼續爭取我們獨特產品線的監管部門批准。我們最近在加拿大獲得了批准，並報告了我們的第二代分段式射頻設備 Morpheus8 和射頻輔助脂肪分解技術 RFAL，它們涵蓋了所有 BodyTite、FaceTite 和 AccuTite 應用。我們也獲得了歐洲針對 Morpheus8 和女性健康應用 Forma V 的 CE 標誌認證。除此之外，我們目前也正在管理全球 5 個監管流程：台灣，TFDA；在韓國，KFDA；在巴西，ANVISA；在中國，CFDA；以及新加坡。除此之外，我們最近也向 FDA 提交了 2 份文件，並向歐洲 CE 提交了另外 2 份文件。因此，總的來說，我們目前有至少 10 到 12 個新的批准等待審批，我們預計這些批准將來自世界各地的監管機構。希望它們都能在 2020 年生效，好嗎？我們正在全球範圍內持續發展。截至 9 月 30 日，我們的員工總數為 232 人（不包括製造業），其中 107 人是直銷人員。

Before we continue to update you with the financial results for Q3, I would like to reemphasize InMode's core business and competitive advantage. These competitive advantages help us to maintain our leadership position and momentum for years to go. InMode is a leading global provider of innovating minimally invasive surgical aesthetic and medical treatment solution. Our proprietary products are designed to address: first, face and body contouring; medical aesthetic and women's health using minimally invasive bipolar radio frequency energy. Minimally invasive bipolar RF energy represents a paradigm shift in the aesthetic surgery market, offering an alternative to conventional surgery while significantly minimizing risk of scarring, downtime, anesthesia, pain and other complications that are typical in surgical procedures. In addition, we design differentiated noninvasive medical aesthetics products as well that includes fat killing and skin tightening simultaneously, permanent hair reduction using our innovative dual-wavelength technology and other treatments targeting skin appearance and texture through our high-power intense pulse light technology.

在我們繼續向您更新第三季的財務表現之前，我想再次強調 InMode 的核心業務和競爭優勢。這些競爭優勢有助於我們在未來幾年保持領導地位和發展勢頭。 InMode是全球領先的創新微創外科美容和醫療解決方案提供者。我們的專有產品旨在解決以下問題：首先，臉部和身體塑形；利用微創雙極射頻能量進行醫學美容和婦女健康。微創雙極射頻能量代表了美容外科手術市場的範式轉變，它提供了傳統手術的替代方案，同時顯著降低了手術過程中常見的疤痕、停機時間、麻醉、疼痛和其他併發症的風險。此外，我們還設計了差異化的非侵入性醫學美容產品，包括同時進行脂肪消除和緊緻皮膚、使用我們創新的雙波長技術進行永久性脫毛以及透過我們的高功率強脈衝光技術針對皮膚外觀和紋理的其他治療。

Our competitive advantage is based on 6 competitive elements, which we will maintain as long as we are keeping the momentum. The first one is our IP. We believe that we have a very strong IP on all of our base technologies, which have been registered in several countries. So far, no one has tried to copy these technologies since we believe that everyone knows that our IP cover the technology very well. To summarize, we believe that our minimally invasive RF bipolar IP will provide us with the protection and advantage over years to come.

我們的競爭優勢是基於六個競爭要素，只要我們保持發展勢頭，我們就能夠維持這些優勢。第一個是我們的IP。我們相信，我們在所有基礎技術上都擁有非常強大的智慧財產權，這些技術已在多個國家註冊。到目前為止，還沒有人試圖複製這些技術，因為我們相信每個人都知道我們的 IP 很好地涵蓋了這些技術。總而言之，我們相信我們的微創射頻雙極 IP 將在未來幾年為我們提供保護和優勢。

The second competitive advantage is our know-how. During the last 10 years, we have developed knowledge and know-how with regard to how to design minimally invasive bipolar RF devices for aesthetic surgery and other surgical procedures. This know-how -- this knowledge covers hardware, software and mechanical engineering.

第二個競爭優勢是我們的專業知識。在過去的 10 年裡，我們已經累積了有關如何設計用於美容手術和其他外科手術的微創雙極射頻設備的知識和技術。這些專有技術—這些知識涵蓋硬體、軟體和機械工程。

The third element is our clinical base. Since our initial introduction to the market, we have published over 40 peer-reviewed articles in the best magazines on this technology and -- on our technologies and indications. We are the lead -- the leaders of the research of minimally invasive bipolar RF clinical science.

第三個要素是我們的臨床基礎。自從我們首次將這項技術引入市場以來，我們已經在最好的雜誌上發表了 40 多篇關於這項技術以及我們的技術和適應症的同行評審文章。我們是微創雙極射頻臨床科學研究的領導者。

The fourth element -- the fourth competitive element is our luminary base. We have developed a group of luminaries and opinion-leading doctors, who are also surgeons, that conduct our study, and they are a great supporter of our technology. It will be very difficult for anyone in our -- of our competitors to develop such unique group of luminaries and opinion-leading doctors.

第四個要素－第四個競爭要素是我們的光源基地。我們已經建立了一群傑出人物和意見領袖醫生，他們也是外科醫生，負責進行我們的研究，他們是我們技術的堅定支持者。在我們的競爭對手中，任何一個人都很難培養出這樣一支獨特的傑出人物和意見領袖醫生隊伍。

The fifth competitive advantage element is the regulatory approval. We passed all the regulatory approval processes in many countries. This process take years since the regulatory bodies around the world ask for long follow-ups. We believe that this is a significant barrier to entry to other competitors.

第五個競爭優勢要素是監理機關的批准。我們通過了許多國家的所有監管審批流程。這個過程需要數年時間，因為世界各地的監管機構都要求長期的追蹤。我們認為，這對其他競爭對手來說是一個重大的進入障礙。

The sixth element is our branding. We own the brands BodyTite, FaceTite, NeckTite, AccuTite, Morpheus8 and others, which are becoming increasingly well-known brand names. We have already sold 4,400 systems worldwide. We are definitely considered a pioneer in the industry with a strong marketing and brand position.

第六個要素是我們的品牌。我們擁有的品牌包括BodyTite、FaceTite、NeckTite、AccuTite、Morpheus8等，這些品牌正日益成為知名品牌。我們在全球已售出 4,400 套系統。我們絕對被視為行業先驅，擁有強大的行銷和品牌地位。

In the third quarter of 2019, InMode generated record revenue of $40 million, a 57% increase from the same period in 2018, reflecting our continued growth and the increased adoption of our minimally invasive bipolar RF technology around the world. Net income increased by 87% to over -- year-over-year to $16.2 million in the third quarter, up from $8.6 million in the same period in 2018. We are focusing on profitable growth and are successfully pursuing our goal of international expansion driven largely by Europe and Asia Pacific. We're increasing this expansion effort with our subsidiaries established in India and Australia and more to come, which both offer a large target market seeking minimally invasive technology that address the need of plastic surgery, cosmetic surgery and women's health.

2019 年第三季度，InMode 創造了 4,000 萬美元的創紀錄營收，較 2018 年同期成長 57%，反映了我們的持續成長以及我們微創雙極射頻技術在全球範圍內的廣泛應用。第三季淨收入年增 87% 至 1,620 萬美元，高於 2018 年同期的 860 萬美元。我們正在加強擴張力度，在印度和澳洲設立了子公司，未來將在更多國家設立子公司，這兩個國家都擁有龐大的目標市場，尋求微創技術，滿足整形外科、美容外科和婦女健康的需求。

Having boots on the ground provide us with direct contact with our customers, ensuring understanding of their need and how to effectively address them, and I mean the doctors. We have a diversified product portfolio. Most of our revenue in the quarter was generated from our BodyTite, Embrace, Optimas and Votiva, so we are not dependent on any individual product.

透過派駐實地人員，我們可以與客戶直接接觸，確保了解他們的需求並知道如何有效地滿足他們的需求，我指的是醫生的需求。我們擁有多樣化的產品組合。本季我們的大部分收入來自 BodyTite、Embrace、Optimas 和 Votiva，因此我們並不依賴任何單一產品。

Now let me hand over the call to Yair. He will review and give you more detail on our financial results. And after that, we will open it to Q&A. Please, Yair.

現在讓我把電話交給亞伊爾。他將審查我們的財務結果並向您提供更多詳細資訊。之後，我們將開始問答環節。請吧，亞伊爾。

Thanks, Moshe. Good day, everyone. Total revenue in the third quarter of 2019 grew 57% to $40 million with gross margin of 87%. Operating expenses in the quarter totaled approximately $19 million, a 42% increase from the previous year. The increase is due largely to our expenditures and marketing efforts. Operating margin in the quarter was 40% compared to 33% for the same period in 2018. Earnings per share in the quarter were $0.42 per diluted share compared to $0.26 in the previous year, an increase of 62%.

謝謝，Moshe。大家好。 2019 年第三季總營收成長 57% 至 4,000 萬美元，毛利率為 87%。本季營運費用總計約1,900萬美元，較上年增加42%。成長主要歸功於我們的支出和行銷努力。本季營業利潤率為 40%，而 2018 年同期為 33%。

We completed the third quarter with a strong balance sheet. As of September 30, 2019, the company had cash and cash equivalents, marketable securities and deposits of $166.3 million, out of which $70 million are net proceeds raised at the recent IPO. On the cash flow front, across the first 9 months of 2019, the company generated $34.8 million from operating activities.

我們以強勁的資產負債表結束了第三季。截至 2019 年 9 月 30 日，該公司擁有現金和現金等價物、有價證券和存款 1.663 億美元，其中 7,000 萬美元是最近 IPO 籌集的淨收益。在現金流方面，2019 年前 9 個月，該公司從經營活動中產生了 3,480 萬美元的收入。

With that, I will turn the call back to Moshe.

說完這些，我將把電話轉回給 Moshe。

Okay. Thank you, Yair. Now we are pleased to open to questions. Miri, do you want to handle this session?

好的。謝謝你，亞伊爾。現在我們很高興能接受提問。 Miri，你想處理這次會議嗎？

(Operator Instructions) The first question comes from Jack Meehan of Barclays.

（操作員指示）第一個問題來自巴克萊銀行的傑克·米漢（Jack Meehan）。

Congrats on the first quarter out of the gate. Just as my first question, the revenue came in better than we were expecting. I heard the update where you stood at August in terms of the commercial hiring. But I was wondering, as you look forward in the U.S., what are your expectations for additional sales hires? In terms of the numbers, where do you expect to end 2019? And what's a good run rate into 2020? And then internationally, could you just give us some color on the -- on what some of the efforts you put in, in Europe and Asia to drive growth?

恭喜第一季取得開門紅。正如我的第一個問題一樣，收入比我們預期的要好。我聽說了你們八月商業招聘方面的最新情況。但我想知道，展望美國市場，您對新增銷售人員有何期望？從數位方面來看，您預計 2019 年將會達到什麼水準？那麼 2020 年的良好運作率是多少呢？那麼在國際上，您能否向我們介紹一下您在歐洲和亞洲為推動成長所做的努力？

Yes. Thank you, Jeff. Thank you. Yes, I will answer your questions. Currently, in North America, we have 96 direct sales reps. Our plan for 2020 is to grow to 115 -- between 110 and 115. Our direct salespeople in the rest of the world right now is about 11 people. And we would like to grow in 2020 by a least another 12 by opening more subsidiaries. As regard to 2019, our target revenue was between $146 million to $148 million. We are now raising the target to $150 million to $152 million. As regard to 2020, we will give the target in the next conference call.

是的。謝謝你，傑夫。謝謝。是的，我會回答你的問題。目前，在北美我們有 96 位直銷代表。我們的 2020 年計畫是發展到 115 人——110 到 115 人之間。我們希望到 2020 年，透過開設更多子公司，使規模再增加至少 12 倍。就2019年而言，我們的目標收入在1​​.46億美元至1.48億美元之間。現在我們把目標提高到 1.5 億美元至 1.52 億美元。至於2020年，我們將在下次電話會議中給予目標。

Great. That's helpful. And then maybe could you just give us some color on where you're seeing traction with the BodyTite family? Just in the quarter, could you give us a sense for how many systems you placed and where you were seeing demand from a customer perspective? And then finally, just how is the AccuTite launch contributing to that? Has that been a driver of the BodyTite placements?

偉大的。這很有幫助。那麼，您能否向我們介紹一下您認為 BodyTite 系列的吸引力在哪裡？僅在本季度，您能否告訴我們您安裝了多少個系統，以及從客戶的角度看您看到的需求在哪裡？最後，AccuTite 的推出對此有何貢獻？這是否是 BodyTite 佈局的驅動因素之一？

The answer, yes, absolutely. As we add more handpieces to the BodyTite Embrace platforms, we sell upgrades to existing customers and we sell the new platforms with the new handpieces. As you know, we do not want to release and reveal the numbers of platforms that we're selling every quarter by names or by category. The only thing I can tell is that we continue to sell across 3 segments of our business, which is minimally invasive, which includes the BodyTite, FaceTite, NeckTite, AccuTite, Embrace and Morpheus8, all the ablative products; and the second segment is the aesthetic, which is the noninvasive RF, IPL laser for more, I would say, conventional aesthetic treatment; and the third part of our -- or the third segment is women's health, which we introduced to the market a few new indications using the AccuTite for labiaplasty and others. Other than that, I don't think we want to reveal the numbers of individual platforms. But again, as I said in my presentation, we do not depend on one product. We are selling across the line.

答案是肯定的。隨著我們為 BodyTite Embrace 平台添加更多手柄，我們會向現有客戶出售升級產品，並出售具有新手柄的新平台。如您所知，我們不想按名稱或類別發布和透露我們每季銷售的平台數量。我唯一能說的是，我們將繼續在 3 個業務領域進行銷售，微創產品包括 BodyTite、FaceTite、NeckTite、AccuTite、Embrace 和 Morpheus8，所有消融產品；第二部分是美容，即利用非侵入性射頻、IPL 雷射進行較傳統的美容療程；我們的第三部分——或者說第三分部是女性健康，我們向市場推出了一些新的適應症，使用 AccuTite 進行陰唇整形術等。除此之外，我認為我們不想透露單一平台的數字。但是，正如我在演講中所說，我們並不依賴一種產品。我們正在跨線銷售。

Great. Last question. The gross margins at 87.4% came in above what we were looking for in the quarter. What do you attribute the leverage on that line to? And what's a good run rate moving forward? Was there anything outsized, which contributed to the upside in the quarter?

偉大的。最後一個問題。 87.4% 的毛利率高於我們本季的預期。您認為這條線上的槓桿作用源自於什麼？那麼未來良好的運作率是多少呢？是否存在一些特別重大的事情，推動了本季的成長？

Okay. First, before I answer your question, I want to say something so everybody will understand. Gross margin of above 85% for InMode, it's a must. It's not nice to have. What does it mean? It means that every time that we go back to the drawing board to design the next platform and we're designing at least 2 new platforms every year, on the drawing board, we have all kinds of formulation to calculate that the systems that we're designing will have 85% gross margin. Otherwise, we do not start. Unless we have 85% to 87% gross margin, we will never be able to invest 45% in marketing, in R&D and others and have a nice profit, which is the most important objective of the firm, I would say. Therefore, we will continue to maintain this level. Either it will be 85%, 86% to 87%, it depends on the mix of the product that we manufacture. If the mix is more RF-based, then it's 87%. If the mix is more laser and IPL, it's 85%. If we sell more on the international market where we recognize only the transfer price and not the full value of the system, then gross margin go a little bit below 85%. But on average, we will keep at least 85% gross margin on any combination product or any portfolio that we will have in the future. Does that answer your question?

好的。首先，在回答你的問題之前，我想說一些話，以便大家能夠理解。對於 InMode 來說，毛利率必須達到 85% 以上。擁有它並不好。這是什麼意思？這意味著每次我們重新開始設計下一個平台時，我們每年都會設計至少 2 個新平台，在繪圖板上，我們有各種公式來計算我們設計的系統的毛利率將達到 85%。否則，我們就不會開始。除非我們的毛利率達到 85% 到 87%，否則我們將永遠無法將 45% 的投資用於行銷、研發和其他方面，並獲得可觀的利潤，而我認為這才是公司最重要的目標。因此我們將繼續保持這一水平。無論是 85%、86% 還是 87%，這取決於我們生產的產品組合。如果混合物更多地基於 RF，則為 87%。如果混合更多的是雷射和 IPL，則為 85%。如果我們在國際市場上銷售更多產品，而我們只承認轉移價格而不是系統的全部價值，那麼毛利率就會略低於 85%。但平均而言，我們將在未來的任何組合產品或任何產品組合中保持至少 85% 的毛利率。這回答了你的問題嗎？

It did. So -- but also -- and I really appreciate that feedback. Just in the quarter itself, was there any -- because it obviously did a lot better in the quarter, was there anything that contributed -- should we expect it kind of drops closer to 85% in the fourth quarter? Or what are you thinking?

確實如此。所以 — — 但同時 — — 我真的很感謝你的回饋。就本季而言，是否有任何因素——因為它在本季度顯然表現好得多，是否有任何因素導致——我們是否應該預計它在第四季度會下降至接近 85%？或者你在想什麼？

You mean on the fourth quarter?

你是指第四季嗎？

Yes. And just going forward, is this a good run rate? Or should we just assume 85% is the...

是的。那麼，展望未來，這是一個好的運行率嗎？或者我們應該假設 85% 是......

Yes. It's going to be a good -- the answer is yes. It will be probably the same as the third, plus or minus 1%. You never calculate it by a fraction of a percentage.

是的。這將是一件好事——答案是肯定的。它可能與第三個相同，加減 1%。你永遠不要用百分比的分數來計算它。

The next question comes from Matt Taylor of UBS.

下一個問題來自瑞銀的馬特泰勒（Matt Taylor）。

Congrats on a good quarter. So I just wanted to ask a little bit more about the pipeline. Can you talk about the platforms that you're planning to launch here in the second half of the year, first, noninvasive hands-free devices for body and face and also the CelluTite application? And how are those rolling out? What's the reception been like? Any other color that you can provide would be great.

恭喜本季取得良好業績。所以我只是想多問一些有關管道的問題。您能談談您計劃在今年下半年推出的平台嗎？這些進展如何？接待情況怎麼樣？如果您能提供任何其他顏色就太好了。

Okay. Okay, I will. Thank you, Matt. Yes, the Evoke -- first of all, the Evolve, we launched the Evolve the U.S. in the last month -- in the last quarter, and we continue in the fourth quarter. We will launch it in the rest of the world in the first quarter of 2020. We're still waiting for the final approval by the CE for Europe of the Evolve, which is the body hands-free device. But it will come. It's coming. We're almost at the end. Right now, regulatory becomes a bottleneck. You need to spend more money and attention to get it, but we know how to do it. We have a good regulatory department here that actually files worldwide with some assistance from consultants. So this is the Evolve.

好的。好的，我會的。謝謝你，馬特。是的，Evoke——首先是Evolve，我們在上個月——上個季度——在美國推出了Evolve，我們將在第四季繼續推出。我們將在 2020 年第一季在世界其他地區推出產品。但它將會到來。它來了。我們快到終點了。目前，監管已成為一個瓶頸。您需要花費更多的金錢和精力才能獲得它，但我們知道如何做。我們這裡有一個很好的監管部門，在顧問的協助下，可以在全球範圍內提交文件。這就是 Evolve。

The Evoke, the hands-free face treatment platform, is pending FDA approval. Hopefully, it will come soon. The system is almost ready. We are waiting for the approval, and we're even starting to manufacture some pieces in order to launch it once we have the approval. I believe it will come either at the end of this quarter or the first of next quarter. I'm sure you understand that the FDA is more sensitive with the face, and they ask many questions to make sure that it's safe and the efficacy is according to what we said. We have done all kinds of in vivo and animal testing to show them the study -- to show them the safety. And hopefully, it will come soon.

免持臉部護理平台 Evoke 正在等待 FDA 批准。希望它能很快到來。系統即將準備就緒。我們正在等待批准，甚至已經開始製造一些零件，以便在獲得批准後立即推出。我相信它將在本季末或下個季度初到來。我相信你明白，FDA 對臉部更加敏感，他們會詢問許多問題以確保其安全性並且功效符合我們所說的。我們進行了各種體內和動物試驗，向他們展示這項研究——向他們展示其安全性。希望它能很快到來。

The same with CelluTite, the CelluTite right now is already FDA approved, but we are waiting to see the results from the study that we are making from the United States to finalize the protocol. So these 2 platforms, as we promised in the road show, we either enter the market towards the end of this quarter. But I believe it would be better to do it right and to launch those 2 products sometime in the first quarter of 2019 -- 2020, excuse me. Other -- we have other products in the pipeline like the EMS and -- the EMS device and some new Morpheus tips. But these are in the engineering phase, and it will come sometime in 2020. Did I answer your question?

CelluTite 也是一樣，CelluTite 目前已經獲得 FDA 批准，但我們正在等待美國研究的結果以最終確定協議。因此，正如我們在路演中承諾的那樣，這兩個平台要么在本季結束時進入市場。但我認為最好還是做好這件事，並在 2019 年或 2020 年第一季的某個時候推出這兩款產品，對不起。其他 — — 我們還有其他產品正在籌備中，例如 EMS 和 — — EMS 設備和一些新的 Morpheus 尖端。但這些都處於工程階段，並將在 2020 年的某個時候實現。

Yes, you did. I just had one follow-up based on that. So firstly, I just was wondering, given you had Evolve launched early last quarter, can you talked about the early uptake of that? How are customers responding to it? Was there actually material sales in Q3?

是的，你做到了。我只是基於此進行了一次後續行動。首先，我只是想知道，鑑於您在上個季度初就推出了 Evolve，您能談談它的早期應用情況嗎？顧客對此有何反應？第三季實際上有實質銷售嗎？

Material sales, yes, it will -- what I can say is it was a successful launch. We sold quite a few in Q3. And we have some backlog, which we're basically supplying in Q4. We increased manufacturing capacity of the Evolve recently, and now we're producing about 25 every week. So it's coming, and it's going to be successful worldwide.

是的，材料銷售會的——我可以說這是一次成功的發布。我們在第三季賣出了不少。我們還有一些積壓訂單，基本上會在第四季供應。我們最近提高了 Evolve 的生產能力，現在每週生產約 25 輛。所以它即將到來，並將在世界範圍內取得成功。

And then just one follow-up on that. So I guess with the Evoke coming a quarter or 2 later, I mean, obviously, the results in Q3 were very strong despite not having any sales of that. I know you don't want to talk about the specific numbers of boxes, but is there 1 or 2 areas this quarter that were very strong that you saw an acceleration in demand? Is there any high-level color that you can provide to help us understand how different areas of the business are performing?

然後只需進行一次後續跟進。因此，我想隨著 Evoke 一兩個季度後上市，顯然，儘管沒有任何銷量，但第三季的業績非常強勁。我知道您不想談論具體的箱子數量，但本季是否有 1 或 2 個領域表現非常強勁，以至於您看到需求加速成長？您能否提供任何高級顏色來幫助我們了解業務的不同領域的表現？

Well, the Evolve, the hands-free device, was actually sold only in the U.S. And it was 9% on our business in the fourth quarter, close to $3.7 million, if I -- to be precise. So that was the nice contribution to Q3, and it will continue to contribute in Q4 and in 2020 as well.

嗯，免持設備 Evolve 實際上只在美國銷售。這是對第三季的良好貢獻，並且它將在第四季度和 2020 年繼續做出貢獻。

The next question comes from Kyle Rose of Canaccord Genuity.

下一個問題來自 Canaccord Genuity 的 Kyle Rose。

Congrats on a strong quarter. So a lot has been asked, but I guess I just wanted to talk -- you put up a press release, I think, back in late August, early September, just about a user meeting. Maybe you can help us understand kind of the feedback from the user meeting, maybe kind of how that helps inform your view of the product development and kind of the market opportunity for some of these new products. And then when you think about 2020, opening up 2 markets, it sounds like 1 in Europe, 1 in Asia Pacific, maybe just help us understand the potential for the size and the investments that need to happen to open up those opportunities. Is that something that happens in the first half? Do we see the revenue growth in the second half? Just kind of flesh that out for us.

恭喜您本季業績強勁。所以有很多問題，但我想我只是想談談——我想，你在 8 月底或 9 月初發布了一份新聞稿，關於一次用戶會議。也許您可以幫助我們了解用戶會議的回饋，也許這有助於您了解產品開發以及某些新產品的市場機會。然後，當你想到2020年，開放兩個市場時，聽起來一個在歐洲，一個在亞太地區，也許只是幫助我們了解規模的潛力以及需要進行的投資以開拓這些機會。這是上半場發生的事嗎？下半年我們會看到收入成長嗎？只是為我們充實一下這一點。

Okay. First, I will start with your second question, okay? The country in Europe that we're talking about, and you can guess, is one of the big -- biggest countries. I'm not talking about Belgium. We are not opening a fully owned or a joint venture controlled by us in a country that will contribute a few million dollars a year, we would like -- or a few hundred thousand dollars a year, we would like to open it in a country where the investments will pay off. And of course, it will be one of the biggest countries.

好的。首先，我先問你的第二個問題，好嗎？我們正在談論的這個歐洲國家，你可以猜到，是歐洲最大的國家之一。我不是說比利時。我們不會在一個每年能貢獻數百萬美元或幾十萬美元的國家開設一家全資或由我們控制的合資企業，我們希望把它開在一個投資能帶來回報的國家。當然，它將是最大的國家之一。

In Asia, I can tell you, we are talking about China. We are trying to open something in China. We have a small company in Guangzhou. And once we get the CFDA approval, we will start operating commercially in China, direct and through some distributor. In China, you cannot go just direct, you have to combine because China is big territories. Sometimes, there's a different mentality. We are learning it right now, doing some homework in order to be prepared for the time that the CFDA will allow us to start. We're in the process of getting CFDA for the InMode RF, the minimally invasive, and also for the InMode.

在亞洲，我可以告訴你，我們談論的是中國。我們正嘗試在中國開拓一些業務。我們在廣州有一家小公司。一旦我們獲得CFDA的批准，我們將開始在中國進行商業運營，直接營運或透過一些經銷商運作。在中國，你不能只採取直接行動，你必須採取聯合行動，因為中國幅員遼闊。有時候，心態是不一樣的。我們現在正在學習，做一些功課，為 CFDA 允許我們開始的時間做好準備。我們正在為 InMode RF、微創和 InMode 申請 CFDA。

As far as your first question regarding the user meeting, the user meeting was the first time we did -- was the first time that InMode actually did such a meeting. And it was just good for the doctors to share information. We had something like, I don't know, 6 to 8 lectures every day. It was for 2 days. Attendance was about 600 people, which is very unique for the first user meeting. We intend to continue to do it. Some doctors shared some of the experience. Some doctors asked questions about the adverse effect. They tried to share protocols and to understand which protocol was better. I think it's good, especially for doctors. It's a community. It's a community like the family of InMode, and we will continue to do it. We are learning for the first time. And the next time, we'll be organized, I believe, even better with some experience that we have from the first time. But it was quite successful.

關於使用者會議的第一個問題，使用者會議是我們第一次舉行——也是 InMode 第一次真正舉行這樣的會議。醫生之間分享資訊是件好事。我們每天大概有 6 到 8 場講座。持續了兩天。出席人數約 600 人，這對於第一次用戶會議來說非常獨特。我們打算繼續這樣做。一些醫生分享了一些經驗。一些醫生對副作用提出了疑問。他們嘗試共享協議並了解哪種協議更好。我認為這很好，尤其是對醫生來說。這是一個社區。這是一個像 InMode 家庭一樣的社區，我們會繼續這樣做。我們是第一次學習。我相信，有了第一次的經驗，下一次我們的組織會更加有秩序。但它相當成功。

Great. And then just one follow-up for me. Just you've got a nice war chest of cash piling up, both from the recent financing in the IPO but then also from just cash flow from operations. I guess how should we think about deployment of capital on a go-forward basis? I mean your expectations for product development and gross margins are very clear. But should we expect you to be acquisitive on a go-forward basis? Just how do you view your cash utilization moving forward?

偉大的。然後我只需跟進一次。你已經累積了大量現金，既來自最近 IPO 的融資，也來自營運產生的現金流。我想我們應該如何考慮未來的資本部署？我的意思是，你對產品開發和毛利率的期望非常明確。但我們是否應該期待您在未來進行收購？您如何看待未來的現金使用情況？

Well, we have close to $170 million. And I will not tell you today that we have -- we know how to deploy $170 million, no. But we have 3 areas where we will invest heavily. First, when you establish a subsidiary, you need millions of dollars. You hire people. You have real estate. You need training. You need to give them demos. You need to keep inventory, working capital. It's an investment. And this is coming from the same source.

嗯，我們有近 1.7 億美元。今天我不會告訴你們，我們知道如何部署 1.7 億美元，不是嗎？但我們將在三個領域投入大量資金。第一，建立子公司需要數百萬美元。你僱人。你有房地產。你需要訓練。你需要向他們提供演示。你需要保留庫存和營運資金。這是一項投資。這與事實出自同一來源。

Second, if the opportunity will present itself and we will be able to acquire a complementing technology that will enable us to design something which will complement our product line, we will do it, licensing or buying technology. And there are some technologies that we are considering right now. We are checking. We have some people coming to us with, call it, technologies that relate to wellness, aesthetic, et cetera. So this is also something that we might consider.

其次，如果有機會，我們能夠獲得一項補充技術，使我們能夠設計出一些可以補充我們產品線的產品，我們就會這樣做，透過授權或購買技術。我們現在正在考慮一些技術。我們正在檢查。有些人向我們提出了所謂的與健康、美學等相關的技術。所以這也是我們可以考慮的事情。

All the rest is, well, increasing our capacity of manufacturing, and that costs money. I will not say it costs $170 million, but it costs money. And we are now establishing a few more lines. Probably, we will increase our production capacity by 1/3 next year. And we are doing it right now. And this is also -- we are deploying money on all kinds of manufacturing facilities, all kinds of testing equipment, all kind of fixtures and having -- and buying inventory of components. This is also another. But at the end of the day, we're generating -- you can see that we're generating about $16 million to $18 million every quarter, which is a lot of money. Basically, it's our net profit. And so I assume that the money will continue to accumulate until we have some good reason to invest tens of millions of dollars. Right now, we do not have.

其餘一切都是為了提高我們的製造能力，而這需要花錢。我不會說它要花費 1.7 億美元，但它是需要錢的。現在我們正在建立更多的線路。可能明年我們的產能會提高1/3。我們現在就正在這麼做。這也是——我們正在投入資金用於各種製造設施、各種測試設備、各種固定裝置以及購買零件庫存。這也是另外一回事。但到最後，我們還是創造了——你可以看到我們每個季度創造了大約 1600 萬到 1800 萬美元的收入，這是一大筆錢。基本上，這是我們的淨利潤。因此我認為，資金會不斷積累，直到我們有充分的理由投資數千萬美元。目前我們還沒有。

(Operator Instructions) The next question comes from Jeff Johnson of Baird.

（操作員指示）下一個問題來自貝爾德的傑夫·約翰遜。

Just a couple of follow-up questions for me. First, Moshe, did I hear you correctly, I joined the call a little late, that you do have EMS indications approved on Evolve? And then on Evoke, I know you're talking about an approval late this year or early next. We did just see an FDA approval on a product called EmFace, E-M, face. Just wondering what that product is. We thought that might be Evoke, but it sounds like it must not have been.

我只想問幾個後續問題。首先，Moshe，我聽清楚了嗎，我有點晚才加入電話會議，你們在 Evolve 上確實有批准的 EMS 適應症？然後關於 Evoke，我知道你正在談論今年年底或明年年初的批准。我們確實剛剛看到 FDA 批准了一款名為 EmFace（E-M，face）的產品。我只是想知道那是什麼產品。我們認為那可能是 Evoke，但聽起來好像不是。

Yes. The EmFace, it's a preliminary on the Evoke. We got the approval on one indication. We're waiting for the second one. So we will launch them together. You are right, this is the product. As we go to the EMS on the Evolve, it is not yet FDA approved. Once it will be approved, we will be able to launch it to the market on the Evolve. But the EMS will be also be launched on the Votiva and other platforms as well.

是的。 EmFace 是 Evoke 的初步版本。我們獲得了一項適應症的批准。我們正在等待第二個。因此我們將一起推出它們。你說得對，這就是產品。當我們談到 Evolve 上的 EMS 時，它尚未獲得 FDA 批准。一旦獲得批准，我們就能夠在 Evolve 上將其推向市場。但 EMS 也將在 Votiva 和其他平台上推出。

All right. That's helpful. And then on the women's health care platform, obviously, there's just been a lot of noise in the past year on there. And you seem to be sitting well compared to some of your competitors in that area. So any color you can provide on that part of the business this quarter, what it grew, how to think about the women's health care business over the next several quarters.

好的。這很有幫助。而在女性保健平台上，顯然，過去一年來出現了許多喧囂。與該領域的一些競爭對手相比，你們似乎處於有利地位。您能否介紹一下本季該部分業務的具體情況、成長情況以及如何看待未來幾季的女性保健業務。

Yes. The woman health business, you know that all the industry had a problem in the middle of last year in 2018 when everybody received the letter from the FDA. Several companies left the market like Lumenis and Cynosure and others. Those companies have used laser to do ablation in the vaginal wall. Since we are using RF, which is nonablative and noninvasive technology, the FDA received our answer to the letter, and we are well cleared by the FDA to continue to sell it. So actually, this market, after the FDA letter, went down significantly. And we are picking up again. Right now, it's about 16% of our business. But by adding more indications to the same platform, we hope that, that will grow again to the level of 20% and above -- 20% and above.

是的。你們知道，就女性健康產業而言，去年在 2018 年中期，整個產業都遇到了問題，當時每個人都收到了 FDA 的信件。 Lumenis、Cynosure 等多家公司退出了市場。這些公司已經使用雷射對陰道壁進行消融。由於我們採用的是射頻技術，它是一種非剝脫性、非侵入性技術，FDA 收到了我們的答复，並且 FDA 批准我們繼續銷售該技術。因此實際上，在 FDA 發出信件之後，這個市場大幅下滑。我們又開始復甦了。目前，它約占我們業務的16％。但透過在同一平台上添加更多指示，我們希望，這一數字將再次增長到 20% 及以上的水平——20% 及以上。

Great. That's helpful. And the last question for me, just on the new relationships in India and Australia. Was there any contribution from inventory load into those dealers in the third quarter? Or can we use this kind of $9 million international revenue number for the third quarter as a good jumping-off point to think about how we grow that number over the next several quarters?

偉大的。這很有幫助。我的最後一個問題是關於印度和澳洲的新關係。第三季這些經銷商的庫存量有任何貢獻嗎？或者我們能否以第三季 900 萬美元的國際收入作為一個良好的起點，來思考如何在接下來的幾季中實現這一數字的成長？

Yes. In Australia, there is none. We just hired the general manager and 2 more people. So their contribution to the third quarter was not -- would not exist. The India was the first quarter that we're actually selling, and the revenue in India was around $280,000 to $300,000.

是的。在澳大利亞，沒有。我們剛聘請了總經理和另外兩名員工。因此他們對第三季的貢獻並不存在。印度是我們實際銷售的第一個季度，印度的收入約為 28 萬至 30 萬美元。

And we have a follow-up from Matt Taylor of UBS.

我們也請瑞銀 (UBS) 的 Matt Taylor 繼續提問。

I just wanted to ask about margins longer term. So you had really strong margins this quarter, and you talked about your commitment to 85%-plus gross margin products. I guess given the high-margin number that we saw in Q3, does that give you more confidence in your gross margin trajectory over the next couple of years? Can we actually see gross margins expand? Can you talk a little bit about those dynamics?

我只是想詢問長期利潤的情況。所以你們本季的利潤率確實很高，而且你們談到了對 85% 以上毛利率產品的承諾。我想，考慮到我們在第三季看到的高利潤率數字，這是否會讓您對未來幾年的毛利率走勢更有信心？我們真的能看到毛利率擴大嗎？能稍微談談這些動態嗎？

Now I think we're in some kind of a balance. I think to grow above 85% to 87% will be very difficult, and we don't want to jeopardize the quality of the system. Of course, we can buy cheaper components and try to do it cheaper, but I don't think it's necessarily having 85% to 87%. I do believe that we will continue to maintain the -- this gross margin level between 85% to 87%, depends on the platform, depends on the territory, depends on the end-user price. I don't think it will go up to above that.

現在我認為我們處於某種平衡狀態。我認為將這一比例從 85% 提高到 87% 將非常困難，我們不想危及系統的品質。當然，我們可以購買更便宜的零件，並嘗試降低成本，但我認為不一定要達到 85% 到 87% 的水平。我確實相信我們將繼續保持 85% 至 87% 之間的毛利率水平，這取決於平台、取決於地理、取決於最終用戶價格。我認為它不會上升到這個水平以上。

This concludes our question-and-answer session. I would like to turn the conference back over to Moshe Mizrahy, Chairman and CEO, for any closing remarks.

我們的問答環節到此結束。我想將會議交還給董事長兼執行長 Moshe Mizrahy，請他作最後發言。

Okay. Again, thank you, everybody, for joining us. We will welcome you again within 3 months in our end-of-year earnings call. And have a good day. Thank you very much. Bye-bye.

好的。再次感謝大家的參與。我們將在 3 個月內在年終收益電話會議上再次歡迎您。祝您有美好的一天。非常感謝。再見。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。