Inmode Ltd (INMD) 2019 Q4 法說會逐字稿

Good morning.

And welcome to the InMode Ltd.

Fourth Quarter 2019 Earnings Conference call.

(Operator Instructions) Please note, this event is being recorded.

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

Please go ahead.

Thank you, operator.

And good day to everybody.

I would like to welcome all of you to InMode's Fourth Quarter and Full Year 2019 Financial Results Conference Call.

With us on the line today are Mr. Moshe Mizrahy, Chairman of the Board and CEO; and Mr. Yair Malca, CFO.

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.

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.

Moshe will begin the call with a business update, followed by Yair with an overview of the financials.

We will then open the call for the question-and-answer session.

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

Moshe, please go ahead.

Okay.

Thank you, Miri, and thanks to all of you for joining our fourth quarter and full year 2019 financial results conference call.

Here with me around the table in Israel are Dr. Michael Kreindel, the Co-Founder and CTO, Michael is also a Board member of the company; Yair Malca, our CFO; and Rafael Lickerman, our VP of Finance.

Before I update you on the major development and financial results for the fourth quarter and the full year 2019, I would like all of you to join us as we celebrate 2 major events.

This year, we are celebrating 10 years of operation.

We began operation in 2009.

So last year was our 10-year anniversary.

The second event we're celebrating is that 2019 was the first year that we reported full year results as a public company.

As we celebrate this major event, we would like to highlight our achievements along the way.

In 2015, the FDA cleared InMode new and proprietary bipolar RF frequency technology, which enabled further development and marketing of Minimally Invasive Subdermal Adipose Remodeling devices.

I'm sure that you -- all of you may know our BodyTite, FaceTite, AccuTite and Morpheus8.

With this new technology, InMode introduced a new category in the medical aesthetic market, which we call Minimally Invasive and Subdermal Ablative Aesthetic Surgery.

This technology enables physicians to provide solution to patients who do not want to suffer from the shortcoming of full plastic surgery, yet, would like to get comparable results.

We call them Treatment Gap Patients.

Today, 5 years after the introduction of this technology in the U.S., InMode has become the leading provider of minimally invasive aesthetic surgery solution to the aesthetic surgeons.

The success of InMode Subdermal Adipose Remodeling Devices in the minimally invasive and the subdermal ablative space inspire InMode to apply the same principle of facial and body reshaping to the noninvasive market with hands-free application.

As such, InMode has developed 2 FDA-cleared, unique hands-free platforms.

They work for body and they work for face.

These 2 platforms are also cleared in Canada and, also in Europe, received the CE Mark for marketing and sales in Europe.

Utilizing this bipolar RF technology for delivering RF energy and electromagnetic pulses, may evolve as the only device for treatment of skin, subdermal set and muscle tone improvement, while Evoke is the first hands-free device for the face and submental area.

The introduction of Evolve and Evoke to the market created for us another new category within the aesthetic market.

We call it Hands-Free Aesthetic Procedures.

And therefore, currently, our portfolio consists of 2 proprietary and protected group of products.

The first one, Minimally Invasive and Subdermal Ablative Aesthetic Surgery; and the second one, Hands-Free Aesthetic Procedures.

These 2 groups are expected to be the main growth engine for InMode in the coming year and to position InMode at the front and as leading innovative aesthetic company.

As for the global reach, InMode continue to develop the United States and the international market through our network of subsidiaries and distribution -- and distributors.

In addition, InMode continue to work on clinical and regulatory advancement in various countries.

Recently, we received ANVISA clearance for Brazil and additional clearances in the United States, Canada, Taiwan and other countries in the Eastern Block.

These new regulatory clearances will create additional market potential for InMode's platform and solutions.

Now for the numbers.

As of December 31, 2019, the total number of employees worldwide was 251, and our distribution network cover over 50 countries.

Our worldwide installed base reached approximately 4,900 platforms, of which approximately 2,800 were in the U.S. In the fourth quarter, InMode generated record revenue of $47 million, a 63% increase from fourth quarter of 2018, reflecting our continued growth and the increased production of our minimally invasive RF technology, as well as the introduction of the new hands-free platform.

International revenue grew 71% year-over-year.

Net income increased to $90 million in the fourth quarter.

We are focusing on profitable growth and are successfully implementing our goal of international expenses.

We are increasing this expansion effort with our current subsidiaries in Spain and the U.K. and our newly established subsidiaries in India and Australia.

As for the full year 2019, our total revenue reached $156.4 million, a 56% increase from 2018, and our net profit grew to $61.1 million, a 173% increase from 2018.

Now for 2020 guidance.

Turning to our 2020 guidance, we expect another consecutive growth year, driven by continued development in the market in the U.S. and internationally.

Based on our expectations, we are providing a full year 2020 revenue guidance of $190 million to $198 million.

We also expect full year 2020 GAAP gross margin to be in the range of 85% to 87%.

Full year 2020 non-GAAP income from operations is expected to be in the range of $76 million to $80 million and the full year 2020, non-GAAP earnings per share is expected to be in the range of $1.85 to $1.93.

Now we would like to update you on our portfolio categorization.

Starting in the first quarter of 2020, we're introducing a more detailed presentation of our product revenue to better reflect our operation by disclosing the following 3 categories.

The first category is the surgical platform, which is -- include all the platforms engaged in minimally invasive and subdermal ablative treatment.

The second category is our hands-free platform, which currently includes Evolve and Evoke.

However, we intend to continue to develop platforms and indications and a new indication for this category.

The third category consists of what we call traditional laser and noninvasive RF platforms.

And here, I would like to make the same statement I made before.

InMode is not traditional laser company.

We develop and sell noninvasive laser equipment, since we want to be one-stop shop to our customers who are buying our unique platforms.

Last but not least, I'm sure that I will be asked on the effect of the coronavirus on our business.

The effect of the coronavirus on our business is threefold.

The first one, we expect the overall impact of our revenue to be as minimal as possible since our Asia Pacific region now account for a small portion of our total revenue.

We believe that, at least in the first quarter, and perhaps, in the second as well, our sales in China and the other neighboring countries will be affected.

As of today, many events and medical conferences are being canceled in Asia.

We also took this into account in our projection for 2020.

We hope that in Q3 and Q4 everything will be back to normal.

Regardless, we are continuing to follow the situation on a daily basis.

The second effect is on our manufacturing.

As you probably know, some of our components are manufactured in China.

And currently, Chinese factories have not returned to full production.

We are working hard to get second and third sources for those components from Europe and other countries.

We believe that these components will probably be more expensive, but we plan to do our best to minimize the effect on the flow of manufacturing and deliveries of products.

The third effect in our regulation in China.

Since the CFDA is now closed, we anticipate delay in the approval of our platforms, hopefully not more than 3 months.

We expected to get the clearance in China in the first quarter.

We now believe that the clearance will come sometime in the second quarter.

Now let me hand over the call to Yair to review our financial results in detail.

Yair?

Thanks, Moshe.

Good day, everyone.

Total revenue in the fourth quarter of 2019 grew 63% to a record $47 million with a gross margin of 87% on a GAAP basis.

The revenue growth was driven primarily by the continued success of InMode's expanding direct sales organization in the United States.

Additionally, InMode continued to gain traction in international markets, with international revenue growing 71% year-over-year.

GAAP operating expenses in the fourth quarter of 2019 totaled approximately $23 million, a 2.3% decrease from the first quarter of 2018.

Sales and marketing expenses increased 60.7% in the fourth quarter of 2019 compared to the fourth quarter of 2018, but were offset by the anniversary of a onetime legal settlement and loss contingency expense related to a sublicense agreement of $8 million in the fourth quarter of 2018.

On a non-GAAP basis, operating expenses totaled $22.7 million in the fourth quarter of 2019 compared to operating expenses of $15.4 million in the fourth quarter of 2018, an increase of 47.6%.

GAAP operating margin was 38.2% in the fourth quarter of 2019 compared to a 4.6% in the fourth quarter of 2018.

Non-GAAP operating margin in the fourth quarter of 2019 was 39% compared to 33% in the fourth quarter of 2018.

GAAP diluted earnings per share in the fourth quarter of 2019 were $0.46 compared to a net loss of $0.01 per diluted share in the fourth quarter of 2018.

Non-GAAP diluted shares -- diluted earnings per share in the fourth quarter of 2019 were $0.46 compared to $0.22 per diluted share in the fourth quarter of 2018, an increase of 109%.

We completed the fourth quarter with a strong balance sheet.

As of December 31, 2019, the company had cash and cash equivalents, marketable securities and deposits of $193.4 million, out of which $70 million are net proceeds raised in the IPO in August 2019.

Total revenue for the full year of 2019 grew 56% to a record $156.4 million with a gross margin of 87% on a GAAP basis.

Year-over-year, international revenue growth was 68% in 2019.

GAAP operating expenses in the full year of 2019 totaled approximately $76.5 million, a 24.2% increase from the full year of 2018.

This increase was attributable to higher levels of sales and marketing spend partially offset by the anniversary of a onetime legal settlement and loss contingency expense related to a sublicense agreement of $8 million in the fourth quarter of 2018.

On a non-GAAP basis, operating expenses totaled $75 million in the full year of 2019 compared to operating expenses of $51.7 million in the year of 2018, an increase of 45.2%.

GAAP operating margin was 38.1% in the full year of 2019 compared to 23.5% for the full year of 2018.

Non-GAAP operating margin for the full year of 2019 was 39.1% compared to 33.4% for the full year of 2018.

GAAP diluted earnings per share in the full year of 2019 were $1.60 compared to $0.62 per diluted share in the full year of 2018.

Non-GAAP diluted earnings per share in the full year of 2019 were $1.63 compared to $0.90 per diluted share in 2018, an increase of 81%.

On the cash flow front, the company generated $62.2 million from operating activities for the full year of 2019.

Please note that 2019 operating cash flow were impacted by the payout of a onetime legal settlement accrued for in prior years.

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

Thank you, Yair.

Thank you, Yair.

With that, I will be pleased to take your questions.

(Operator Instructions) The first question will come from Jack Meehan with Barclays.

Congrats on the quarter.

So I'm looking forward to the new disclosures you plan to provide around revenue across surgical, hands-free, traditional.

Was hoping, could you just give us a little bit of color if you look at that today, what percentage of revenue each of those buckets were in 2019?

And within the guidance, what you expect each of those to grow at?

I'm expecting the hands-free is probably the fastest level of growth given the new products, but just a little bit more color there would be helpful.

Okay.

Jack, this is Moshe.

Well, in 2019, we started to -- we introduced the Evolve preliminary in August.

And therefore, we sold hands-free devices only the Evolve -- the Evoke only in the first quarter of 2020, only on the -- a little bit on the third quarter and on the fourth quarter.

Altogether, it was around $12 million.

The main market of minimally invasive -- just a second, the main market for the minimally invasive was around, minimally invasive $24 million.

And the subdermal ablative.

And the traditional was only $1 million.

So the previous quarter, just a second.

Okay.

The numbers that I'm giving you right now -- I'm looking on the spreadsheet.

The numbers that I'm giving you right now is on U.S.-only.

I will not give you numbers on the international, since we did not sell any hands-free devices on the international market.

So on Q4 of 2019, $24 million were the minimally invasive and ablative.

Hands-free was around $9 million, and the non-invasive laser was only $1 million, total of $33 million.

This is out of the $47 million.

In addition to that, we had another $4.3 million of recurrent and the rest was international.

On the full year 2009 -- 2019, $89 million was the minimally invasive and ablative, $10 million was the noninvasive, the hands-free was $12 million, since we sold a little bit on the third quarter as well.

This is together for U.S. $111 million.

Total sales in 2019 was $156 million, out of which was around $15.4 million of recurrent and the rest was international.

But in the international, we did not sell any hands-free yet.

Does that answer your question?

It did.

And miraculously, I think I kept up with all the numbers, and I think they make sense.

The -- so it seems like you're off to...

As you can see.

Yes, Jack, as you can see, up until we will start selling the hands-free devices, which is the unique platforms in 2020, the minimally invasive and ablative, all the surgical products are the main category for us.

Yes.

So it seems like you got off to a really strong start with Evolve.

Maybe just talk about, in terms of revenue within your guidance of $190 million to $198 million, what are you assuming for those platforms and how the customer feedback has been?

Okay.

Well, we don't have a lot of customer feedback because most of the deliveries were done at the end of the fourth quarter.

But we get some doctors who did some preliminary study even before we launched the product to the market, and the results are good.

So we're very encouraged.

What will happen in the future with the hands-free devices?

First, in general, we do believe that the potential of the technology that we develop for the hands-free segment is even higher than the potential of the minimal invasive.

And the reason for that is that the minimal invasive and subdermal ablative is mainly for people -- for doctors who are surgeons.

And the hands-free devices can be used by any aesthetic doctor.

And the ratio between plastic surgery -- plastic surgeons and aesthetic surgeons, doctors who are doing surgery, to doctors who are engaged in just medical aesthetics, I would say, is at least 1:6 or 1:7.

So the potential is high.

How the market will accept that?

We don't know yet.

We have those few quarters with that.

It's at least 2, 3 quarters to understand the potential, to understand the message, to fine-tune the message, to decide which community of doctors we are approaching.

So it's too early to say.

That's fair.

And then last question, the recurring revenue, I think I heard $4.3 million in total.

It seems like it continued to have a nice ramp on the consumable side.

Maybe just what was the revenue contribution from consumables?

And how are you seeing adoption side of things?

We're currently around 10%.

Overall, in 2019, our current -- our current revenue from disposable and others, around 10% of the total revenue worldwide.

And the breakdown in there is about 7% -- 70% of that is consumable, and 30% of that is warranty.

Does that answer your question?

Yes.

And how much of the growth is coming from the minimally invasive side?

And how do you expect that to ramp in 2020?

Jack, only the minimally invasive and ablative has disposable.

The hands-free and the noninvasive do not -- platforms do not have any disposable.

The disposable are for the BodyTite, NeckTite, AccuTite, Morpheus8 and now we're introducing other version of the Morpheus8.

These are the onetime use, and these are the disposable.

So as the installed base of the minimally invasive and ablative platforms will grow, the total number of -- the total number of disposables will grow as well.

We see this starting in 2019.

For example, Morpheus8 is becoming a big winner, and we don't keep the -- we don't even keep the manufacturing in order to supply all the demand, but it's growing.

Consumer doubled year-over-year in 2019 versus 2018, consumable exactly doubled themselves.

The next question comes from Matt Taylor with UBS.

I just had a follow-up on Jack's question.

Could you articulate when you look at the 3 main categories that you're now breaking out, how much of the growth in 2020 do you expect to come from each of them?

If you can quantify that or just kind of speak to the trends?

I believe that just roughly, I mean, it's too early to say, but just roughly, I would say that, at least 65% to 70% of our revenue will continue to come with the established business of the minimally invasive and ablative.

25% worldwide will come up with the hands-free since the introduction will take time.

The regulation in certain countries will take time, although it's already cleared by the FDA but in other countries in Europe, Asia, we need to go through the process, and we haven't started yet.

So this will be around 20%, 25% and then the traditional laser will continue to be around, I would say, between 5% to 10%.

So it sounds like the hands-free launches are going really well.

You're predicting a lot of growth that this year.

Could you just talk a little bit about the initial receptivity to them, how you feel they're differentiated?

And just any other color on market size and growth?

You mean on the hands-free platforms?

Yes.

Okay.

Okay.

We have basically 2 platforms.

The Evoke, which is for the face, we don't have any competition because there is not even one platform similar to that in the market today.

On the Evolve side, there are some companies who are offering hands-free devices like Zeltiq with the fat freezing and, like, BTL with the EMS and some others with EMS.

But these are single-function platforms.

The beauty of Evolve is that Evolve has 3 modalities.

It can compete with BTL and all the other EMS because we have one of the modalities, EMS.

It can compete with Zeltiq and all the laser SculpSure from Cynosure and others on the fat treatment and -- but also, we have additional modality, which is the type for skin tightening.

Also the 3 modality in the Evolve is doing fat treatment, but also skin tightening.

And therefore, when we see the competition, there's not even one platform who can offer such comprehensive platform to the doctors.

And this is something that's unique about Evolve.

What is the potential?

I said before, I believe if we will position it right, to the aesthetic surgeons and also to the aesthetic physician, doctors who are not doing surgical and who are not involved in minimally invasive, the potential is high all over the world.

But time will say.

We need to compete against the competitors.

We need to position it.

We need to develop some training program for every country.

We need to finalize the regulation in many other countries.

But during 2020, that's the main objective of us to bring the hands-free platforms category into the awareness of all the doctors who are engaged in aesthetic.

Great.

So one other follow-up question I had, I guess, when you talk about the contributions from these hands-free products, you mentioned a couple of times that you're looking to roll these out across the globe throughout 2020.

Can you just offer some early thoughts on '21 and '22?

Could we see this launch build basically over multiple years?

Or do you see -- I guess, what year would you see peak sales from these products?

Okay, okay, good question.

Well, the plan for 2020 is to take these 2 platforms and get regulation clearances in Asia, in South America, in the Eastern Bloc, which is separate from the regular CE, in Italy, which is again separate from the regular CE, and make sure that we get clearances all over the world, including Canada, U.S. and other countries.

Once we have that, and also in Brazil, of course.

Once we have that, in 2021 I believe the numbers -- the total revenue from the hands-free category will be at least double from 2020, at least double.

And also for 2021, we might be able to double it again because honestly, the technology that we're presenting on the -- which is based on the bipolar RF is the only technology that actually treat the fat and tight the skin.

Even when you take the Cynosure or SculpSure or the Zeltiq, the CoolSculpt, okay, they know how to kill fat cells, but then you have lose skin.

And the beauty of our technology, especially with the hands-free, is that we can do both simultaneously, and we can combine between the 3 modalities, depends on the patient, and customize the treatment according to the BMI, according to what -- or what the patient want to achieve.

We have many types of scenarios of treatment and protocols of treatment that we can employ here.

So we see a great potential for that, and this is something that we will concentrate on 2020, not just in the United States.

But as I said, to get us cleared by the regulation authorities in many countries and in 2021 to go big.

The next question comes from Kyle Rose with Canaccord Genuity.

This is [Ian] on for Kyle.

Congrats on another impressive quarter.

Just wanted to ask about gross margins, as that line came in a bit above what we were expecting.

And 2020 guidance is 85% to 87%, seems to imply a bit of a step down from the current levels?

Just anything in particular this quarter that led to the strong performance in that line.

Anything you're seeing in 2020 that would weigh it down a bit.

I know you mentioned the manufacturing concerns from coronavirus.

Was there anything else?

Okay.

Good question.

Yes.

Well, the gross margin in the fourth quarter and the full year of 2019 was 87%.

And the main reason is, first, economies of scale.

I mean, we manufacture much more than 2018.

And we sold 50 -- more than $50 million more.

Now when you deal with this kind of manufacturing, you have bargaining power, again, versus suppliers.

You can get better prices and of course, you don't increase your overhead accordingly.

And therefore, 1% increase from 2018 to 2019 was reasonable increase based on that.

What will happen in 2020?

We believe that somehow, we will need to find a solution for the component that we will not be purchased from China.

And we might pay a little bit more.

And this is the reason why we say that the range is between 85% to 87%.

If the coronavirus will spread, and we will need -- and China factories will not open in the second quarter, then we estimate 1% decrease in the gross margin in 2020 to something in the neighborhood of 86%.

This is based on some calculation that we did here.

But I want to tell you one thing which is very important, and we dealt with this issue this week, and we have teams of -- we have -- we established a team of people that's right now, exploring all the other alternatives around the world for similar components.

And we will pay more on the components as long as we can keep the production line up and running.

This is more important for us to deliver on time.

And then on the first quarter, we don't see a major because we have some inventory, but if this virus, the coronavirus will continue to create an issue -- to be an issue in the second quarter, the gross margin will go 1% down.

And this is why we estimate 85% to 87%.

(Operator Instructions) The next question is from Jeff Johnson with Baird.

Moshe, I just want to follow-up on the subcomponent supplier point there you just made on the 100 basis point impact.

Is there any risk that you won't be able to find alternative suppliers?

I guess, you've quantified the size, but is there a risk of actually going out and finding those suppliers?

No, there is no such risk.

And even if we have to make, for example, metal component in Israel, and it will cost, I don't know, 4x as much, we will do it.

We are not taking any chance of not delivering product on time.

And we're not taking any chance even if it will cost much more to stop the production line because once you stop the production line, it will be very difficult to start them again.

You lose the knowledge, you lose the people and you don't want to be in this situation.

And I can assure you that all the components will be purchased from second and third sources, and we will continue the manufacturing.

The good news, and I'm saying it again, the good news is we are not yet cleared in China for selling our product.

Therefore, the effect on revenue will be very minimal.

And unlike other companies like Lumenis and Cynosure and of course, Candela, who are having subsidiaries in China and a major part of their business in Asia originated in China, they are going to be hurt much more than us as far as revenue.

But as far as manufacturing and component, there is no risk that we will stop the lines.

All right.

That's helpful.

And then maybe 2 follow-ups on Evolve and Morpheus Evolve.

Are you seeing most plastic surgeons and other purchasers of that platform buying all 3 hand pieces?

Are they buying 2 hand pieces and maybe thinking about adding EMS later?

Just would love to hear kind of an update on how that is being purchased.

In Morpheus8, you mentioned some updates to that.

Any additional color you could provide there would be helpful.

Most system of Evolve that we sold in the preliminary launch was with all 3 modalities because the message to the doctor is simple, those modalities and the treatment of tight, trim and tone are complementing each other.

And therefore, in order to customize the treatment per patient, what you need to do is to develop a customized protocol for him and you need all 3 modalities.

But we do offer the system with 1, 2 or 3 modalities.

Great.

Morpheus8, the updates there?

What do you want to know about the Morpheus?

You said something in passing, in answering a previous question about some updates there.

And I didn't know if something is changing with that product, if you're launching a second-gen or maybe a third-gen product in Morpheus8.

Just was trying to follow-up from a comment you made in passing.

No, no.

What I said is that we'll continue to develop some other version of the Morpheus because the Morpheus is a winner product, and we will announce it once it's ready and get the clearance from the FDA.

All right, great.

And then last question for me.

Just India and Australia, I think your 2 newest subs.

Just where are you at in building out your market presence in those 2 markets?

Are you now fully staffed up and going after those markets?

And how should we think about maybe your presence in those markets in 2020 versus 2019?

Well, we started the Indian subsidiary in 2019 and in the fourth quarter, we did close to $400,000 already, which is good for start.

That was the first full quarter.

In Australia, we set up the company in the fourth quarter of 2019, we hired the Managing Director.

We hired a logistic guy.

We hired the 3 salespeople.

They are getting ready with the training, and they sold 2 system in the fourth quarter and -- not in the fourth quarter.

In the beginning of this quarter or the first quarter so I believe that in Australia and India, by establishing subsidiaries we're going to be one of the market leaders.

The next question is a follow-up question from Jack Meehan with Barclays.

I was wondering if you could update us where you ended the year in terms of the number of salespeople in the U.S. And given some of the distractions at some of your competitors, do you think that's helped you at all on the commercial front?

Yes.

As of December 31, 2019, we had 110 direct salespeople in the U.S. and in Canada.

But since then, we continue to hire.

And prepare ourselves for 2020.

I believe there is some opportunity.

And I would like to explain that in the market today -- the fact that Cynosure was acquired by an equity fund and Zeltiq is not doing very well under Allergan.

And I believe that the companies like Alma and Candela, just because the crisis in China, will lose some of the revenue in 2020.

I'm sure that some people will leave those companies, and we might find some good people to hire in 2020.

And we will continue to hire because if we want to be in the neighborhood of $200 million in worldwide and at least 70% of that will be in North America, we need more people.

And on average, direct salesperson in North America is selling something between $1.3 million to $1.4 million a year.

So we can calculate and do the math simply in order to determine how many sell -- direct sales rep we need, but we continue to hire in 2020.

That's great, and then within your guidance for 2020, is there a range you feel comfortable with for the first quarter, is there anything seasonally you would call out?

Jack, we decided that we do not want to give guidance for the first quarter.

I'm sure all of you know the seasonality of the market.

But we decided we don't want to give guidance per quarter, but rather give guidance for the full year, which we will update every quarter with the actual.

And therefore, at the end of Q1, we will update the numbers based on the actual revenue that we achieved in Q1, and Q2 and Q3 the same.

So right now, the guidance that we gave, we believe, as far as competitive situation with our competitors.

It's the maximum we can do.

Also, the categorization that we decided to reveal.

I mean, the 3 categories are also because we cannot give information about individual platforms.

This is a very strict competitive information, which we do not want to share with our competitors, all of them are on the line now.

No, that's all fair.

Last follow-up.

You're building a bit of a war chest on the balance sheet now, over $190 million in cash and equivalents.

How are you feeling in terms of what you want to do on the deal front potentially?

And do you think any of this disruption could open up some targets for you?

Well, maybe.

We are not engaged in any M&A.

We had a board meeting yesterday and basically, in the board meeting, we decided to give all the $200 million that we have as bonus to the employees, but we'll do it over 4 quarters, not immediately.

I'm kidding.

No, we're not.

We don't have any M&A target right now.

We have enough organic growth on the table from our development, which we need to bring to the market with a high potential.

And with the management attention that we have in this company currently, I just want to remind everybody that we are not a very big company, altogether, 250 people.

We do not see any reason why to start doing an M&A and engage in all kind of issues and others, it will take time.

We might do it in the following years.

But right now, the answer is we will continue to generate cash and it will accumulate on the balance sheet.

If the opportunity will present itself to buy technology or something which will complement our product line, yes, we will consider it.

But this is not $200 million.

Ladies and gentlemen, this concludes our question-and-answer session.

I would like to turn the conference back over to Moshe Mizrahy for any closing remarks.

Okay.

Again, thank you, everybody, for joining us.

It was a very good quarter for us.

We are very excited with the new categories that we're developing.

We're very excited with the R&D pipeline that we established for the 2021 and '22.

And we have a full engineering team here in Israel who are working on new platforms.

As we promised during the roadshow of the IPO, we will bring to the market at least 2 new platforms every year, in order to keep the momentum and keep the growth and continue to be the innovation -- the innovative leaders of the medical aesthetic.

Thank you all.

And thank you, sir.

The conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect.