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spk10: Good day and welcome to InMode's fourth quarter and full year 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Miri Sigel of MSIR. Please go ahead.
spk00: Thank you, operator and everyone, for joining us today. Welcome to InMode's fourth quarter and full year 2023 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 go to the investor relations section of the company's website. Changes in business, competitive, technological, regulatory, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today. Our historical results are not necessarily indicative of future performance. As such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them except as required by law. With that, I'd like to pass the call over to Moshe Mizrachi, Chairman and CEO. Moshe, please go ahead.
spk04: Thank you, Miri, and to everyone for joining us. With me today, Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer, Yair Malka, our Chief Financial Officer, Shaquille Ocani, our President in North America, and Raphael Liekermann, our VP Finance. Following our prepared remark, we will all be available to answer your questions. The second half of 2023 presented challenges for InMod for the aesthetic industry as all and to the surgical aesthetic sector in particular. In the fourth quarter, we revised our guidance for the first time in the history of the company due to the increased impact of the industry slowdown. This resulted in 5% year-over-year decline in Q4 revenue. which amounted to $126.8 million. However, we are pleased to have grown our full year revenue to a record of $492 million, reflecting an 8% increase compared to the full year of 2021. We take pride in being the only company in the industry that consistently generate over $100 million per quarter, demonstrating growth even in the face of a challenging year. Moreover, we keep our gross margin, the highest in the industry, strong and steady at 84% for both Q4 and a full year, all while maintaining our established price structure for the platforms and for the consumable. As previously mentioned, over 80% of the platform sales are facilitated through leasing agreement. Higher interest rate and longer lending approval cycles have impacted in-mode overall growth rate. This macroeconomics environment has also affected patients who are more sensitive to the price of their aesthetic treatment. resulting in lower underlying demand for our minimally invasive treatment. To address these challenges, we are in the process of establishing approval program with financial institution to improve and expedite the credit decision process. In some cases, we directly leverage our strong balance sheet to support physician by providing financing option ourselves. Additionally, capitalizing on this lower year and our robust balance sheet, in 2023, we expanded our R&D activity by hiring more engineers and recruiting training professionals. Also, we increased our sales team in our subsidiaries, expedited international expansion, and increased investment in worldwide regulatory pathways. During 2023, we introduced two successful new platforms, Envision for the ophthalmology market and Define for the hand-free aesthetic market, which is the next generation of Evoque. We are encouraged by the results from the soft launch of our Envision platforms last year, and we expect Envision to expand outside the U.S. during 2024. InMod continues to innovate bringing new and exciting product to the market. In 2024, we plan to launch two new platforms offering significant improvement in technology and energy levels, along with the new technology for our minimal invasive treatment and for Morpheus 8. Finally, we remain committed to supporting all customers, distributors, employees, salespeople worldwide. Regarding the situation in Israel, we would like to reiterate that we have established a contingency plan with sufficient inventory globally, including in Israel, in the U.S., and in Europe. We continue to closely monitor the situation and are pleased to report that we are conducting business as usual. Now, I would like to turn the call over to Shaquille, our president in North America. Shaquille.
spk08: challenges in North America during the fourth quarter. Despite the headwinds of lower platform sales, we are reporting a 20% increase in consumable and service sales in Q4. Consumables and service revenue accounted for 16% of total Q4 revenues. As Moshe mentioned, we are pleased with the successful launches of Envision and Define. Both platforms have made significant progress in North America, getting traction amongst practices and patients. Considering the anticipated slower market demand this year, we've implemented changes within our sales team in North America. We've adjusted our infrastructure to position ourselves for accelerated growth when market conditions improve. Lastly, I'd like to thank our entire North American team for their continued hard work. I'll now hand over the call to Yair for a review of the financial results in more detail. Yair?
spk01: Thanks, Shaquille, and hello, everyone. Thank you for joining us. Starting with total revenue, Inmo generated $126.8 million in the fourth quarter of 2023, with a gross margin of 84% on a GAAP basis. For full year 2023, revenue totaled a record $492 million, an increase of 8% compared to 2022. Non-GAAP gross margins remained the highest in the industry and within our target range at 84% for both the fourth quarter and the full year of 2023. In Q4 and in the full year of 2023, our minimally invasive technology platforms accounted for 83% of total revenues. For the full year of 2023, consumable accounted for 16% of revenue, an increase from 13% in 2022. Moving to our international operations, fourth quarter sales outside the U.S. accounted for 46%, million or 36% of sales, a 9% increase compared to Q4 last year. For a full year of 2023, sales outside the US accounted for $184.2 million or 37% of sales, an 18% increase compared to 2022. InMode now operates in a total of 96 countries. Among our global contributors, Asia and Europe were the primary drivers fueling our growth rate. To support our operations and growth, we currently have a sales team of more than 256 direct reps and 82 distributors worldwide. GAAP operating expenses in the fourth quarter were $55.3 million and $215.7 million for the full year, a 5% and an 18% increase year over year, respectively. Sales and marketing expenses increased slightly to $49.5 million in the fourth quarter, compared to $47 million in the same period last year. Sales and marketing expenses for the full year of 2023 were $193 million, compared to $160.6 million for 2022. This increase is attributed to hiring more sales representatives, increasing our presence in the US and globally. Next, we look at share-based compensation, which decreased to $6.3 million in the fourth quarter of 2023 and $23.6 million in the full year of 2023. On an UNGA basis, operating expenses were $49.5 million in the quarter compared to a total of $46.1 million in the same quarter of 2022, representing a 7% increase. For 2023, non-GAAP operating expenses were $194.1 million compared to $160.4 million for 2022. GAAP operating margin for Q4 and for 2023 was 40%. Non-GAAP operating margins for the first quarter and for full year 2023 was 45%. compared to 50% and 49% for the fourth quarter of 2022 and full year 2022. GAAP diluted earnings per share for the fourth quarter was $0.64 compared to $0.44 per diluted share in Q4 of 2022 and $2.30 in 2023 compared to $1.89 in 2022. Non-GAAP diluted earnings per share for this quarter were $0.71 compared to $0.78 per diluted share in the first quarter of 2022, and $2.57 for 2023 compared to $2.42 for 2022. Once again, we ended the quarter with a strong balance sheet. As of December 31, 2023, the company had cash and cash equivalents, marketable securities and deposits, of $741.6 million. This quarter, Inmo generated $61.2 million from operating activities. Before I turn the call back to Moshe, I'd like to reiterate our guidance for 2024. Revenues between $495 million and $505 million. Non-GAAP gross margins between 83% and 85%. Non-GAAP income from operations between $217 million and $222 million. Non-GAAP earnings per dilute share between $2.53 and $2.57. I will now turn over the call back to Moshe. Thank you, Eir.
spk04: Thank you, Shaquille, operator. We're ready for Q&A, please.
spk10: Thank you. We will now begin the question and answer session. To ask a question, press star then one on your telephone keypad. If at any time your question has been addressed and you would like to withdraw your question, press star then two. Our first question today comes from Matt Mixick with Barclays. Please go ahead.
spk02: Hey, good morning. Thanks so much for taking the question and appreciate all the color. I wanted to maybe start off with just, you know, you could talk a little bit about what you're assuming in your current 2024 revenue guide and what kind of indication have you seen since December and early January to the trajectory of some of the major factors driving your current outlook for 2024?
spk04: Yeah, thank you for the question. Well, as you can see, we try to be, this is Moshe, we try to be very conservative. What happened in the last six months of 2023 in the macroeconomics, with the interest rate, with all the leasing problems that we encounter, it's continuing in Q1. It's not over yet. We don't know what will happen during the quarters of 2024. We read a lot of microeconomics studies and research, and we understand that it might get better in the second half of the year. And therefore, we have decided to be very conservative in the guidance We want to meet the guidance and not change it like we did in the last three months of 2023. What we see in December and January is continued the situation that exists in the last six months of 2023. We don't see any positive sign yet. in the terms and the obstacle that we saw in the last six months of 2023. And therefore, I mean, we will not change it until we will be absolutely sure that we can meet the guidance that we will give. I don't know if I answered your question, but that's the situation currently.
spk02: Yeah, no, that's helpful. And then secondly, you mentioned a couple of new platforms that you're launching this year. And, you know, if we are going to think about sort of the cadence for the year and the potential for things to sort of stabilize and start to improve, you know, what kind of factor, you know, might those play? Are those a back-end loaded effect and any additional color that you can share on those or any other actions you're able to take to sort of, offset some of the market dynamics you're describing. Thanks.
spk04: Okay. Basically, the two platforms that we will introduce in 2024 are second-generation technology for the minimal invasive, the RFAL, radiofrequency-assisted lipolysis, and the Morpheus 8 technology. These are basically the two main lines of the surgical part of our portfolio. We have developed a very unique and very, I would say, breakthrough technology for new minimal invasive to be able to do plastic surgery with one incision point with revolutionary hand pieces. And we have improved dramatically the performance of the Morpheus 8, which is, as everybody knows, one of the biggest brand names in the medical aesthetic. Both will come during the year when the final tuning of completing the R&D, the studies, and the regulation for them. We will introduce them to the market, not in Q1, but I would say more like end of Q2, beginning of Q3. and we believe that they will add to our revenue in the second half of the year. Of course, taking into consideration is that the situation, the macroeconomics and the situation in the last six months of 2024 will get better. As far as R&D, we're not slowing down. There's no slowdown in R&D and in-mode. We continue to develop business as usual, and we will continue to bring Two new platforms, two new indications, either in the aesthetic field or in the ophthalmology, women health with Empower. We have currently a pipeline of more than five major new platforms that we will bring to the market in the next few years. I mean, this is our bread and butter here in Israel, and we will continue to develop product and bring new stuff to the doctor and to the patient.
spk02: Very helpful. Thanks so much for the call.
spk10: Our next question is from Matt Taylor with Jefferies.
spk11: Hey, good morning. This is Mike Sarcona from Matt Taylor, and thank you for taking my question. Just to start, a follow-up on the guidance question. You talked about it from the macro perspective and some of the newer systems slated for 2024. But could you give any color on how you're thinking about contribution from Envision and the new defined system as you're thinking about 2024? Yes, yes.
spk04: First, I want to say something, Matt. You know, the macroanalyst of Jefferies was the only one who predicted that the economy will start to do slowdown in the third quarter of 2023. And he was absolutely right. I read his microeconomics study and research in the beginning of the year, and he was quite right. Regarding the Envision, the Envision was launched to the market in the middle of the second quarter in the United States. And we did well until the end of the year. We sold close to $30 million of this platform in two and a half quarter. So we're very, very encouraged, very, very encouraged. We see that the doctors and the user are happy with the results. and we believe that the momentum will continue in 2024. We also intend to bring these platforms to Europe. We introduced the platforms during the distributor meeting in Paris during the IMCA show, 10 days ago, close to 10 days or two weeks ago, and everybody was excited. We need to find the right distributors in Europe and train our salespeople in the subsidiaries that we have in Europe so they can handle and sell this platform. We intend to bring some doctors from the United States and Canada who are luminary for us in this particular category, ophthalmology, and bring them to do workshop in Europe so we can expedite the penetration process. But we're very encouraged with Envision. As regard to the defined... As you know, the first generation of the Define was the Evoke, which was very successful when it was introduced during the COVID time because it enabled the doctor to do social distancing treatment without being in the room. But two years after, we decided that we want to improve this platform and bring something a little bit more, I would say, more well-designed, especially with the mask that we put on the face. And we redesigned it and we added to the platforms Morpheus for the face so the doctor can complement the hand-free treatment with Morpheus face, which everybody knows that the results are great. We developed a combination treatment for both the hand-free and the Morpheus for these platforms. We introduced all this during the sales meeting of North America at the end of January and it was well accepted. We believe that right now we start to penetrate the market with the new protocol and the new device. I mean, it's hand-free. Hand-free, it's not the highest technology or the best seller of in-mode because hand-free was never best seller. It's a complementary product. But I believe that this complementary product is the best in the market as far as the hand-free category. Did I answer you, Matt?
spk11: You did, Moshe. Thank you very much. And then just, you know, one more question. You talked about, you know, baking in continuation of these macro headwinds into guidance. And you also mentioned you're in the process of establishing an approval program to expedite the credit process and maybe use some of Inmo's balance sheet. Can you just talk about kind of where you stand in that process in terms of when does that get off the ground and where you're going to focus that geographically? And if that starts to make some headway or it becomes effective, Can that drive upside to how you're thinking about 2024 sales or guidance right now?
spk01: Yes, this is Yair. Right now, I would say it is baked into guidance already. We have a couple of programs, one in the U.S. and one outside of the U.S., and we are looking to expand those. Basically, what we are doing is some sort of risk-sharing mechanism where we can take a very small portion of the risk from our leasing partners, and that would give them the incentives to what we call buy deeper and provide approval quicker. And I think that's definitely going to help us. But as we mentioned, there is also some slowdown in the demand in the underlying market. And again, this will not help with this portion. So overall, we already implemented a couple of programs, and we plan to expand those. However, this is already baked into the guidance, at least at the moment.
spk11: Okay, great. Thank you, Yair. You're welcome.
spk10: Our next question comes from Danielle Antofi with UBS.
spk06: Thank you so much. Good morning, everyone. Thanks for taking the question. Just, Yair and Moshe, on the underlying demand component here, just curious. I know, Moshe, you mentioned January so far. You haven't seen an improvement. I just want to confirm that that's true of the underlying demand as well. And I would just love to hear how you guys think about, you know, the sort of drivers of improving demand. Like what should we be looking for as it relates to the economy that could, you know, signal a potential uptick in improving demand? That's the first part of my question. And then the second part of the question, given that this is a capital business, how much of a lag is there once we see improving demand? Like, do people start purchasing equipment more readily three months later, six months later? Is it right away? Would just love some color on how to think about that. Thanks so much.
spk04: Okay. Well, I will reiterate what I said earlier. Right now, in the months of December and January, we do not see any change in the outlook of the macro situation. Whether or not we can see three months in advance, we don't know. And I don't think that anybody can answer that. We see some slowdown, not just in the equipment, but also we see some slowdown in the disposable sales because we believe that the slowdown affect the consumer as well. And less people are going right now to do minimally invasive procedures, which is a little bit more effective than non-invasive procedure these days. So the only thing that we can say is We expect some improvement in the situation or the macro look sometime in the second half of the year, not in the first half of the year. We see the same process happening in Europe right now, especially in the major countries. The inflation in the United States already went down a little bit, but in Europe not yet, and therefore the process there will take some more time. But we're basically, you know, evaluating the situation on a daily basis, almost on a daily basis. We see the behavior of the leasing company, and this is something that tells us exactly what's going on in the market. The leasing companies right now are very tough in the time that take them to to clear a transaction and also the interest rate that they are requiring and also the process and what kind of deals they expect to get and what kind of deal they don't want to get. So, I mean, we are monitoring it. So far, we don't see any sign of improvement, but hopefully we can start seeing it at the end of the second quarter.
spk06: Okay, that's helpful. And then you obviously have a very strong balance sheet. I appreciate the work you're doing to help take on risk as well. I assume that doesn't preclude you from continuing to search for potential M&A opportunities and you can say on where you guys stand there. I mean, it feels like the market might be ripe given the difficulties and you guys are in a strong position there. Thanks so much.
spk04: We're currently exploring a potential candidate for M&A, something that complements our portfolio. Not a laser company, by the way. It's a company that is also in the aesthetic field, but not similar to us. We're in the very early stage of evaluating the company. We don't have any bank. We're doing it ourselves. And we will know better sometime in the beginning of March whether we can go to the next practical step or not. That's all what we do right now. As I said before, the board of directors decided not to do buyback because of many reasons that I have explained before. but rather to keep the money to try to do M&A, more strategic M&A, which we believe will benefit the company much better than buying our own stock. So this is the situation. I mean, I have to say something. The macroeconomics did not help to the M&A, I would say, process. because, you know, all the sellers are waiting to see that the market will improve. Maybe they can get a better price for their assets. But that's the situation. We cannot help it. But as I said, we're exploring one opportunity right now.
spk06: Thank you so much. Great comment.
spk10: And our next question comes from Mike Mattson with Needham & Company.
spk05: Good morning. Thanks for taking my questions. Just wanted to start with kind of quarterly sequencing in 2024. So, you know, can you comment on whether or not you're comfortable with consensus in the first quarter? I think it's around 100 million or so.
spk04: We do not give guidance per quarter. We only give guidance per year. And we're updating the guidance, if we're updating the guidance, not always, at the end of each quarter, based on the performance of the quarter and what we see forward. And therefore, we will not comment on any guidance on the first quarter. But as you know, this industry has some seasonality. The fourth quarter is the strongest one. The third quarter is the slowest one because of the summer. The second quarter is also strong. And the first quarter is in between. But, you know, during the last few years, because of the COVID and because of some other reason, Decisionality did not exactly was the same as years ago, and therefore we don't know what will happen in 2024, and therefore guidance per quarter is not something that we provide.
spk05: Okay, I understand. And then, you know, your commentary around the patient demand, from what I remember, you know, I don't remember you talking about that as much or commenting on that. I seem to remember the focus, you know, in the prior couple quarters, you know, about the challenges you're facing being more kind of focused on the, you know, financing conditions, both interest rates and just tighter, slower financing in general. So more on kind of the physician side of things. Am I correct in interpreting this patient demand issue as being something kind of a newer headwind, or has that been there all along?
spk04: Well, you know, we have to distinguish between non-invasive treatment and minimally invasive treatment, okay? Non-invasive treatments like hair removal, pigmentation, all kinds of topical treatments, these treatments are a type of commodity. The cost is not very high. And I don't know, just because we're not exactly in this type of business, only 10% of our products are commodity type. I don't know how much this segment of the market was affected. The minimally invasive, mainly the minimally invasive radiofrequency-assisted dipolysis means doing some kind of plastic surgical procedure with one incision point with all the benefits that we have presented to the market. And the Morpheus 8, which is also surgical because it penetrates the skin up to 7 mm deep, are not cheap procedures. These procedures can range from, I don't know, $2,000 to $5,000, $6,000, $7,000 per procedure. Although it's done in the doctor clinic and although it's much cheaper than a full surgical procedure, but yet it's expensive relatively to non-invasive treatment. And we believe from the disposable part of our business, we see some slowdown. not the major slowdown. By the way, in the fourth quarter, we sold more disposable than on the third quarter. But the growth rate was not what we expected. Overall, in 2023, we sold almost 1 million disposable, compared to 730,000 in 2022. So we see increase as far as the total numbers of disposable and the total number of procedure. When I said we see some slowdown, I meant that we don't see the exact growth rate that we experienced in previous quarter and in previous year. But that will change, hopefully, when the market will, not the market, when the economy will prosper again and the cost of capital will go down. and people will continue to spend money on minimally invasive and plastic surgery as well. So that's the situation today, and this is the reason why we said we see some slowdown, but don't take it as a complete slowdown. It's a slowdown of the rate of growth. Am I explaining myself? Yeah, that makes sense. Thank you, Marci.
spk10: Our next question comes from Caitlin Cronin with Canaccord Genuity.
spk07: Hi, everyone. Thanks for taking the questions. I just want to focus on the U.S. for a moment. What was consumable growth in the U.S. in the Q4? Was it still, was it positive, was it negative? And then just regarding, you know, the guidance for this year, what does that really assume from the U.S. perspective, you know, continued deceleration or, you know, some growth?
spk04: Shaquille, would you answer that?
spk08: Yair, did you want to go over?
spk01: I can answer. The overall consumable growth did go around 15%, I would say. Obviously, it's lower than in the Q1 or Q2 or Q3. So as Moshe mentioned, we do see some slowdown in the growth rate. So it's in the high teens, but it's definitely lower. than the 40%, four zero percent that we saw in the first half of the year. So in the second half of the year, we start seeing some slowdown in the growth rate.
spk07: Got it, okay. And then when do you expect the dry eye indication in the US for InVision?
spk01: Say it again, dry eye indication.
spk04: Ah, okay. We are in the process of finalizing the protocol with the FDA under IDE submission. They asked a few questions. Hopefully, by the end of this month, we will answer them, and they will give us the promotion to do a pivotal study for 510 clearance, which will probably start sometime at the end of this quarter. We already selected the site to do the study according to the protocol that will be approved. It's a process, but in the meantime, although we do not claim that because we don't have the clearance yet from the FDA, but we have preliminary study that we did showing the combination of treatment that's helping dry eye. And doctors are testing it themselves, and the results, as far as what we hear from the market, is great.
spk07: Great, thank you.
spk10: Thank you. Our next question comes from Jeff Johnson with Baird.
spk03: Thank you. Good morning, guys. Moshe, understanding you don't give quarterly guidance, but I guess I'll try one more time on it. You know, you have said you don't expect an improvement in the first half that should come potentially in the second half. If we look back at 23, obviously the first half of 23 was still a very solid year, especially the first quarter, but both quarters were solid. And you've said there's no improvement in December and January off the kind of second half 23. So if I put all that kind of in the mix, It would seem to me that it's just a logical statement to say the first half of the year, probably down mid-up or single digits on a year-over-year basis from a revenue perspective. And then in the second half, the hope would be to get back to kind of mid-up or single-digit growth. If I balance it that way, just is there any flaw in my logic there, even though I know you don't give quarterly guidance?
spk01: So we do not give quarterly guidance, but you do see that the overall guidance is pretty much flat year over year. I would say that probably the sequence between the quarter, the allocations of this guidance between the quarters, will either be similar to 2023 or a little bit back-ended because of all the factors that Moshe mentioned.
spk04: Yeah, I mean, in 2023, the first two quarters, the growth compared to 2022 was 20% in the first quarter and the second quarter. If you ask me if we anticipate to have the same growth this year, absolutely not. The second half of 2023 was slow, and the first half of 2023 was with the right momentum. I believe in 2024 it will be the opposite, if I'm right. So the first two quarters will be the slowest one, and the second two quarters, I mean, will compensate.
spk03: All right. Yeah, we'll try again maybe offline. On the margin side, Moshe, if I look back, you know, pre-COVID, your operating margin, and I'm thinking more operating margin, obviously your gross margin has stayed very nicely consistent here for many years in that low to mid-80s. If I look at the operating margin, you know, pre-COVID, you were kind of right around that 40%. 40% range. Obviously, in the really strong 21, 22 years, you picked up to 50%. This past year, kind of 45, guiding to about 44 and 24. So I guess my question is, are we settling in at kind of that low to mid 40s, 44, 45? If I think out over the next three to five years, and if we exclude any kind of M&A, Do you think you can hold that low to mid 40s operating margin going forward and kind of grow earnings in line with revenue growth rates? Is that the way to think about kind of the algorithm to end mode over the next several years? Thank you.
spk04: Absolutely, yes. I mean, we're trying very hard, I mean, to keep the margin steady, gross margin and operating. Although, if you notice, we're spending more money for marketing. And this is because of many reasons. We believe that during a slowdown period, we have to invest more in marketing. I know that many people think differently than me, that in a crisis, you need to slow down in expenses. We don't think the same. We believe that when the market is slowing down or there is some crisis on the market, The opportunity for a company like us is to continue spending R&D, marketing, of course not G&A, you noticed that, and capture market share. Then although, I mean, the total market went down a little bit, but as far as market share, I believe the market share of InMod grow in the last six months of the year. And, you know, we're waiting to see what Qtero will report, but I'm sure you'll see that they did not grow this year. On the opposite, they went down. Other companies in this industry are mostly private companies, But here and there, we have some information. Alma, it's a public company, and as you notice, they went down in the second half of the year. They did not report the second half, but in the first half of the year, they went down. So for us, keeping the margin is important, but we will not discontinue to invest, not in marketing, not in R&D. We're not doing cost-cutting.
spk02: Thank you.
spk10: Thank you. And our final question today comes from Anthony Petrone with Muzo Financial Group.
spk09: Hello. Thank you for taking the question, fitting me in here. Maybe one on macro, just as we think about it geographically. How do the pressures in the US stack up relative to Europe and the APAC region? So that would be the first question. And when you think about financing options Moishe, do we think about, again, directly financing practices or will there also be an option for patient finance? And so thinking about an entity in the U.S. such as CareCredit that is providing financing for aesthetic procedures, can you also step into that market as well? Or again, is this just going to be capital financing? Thanks.
spk04: Well, good question. As far as territories, I think we mentioned it in the PR. ROW in 2023 grew by something like 18%. North America total was less than that. And the reason for that is not because we're not investing in North America or in the United States. The reason for that is that in 2023, we have established two new subsidiaries in Europe, one in Japan and one in Germany, Austria. And we continue to hire more people and more salespeople because the ROW market is important for us. And we believe the ROW will grow in 2024. We have a plan to continue to invest in addition to what we're investing in the United States. So our W in 2023 grow a little bit more than in the U.S., especially in platforms and new territories and new, I would say, regulatory clearances that we received for different countries. As far as financing customers, we've never been in this business. There are companies that are doing it. and they work directly with the doctors. We don't intend to go to finance customers because this is not the business that we're in. We will help to using our strong balance sheet, as Yair said and I said, to help the leasing company or share the risk with them to expedite the process of clearing transaction for the doctors, but as far as customers, we do not intend to get into this business.
spk10: Thank you. We've run out of time for questions today. This concludes our question and answer session. I would like to turn the conference back over to Moshe Mizrahi, Chairman and CEO, for any closing remarks.
spk04: Thank you, operator. Again, I would like to say that although 2023 was a challenging year for us, but we keep the momentum and we know how to turn slowdown and crisis into opportunities. And I believe we did that with all the new R&D, the new two subsidiaries that we built even in a tough time. adding more people all over the world in order to enlarge the sales force and the support force. I would like to thank all InMod employees worldwide for the hard work they gave in 2023. Especially, I would like to thank the Israeli team. As everybody knows, we're facing a very challenging time in Israel. And I think that the effort that people in Israel did since October, when the war started, to make sure that we will run the business as usual, although many of the team in the manufacturing and in the office went on reserve duty, everybody work overtime as much as needed. We rescheduled the manufacturing line to make sure that we will be able to supply everything to everybody within seven days and we did it very well and we continue to support and we continue to look for the cost, maintaining the margin. I hope 2024 will be a better year for us. Although 2023 was not, I don't want to say that it was It was a tough year, but not a bad year. So thank you all, and looking forward to see you at the end of the first quarter.
spk10: The conference has concluded. Thank you for attending today's presentation. You may disconnect.
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