Good afternoon, everyone. Suraj Kalia, Senior Medical Device Analyst at Oppenheimer. We're pleased to have management from InMode with us this afternoon. CEO Moshe Mizrahy, who I've known for more than what is it now, Moshe. Almost 15+ years? Yeah, 17. You're keeping a better track of that. You have CFO, Yair Malca. It's a pleasure considering the circumstances. You've taken the time. We do appreciate it. Thank you. Yeah. Well, always. So- Thanks for letting me out. Fair enough. Gentlemen, Moshe, let me start out with the 800 lb gorilla in the room. You know, you guys, from a geography perspective, help us understand how things are on your side of the fence. Manufacturing, any dislocations, how should we think about business going on in the current environment, as best as you can say? Well, it's a challenging time, but unfortunately, I can say we get used to. It's not the first time. In the last almost three years, we are off and on in this kind of environment and situation, which is not easy to handle. I mean, first, we are located on the northern part of Israel, so we have the threat from Iran, and we also have the threat from the Lebanese border. We need to handle both, including our manufacturing facility, which is in the northern part of Israel. I would say that we're operating right now in, let's say, 60% capacity. Not all the people are coming to work because schools are closed and they have children, so they have to stay at home, and some of them are working from home, some of them are coming. We try to manage it. I cannot say business as usual because business is not usual. On the manufacturing facility, every time there is some kind of threat, we need to close and wait, so they're also working around 60% capacity. Shipping and logistics, it's quite a challenge right now because the airport is closed almost. They have some flights, but not many. DHL and FedEx are not flying to Israel now, so we need to manage between all kinds of other flights which cost five times as much. We ship mainly right now from sea through sea. The R&D working, you know, as much as we can. We have several issues with getting parts because logistics is inbound and outbound, and we have some problems with shipping to Israel. You know, the fact is that we had enough inventory to fit the market and also to fit the manufacturing. You know, the most important right now is to take care on the safety of the employees, which we do, and their families. Other than that's life here. Yeah. You know, we need to face it. Yep, that's the sad situation. Yep. Moshe, you mentioned about your manufacturing in the northern part of Israel, and are there any? How do you plan, if I could, just in terms of mitigating any disruptions whatsoever on the manufacturing side? Do you all have enough inventory? You mentioned, like, you know, you're trying to. Yes, we do. If you remember, we discussed that. If you look on the balance sheet, you see that we basically built some safety inventory on finished good and also on component and sub-assembly. Some people asking us why the inventory gets so high because of that, and that started two years ago in the previous war, and we use it right now. We shipped a lot of product to all the subsidiaries around the world, and now we're shipping between the subsidiaries just to fill the gap, because shipping from Israel is a challenge right now. It's not so easy. Yes. Listen, if the situation will be like that another six months, I don't know what we will do. We don't have inventory for until the end of the year. Hopefully, the President of the United States will decide that the game is over and he's tired, and will stop this crazy time. Fair point. Moshe, let me get the second key topic out of the way. You know, obviously, you'll have announced a share buyback. You know, there have been some back and forth with an activist. Help us understand the lay of the land, how you all are seeing it, and how should we think about the path forward. Well, as you know, we are allowed to do 10% buyback every calendar year without the need to pay dividend tax, and we're doing it. Already, up until now, we bought shares for $508 million. Now, the board approved another 6.4 million shares. Let's say it's about, I don't know, $85 million-$90 million. It will reach something like $600 million of buyback in the last 3.5 years, or maybe a little bit more. We will continue to do it. There's a big argument if this is the best way to return capital to the shareholders, but, you know, we have a board of directors that decide that that's the best way to return capital, and we're doing it. So far, we returned more than $600 million, and we will continue to do it. In the meantime, only 10%, we might consider more. We want to leave some money in order to use it in case we have an opportunity to do an M&A. We don't want to spend all the money, although we are positive cash flow, but not as positive as we used to be. Less. Yeah. Therefore, right now we have $550 million. If we execute all this program within a few months, I don't know how long it will take, we will be left with $450 million. Enough to do an acquisition if we need to do an acquisition, but not a small one, because we're not looking for a small one. We're looking for something in the neighborhood of between $500 million-$1 billion. That's the size that we can manage. We'll see. Right now we don't have any opportunity in the pipeline. Moshe, if I could move to the company-specific questions. Moshe, on the Q4 call, you mentioned you had talked about seeing early signs of stabilization in patient activity usage levels. How should we think about as the year progresses, 'cause a lot has changed since then, and are you seeing on a customer level, and by customer, I mean the patients who come in for skin tightening and whatever, what are your internal market intelligence suggesting about disposable income for end customers and how that is flowing upstream through your customers? I believe we reported in Q4 of last year that what we see is some kind of stabilization in the treatment area. I believe this quarter we see the same trend. We're not growing, but we're not coming down. That's on the disposable side. On the platform side, you know that the guidance was similar to the U.S. because we try to be conservative. Hopefully, we'll do more, but unfortunately, the interest rate on leasing is very high, and the leasing company, just because of the situation in Israel, do not want to take a big risk. Interest rate is still on the level of 14%-15% on leasing packages for 5 years. Interest rate in the U.S. went down three times last year, but altogether is 0.75%. It's not very high, and it did not affect the interest on leasing. Hopefully, in 2026, it will come to a better situation where interest rates will drop. I don't know what is the expectation. I believe it's more than 1.5%, but who knows what will happen, because the U.S. is also engaged in a war right now, and it's costing money. Right. Nobody know what will happen. We try to be conservative. If we need to do some changes on the guidance, we'll do it at the end of the quarter, like we do in every end of the quarter. Right now, we don't see the light at the end of the tunnel. I used to say it over and over, and I'm saying it again now. If we will be able to stabilize the company in 2026, I believe we can show some growth in 2027 because we have some good stuff coming out of the R&D pipeline. Got it. On that note, Moshe Mizrahy, one of the things that, you know, I'm curious about is your average age of your installed base, what should we think about the cadence of upgrades, you know, and are there any geographic areas, U.S., Europe, Asia, that you know we can see a more pronounced replacement cycle? Obviously, this war is creating noise, but once we are on the other end, how should we think about the cadence of replacements and upgrades? Well, we do upgrade all the time. When we came up with the Optimas Max, we did a lot of upgrade on Optimas, which we take back to sell it in other countries or to different customers. We do upgrade. We do a lot of upgrade. When we came up with the IgniteRF, we did a lot of upgrade of body type system. Currently we have about 30,000 systems worldwide. I would say that we are growing something in between around 5,000 systems every year, and we will continue to grow. I'm sure that there is some depreciation of 5,000 systems that go out of the market, not because they are not operating, but because when doctor buy a second system which is more advanced, he prefer to use the most advanced one with the highest technology, and the other platforms is idle. That's what we think. Sometimes they do upgrade, sometimes they keep it, because we don't pay them a lot on the upgrade. I believe that right now we're in some kind of, you know, some kind of parity between the systems that we bring to the market and the systems that is leaving the market, and this is the stabilization that I'm talking about because we don't see a major growth on the disposable. In between $200,000 ±10,000 per quarter, which is for several quarters keeping the same number, not going down. That's the situation. Right now, if we will come with new indications to the market and the doctors will need to buy a new system, that might enlarge the install base. Right now, the install base is stable in between 25,000-28,000 systems worldwide. Got it. Moshe, I know, yeah, I think so I read it somewhere, you guys were, you know, y'all have hired a new North American president, y'all were unifying U.S., Canada. Just, I guess what are you all doing differently right now that, you know, in terms of strategy, what should we expect, let's say, for the remainder of 2026? Obviously, once again, there's gonna be noise, but maybe let's, a little fast-forward to 2027. How do you see things changing, especially in North America? You are right. We made a major change in the structure and the organization in North America. Until last year, we used to run it like two different companies, Canada vice president, East Coast vice president, West Coast vice president, and a president that's running in between the three of them. This year we decided that we're doing it differently. We are united all North America into a one operation with one president and six territory manager and another territory manager in Canada. They're all reporting to him. We have vice president of sales and vice president of strategy in order to bring new product to the market. I believe we're in the early stage to say if this organization doesn't need any fine-tuning, but we are following it all the time. So far it seems successful. You know, during the last year and the beginning of this year, we have replaced some of our salespeople, something in the neighborhood of 30. We hired some new guys, which came with some experience. Some of them are in the early stage to say if they're successful. You know, after seven years of running marathon, I felt like it's a time to change, mainly because we start to see the stagnation. When you have a stagnation, you have to do something. That's the changes in the organization that we have implemented. Let's wait another quarter or two to see if this is the final one or if we have to do some fine-tuning as well. Moshe, what do you consider normalized sales rep productivity, let's say, in 2027? What would be the number, the number where you would say, you know, use that and say, "You know what? These changes that we have done in North America, they make sense now. Well, we're making changes not only in North America. We have established in 2025 two new companies to go direct, Argentina and Thailand. In addition to that, we have made changes in Europe. We divided Europe into subsidiaries and distributors with two different managers. In 2025, we made changes in Asia. We replaced the guy who responsible for all Asia. In 2025, basically I can say that we reorganized all the distribution network. We need to see how it will work, whether or not we need to do some fine-tuning, not only in North America. If you ask me what is my expectation for 2027, if the company will be stabilized in 2026, I believe that 2027 we will start seeing momentum. Maybe with the new product that we bring to the market in 2026 and the existing portfolio that we have, we hope to see some kind of a growth. That's, you know, yet to be seen. Yep. Yeah, a lot of macro level unknowns right now. Moshe, another company-specific attribute that I find interesting, that's happening is your contribution from non-invasive technologies, right? Whether it's Apex or Solaria, it keeps on increasing. I think so, if I remember correctly, you're now almost 20% contribution from this. You know, help us understand how do you see this? Is this like a dedicated strategy long term, or this just happened, you know, getting to 20% so quickly? No, no, it's a dedicated strategy. You know, when we started the company, we said that we try to concentrate on RF energy and not laser energy. Because RF energy can penetrate deeper, especially if you're doing a minimally invasive procedures when you penetrate the skin. But what we learned during the years that there are some laser technology that complement the technology that we bring to the market. For example, when you do a Morpheus8 on 7 mm deep, you go all the way 7 mm to the skin, and then you complement that with CO2 laser for the superficial, which is a combined treatment, you get a better result. We decided that, you know, now we are not a small company, and we need to enlarge the portfolio, and there is no reason why we cannot get to CO2 or to Pico, all kind of lasers that we're developing or Q-switched that we're developing right now. These are platforms that do not have disposable, although you need to change the hand piece every, let's say, 1 million shot. I mean, you need to change the laser. It's not exactly disposable, but there are some annuity income with that as well. Right now, you know, we are more oriented to combination treatment, like, you know, a full face Pico before or after Morpheus8, like, CO2 after, QuantumRF face, just to get rid of the fine line and the texture. Therefore, we're developing what we call the bread and butter of the industry, which is laser devices. Don't forget, we're coming from the laser industry. We know laser very well, and we have the team that can develop. Another thing I wanted to say, every laser that we develop has some competitive advantage over the existing lasers which are currently on the market. We try to improve that in a way that we will be a little bit better. Of course, it's difficult because those technology are sometimes 20 or 25 years old, and if you want to come up with something better, you have to be very creative. We manage to do it. Got it. Fair enough. Moshe, you know, your recent foray into dry eye, maybe you can talk about that, if, you know, the call point, any changes needed in the sales force. Is the incentive structure different for sales? 'Cause dry eye, you know, it's not only the devices, but it's also the pharma side of the equation, and I'm curious how you see that playing out. We're not in the pharma business on the dry eye business, which is the platforms that we call the Envision, well, we made two major development. The first one is that we built a dedicated team just for these platforms in North America, which are not aesthetic, they do only Envision. This is the first time that we distinguish between platforms and categories. The second thing, we are very close to get from the FDA, based on IDE submission, approval to start the study to do dry eye only with RF. They need to approve. We submitted the protocol. They had few questions, and I would say that last week on Thursday, we submitted all the answers, and hopefully, they will approve the study so we can start doing the study and maybe get the clearance sometime early 2027. On one hand, we're preparing the sales team. On the other hand, we're working on the indication, and hopefully it all will be merged sometime when we get the clearance. Then I believe that we have a breakthrough technology that will go to optometrists and ophthalmologists as well. Got it. Fair enough. Interesting. Moshe, one question for you, and then I'll pose the last question to Yair. Moshe, I wanna go back to your comment about M&A. I think, sir, I heard you say that you all are looking for this something in the size of $500 million-$1 billion. Even though you all don't have any targets right now, I think I'm paraphrasing, but I thought I heard you say that. Moshe, what are the areas right now that would complement where InMode is currently, whether on the product side, on the strategy side, on the customer side, geography side? How should we, on our side of the fence, think about what you guys are potentially aiming- If we will acquire something or a company, it need to be in a size of, you know, you said $500 million-$1 billion value. We cannot, as a company, handle five different small companies acquisition. It can be something that supplement our technologies on the medical aesthetic, like injectables. I'm sure you know that we try to buy Hugel, and we offer $1.3 billion, and they did not accept that. We try to buy a company called Prollenium in Canada, which are doing fillers, and we offer them $800 million, and they refuse. Today I'm sure that they regret to say the least. If we will find a good company that has nice portfolio of product in Asia, which are strong in China, for example, and in Korea, that's another opportunity because we're not strong. We're selling $50 million in Asia per year, and there's no reason why we cannot do $300 million or $400 million there. The market is growing in Asia. If we can do acquisition in Asia, you know, we can do that. Although we have four subsidiaries, and we are growing in Asia. We have Australia, India, Japan, and Thailand, and we would like to establish something in China right now to start step by step. We would like to build something in Korea right now. If an opportunity will present itself in Asia to buy a company with a nice distribution network in the Asian market, that's an opportunity. Fair enough. Yair, last question for you. We're a couple of minutes away from our time. You'll obviously have managed the P&L pretty well over the last few years, especially gross margins. There are so many things coming at you, but, you know, you guys have. Operationally, you'll have managed it very well. Yair, we know there is a noise, right? Macro level noise that you guys are just in a. How should we think about, let's say, for the rest of the year in 2027, as you know, come out of this, what should we think about from an operations perspective, the stress points, and then help us understand coming out gross margins for the company? I think gross margin has a lot to do with the product mix and the geographic mix of our revenue. Product mix, I start with that. The fact that, as Moshe mentioned, we want to offer more combination treatments to our physicians, that means that we start selling more laser-based device. Laser-based device traditionally has lower gross margins, so that's definitely impacting to some extent our gross margins. Again, we are doing that because we do want to become a one-stop shop for our customers. However, there is a price for that to pay on the gross margin. In addition, the tariffs here in the U.S. did not help at all. We are still trying to figure out what would be the long-term impact based on the final results or final decision on the tariffs. But that's also impacted the gross margins. Generally speaking, the fact that most of the headwinds that we experienced were in the U.S., or at least in the U.S., they were more severe than in other parts of the world, where in the U.S. we have the highest margins, whether it's gross margins or operating margins. This is where we do have the highest margins. I think with the fact that we did experience some slowdown in the U.S. market, that's also impacted our gross margin. On the positive note, I will end that with all the new structure that we put together in North America, and again, generally speaking, we believe that the demand for aesthetic procedures in the U.S. and globally, to that matter, is not gonna go away. It's gonna come back at some point. The U.S. would start grow, and then, only then we start to see some improvement in the margins. Got it. Fair enough. All fair points. Gentlemen, we're up on time. Moshe, always a pleasure to reconnect. I pray things settle down on you guys' end. I know it's a tough time, but if anyone can manage to get out of it intact from a company perspective, I think, sir, InMode is in good hands. We do appreciate your time this afternoon. Thank you so much, gentlemen. Thank you. Thank you very much. Thank you. Bye-bye. Okay, gentlemen.