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InMode Ltd. (INMD) Q1 2021 Earnings Call Transcript

By Motley Fool Transcribing - May 6, 2021 at 12:01AM

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INMD earnings call for the period ending March 31, 2021.

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InMode Ltd. (INMD -2.86%)
Q1 2021 Earnings Call
May 05, 2021, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the InMode Ltd. first-quarter 2021 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.

Miri Segal -- Investor Relations

Thank you, operator, and good day to everybody. I would like to welcome all of you to InMode's first-quarter 2021 financial results conference 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 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 these 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 Mizrahy, InMode's chairman of the board and CEO, will begin the call with the business update and pass it over to Shakil Lakhani, InMode's president of North America, to discuss our North American operations.

He will be followed by Yair Malca, InMode's CFO, with an overview of the financials. We will then open for the question-and-answer session. I'll now hand over the call to Mr. Moshe Mizrahy.

Moshe, please go ahead.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Thank you, Miri, and thanks to all of you for joining our first-quarter 2021 financial results conference call. With me on the call today are also Dr. Michael Kreindel, our co-founder and chief technology officer; Dr. Spero Theodorou, our chief medical officer; and Rafael Lickerman, our VP, finance.

All of us will be available for Q&A later. In the first quarter of 2021, InMode generated revenue of $65.5 million, a 62% increase over the first quarter of 2020. First-quarter record net income on a GAAP basis was $26.6 million and $29.3 million of net income on a non-GAAP basis. In Q1, 2021, we derived approximately 69% of our global revenue from InMode proprietary surgical technology platforms, engage in minimally invasive and subdermal ablative treatment.

24% derived from our hands-free platforms and 7% from our traditional laser and noninvasive RF platforms. We are happy to report that all segments continue to grow. The impressive growth in the first quarter was driven by demand for our minimally invasive proprietary platforms and the hands-free platforms. As the growing number of doctors are using our system.

In fact, during the past year, the number of consumables sold has reached a new record every quarter. Overall, we have more than doubled the numbers of consumables sold in the last four quarters. This is an indication of an ever-growing use of our system. We continue to see demand from new and repeat patients seeking to improve how they look and how they feel.

On a global scale, we are working to duplicate our success in the United States by expanding our sales capability and engaging with new distributors and countries to expand our international presence. Since the beginning of 2021, we have added five new distributors and 10 new countries to our international network. Our excellent first quarter include international revenue growth of 123% year over year. As our revenue outside the U.S.

grew from 24% in Q1, 2020 to 33% in Q1, 2021. Currently, our U.S. installed base totaled approximately 4,250 systems, which represent about 53% of our worldwide installed base of approximately 8,050 systems. While we expect continued growth in the U.S., we also anticipate even faster expansion in the OUS market.

As we have yet to fully penetrate many markets across Asia, Latin America, and Europe. Our North American sales team consists of 135 fully trained specialists and our global team totaled 156 individuals. As for our installed base, we expect these numbers to organically increase as we expand our innovative technology to other parts of the world and enter new verticals. We are constantly working to get more regulatory approval across the globe to expand our product offering in each country.

At any given time, we are engaged in at least 12 to 15 regulatory projects all the way from Brazil to China. We're also expanding our verticals beyond aesthetic. As our R&D pipeline include over a dozen projects for other medical areas such as gynecology, ophthalmology, ENT, urology, and several others. As part of our strategy, we expect to launch two new platforms this year in which our advanced bipolar RF technology will provide significant quality of life improvement.

One of these platforms is called Empower, which we expect to launch in the third quarter of 2021. Empower will be the gold standard in women health and wellness, and we are excited to announce that it has earned FDA approval for all of its applicators. Based on our successful performance in the first quarter of 2021 and the visibility we have into the rest of 2021, we are increasing our full-year 2021 revenue guidance range to be between $270 million to $280 million. And we intend to maintain a non-GAAP gross margin of 84% to 86%.

Lastly, we continue to support and augment our team worldwide, while complying with all local and regional health and safety guidelines for the welfare of our employees and customers. With that, I would like to turn the call over to Shakil, our president in North America. Shakil?

Shakil Lakhani -- President, North America

Thank you, Moshe, and hello, everyone. We delivered an impressive performance in the first quarter with sales reaching an all-time high in March as momentum for our minimally invasive and hands-free devices carried over into the new year. The strength of our capital equipment sales during what is typically a seasonally slow quarter was driven by underlying demand for our in office-based procedures. This was demonstrated by another consecutive quarter of record consumable sales in North America, which more than tripled year over year.

Doctors are using our systems with increased frequency, which is a great indication of the growing acceptance, endorsement, and implementation of our technology. In North America, we continued to build out our sales force and seamlessly integrated our new hires from 2020. Leveraging our online platform InMode University, our sales team was easily able to disseminate and expand knowledge of InMode's leading technology and stay connected to physicians across the country. As a result, the team successfully fulfilled the growing demand for our products as physicians and patients pursued effective, easy, and frequently used social distancing-friendly aesthetic procedures in in-office-based settings.

Additionally, our now fully staffed post-sales support team was a significant driver of our consumable sales growth this quarter. As mentioned, each quarter, the volume of consumable sales continues to grow, and we believe that this trend will continue. Looking further into 2021, we are excited to see a growing number of in-person events scheduled, yielding abundant opportunities for us to connect with the medical and aesthetic communities, as we bring our solutions to the market. Concurrently, with the upcoming launch of our women's health and wellness platform, we expect to introduce this technology to the women's health and wellness community later this year in order to build awareness and educate practitioners on the various medical applications available.

Furthermore, we will continue to recruit industry sales talent over the course of the year to fuel our ongoing growth. We are extremely proud of our North American team for all the hard work and dedication they put it on a daily basis. Their ability to execute and maintain a positive attitude during challenging times in the industry and our world has been extremely impressive, and we anticipate this trend to continue as we move forward. Now, let me hand over the call to Yair to review our financial results in detail.

Yair?

Yair Malca -- Chief Financial Officer

Thanks, Shakil. Good day, everyone. Total revenue in the first quarter of 2021 increased 62% year over year to $65.5 million, with a gross margin of 85% on a GAAP basis. The increase in revenues was primarily attributable to continued strong demand for our platforms in the beginning of the new year, highlighting significant growth in each of our technologies, minimally invasive and subdermal ablative treatments grew 75%, hands-free platform increased by 33%, and laser and noninvasive grew 68%.

The growth in each of these technologies exemplifies how we've learned to adjust and operate in a world with COVID-19 and maintained growth across the board. In addition, international sales have increased dramatically year over year, as we successfully replicate our U.S. growth strategy on a global level. Geographically, we saw the highest growth rate in Asia and Europe, which increased by 273% and 63% year over year, respectively.

Our capital equipment accounted for 88% of our revenue, while consumables and service revenue were 12%. GAAP operating expenses in the first quarter of 2021 totaled approximately $28.7 million, a 1.5% increase from the first quarter of 2020. Sales and marketing expenses increased 6.8% in the first quarter of 2021 compared to the first quarter of 2020. Stock-based compensation decreased to $2.7 million in the first quarter of 2021, compared to $6.1 million in the first quarter of 2020.

On a non-GAAP basis, operating expenses totaled approximately $26.2 million in the first quarter of 2021, compared to operating expenses of $22.3 million in the same quarter of 2020, an increase of 17.6%. GAAP operating margin was 41% in the first quarter of 2021, compared to 15% in the first quarter of 2020. Non-GAAP operating margin in the first quarter of 2021 was 45%, compared to 30% in the first quarter of 2020. This increase derived from the March 2020 interruption of the sales cycle by the COVID-19 outbreak and consequently marketing expenditure did not result in sales at the end of the first quarter of 2020.

Also in the first quarter of 2021, marketing activities in the United States such as event and conference participation were still minimal due to public health restrictions prompted by the COVID-19 pandemic. And as a result, expenses were lower. GAAP diluted earnings per share in the first quarter of 2021 was $0.63, compared to $0.15 per diluted share in the first quarter of 2020. Non-GAAP diluted earnings per share in the first quarter of 2021 was $0.69, compared to $0.30 per diluted share for the same quarter of 2020.

We've completed the first quarter with a strong balance sheet. As of March 31, 2021, the compound had cash and cash equivalents, marketable securities, and deposits of $293.4 million. On a cash flow front, the company generated $24.8 million from operating activities for the first quarter of 2021. Lastly, I would like to highlight that this quarter, we have implemented additional metrics, including a breakdown of our revenue streams by geography, category, and technology.

This data is available in tables that accompany our filings. We believe that publishing this information will provide better transparency and will enhance investors' understanding of our business. With that, I will turn the call back over to Moshe.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Thank you, everybody. Thank you, Yair. Thank you, Shakil. Thank you, Miri.

I believe now we have to start with the Q&A.

Questions & Answers:


Operator

We will now begin the question-and-answer session. [Operator instructions] Our first question today will come from Matt Taylor with UBS. Please go ahead.

Matt Taylor -- UBS -- Analyst

Hi, guys. Thanks for taking the question and congrats on a really nice outcome here in the quarter. So I appreciate you mentioned that March was a record month for the company. I was wondering if you could talk about any trends into the second quarter.

And maybe just offer some views on how long you expect this elevated demand that we've been seeing from kind of the Zoom boom or the pandemic lasting.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Shakil, maybe you'll start from North America, and then I will continue.

Shakil Lakhani -- President, North America

Sure, absolutely. Hey, how are you doing, Matt? So yeah, I mean, I think obviously, we expected some pent-up demand post-pandemic, but I think based on what we've been able to do and accomplish with our -- we don't think it's really -- there's obviously a lot of good things going on with post-pandemic demand and patients wanting to get things done. But I do think that sticking to the core fundamentals of the business that we've always kind of followed is just nicely kind of added in as we've added on different new talent and develop some of the people that we -- when we went on our hiring frenzy. So I think it's kind of paid dividends moving forward.

I do think that moving forward for the rest of the year, I think we do anticipate to see similar demand from patients. But again, I think it goes back to the fundamentals of InMode and how we've always kind of operated that we've just kind of put our heads down and kept doing what we do best. And I think that's why we've been able to continue to show such good growth.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Matt, this is Moshe. Well, Apple was a very strong month internationally and also worldwide. I mean, usually, as you know, the second quarter is better than the first quarter as far as seasonality on this business, and we expect the second quarter to be strong as well. Although we have some countries worldwide, like Canada, India, some of the European countries, and of course, Latin America, Brazil and Mexico are not in a good shape.

But I have to say that, unlike March, April of 2020, people learn how to live with the COVID, and they don't stop seeing patients, doctors do not stop seeing patients and do not stop working in the clinic. So maybe it's a little bit slower than in certain countries than what we expected. But as I said, April was a good month, and we believe that, for example, in Europe, now they start to vaccinate on a full scale. Things will get better in May and June and the second quarter will be a good one, as always.

Matt Taylor -- UBS -- Analyst

Got it. Thanks, Moshe. So I wanted to ask one about your sales force and the addition of these distributors. It seems like you continue to expand in North America.

I was wondering if you could give us a more specific update there? And can you talk about the expansion to these additional countries impressive OUS growth this quarter to the extent that you continue? And are you going to be adding any other countries this year?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Well, yes, we are adding countries since the beginning of 2021, as I said in my call, we added 10 new countries, relatively small countries because all the big countries are already covered. And all those small countries are being handled by five distributors, mainly in Europe, one country in Africa, another one country in the Middle East. We do not neglect them, although they are small countries, but we believe that if our presence will be covered -- now we are covering 63 countries -- 63 countries, including our subsidiary. In addition to that, as you know, we have bought out the partners in our joint venture company in China and also bid in the United -- in the U.K.

So now these two subsidiaries are fully owned by us. That will enable us to invest more in these two countries since we are controlling the companies and the distribution. And we would like to add in all of our subsidiaries, more salespeople. The only subsidiary, which is now a little bit stark is India.

Everybody knows what's going on in India. We have a small subsidiary there, six people, but unfortunately, the situation in India right now, it's at standstill. Hopefully, within a month or two, they will overcome it. We support them with any help that they need.

We do not fire them or not lay them off because we want to keep the operation, we see a big potential there. But in other countries, like in China and Korea, were growing fast. As far as establishing additional subsidiaries, yes, we have a plan for another one in Europe, and maybe another one in Asia. Not sure if it will happen in the second quarter or the third quarter, but this is something that we've planned to do.

Selling direct, right now most of our revenue coming from direct. I would say that if the international market cover $22 million out of the $65 million, $11 million came from direct operation and $11 million came from distributors. And we would like to increase the direct part as much as we can since when we sell direct, we recognize the full value, and we have a higher gross margin. That's the plan.

Did I answer your question?

Matt Taylor -- UBS -- Analyst

Yeah, that was great. Thanks a lot.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Thanks for the question. Thank you very much.

Operator

Our next question will come from Kyle Rose, who is with Canaccord Genuity. Please go ahead.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. Thank you for taking the question. Congrats on a really strong quarter, everybody. I wanted to see if we could touch on one big-picture question with respect to guidance.

And then just a follow-on for first on the Shak's comments. On the big picture, you've obviously got major products launching this year. Empower, sounds like that's moved out a little bit from the Q2 into the Q3. So maybe just help us understand what your guidance really contemplates from the contribution of new products in 2021 and how that mix shift of the technologies between MIS to hands-free will shift to include the new Empower platform.

And then, Shak, you talked about really the post-sales support team helping drive consumables. Maybe just help us understand what that team looks like and kind of the contribution you can expect that focus to have moving forward on the consumable side of things?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Shak, you can start.

Shakil Lakhani -- President, North America

Yes. So I'll start with the post-sale, and then I'll hand it off to Moshe to handle some of the guidance-related questions. So yes, so we actually have two directors of acquiring operations who've done a phenomenal job putting together their teams. It's something that we couldn't roll out just all at once.

It had to be something that was done nice and gradual. So as per my comments, our teams are fully now built out. We look to expand those as demand keeps on rising as consumable business keeps going. But I think that was a major driver for what we've been able to accomplish for them and their teams.

And it's -- again, the main thing that we're trying to do for our physicians and for our owners of our equipment is to basically provide them with the ability to try and pay off their units as soon as possible and generate the maximum amount of return on investment in the shortest period of time. We try not to promise anything crazy, but it is very important for us to try to do that. And in turn, just like anything else in life, if you do well on your first investment, you're going to reinvest. And we do have several physicians that are reinvesting with us because they're very happy with their first purchase and the support that they were given.

Moshe, did you want to handle the guidance question for Kyle, please?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Yes. The new guidance that we gave, $270 million to $280 million, are mainly based on the existing portfolio. Even if we will launch the Empower in the third quarter, which we will, sometime at the end of the third quarter for the fourth quarter, we do not expect to sell many. Because when you launch a product, you do a soft lounge and gradually, you increase the numbers of users, you want to make sure that everybody is well thinned.

You want to make sure that everybody know the protocols. We want to publish studies, continue to publish studies on the product. We want to introduce the product to luminary doctors. It's a process.

It's not a consumer product. It's not file and forget. It's not something that you can put on the Internet, and then you get, I don't know, many millions of dollars of revenue. Every product that we launched in the U.S.

first and then in Canada and then internationally, it's a gradual process, which we do it very carefully, to make sure that there was enough training centers, to make sure that there is enough doctors that can help other doctors to do the first treatment. So I don't anticipate a lot of revenue coming from the Empower in the fourth quarter if we will launch it in the third quarter. But in 2022, hopefully, it will become one of our important platforms in our portfolio.

Shakil Lakhani -- President, North America

I mean, Kyle, sorry, just to add a little color on that, adding to what Moshe said. When it comes to Empower, we know that this market is a huge market. However, like everything we do at in mode, we like to appropriate -- we like to approach it very calculated. And we don't want to rush anything.

So we're going to make sure that patients are going to be able to get exactly what they expect. Physicians are going to be able to get the patients that they are looking to treat and help change their lives. And it's a gigantic segment that has had a lot of eye off the ball for the last few years now. So I think we're -- like Moshe said, for 2022, I think we look at it as a very large potential.

For this year, with the current products that we have, the minimally invasive, the hands-free, and some of our traditional aesthetic. We have our hands full right now. So as we scale out and build out our sales force for the women's health and wellness, we do see some really good future upside, but I think we're going to be able to capitalize on.

Kyle Rose -- Canaccord Genuity -- Analyst

OK. Thank you. That's very helpful. And then just my last question was, I appreciate the updates as far as system placements, obviously making good progress there.

Can you maybe just give us an update on the U.S. installed base, you know, you've seen the really strong demand for consumables and procedures, both in your business, but then the broader aesthetics market, how much of those -- of that 4,050 account base in the U.S. is own multiple machines? How much of that is like core versus, you know, "noncore physicians?" Just trying to really understand that, particularly as you launch these products that are going to expand into additional medical specialties.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Sure. Yair, did you want to chime in on that?

Yair Malca -- Chief Financial Officer

Sure. So we have 4,250 units installed. I would say about 20% of our accounts has more than one system. And most of them, I can comfortably say that there are core physicians.

Kyle Rose -- Canaccord Genuity -- Analyst

OK. Great. Thank you for taking the questions today.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question will come from Jeff Johnson with R.W. Baird. Please go ahead.

Unknown speaker -- Robert W. Baird -- Analyst

Good morning, guys. This is Dane on for Jeff. My first one is kind of piggybacking off Matt earlier. Just wondering if you can provide a little bit more insight kind of on the gaining of revenue over the remainder of this year.

I mean, even if we kind of assume fairly stable sequential revenue in 2Q versus 1Q, which I know Moshe mentioned 2Q is seasonally higher, that even implies kind of year-over-year revenue growth of 5% to 10% in the back half of this year if my math is right. So obviously, we know 3Q recovered very quick in 4Q last year saw strong growth as well. But is that 5% to 10% growth kind of the way to think about the second half for now? Or is that a little bit of conservatism applied in there?

Yair Malca -- Chief Financial Officer

The 5% to 10% -- the 5% to 10% is not exactly the right way to do this because if you think about it in the second half of 2020, there was a lot of pent-up demand following the three months of the ban of electric procedures that we had in the U.S. between March, mid-March to June -- on the way to June. So a lot of the businesses was supposed to happen during this quarter was pushed out to the second half of the year. So I'm not sure if you look at the second half of the year, it's the white way to analyze our business, it will be better to look at the full-year picture.

It will give you a better indication of what the growth would look like. Does that make sense?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Let me -- this is Moshe. Let me add to it. We have seasonality in our business. Of course, the fourth quarter is the strongest one, but the third quarter is a summer time.

And in the summertime, certain territories are totally closed, like Europe and some others. And therefore, I said the second quarter is better than the first one, but the third quarter was slower. 2020 was not a typical year at all. So we cannot determine the seasonality based on 2020.

2020, the third quarter was strong because nobody -- everybody was locked down for three months, and they wanted to go to work instead of going vacationing on the summertime. And therefore, I hope that 2021, hopefully, once the COVID will disappear, will start to be more typical year. What I said is that the second quarter is better than the first one. This is typically what happened in the aesthetic market.

Now the 270 to 280, this is what we see right now based on visibility that we have. And just to remind everybody that we don't have backlog. It's not a backlog company. We don't have the backlog for the second quarter.

Everything that we sell in the second quarter come on the second quarter. It's not something that we have a backlog, and we start the quarter with that amount of U.S. dollars as far as revenue. I hope that it's more clarifying it now.

Unknown speaker -- Robert W. Baird -- Analyst

Yeah. Thank you. That was very helpful. And then my second question was just kind of be from a geographic perspective, following up there.

Just wondering if you can provide any details on markets that you think could be probably the most meaningful growth drivers for this year and then maybe even into next? Thanks.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

OK. That's a good question. Well, one of the most important driver on the international market is the regulation per country. I'm sure you know that in the United States, there's one regulatory body, which is the FDA, but internationally, we're dealing in any given time with 27 different regulatory bodies, all the way from ANVISA in Brazil to CFDA in China.

Now, we submit approval for all of our platforms, but it takes some time. ANVISA, it's the longest one in Brazil. China is becoming a very long process. I can tell you right now, in China, we have only three out of our nine platforms already been approved.

And we're working on the other six, how long it will take, we don't know. In ANVISA, the same, three out of the nine, and we continue to submit studies and application and all kind of tests that they require. Once this is -- once the regulation is clear per country then you open additional market. It's not just territory.

Even if you have the territory, it depends how big is your portfolio in this country. So the three growth drivers that we have internationally right now that most of the big countries are already covered, its regulation, OK? And second, establishing a very, what we need is a base of luminary doctors that will use the system and training centers for other doctors, that take time, exactly the same process like we did in the United States. What I said in my talk is we believe that the international market, percentage-wise will grow faster than the U.S. market.

Because in the U.S. market, we started in 2015. Once we got the first FDA on the international market, we started three years later, basically. We saw here and there, but we started to invest money three years later.

And right now, our OUS versus U.S. is 66% versus 33%. I believe that within two years, it will be %60, %40.

Unknown speaker -- Robert W. Baird -- Analyst

OK. Thanks. Just wondering, are there any specific countries that maybe you haven't touched on earlier before that we could see kind of additional growth coming from?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Yeah. There's four countries which we believe, in 2021, will deliver well for us: China, Korea, Brazil, and hopefully, Germany. These are slow countries in 2020. And I hope that in 2021, they will deliver better.

We invest heavily on those four countries because there was a big market there.

Unknown speaker -- Robert W. Baird -- Analyst

Thank you again.

Operator

[Operator instructions] Our next question will come from Asaf Barel Chandali, who's with Oppenheimer. Please go ahead.

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

Hey, guys, thanks for taking my questions. And again, congratulations on the exceptional performance. So I guess, kind of echoing other people's statements, we appreciate the higher level of disclosure on the segment reporting. Staying here on international, we know it takes some time on some of the approval in other regions, and you made it very clear that Brazil and China are particularly challenging, but can three remains a very small portion of the international business, what kind of opportunities you guys see over the long-term in introducing some of the hands-free products?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

OK. Thank you. Thank you for the question. Yes, you're right.

The hand-free devices are not yet penetrated on the international market. And the reason for that is that in 2020, the international market all the way from South America, Asia, and Europe were hit heavily by the corona. And we have decided internally, not to launch this product that the end free product in this country and spend the marketing money that we wanted because we felt like it's not -- the timing is not good. Right now, we're starting to do it again.

And we take it into the countries. The Evoke and Evolve are not yet approved in most of the countries in Europe, Asia, and also in South America, we're in the process. For example, in China and Brazil, our two main markets, it's not yet approved, but it's in the process. In other countries, it's already been approved.

In Europe, only part of it is approved, and we're still waiting for the approval of the others. But once we get the approval country by country if the opportunity will present itself as far as the status of the COVID. We will launch the platforms, these two platforms, Evoke and Evolve. And hopefully, it will be the same success like in the United States.

But the delay was made because of the situation of the COVID. And because of the decision we made, not to spend the marketing money that we had budgeted for the Evoke and Evolve on the international market because we felt like we will spend the money, but the acceptance will not be as high as we want.

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

OK. Great. That's very clear. It's helpful.

And this is a pretty broad question. But I imagine it will become kind of increasing importance as we move forward. The company has demonstrated very clearly that it will kind of develop technology for the medical aesthetics market and deliver very strong sales performance on it. How should we be thinking about your approach to the non-aesthetics market, whether it be in terms of the target kind of use cases? How you've gone about selecting them, maybe if there are any kind of critical differences in your sales approach? And just any color there on how you guys would be looking to execute it.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Spero, I think this question is for you. Can you answer that?

Spero Theodorou -- Chief Medical Officer

Sure. My understanding is -- so your question is how we're approaching the nonaesthetic market. Is that your question?

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

Yes.

Spero Theodorou -- Chief Medical Officer

So I want to bring up a reminder that a large part of InMode's sales force came from Cynosure. Shak had actually commented on that in a little more detail and give some color. That's important because both Shak and I worked with Cyno back in day and with the launch of Mona Lisa at that time, a large part of the sales force is really comfortable and used to actually sign that product in women's health. So Shak, you could certainly talk about that part.

But as far as the KOLs and the network we've put together to go into that, it's very different than aesthetics. You need some real heavy-duty research because the aspects of what we're trying to accomplish are not aesthetic or more functional like SQI and stuff like that. So about two, three years ago, two years ago, when all the issues happened with the FDA, Moshe and the whole team doubled down on their studies instead of running for the gates. And that's what you're going to see coming out this year is the benefit of doing that.

So investing in the studies, investing in the research, and accomplishing things, we believe, we feel very strongly about moving forward is going to be a combination of that. So a very strong KOL network that's already in place. And I say top-notch and an experienced sales force has already done women's health and wellness in the past. Shak, do you might want to give a little color on that?

Shakil Lakhani -- President, North America

Yes. So very good question. I think the main thing to understand is that we've. We've always -- although our consumable growth has been impressive and it's continuing, and we will continue to do that.

We've always been a capital equipment company. And as long as we can provide physicians with treatments that patients are seeking, whether it's aesthetics or it's medical that our cash pay payments or treatment, sorry. We know how to position that side of the business and how to basically help physicians generate additional revenue and income. So when you look at what's going on with reimbursements and managed care medicine, there hasn't been one year for, I don't know, how many years where reimbursements have it stayed the same or gone down.

Meanwhile, people have their overhead and expenses, staying the same or, if not right now, increasing. And so I think as long as that still stays in place and things don't change on that end, which I don't foresee any of that happening. We're always going to have a place to be able to get in, help some of the titans generate additional revenue to their businesses and to their practices. And at the same time helping patients, achieve certain things that they want to do.

So whether it's in the GYN market or the ophthalmology market or wherever we're going. We have a very good understanding of how to distribute this equipment. That's not an issue. It's a plug-and-play with everything else that we do right now, but I think like Spero said, a lot of it and like Moshe said earlier, a lot of this is going to come down to building some awareness in terms of procedures and what type of treatment options that you can get out there.

And we also have an expertise in that. So frankly, it's different. I'm not going to say they're identical, it's different, but it is a plug and play. And it's not our first time doing it because we have experience with that from previous products at previous companies.

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

OK. Great. That's very helpful. Last question on my end.

The company has done really an exceptional job selling kind of executing, performing throughout COVID. I'll just once again point out kind of some of the other medical aesthetics comps maybe struggling on a relative basis. What is the company doing in terms of online sales presence that maybe can carry through post-COVID?

Shakil Lakhani -- President, North America

Yeah. So you know, I discussed mode university. Obviously, it's a platform that we have, which not only helps train our people internally, but it also provides physicians with updated techniques and tips and things that they can actually apply to their practices. So as much as I would prefer to stay away from talking about other comps because I think we kind of stand out in our own way.

I think from our perspective, the way we look at this is it's actually back to business-as-usual pre-COVID in terms of our approach and how we're actually targeting and marketing to doctors. So we've made some changes to obviously cater to the new world, as you might call it. But at the same time, I do think it's very important to note that we are now seeing business and activity getting back to exactly or very similar to what it was beforehand. So the online stuff we've obviously been able to do, like I said, with InMode university and getting that out there, and we invested in that platform, of course, and it's paid off very well.

But you now have things, and I mentioned in my script, but in-person meetings and events, those things are starting to happen almost like back to business is regular, right? Different things that we're doing. And just keeping people safe when we do have crowds of people. We've taken all these kind of precautions in terms of how we actually implement it into the business and our business world. So I think that's helped out, and we'll see it continue that way.

And again, we'll continue to assimilate as things change.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Yeah. And another reason why we're successful now are post-COVID, is the way we treated all of our employees worldwide. Some of our competitors without mentioning name, when the crisis started, decided to save money by firing their salespeople, R&D people, and others because they said they don't know what will happen. We decided differently.

We decided that we want to keep everybody as a family, even if it will cost us money. And even if for three months, we did not sell. But we continue to work, as Shakil said, on training on the InMode University. We continue to develop products.

We continue to train the sales team and the doctors on a virtual way. And we waited to see what will happen. And once the crisis on June last year, start to show some endpoint, it was like a bullet train. Everybody on to the market and capture market share, while the other competitors or what you call the comp start to hire people and we train them and lose another three months.

I think that was a very good and important decision in the United States made by Shakil and supported by myself. And the payback, we see the payback post-COVID in a big way.

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

OK. Great. Yeah. Really, a credit to you guys, you know, really, the whole team for pulling through a very difficult period with that.

Yeah. Thank you very much for the call. Thanks, guys.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Appreciate that. Thank you.

Operator

Our next question will come from Stephen Kay with Steve Kay Financial. Please go ahead.

Unknown speaker -- Robert W. Baird -- Analyst

Thank you very much. I'm one of your users in the United States called the Rose Clinic. And it looks like they're -- they've got some kind of a dual approach in helping some of their clients. There's a product called Renuvion skin tightening.

That they're using with Morpheus8, do you have a product like the Renuvion that could compete with them so that you were capturing that both processes that are being offered to their clients or patients?

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Yes, we actually go to that. I'll let Dr. Theodorou comment on that a little further here.

Spero Theodorou -- Chief Medical Officer

So later frequency will be specialized in, of course, and our body type platform is our Star product, right, which we started off with and what our patents Protect, which is bipolar radiofrequency. The biggest differentiator here is you're able to control the temperature, acquire it and control it and take you that energy and causing skin tightening and contraction for tightening. So of course, there are other companies that are trying to do the same and following that line. But unfortunately, when you don't have an endpoint and a temperature, scientific temperature that you know that you're getting time, you're basically a lower the place.

So there's definitely -- when you're in the front and you're leading and you're putting a lot of effort into research, they're going to be companies that are trying to come after us to try and duplicate that sort of thing. So very different product from ours in our respect. So not necessarily what I would recommend for my patients because I'm also a practicing plastic surgeon. So to answer your question certainly, that company, interesting product, but they have a long way to go to catch up with what 10 years of research we put in place to accomplish what we needed to do.

Unknown speaker -- Robert W. Baird -- Analyst

OK. Thank you. One follow-up if I may. The pharmaceutical companies are advertising heavily and have been doing so for some years directly to the public with the apparent result -- or hoped for result being that those patients will then go to their doctors and say, do you have such and such a drug that you can -- I saw advertised on TV.

It looks like it's a great drug. Is that type of marketing to drive sales to your physicians been considered?

Shakil Lakhani -- President, North America

Yeah. Great question, Steve. So we're never -- if you look at our balance sheet, we're never going to be that company that's going to spend more than what we made, right? That's just -- it's the fundamental DNA of our company. However, we do -- if you look at some of the celebrity endorsers that we've had in the past, Paula Abdul, some of the other organic ways of now using social media to really grow the business and doing that for our physicians is definitely a big part of what I mentioned earlier with the post-sale support team.

They're all over that. So we definitely do take an approach. Again, we're not going to be the company to go out and spend more than what we can make throwing all kinds of money and advertisements and this and that. But I do think that we've done a -- we've spent a lot of time actually looking into those types of things and how we can effectively get direct-to-consumer in the smartest and quickest ways possible.

So I think we've looked at some of our options that we have, and we've started to utilize them. And if you look at what we talked about through our consumable growth, the reason it's doubling and tripling over time is simply because we are starting to apply some of these things in there. Does that answer your question?

Unknown speaker -- Robert W. Baird -- Analyst

Yes, it does. With 10 million Americans turning 65 every day, it seems like your market has got a long ways to go.

Shakil Lakhani -- President, North America

We hope so.

Unknown speaker -- Robert W. Baird -- Analyst

Well, you know, I think it's important -- just to add some color here. The holy grail of plastic surgery is the ability to tighten skin without causing scars. And there's no one that's gone farther along that path. We're not there yet, but we're further along than anyone else.

So that's something that -- that's a take-home message as to where we're heading and what we've done so far, and that's why it's resonating so well with physicians. And especially to your marketing question, we allow the physicians -- when you have a good product and the patients like it and the getting results, they push it out on their own social media on their own channels. And that's a lot more effective because, first, it's true. And second, it saves us money in many ways because we allow our customers to speak for us.

So going down the road of a huge budget for consumer marketing, certainly, companies have done successfully. But I think that getting an organic base and foundation of what we're doing, so adoption is actually quite effective. So we're quite content with that.

And more credible, too, I would add. OK. Thank you.

Shakil Lakhani -- President, North America

Very welcome. Thank you.

Operator

Ladies and gentlemen, this will conclude our question-and-answer session. I'd like to turn the conference back over to Moshe Mizrahy, CEO, for any closing remarks.

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Thanks again. Thank you all for joining our first-quarter earnings call. I want to thank to all of our employees worldwide. They help us to achieve what we have -- what we're achieving quarter over quarter.

I also want to thank our investors for the trust they're giving us. I hope that we will continue to please them and to deliver what they expect. I want to take my management team with me on the line today who participate in the call and helped to facilitate that.I want to see all of you again in August, in the second-quarter earnings call, which probably will be on the first week of August. Thank you for everything.

Now, I will turn it to the operator.

Operator

[Operator signoff]

Duration: 54 minutes

Call participants:

Miri Segal -- Investor Relations

Moshe Mizrahy -- Chairman of the Board and Chief Executive Officer

Shakil Lakhani -- President, North America

Yair Malca -- Chief Financial Officer

Matt Taylor -- UBS -- Analyst

Kyle Rose -- Canaccord Genuity -- Analyst

Unknown speaker -- Robert W. Baird -- Analyst

Asaf Barel Chandali -- Oppenheimer & Co. -- Analyst

Spero Theodorou -- Chief Medical Officer

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