InMode Ltd. (INMD) Q4 2021 Earnings Call Transcript

InMode Ltd. (INMD 0.40%)
Q4 2021 Earnings Call
Feb 10, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the InMode Ltd. fourth quarter and full year 2021 earnings results conference call. [Operator instructions] I would now like to turn the conference over to Miri Segal from MS-IR. Please go ahead.

Miri Segal -- Investor Relations

Thank you, operator and everyone, for joining us today. Welcome to InMode's fourth quarter and full year 2021 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 the 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 Mizrahy, chairman and CEO.

Moshe, please go ahead.

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

Thank you, Miri, and thank you all for joining our fourth quarter and full year 2021 earnings call. With me today are Dr. Michael Kreindel, our co-founder and chief technology officer; Yair Malca, our CFO; Shakil Lakhani, our president in North America; Dr. Spero Theodorou, our chief medical officer; and, Rafael Lickerman, our VP of finance.

We will all be available for Q&A session after our prepared remarks. Once again, we have the pleasure of announcing a record quarter with revenue of $110.5 million and $357.6 million for the full year, an increase of 47% and 73% compared to the same period last year. Crossing the $100 million dollars quarterly, revenue marked a symbolic and meaningful achievement for our company. We continue to achieve strong, profitable growth.

Net income for the quarter on a GAAP basis was 52.7 million and 55.2 million on a non-GAAP basis. In the full year of 2021, net income reached 165 million on a GAAP basis and 176.3 million on a non-GAAP basis. As a result of our strategy to focus on selling more system globally, sales of capital equipment represent 89% of our total revenue in the fourth quarter. Sales from consumable and services increased significantly and reached record volume every quarter.

These sale accounted for 11% of total in the fourth quarter and in the full year of 2021. By launching new platforms and innovative modalities and growing our install base in the U.S. and globally, we expect consistent growth in consumable revenue will become a more significant part of our revenue mix. I would like to highlight the ongoing growth from our minimally invasive and ablative technologies, which now account for 73% of our revenue compared with 65% last year.

Hands-free devices generated 17% of our revenue and non-invasive RF and laser platforms were present the remaining 10%. The product line mix for the full year was 72% for minimally invasive, 20% for hands-free, and 8% for non-invasive RF and laser platforms. Looking in the international side of the business, fourth quarter sales outside the U.S. accounted for $36.3 million, a 69% increase compared to the same quarter last year.

Full year results reached $120.3 million, a 112% increase compared to 2020. These figures represent 34% of our total revenue of all 2021 and 33% of our total revenue for the fourth quarter. InMode currently operates in 71 countries, having added 17 countries more in 2021. We also expanded our existing operation in Italy by establishing a subsidiary there.

We see most of the growth coming from region where we are already involved, yet there was opportunity in the new territories. Furthermore, despite facing serious global supply chain obstacle in 2021, we successfully delivered every system within 10 days of receiving an order. We would not have done that without our hardworking and dedicated employees and partners. We value their contribution and thank them for it.

As for 2022, we're continuing to evaluate the impact of the omicron and the BA.2 COVID variant on our business that we do in every territory. We hope that current wave of COVID will pass and will be the last one, so that business across the world will return to normal soon. Now, I would like to turn the call over to Shakil, our president in North America. Shakil?

Shakil Lakhani -- President, North America

Thanks, Moshe and everyone, for joining us. InMode ended the fourth quarter and 2021 with another record performance and the successful launches of the EvolveX and EmpowerRF platforms. Sales from capital equipment were the main contributor to our quarterly revenues with 98.6 million in Q4 and 318.2 million for all of 2021 with an install base of 11,600 units. Additionally, as Moshe mentioned, as our install base grows and our systems are used more frequently, the number of disposables continues to reach new records as well.

The U.S. remains the leading market and was the biggest contributor to our topline, with the total fourth quarter sales amounting to 74.2 million compared to 53.7 million in the same quarter of 2020, a 38% increase. Despite new COVID variants causing another surge across North America, physician offices in the fourth quarter were the busiest they've been in all of 2021. Demand for minimally invasive technologies has been steadily increasing, supporting our growth in the U.S.

and globally. With the launch of EmpowerRF, we've seen significant interest by physicians in the women's health space. Currently, our focus is on North America. However, we will gradually expand to the rest of the world.

We plan to continue hiring new sales staff for the North American market, which will increase top-line growth as proven in previous years. We're very grateful to our team and their continued commitment. We would not be as successful as we are without each and every individual. I will now hand over the call to Yair for a review of the financial results in more detail.

Yair?

Yair Malca -- Chief Financial Officer

Thanks, Shakil, and good day, everyone. Now, I'd like to break down the numbers for the quarter and the year in greater detail. Total revenue in the fourth quarter of 2021 increased 47% year over year to $110.5 million with a gross margin of 85% on a GAAP basis. For full year 2021, revenue totaled $357.6 million, an increase of 73% compared to 2020.

Sales of minimally invasive and subdermal ablative technologies in the fourth quarter of 2021 grew 64% year over year. The geographical revenue mix in Q4 was 67% in the U.S. and 33% internationally, compared to 71% and 29% for the same quarter in 2020, respectively. International sales increased year over year by 69%.

Capital equipment in the fourth quarter accounted for 89% of our revenue, and consumable and service revenues represented the remaining 11%, identical to the ratio for the full year. GAAP operating expenses in the first quarter were $39.5 million and $136.5 million for the full year of 2021, a 35% and 33% increase year over year, respectively. Sales and marketing expenses increased 40% in Q4 compared to the fourth quarter of 2020 and 38% for the full year 2021 compared to last year. This is a result of the improvement in the COVID status in certain countries and regions around the world, especially in the U.S.

where we saw an increase in in-person marketing events. Share-based compensation decreased to $3.1 million in the fourth quarter of 2021, compared to $3.2 million in the fourth quarter of 2020 and to $12 million for all of 2021 from $12.8 million in all of 2020. On a non-GAAP basis, operating expenses totaled approximately $37.5 million in Q4 of 2021 compared to operating expenses of $26 million in the same quarter of 2020, an increase of 44%. Non-GAAP operating expenses for the full year of 2021 were $126.4 million compared to $90 million in the full year of 2020, a 40% increase.

GAAP operating margin was 49% in the fourth quarter and 47% for all of 2021 compared to 47% and 35% for the same periods in 2020. Non-GAAP operating margin was 51% in the fourth quarter and 50% for all of 2021 Compared to 51% and 42% for the same period in 2020. Our profitability in the quarter and during 2021 was remarkable. GAAP diluted earnings per share for Q4, 2021 was $0.61 compared to $0.43 per diluted share in the fourth quarter of 2020, and $1.92 for the full year of 2021 compared to $0.89 for the full year of 2020.

Non-GAAP diluted earnings per share for Q4 2021 were $0.64, compared to $0.47 per diluted share in the fourth quarter of 2020, and $2.05 for the full year of 2021 compared to $1.06 for the full year of 2020. We ended 2021 with a very strong balance sheet. As of December 31 2021, the company had cash and cash equivalents marketable securities and deposits of $415.9 million. On the cash flow front, the company generated $52.9 million from operating activities for the fourth quarter, and $174.9 million for all of 2021.

I will now turn over the call back to Moshe.

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

Thank you, everybody. I believe we now open the Q&A session. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question today comes from Matt Taylor with UBS. Please go ahead.

Matt Taylor -- UBS -- Analyst

Hi. Good morning. Thanks for taking the question. So, I wanted to start off, you mentioned omicron in the press release and in your comments.

And I guess I just wanted to get some thoughts from you about how disruptive that has been in Q1. Has that had any impact on your views for the rest of the year? And just any color on recent --

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

Yeah, this is Moshe. Hi, Matt. Well, I cannot answer what would be the effect on the full year. But one thing I can tell you that right now, there are some countries which are totally closed.

And we have some slowdown, for example, in China. I'm sure you know that they have adopted zero cases program. They don't allow people to travel even within their territory. They don't allow people to travel between cities.

So, our salespeople in China right now are very limited in the way they can do business. They try to overcome it. Also in Europe, there are countries under lockdown, like Netherlands and Austria, where hopefully soon, they will get out of it. I believe that sometime in February or maybe early March, business will go back to normal.

But we continue, as I said, to evaluate the situation, country by country, territory by territory. You know, we are lucky that it is not affecting the United State as of now. But, you know, with the omicron and the new variant that just came, which create another feel in some countries, we will see what will happen.

Matt Taylor -- UBS -- Analyst

OK. Thanks, Moshe. Just to clarify. I mean, you guys are now in dozens of countries.

You just mentioned a few. You know, what percentage of your revenue base in these -- that are actually having more severe lockdowns?

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

Well, China is a grower -- is one of our growth engine. And I believe that in the first quarter, we will do less than what we did on the fourth quarter, hopefully not much less. I would say that 10% of the countries where we sell will be some effect. Other than that, we need to wait and see what will happen in the next few weeks.

Matt Taylor -- UBS -- Analyst

OK, great. No, thanks for that. And then I just want to ask one about margins and supply chain. It seems like you've been doing a good job managing through these challenges, keeping your margins really high here.

Is there anything that investors should be concerned about in terms of disruption or increased costs? And how conservative are you being on your margin guidance for 2022?

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

Well, we managed very well the situation in 2021, as we go through the supply chain. I'm sure you know that, you know -- some we have -- we have established a red team in Israel. But every time we had a problem with component and with subassembly, we managed to overcome it because we have more than one suppliers per each component and each subassembly. Things are not getting better.

That's something that I can tell you right away. The supply chain is not improving. I don't say it will -- it's getting worse. But as we see now the beginning of 2022, we still see some difficulties and we foresee that during 2022, it will continue.

I can give you an example of logistic. A container formation to North America used to cost $3,500. Now the cost is $12,000. But we managed to overcome it by doing some kind of special shipping in the low cost.

Well, I believe we will overcome the supply chain like we did in 2021. And we deliver everything within a week or 10 days of every order. We do our best. But I know from some of our competitors and some of other companies in the medical field that they are giving now delivery time to customers of six or nine months.

We did not do that. But yeah, we're flexible. And I would say that hopefully it will not affect us.

Matt Taylor -- UBS -- Analyst

OK, maybe just ask one more, I'd like to ask one on the pipeline and more of a clinical, I mean, for Spero. We'd just left with thoughts on Empower, if you're still feeling like 20 million or 25 million, I think you've talked about, is a good number for '22? And maybe talk about some of the data that you're generating around it, and whether that could develop into, you know, more kind of medical applications from Empower in the future.

Spero Theodorou -- Chief Medical Officer

I'll let Moshe handle the first part of that question, or Shak.

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

Well, if the question is whether or not we will do what we anticipated for 2022, which is worldwide $20 million, I think, yes. I think we will do it. North America, and we intend to introduce the platforms in other parts or other territories as well. But I think, Spero, what Matt asked is about the clinical data.

Spero Theodorou -- Chief Medical Officer

Sure. Thank you, Matt. Great question. We're always very conservative when we're discussing female health and wellness because, obviously, the standards there as regard as opposed to aesthetics are a little different.

However, you know, we did do a soft launch and we're getting feedback continuously across the country from a number of urogynecologist and gynecologist. As you know urogynecologist are the group that is probably the most critical and the toughest group to penetrate, just as was in plastic surgery. And this is where we started. And -- because we believe we have a product that has a lot of staying power.

And we wanted them to buy in and adopt and help us and sort of guide us through this process. And I can tell you right now that the results have been very, very encouraging. They're extremely excited. We have ways to go, absolutely.

But the preliminary data that's coming back is pretty remarkable. Typically, we look at a number of treatments and some of the data that shows that we go one to three treatments typically for what this new device is doing, especially as it regards to vaginal -- intravaginal microneedling. And we want to see how far we can push things just with one treatment. And we saw that the results are very, very strong.

And we're very, very happy to see that our preliminary results are coming back in this fashion. Now, as you know, Matt. This is not -- this is a marathon. And we're always very conservative on the way we look at our data and the way we present it.

But I can tell you right now, the excitement is palpable. And I'm very, very happy to say that, and Shak can probably reiterate the same thing, that feedback and the excitement across the board is something that we're very, very happy to have. And I'll leave it at that for now. But because a lot of the things that we're doing in their midst of publication, as you know.

So, everything we do is peer-reviewed, everything we try to put out there is going to be published. And our adoption rate for KOLs is we always take the hard way first, as you know, and that pays us in dividends. So, urogynecologist, toughest group. We have some of the top KOL leaders in the country.

And we're just continuing doing studies with them and opening the doors with this group. And I can tell you right now, they're very excited. So, I can leave it at that.

Matt Taylor -- UBS -- Analyst

Thank you very much, guys.

Spero Theodorou -- Chief Medical Officer

Great.

Operator

The next question comes from Kyle Rose with Canaccord. Please go ahead.

Kyle Rose -- Canaccord Genuity -- Analyst

Great, thank you for taking the questions. Moshe, you talked -- and Yair, you talked a lot about the growth in the consumable side. And with the install base you have, expectations for that to continue to grow. Can you maybe just kind of help us flush that out a little bit more? I mean, does that mean you expect to see consumables and service revenues go from 11% to 12% next year? Does that mean -- could we see it, you know, move closer toward 15%? Just trying to really understand what that looks like now that you've got, you know, over 11,000 systems placed globally?

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

Well, I can tell you that -- hi, this is Moshe. I can tell you that in the last quarter, we sold 132,000 disposables compared to the third quarter where we sold only 94,000. So, this is growing. But as long as we continue to install or to enlarge our install base -- and by the way in the fourth quarter, we sold more than 1,300 system.

So, it went up from 10% to 11%. With the install base of 11,600 system, that's what we have right now on the market. We have something like I would say close to more than 500,000 disposable every year. And don't forget, not all the system that we sell need the disposable.

I would say that a little bit more than 50% or 55%, maybe 60%, are using disposable and go all the way to the subdermal set. As we grow, all of our new platforms are designed to have disposable. We will not design additional platforms without any disposables. So, in the future, once the install base will get, I would say, to 20,000 or 25,000, I assume that the disposable will grow to a neighborhood of I would say 14%, 15% of the total revenue.

But again, I would like to say it again, we're not a laser -- laser blade company. We do not sell the system for less or do not give the system for free, just to charge high price for disposable. We know that some companies in the medical aesthetic did it in the past, and they failed. And therefore, we charge for the system.

And we price the disposable in a reasonable price in order to encourage doctors to use more and more and to have more treatment. I think this is the right approach and the right philosophy. And this is basically our strategy.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. I appreciate the color there. And, I think we've already gotten, you know, some good insights on Empower. Maybe I'm wondering if we could get some commentary around the launch of EvolveX.

And just what you're seeing there, whether it's, you know, upgrades from existing customers or continued penetration from new customers there. Maybe just a commentary on that launch would be helpful.

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

Shakil, can you answer that?

Shakil Lakhani -- President, North America

Yeah, sure. Absolutely. So, we've actually seen some, you know, the combination of RF and EMS type of device. We're basically seeing a very -- it's not I know you had mentioned that if it was existing customers or not.

You know, there are some that are -- we're going to be doing some upgrades for some of our existing customers so they have the latest and greatest technology. But in terms of the newer business with the market, we have an extremely aggressive plan put in place for, as you know, a Spero even just mentioned with Empower and also Evolve, we always kind of slow boat things to make sure that things are ready to excel from an efficacy standpoint, a safety standpoint, and also from a result standpoint. So, now that we're very comfortable with that, although we use the word launches for both Empower and for EvolveX, now, we're going into the hard launch phase, which we feel pretty optimistic about, both from, you know, the business perspective for our customers, and also from our standpoint as well. So, we do see -- we've seen some excitement.

The results so far have been -- you know, Spero can elaborate a little more, but the results so far have been very impressive. Safety has been very impressive. So, overall, we're feeling pretty good about it.

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

Spero, do you want to talk a little bit?

Spero Theodorou -- Chief Medical Officer

Yeah. I mean, sure. Look, when you look at incontinence in these things and you look at the standard that's been up to now sort of -- if you could get a 50% improvement at three months, I think that benchmark is quite low. And it's just a function of what technology is out there currently, 50% improvement being like, you know, a woman that loses urine and does these things, that's what she can expect.

And I think that if we took that as a goal, and we went after that as a goal to hit that sort of 50% benchmark in three months, I don't think we would have been in business. You know, we're taking everything that we do from the aesthetics, and Mishka will also say the following that we will not go to market unless we have something that could produce 85%, 90% clinical results. Because simply put, the people will not pay cash for it. And we're in the cash business.

So, we're taking all that model, we're taking all that sort of thought process. And we're applying it to the female health and wellness sector so we need to -- and I can tell you right now, our preliminary results are blowing past that number, so past the 50% of three months, which is currently out there. So, we're very, very encouraged in that respect. But that is our standard.

We need to be able to say -- if someone's coming in for a clinical treatment that is not currently covered by insurance and is paying cash for it, that patient needs to be able to say, "OK, I have an 80% to 90% improvement." And I can tell you right now, that's the area we're looking at. And that's what we're getting right now as a feedback from our doctors, and we're looking at the data. And we're very excited that we're actually blowing past that benchmark. I'm very cautious always because these things are numbers.

But so far, that's the range that we're getting. It's really high. It's comparable to what we get in aesthetics, and excited to keep on moving this direction. So, we thank Moshe for the support he's giving us.

But that is our benchmark. And we want to redefine the way things are being addressed in this space in female health and wellness. And I think we're well off on the road to do that.

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

Great.

Kyle Rose -- Canaccord Genuity -- Analyst

Spero, can you talk a little bit about EvolveX?

Spero Theodorou -- Chief Medical Officer

Sure. So -- I mean, it's important to understand that when it comes to radio frequency and heating and muscle and all that sort of thing, we were the first to actually look at that space. And I can tell you this much. Shak and I were talking about this, and he was like, "Well, you know, how about we are preheating the muscle just as you work out." And there's a whole history of heating the muscle and rehabilitation for athletes and injured athletes.

So the ability to be able to preheat the muscle and then activate it with EMS is something that we started doing early on. And we did that because it's a function of our different hand pieces, right? We have RF hand piece, we have EMS hand piece. So taking that ability and bring it over to EvolveX and saying, "OK, now we have a hand piece that can do both at the same time is great." But you can also uncouple it. What does that mean? Well, everybody is different.

Everyone's requirement is different. So having the ability to change things around to be able to come and say, "Well, what do you want? You want your muscles bigger, or you want the fat gone?" Because there are people who say, "OK, I don't need the fat, all this fat." Or, "I don't want to lose volume in my but, for example. So all these things, the more -- any device or any platform that respects the individuality and the change in the body habitus of every patient, and you're able to change things around like that is great. Because everyone is sort of unique.

Transform and EvolveX does that. So, I could do RF with EMS, preheat the muscle and then activate it. I could do EMS on itself. I could do RF in itself.

So, that is sort of the way we look at things in plastic surgery when we do minimally invasive and invasive surgery. And we brought that over to noninvasive and that ability to change things around to couple/uncouple is sort of something that Mishka was great at delivering. And we find a big resonance in our customer base to be able to do that as well because it's mimicking real life in the way clinical results are being addressed.

Kyle Rose -- Canaccord Genuity -- Analyst

Thank you very much for taking the questions.

Spero Theodorou -- Chief Medical Officer

Not at all.

Operator

Next question comes from Michael Matson with Needham & Company. Please go ahead.

Mike Matson -- Needham and Company -- Analyst

Yeah, thanks. I wanted to ask about the EPS guidance? You know, by my math, it seems to -- I understand there's a tax rate headwind, but it does seem to imply that there's an operating margin decline in 2021 -- or sorry, from 2021, if my math is correct. So, is there any reason to expect that, or is it just being conservative on your part?

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

So, we always try to be conservative, as you know. In addition, we do plan to invest more in a sales and marketing and some more marketing activities, as well as clinical studies. And so, this year, we expect to have a slightly higher operating expenses. But overall, we're looking at 48% operating margin, it's still quite remarkable.

And add into that, around 2022 going to be the first year, as you know, that we start paying taxes after a 10-years break. And that would come out to be around 10%, we estimated, at this point, at least. And as I mentioned, we always tend to be conservative when we can.

Mike Matson -- Needham and Company -- Analyst

OK, got it. And then your cash balance continues to grow here. The stock has pulled back quite a bit, you know, arguably overvalued -- sorry, undervalued maybe when you look at it on PE basis. So would you be open to doing a share repurchase?

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

Well, Mike, we did. So far, we did close to 1.5 million shares that we bought back in the last, I would say, less than a year. We still have a way to go. The board of directors give us the permission to continue to buy back shares, and we will continue.

I'm not saying that we will spend $200 million for that, but we'll do it -- we'll do it on a daily basis. Yes, you're right. We have more than $400 million in cash, close to $420 million in cash. We are exploring some opportunities for M&A, but we did not find anything that will fit our portfolio yet.

One thing I can tell you, as we said before, we will not buy a laser company because laser is becoming a commodity in the medical aesthetic. We need to find something that will complement our portfolio, either in technology, marketing, sales network, something that will two plus two will equal five. But nowadays, it is very difficult to find something within a reasonable price. But yet, we have a very robust R&D pipeline, close to 15 project.

And we're releasing two projects every year. So, the organic growth will continue to be the most, I would say, growth engine for InMode, at least in the next two years.

Mike Matson -- Needham and Company -- Analyst

OK, got it. And then just looking at the different product categories, the hands-free, looks like it's been down year over year for two quarters in a row. I mean, I would assume that's mainly just due to the comps from COVID where that was kind of benefiting back in 2020. And conversely non-invasive has been strengthening recently.

They've got a similar issue in kind of the opposite direction, just easier comps. But I was just curious if there's anything else going on there aside from the comps in those two, you know, categories.

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

Well, the hands-free, when we came up with the hands-free to the market, we knew that this is not going to be more than 20% of our business. Our main category is minimally invasive and ablative, where we can take operations from the surgical, from the full surgery and the full anesthesia and bring it to the doctor office. This is exactly what the Empower is doing. And the Empower is minimally invasive because you basic penetrate the skin and you do some fractional RF as well.

And we will continue to develop products that will have on one hand will be more surgical than non-surgical. And on the other hand, we'll have some disposable as well. So, the hands-free is a complementary technology for us. It is not going to be 50% of our business.

The noninvasive RF and the laser, which I call it as a commodity category, we have a lot of competition for many companies. This is not the main category for us. And it is good because it's a very competitive market with very low gross margin, with overcapacity with, you know, price per unit, which is much lower than what we can charge without any IP protection. Laser are invented.

You know, 40-something years ago, there was no IP protection anymore. And therefore, we try to concentrate on where we have competitive advantage. And this is basically the surgical part of our business. And I believe that we're very happy with the breakdown of the category, we're more than 70% in the area where we can protect the technology and get nice prices for the system, 20% will be there hands-free.

And I hope it will continue. We're going to bring to the market second generation of the hands-free devices. And the laser and the regular RF, the noninvasive RF, will continue to be between 8% to 10% of our business. That's kind of breakdown we'll be continue in the future.

Mike Matson -- Needham and Company -- Analyst

OK, got it. Thank you.

Operator

Next question comes from Jeff Johnson with Baird. Please go ahead.

Jeff Johnson -- Robert W. Baird and Company -- Analyst

Thank you. Good morning, guys. Maybe just a couple clarifying or follow-up questions on things that have been discussed so far. So, Moshe, just your comments there on the hands-free, I mean, and trying to put that together with, I think, with Shak's comments on EvolveX.

As EvolveX hopefully ramps some this year, does hands-free continue to decline year over year for the next couple quarters until we kind of anniversary through those four really, really tough comps? And just how to think about the year-over-year performance of hands-free, just in the next couple few quarters.

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

No, we did not say that this will go down. The only thing that I said, it will remain something like between 18% to 20% of our total business. But as the business will grow, the hands-free also will grow. I mean, the Transform and EvolveX is the second generation of the Evolve.

And hopefully, in 2022, we will bring second generation for the Evolve -- for the face hands-free as well, just to maintain the competitive advantage. I mean, the fact that we came up with EMS and RF combined in the same modality give us a major competitive advantage vis-a-via all the other companies in the Hands-free currently. So, I don't think the hands-free will go down. It will continue to be a complementary technology for the doctors.

But to tell you that that will be more than 20% of our total business, I will say I don't think it will be. It will maintain the same level and the same, I would say, percentage as part of the total portfolio.

Jeff Johnson -- Robert W. Baird and Company -- Analyst

OK, that's helpful. Thank you. And just going back on Empower. You know, look, I understand you guys are a cash-paid business, it's a fantastic place to be from a consumer facing standpoint, things like that.

But if some of those urinary incontinence and urinary loss or urine loss numbers are as good as they are, and even if the path might be extended, you know, a couple few years it would take to get actual reimbursement, would there ever be a reason to go down the path of trying to get a reimbursement code? It would seem like it would open the market up so much more. And if the effect is so strong, it would seem like it would be good for the patient as well. So just how to think about reimbursement, you know, commercial pay, government pay versus cash pay for something like an Empower procedure and UI.

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

Let me try to answer and I will hand it out to Spero, maybe, who will elaborate more. We're not against reimbursement. We never said that. I mean, in the future, we will continue to develop some indication for women health, which might need reimbursement.

As of today, the Empower with the four modalities: the FormaV, the Morpheus8V, the VTone, and Aviva, we feel like private money is the best, I would say, business model for this platform. To tell you that in the future, we will not go into reimbursement indication, we might go. And we're developing some indication like that today.

Spero Theodorou -- Chief Medical Officer

Moshe, that's a great question, by the way. So, a lot of companies will spend a lot of time going down the reimbursement pathway and not having any revenue at all. And at one point -- hoping that at some point after you burn through all that cash. But at some point, you're able to go down that route.

And whether -- and getting breakthrough designation, as we all know, is very hard to do. But I can tell you this much that, absolutely, we want to change the way women's health is being done. And we have -- we're in a unique position to have -- to be -- to have cash based procedures that to support our research, to support indications, to support FDA, all those things that we can do this in parallel. That's a unique position to be in.

All this data that we're collecting everything that we're looking at the types of KOLs we're bringing aboard, the types of academic establishments that we're engaging, it's all building the foundation for them in the future. So, yes, we're not opposed on the contrary, wanted to be able to open the market. But we're in a unique position to be able to do these things with a cash-based foundation, which is quite different than most companies out there. It's sort of a pass or fail, as far as when they're doing these sorts of things.

Does that answer your question?

Jeff Johnson -- Robert W. Baird and Company -- Analyst

It does. Thank you. That's helpful.

Spero Theodorou -- Chief Medical Officer

OK.

Jeff Johnson -- Robert W. Baird and Company -- Analyst

And then last one, I promise, just on the competition side, Moshe, I mean, I totally agree with you. Docs do not like to obtain click fees or per-use fees. I think the model, as much as investors want to see, more recurring revenue. I totally get the model of charging a full, you know, market price for the system itself and lower price for the consumable.

That's surely what those doctors appreciate. But on the competitive side, you know, there is some noise out there from a company that has some good skin tightening data, but they are charging a very high consumable price as well. So one, you know, just kind of help us understand the competition in MI skin tightening right now, you know, with this newer competitor that has good skin tightening data but the consumables are high.

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

Well, I assume you talk about Thermage, which is with Solta. They just announced that they're going public, and they released their prospectus. And in their prospectus, yes, they have three quarters something like, I don't know, 75%, disposable and 25% platforms. But don't forget, Thermage is a 25-years-old company.

They're on the market for long time. We are on the market only five or six years, 20% of the time, of the 25 years that they are. So, they have a bigger install base, and they sell less platforms and they sell more consumable. I think that one day, we will sell more consumable.

And it will be much higher than 10%. But it's take time to build the install base worldwide. Once the install base will be much larger than what we have today. And I assume Thermage has much more than 10,000 systems worldwide installed, especially in Asia, where they're very strong, 70% of the business is in Asia.

I believe that we will also see some -- that our disposable proportion of the total revenue will be higher. But right now, we're still young company. And as a young company with only 11,000 system installed, I mean, the revenue coming from the disposable is growing. And it's growing.

It's went from 10% to 11%. But don't expect that to go to 20% over three quarters. It will -- it will go slowly, but it will go nicely. We see more and more treatments are being done.

We see more and more disposable are being bought from us. But in the same time, we see a lot of new platforms that we install in the market. And the new doctors need some time before they start doing 10 cases per week. So, this is a learning curve.

We are all wide on the learning curve. And one day, we will be not -- I don't want to say like Solta and like Thermage, but the disposable will be a bigger part of our revenue.

Jeff Johnson -- Robert W. Baird and Company -- Analyst

Thanks. And maybe we can take it offline in the follow-up call, Moshe. I was actually referring to a different company, the Renuvion helium procedure. But again, maybe in the interest of time, we can just talk offline.

Thank you.

Spero Theodorou -- Chief Medical Officer

We're happy to send you an article where we did a comparison study with them, so. It just got published last week.

Jeff Johnson -- Robert W. Baird and Company -- Analyst

Thanks, Spero.

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

Yeah, yeah, of course, of course. He's talking about J Plasma, I understand. OK.

Operator

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

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

Thank you, operator. Thank you. Thank you all for joining our fourth quarter 2021 and the full year 2021 earnings call. I want to take the opportunity to thank all of our people around the world in all of the 72 countries -- 71 countries that we operate in.

I want to thank the salespeople. I want to thank the engineering team for working very hard. Special thanks to the logistic and manufacturing and the supply chain people that managed to supply everything on time in a tough year like 2021. And I'm sure that they will continue to do that.

Thank you all. And see you soon in the next earnings call.

Operator

[Operator signoff]

Duration: 46 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

Spero Theodorou -- Chief Medical Officer

Kyle Rose -- Canaccord Genuity -- Analyst

Mike Matson -- Needham and Company -- Analyst

Jeff Johnson -- Robert W. Baird and Company -- Analyst

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