InMode Ltd.
Q1 2021 Earnings Call Transcript

Published: 5 May 2021

[Operator:]

Good day, and welcome to the InMode Ltd. First Quarter 2021 Earnings Conference Call. . I would now like to turn the conference over to Miri Segal of MS-IR. Please go ahead.

[Miri Segal:]

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.

[Moshe Mizrahy:]

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 base -- 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 4 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 5 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.

[Shakil Lakhani:]

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.

[Yair Malca:]

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.

[Moshe Mizrahy:]

Thank you, everybody. Thank you, Yair. Thank you, Shakil. Thank you, Miri. I believe now we have to start with the Q&A.

[Operator:]

. Our first question today will come from Matt Taylor with UBS.

[Matt Taylor:]

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:]

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

[Shakil Lakhani:]

Sure, absolutely. Matt, so yes, 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:]

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:]

Got it. 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:]

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 5 distributors, mainly in Europe, 1 country in Africa, another 1 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 K -- in the U.K.

[Matt Taylor:]

Yes, that was great.

[Operator:]

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

[Kyle Rose:]

Congrats on a really strong quarter, everybody. I wanted to see if we could touch on 1 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:]

Shak, you can start.

[Shakil Lakhani:]

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:]

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:]

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:]

Okay. 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'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 "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:]

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

[Yair Malca:]

Sure. So we have 4,250 units installed. I would say about 20% of our accounts has more than 1 system. And most of them, I can comfortably say that there are core physicians.

[Operator:]

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

[Unidentified Analyst:]

This is Dane on for Jeff. My first one is kind of piggy backing 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:]

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 3 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:]

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 summertime. And in the summer time, 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 3 months, and they wanted to go to work instead of going vacationing on the summer time. 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.

[Unidentified Analyst:]

Yes. 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?

[Moshe Mizrahy:]

Okay. 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 1 in Brazil. China is becoming a very long process. I can tell you right now, in China, we have only 3 out of our 9 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, 3 out of the 9, 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 3 growth drivers that we have internationally right now that most of the big countries are already covered, its regulation, okay. 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 3 years later, basically. We saw here and there, but we started to invest money 3 years later. And right now, our OUS versus U.S. is 66% versus 33%. I believe that within 2 years, it will be %60, %40.

[Unidentified Analyst:]

Okay. 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:]

Yes. 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 4 countries because there was a big market there.

[Operator:]

. Our next question will come from Asaf Chandali, who's with Oppenheimer.

[Asaf Chandali:]

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 3 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:]

Okay. 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 2 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 2 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 that we will spend the money, but the acceptance will not be as high as we want.

[Asaf Chandali:]

Okay. 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:]

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

[Spero Theodorou:]

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

[Asaf Chandali:]

Yes.

[Spero Theodorou:]

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 2, 3 years ago, 2 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:]

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 1 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 Chandali:]

Okay. 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:]

Yes. So 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:]

Yes. 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 3 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 3 months. I think that was a very good and important decision in the United States made by Shakil and supported by myself. And it's -- and the payback, we see the payback post-COVID in a big way.

[Asaf Chandali:]

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

[Moshe Mizrahy:]

Appreciate that. Thank you.

[Operator:]

Our next question will come from Stephen Kay with Steve K Financial.

[Unidentified Analyst:]

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:]

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

[Spero Theodorou:]

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 by radio frequency. 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.

[Unidentified Analyst:]

Okay. 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 parent 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:]

Yes. 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?

[Unidentified 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:]

We hope so.

[Unidentified Company Representative:]

Well. I think it's important, just to add some color here. The holy grail of plastic surgery is the ability to tighten skid 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.

[Unidentified Analyst:]

And more credible, too, I would add. Okay.

[Operator:]

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

[Moshe Mizrahy:]

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:]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.