InMode is a global leader in the production and sale of minimally invasive aesthetic solutions. In english: they sell machines that make people look tighter. This is a highly competitive industry, yet none of their competitors have put a dent into their moat.

Let's go over why these three KPI's are so important.

InMode management brings up their goal of 83-85% gross margins on nearly every single conference call. They will not budge on these margins, and even though they've had supply chain issues, their latest quarter still was >83% GM. Throughout the time they have gone public, they have kept this number in their guidance range.

Before they went public they had 20-30% revenue growth and I assume their GM's were maintained around that same number. I don't have numerical proof, but this is an assumption given how much importance management puts on the number.

If this number begins falling, there is a good chance their moat is being eaten away. Right now, I can accept the decreased numbers due to supply chain issues and insane shipping costs. When things go back to normal, you will want to make sure this numbers stay ~85%.

The US is their cash cow. It still consists of 64% of revenues, but this is decreasing. YoY this is down from 65%. The international segment just grew 33% YoY. China, Korea and LATAM remain huge markets that are barely tapped yet.

I'd look for this number to continue growing. Their Ex-US growth rates are slightly higher than the US and have a vastly larger market size for their products. The bottleneck comes in the regulatory process of getting their machines approved for use. They keep getting more and more machines online and in use, so I don't see a reason this stops anytime soon.

Currently at 13%. 11% ~ 1 year ago. This isn't a high growth SaaS company with high levels of recurring revenue. Yet their install base keeps growing (~14,000). Management has said all machines will have consumables as part of their operation in the future.

So although we'll never see 80% recurring revenues, we can still have some margin of safety as their consumables segment goes up. They've said they'd love to get this into the high teens at some point in the future. I think this is doable, as a more mature company Solta Medical has 25% recurring revenues, but its 25 years older than InMode.

For any potential InMode buyers or holders, now you have a great idea of what will move this company. If you see steady GM's, increasing revenues Ex-US and increased consumable revenue, $INMD is likely increasing intrinsic value.

Let me know your thoughts on InMode and what KPI's you track in the comments below!