Inmode [INMD] Conference call transcript for 2023 q1
2023-05-02 11:16:02
Fiscal: 2023 q1
Operator: Good day, and welcome to the InMode First Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Miri Segal, CEO of MS-IR. Please go ahead.
Miri Segal: Thank you, operator and to everyone for joining us today. Welcome to InMode’s first quarter 2023 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 our 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: Thank you, Miri. And to everyone for joining us. With me today are Dr. Michael Kreindel, our Co-Founder and Chief Technology Officer; Yair Malca, our Chief Financial Officer; Shakil Lakhani, our President in North America; Dr. Spero Theodorou, our Chief Medical Officer; and Rafael Lickerman, our VP of Finance. Following our prepared remarks, we will all be available to answer your question. We reported revenue of $106.1 in the first quarter, an increase of 23.5%, compared to the first quarter of 2022. Sales from consumable and service continued to grow in the first quarter and Shakil will go over that in more detail shortly. I would like to take the moment to recognize that 15-years ago we started this company with a small investment of just $3.5 million and an idea that with bipolar RF technology, our expertise and knowledge of the aesthetic industry, we can disrupt the industry and help close the treatment gap. We have been accomplishing this by providing patient remarkable and lasting results. We are working closely with leading plastic surgeon that have endorsed our safe FDA approved technology. Today, we can say that InMode is the leading global provider of innovative minimal invasive aesthetic and wellness solution operating in 92 countries with seven patented technology across 10 product family and an installed base of over 8,400 platforms in the United States and over 18,300 system globally. We are proud to recognize this 15-years anniversary as we announced a strong start to the year, we would not reach this solid consistent results without the dedication and hard work of our employees. And I would like to take the opportunity to thank them for their commitment and care. Last year, we successfully introduced the Envision platforms in Canada. Envision has an innovative technology targeted for ophthalmology and optometrist market. And we expect to launch these platforms in the U.S. in the coming months. As we mentioned last quarter, the next generation Evoke, our hands free platform for face treatment is planned to launch in the second-half of this year and we look forward to updating you all on this progress. Now, I would like to turn the call over to Shakil, our President in North America. Shakil, please.
Shakil Lakhani: Thanks, Moshe and everyone for joining us. We are happy to report a strong first quarter with significant growth coming from consumable sales. Revenue from consumables and service grew nearly 43% year-over-year. This is a strong indication that the platforms we sell are being used more frequently signifying continued positive demand and momentum. Our Morpheus A platform continues to gain traction and benefit from our brand ambassadors, strong market awareness and positive patient results. As Moshe mentioned, we'll continue our strategy to expand into new areas of wellness such as ophthalmology, optometry markets with our Envision platform. We've begun to hire focused sales reps for Envision and we gradually expect to establish a dedicated sales team for this market and for women's health and wellness market in the future. Lastly, I'd like to thank our entire North American team for their continued hard work. I'll now hand over the call to Yair for a review of the financial results in more detail. Yair?
Yair Malca: Thanks, Shakil, and hello everyone. Thank you for joining us. Starting with total revenue, InMode generated $106.1 million in the first quarter of 2023, representing a 23.5% year-over-year increase with a gross margin of 83% on a GAAP basis. Traditionally, based on past seasonality, our first quarter is the slowest quarter in the year. We expect 2023 to behave in a similar way to last year. First quarter sales outside of the U.S. accounted for $43.8 million or 41% of sales, compared to 38% in Q1 of last year. We see growth coming from different regions with sales in Europe hit a new record in Q1. And we are planning to establish at least one additional subsidiary in Europe or Asia later this year. To support our operations and growth, InMode now operates in total of over 90 countries, with a sales team of more than 236 direct reps and over 81 distributors worldwide. Capital equipment in the first quarter represented 81% of total revenue, while consumer business service revenues accounted for the remaining 19%. GAAP operating expenses in the first quarter were $46.8 million, a 30% increase year-over-year. Sales and marketing expenses increased to $41.7 million in the first quarter, compared to $30.8 million in the same period last year. This increase is attributed to the addition of new sales representatives, as well as investment in direct-to-consumer advertising campaigns and hosting in-person events to support the company's gross projections. Share-based compensation accounted for $4.2 million in the first quarter of 2023, an increase compared to $3.1 million in the first quarter of 2022. On a non-GAAP basis, operating expenses were $43 million in the quarter, compared to a total of $33.4 million in the same quarter of 2022, representing a 29% increase. GAAP operating margin for Q1 was 39%, compared to an operating margin of 41% in the first quarter of 2022. Non-GAAP operating margin for the first quarter of 2023 was 43%, a slight decrease from 44% in the first quarter of 2022. GAAP diluted earnings per share for the first quarter were $0.47, compared to $0.36 per diluted share in Q1 of 2022. Non-GAAP diluted earnings per share for this quarter were $0.52, compared to $0.40 per diluted share in the first quarter of 2022. Once again, we ended the quarter with a strong balance sheet. As of March 31, 2023, the company had cash and cash equivalents, marketable securities and deposits of $574.5 million. This quarter, excluding a one-time tax payment of $15 million, InMode generated $36.1 million from operating activities. Before I turn the call back to Moshe to take your questions, I'd like to reiterate our guidance for 2023. Revenues between $525 million and $530 million, non-GAAP gross margin between 83% to 85%. Non-GAAP income from operations between $236 million and $238 million. Non-GAAP earnings per diluted share between $2.58 and $2.60. I will now turn over the call back to Moshe.
Moshe Mizrahy: Thank you, Yair. Thank you, Shakil. Operator, we're ready for Q&A.
Operator: Thank you. We will now begin the question-and-answer session. Our first question comes from Michael Sarcone with Jefferies. Please go ahead.
Michael Sarcone: Thanks and good morning. This is Mike on for Matt this morning. So just the first question on guidance. You had a really strong start to the year, nearly 24% growth in the first quarter, and that was on the toughest comp of the year. Can you just talk about how you think about guidance and some of the key assumptions there? I know you got Envision launching in the U.S. soon and the next-gen Evoke in 2H. So again, just some key assumptions around guide. And is it fair to characterize the guide as conservative?
Moshe Mizrahy: Yes. I would say, as always we claim, we try to be very conservative with guidance. Although we did a little bit better than the consensus on Q1 2023, we decided to keep the guidance until the end of Q2 to see how Q2 will be. As you know there is some seasonality in this business. The first quarter is the slowest one, second quarter must be much stronger than the first quarter. If we will successfully end the second quarter with the expectation that -- and above the consensus of the estimate of the analysts, then we will consider increasing the guidance. But on the first quarter, I mean, we did $106 million, compared with $102 million, $101 million consensus estimate. We felt like it will be better and more conservative to stay with this guidance and wait another quarter to see what will be the situation in the U.S. and in the rest of the world, as far as slowdown, recession, increase interest rate, and then we will feel much better to increase the guidance some time at the end of Q2.
Michael Sarcone: Okay. Thanks, Moshe, that makes sense. And then, are you seeing any changes in your customers’ ability to finance the system?
Moshe Mizrahy: No, we don't. We don't. Although it's taking a little bit longer, especially in the U.S. and Shakil will elaborate on that. But in Europe, for example, we signed an agreement with the bank that is helping us to finance customers in Europe, something that we didn't have in the last, I would say, three years, which will make it easier for customers in Europe to finance the system. In the United States, Shakil, do you want to say few words on that?
Shakil Lakhani: Yes, sure. So like Moshe said, we're not seeing too much on that end. We are seeing it taking a little bit longer than we're used to, just kind of looking at risks so on and so forth. But right now, we haven't seen that as a prohibitive factor.
Michael Sarcone: Got it. And when you say a little bit longer, that's just kind of the selling cycle?
Shakil Lakhani: It's just -- yes, well, not necessarily a selling cycle, they're just requiring different documents from the buyer just to again ensure that -- basically, it's like -- I wouldn't say, it's to the degree of what happened back in 2008-2009, not even close to that, but they're just banks and just being a little pickier with who they’ve given their money to. So they just want to ensure that they get the appropriate information. So, previously you'd be able to get x amount of dollars proved with just a credit application, now they might need to provide some further documentation along with it. So it might add 12 to 24 hours to the process.
Michael Sarcone: Got it. Thank you. And I'll just sneak one more in there. Interesting disclosure in the press release just about the impact of popular weight loss drugs. It was going to be one of my questions, whether you're seeing an influx of loose skin patients. Is there any offset there like when you factor that in, the weight loss drugs, do you expect to see lower demand for liposuction and kind of what's the net impact on demand for InMode procedures that you're expecting?
Moshe Mizrahy: Spero, could you please answer that?
Spero Theodorou: Sure. That's a great question. Look, it's -- on the contrary, the weight loss is actually helps us because, first of all, we're the skin tightening company, right? So when the patients have loose skin, they've already lost the weight, they come to us to be able to tie in that. So what it actually does, it increases the number of patients you can do with liposuction, right? So they still have some fat of pockets or fat areas, that areas that need removed. But if you have loose skin, it kind of limits them in the aesthetic result. So adding a tightening procedure in addition to the liposuction capabilities we have increases the size of that market. What the drugs have done is increased awareness. I mean, they use this marketing thing like Ozempic space, right? That's a cool name, but at the end of day, it's just weight loss and we deal with that and our plastic surgeons and doctors across the board are always dealing with loose skin. I'll remind you that the holy grail of plastic surgery is the ability to tighten skin without scars. And even though a lot of these patients might end up needing excision procedure perhaps, if they are depending on the amount of weight loss, we are perfectly positioned to take advantage of this and our clinics have seen a large influx of patients since this has taken over like wildfire. So net, net benefit. Did that answer your question?
Michael Sarcone: It does. Very helpful, thank you.
Spero Theodorou: You're welcome.
Operator: Our next question comes from Matt Miksic with Barclays. Please go ahead.
Unidentified Analyst: Hi, this (ph) on for Matt. Thanks for taking our question. I guess, just to clarify on the guide, is it fair to say that, you don't see any specific concerns related to the rest of the year and it is just general conservatism?
Moshe Mizrahy: I didn't understand the question. Do you ask, if we see any concern in the market?
Unidentified Analyst: Yes, just based on the answer you’ve provided earlier, I just wanted to clarify, is it fair to say that we don't see any specific concerns or -- and it's just general conservatism into your current guidance?
Moshe Mizrahy: Well, I believe we said it very clear, we don't see any signs of slowdown, any sign of recession on the market that we operate, maybe now the market is different. But just because our technology today is in the very embryonic stage. I mean, we have less than 20,000 system installed and the potential is few hundred. If you take into account, only doctors who are doing medical aesthetic using laser and others, all of them in the future will need bipolar RF because with laser they do only topical treatment and if they do -- if they want to do body and face reshaping, they will need us. So we don't see any slowdown. On the contrary, I have to say that we sell more disposable this quarter than in the fourth quarter of 2022, and usually the fourth quarter is the strongest one. So we don't see any slowdown. The reason why we did not change the guidance is because we wanted to wait another quarter before we change. We just gave the guidance a quarter ago, and if everything will look according to our expectation on the second quarter, then the guidance will be raised.
Unidentified Analyst: Understood, that’s helpful. And then I guess, shifting gears to Empower, just curious on how has that been tracking and if 20% growth in 2023 is still the right way to think about this or do you expect a bit more acceleration in this year.
Moshe Mizrahy: Well, we didn't give any guidance on Empower this quarter, but I can tell you that we sold in the first quarter, we sold more than the first quarter of 2022.
Unidentified Analyst: Okay, great. Thank you.
Operator: Your next question comes from Danielle Antalffy with UBS. Please go ahead.
Danielle Antalffy: Hey, good morning, everyone. Thanks so much for taking the question. Just a question, Moshe, on capital allocation. You guys have talked in the past about how to think about potential M&A here. Any updates there on how you're thinking about capital allocation and potential for a deal to happen sometime this year?
Moshe Mizrahy: Well, that's the $64,000 question, I would say. Yes, we are exploring opportunities, more than one. And some of them are -- we even spend money to check to due diligence, et cetera. One thing I want to say, very difficult to find a company that will be with the same -- with the same profitability structure of InMode. So any company that we will acquire should not dilute the shareholders. It should be accretive and not dilutive. And it's not easy. It's not easy because of the profitability structure of InMode. So we're very careful in the analysis that we're doing on companies that we would like or that we're exploring a possibility to do M&A. I cannot announce anything special today. The only thing I can say that we spend on the time, money, management attention and we're looking for acquisition.
Danielle Antalffy: Okay, got it. That's helpful. And then just a question on indication expansion. So Empower is obviously doing well, beyond that, as we think about stress, urinary incontinence, et cetera, any updates or next steps we should be looking for -- to measure InMode against making progress there? Thanks so much.
Moshe Mizrahy: InMode against what? Against whom? I don't think we have any...
Danielle Antalffy: No, no, no, just whether like anything, any milestones we should be looking for to measure progress against getting those indications we're launching in those markets.
Moshe Mizrahy: I believe we said a quarter ago that we'll be happy and expect to do 20% more on Empower than last year, we're not changing this guidance today.
Danielle Antalffy: Okay. Thanks.
Operator: Your next question comes from Dane Reinhardt with Baird. Please go ahead.
Dane Reinhardt: Hey, good morning, guys. Thanks for the questions. Just wondering if you can maybe give any more color, kind of, on the U.S. placements just being up 10%. I think that was a little bit lighter than we and what some other investors have kind of been expecting? So I know seasonality definitely plays a factor, is there anything else there impacting? And I know you have both Evoke and Envision launching, kind of, later this year. What might we be able to kind of expect for those two contributes to U.S. placements later this year?
Moshe Mizrahy: Shakil, could you please elaborate on that?
Shakil Lakhani: Sure. Yes, as far as placements go, when it comes down to revenue, we still had a pretty significant amount of growth. And if you're looking at placements again, I'm not sure what model you guys have in place, but we don't see too many economic factors affecting things right now or changing the growth path that we're on. Of course, we anticipate further growth, as I mentioned in the script in building out Envision and a sales force dedicated to that. We do have plans to, obviously, see some pretty substantial growth. Can't give you a number, really, we're kind of feeling out the market and getting things ready, but we're extremely excited about it and we think there is going to be a nice little runway for us.
Dane Reinhardt: Okay. Thank you.
Shakil Lakhani: I think it was mainly seasonality. It was mainly due to seasonality, Q1 tends to be the slowest in the year and especially we see this effect in the U.S. So, that's something that I would like to add.
Moshe Mizrahy: It's not something new, it's been like that in the medical aesthetic category or industry or whatever, so I don't think that InMode can change that.
Spero Theodorou: I think -- Spero, here. I think what's important to outline is that there is a discrepancy between the macro picture and what people are saying, what we're seeing on the ground for demand for patients and doctors. We don't see any slowdown, the demand is very high. Most of the physicians are booked, still booked solidly two, three months in advance. So if there is something that people are concerned about, we're not seeing it and that's sort of what we're seeing from all the offices we talked to. So, if that helps you at all.
Dane Reinhardt: Okay, yes. Thank you. And then on the Morpheus8 new burst and 3D modes, I know we've been kind of seeing some more competition here in micro needling just over the past year or two with some other competitive launches. So can you just maybe give us a little bit more color on how you believe these new, kind of, Morpheus8 options and it's bipolar designer help differentiating versus competition?
Moshe Mizrahy: Okay. First, I want to say something about our comparison of Morpheus8, which is the fractional RF, the only fractional RF technology on the market, because it's well protected than all the other micro needling. The fractional RF, which we call Morpheus as a brand name is basically a bipolar RF device, which basically deliver the energy from deep to the epidermis, and by doing that, create all level of the skin. Unlike all the others micro needling while delivering the energy only on the tip of the pin, so the total -- that's what make the results much better. Now regarding the 3D, the 3D is basically something that we have developed for body treatment. In body treatment, we use 40 pin tips which make it larger spot size for treatment. And just because the return electrode -- the second electrode of the bipolar is on the skin, we wanted to make sure that the distribution of energy in all four pins will be equal to eliminate any kind of uneven distribution between the pins and therefore we develop it. It's a minor change, but it's give the doctor some advantage and time consuming -- and time -- and saving time in the treatment, but overall, it's the same Morpheus technology.
Dane Reinhardt: Okay, thank you. And then if I can just sneak one last one. And I think every quarter you kind of have given an absolute number of consumables sold. I think last quarter it was like 2,030 and 1,080 the two quarters prior to that. I was just wondering if you could update that for the first quarter.
Moshe Mizrahy: We did 237,000 pieces.
Dane Reinhardt: Okay, thank you. Appreciate the questions.
Operator: Our next question comes from Mike Matson with Needham & Company. Please go ahead.
Mike Matson: Yes, thanks for taking my questions. Just starting with Empower, wondering if you could give us an update on where you're at, kind of, launching that product outside the U.S., which markets it has been launched in? And then I guess similar question for Envision, when you do launch that product, I guess, will be first in the U.S., and I mean is that going to follow, kind of a similar pattern as Empower outside the U.S.?
Moshe Mizrahy: Okay. The Empower right now is approved only in certain countries. It's approved in Mexico and we're now working in Argentina, not yet in Brazil, which is a big market, and not in other countries in Latin America. We have to deal with these platforms and individual regulatory body. In Europe, it's already approved in several countries, but due to the fact that in Europe, the regulation system is changing from what they call MDD to MDR, and I will not try to explain the difference, because it's complicated, we have to go again and do some re-approval in certain countries, and we're doing it right now. But in most countries in Europe, we're in the process of introducing it. This quarter it will be introduced by some luminary doctor that would bring from the U.S. in three main countries, Spain, U.K. and France. Following that we will introduce that in Italy. In Italy it's a special regulation, we don't have the clearance yet. In Asia, we cleared the system only in one country, which is Australia. Also in India we're starting now. China, Korea and Japan the system is not clear yet from a regulatory, but it's in the process, take time. So that's the situation outside the U.S. In Canada, it's already cleared, in the U.S., as you know, was selling there. As far as Envision, outside the U.S., as you know, we did a soft launch in Canada before we starting in the U.S., and the other part of the world, we have not started yet.
Mike Matson: Okay, got it. Thank you. And then just within the minimally invasive category, I mean, I know you don't break out, kind of, detailed sales by the product lines, but you have BodyTite, FaceTite, Morpheus8, probably some other things in there. Is -- are they kind of all contributing equally to the growth or Morpheus8, does seem to be generating quite a bit of buzz on social media and other places. I mean, is that -- is Morpheus8 the primary driver there or is just everything?
Moshe Mizrahy: Well, Morpheus8 is the star, but it's not the only one. We continue to sell the Optimas with all the other handpieces. We have good results in Asia with the body affects, mini affects. We're doing very well with the minimal invasive BodyTite, FaceTite in Europe. Yes, Morpheus is not a platform, Morpheus is a technology, which basically the handpiece that can go in different type of platforms, and we try to incorporate Morpheus in the platforms that we're developing in order to make everything more attractive. In addition, we're developing combination treatment of Morpheus and Forma, body affects and Forma, body mini affects and plus. So we continue to develop in growing -- in a growing market with the existing portfolio by combining and by synergizing between the technologies and the handpieces.
Mike Matson: Okay.
Spero Theodorou: Mike, this is Spero, just to give you a little color. Primarily we're an aesthetics company, right? And we have -- by increasing our TAM, this is really important that's why we went into the OBGYN and gynecology business, we're going ophthalmology business, and what we looked at is our narrative is, look we're going teaching doctors how to do aesthetics. When we looked at Empower, we go in with something they already know, right? They have these patients in their office, they have stress urinary incontinence, this is a captive audience, which they're not used to sort of charging for. And then we come in with all the other technologies to teach them aesthetics. So that was our theory. We looked at our Morpheus tips across the board in United States, in North America and we saw that the top accounts for every intravascular Morpheus tip sold or used there is six Morpheus tips used for aesthetics reason on the Empower platform. So that just justifies and sort of proves our narrative that, yes, so we go in with something that they're comfortable with, they have that existing patient population and sort of the Morpheus tip show that. Then we looked across the board, and we saw, okay, how about all the accounts, and we saw for every intravascular Morpheus tip, we have 2.5 Morpheus tips cosmetic ones being used the rest of the body. So let's not forget that we are an aesthetics company and Morpheus is a technology like Moshe said, but the fact that the consumables are rising showed us adoption and our narrative is actually playing through and we plan on doing the same with Envision. That make sense? Your little color Mike?
Mike Matson: Yes, it does. And I guess it's a good point, I mean, because your platforms are from multiple capabilities, so it's a little hard to separate them, I guess, in terms of what's actually driving the growth at least on the terms of platform sales. Got it. Thank you.
Spero Theodorou: No problem.
Operator: Our next question comes Kyle Rose with Canaccord. Please go ahead.
Kyle Rose: Great, thank you for the commentary. I wanted to ask, just a little bit about the commentary around the weight loss drugs in patients there. I guess just -- I know it's all going to roll up in minimally invasive, but should we expect to see more utilization of Morpheus body -- in BodyTite or do you expect that, that might drive more of the hands-free, given you have some new products that are coming there?
Shakil Lakhani: Hey, Kyle. I think it's going to be -- I think it's actually going to be a mix of both frankly. As Spero mentioned earlier, the holy grail of plastic surgery is being able to tighten skin. Our goal and our job here is to be able to provide the appropriate tools for each physician or surgeon in order to actually help treat those things that they're looking to treat. So if they have some laxity grade, when Spero said there's still going to be some patients that have this -- have massive weight loss and they're going to need an excisional procedure. We're not trying to take away from that as well, but if there some ways that we can get in whether it's with BodyTite, FaceTite or with our handsfree technology or even with Morpheus8, again, it's our job to basically provide the appropriate tools for each one of these -- the appropriate surgeon or provider, so that they can actually pick and choose what they need to use to optimize patient outcomes. Is that make sense, Kyle?
Kyle Rose: Yes, it's helpful. And then on -- I think you've had some commentary as you go into some of the, I guess, wellness or the non-core markets, we'll call them, you've talked about potentially building out some additional sales and commercial teams there. One, I guess what is the status on those initiatives? And then two, how should we think about those investments taking place over the course of the year and relative to your operating expense guidance?
Shakil Lakhani: Sure. So in terms of -- from a distribution standpoint, we're actually already in the process of hiring as I mentioned. So, we've made several recent hires, some from competitors, some from outside that we’ll bring them and train, the InMode way. And we're obviously looking for that to materialize over the next few quarters. Again, as you know, Kyle, you've been following us for quite a while. We like to do things slow and steady to start. We don't like rushing right out the gate. So we want to do it right. We want to do it in a way where it makes sense for reps, to make sense for the company, and at the end of the day, it's going to contribute to the bottom line and top line. So from that standpoint, we look at it that way. I don't see anything major in terms of -- anything extraordinary from what we already do in terms of expanding distribution that's going to lead to any major costs.
Kyle Rose: Okay. And then the last question, I'll ask is just on the, we'll call it, the core business, in the core commercial team. You've got a competitor out there that -- a little bit of drama going on, is there any opportunity to peel off commercial or R&D talent there? And just maybe, kind of, walk us through your thoughts on being a share taker via some of the commercial talent in the market.
Shakil Lakhani: Sure. I guess we'll leave them as a secret. No, so we’re…
Spero Theodorou: Why do you think that is, Kyle?
Kyle Rose: Yes, exactly.
Shakil Lakhani: And we know in this chaos is opportunity, right. So we're, again we're very selective and picky with the people that we bring on. But again, we also wanted to bring on people that are going to be able to do business the way that we're used to doing business. So we're absolutely on the hunt right now, there is no question about it. And we will be, but again, we're only going to that might just exposed maybe 5% to 10% because we're only going to take the best of the best and bring them over and help them kind of develop and learn again to do things in InMode way. So from that standpoint, we're -- of course, Kyle, you could probably imagine we were on it with probably about 30 minutes to 60 minutes, but again it's not, I wouldn't say it's something extremely -- it's not something super major. If people are looking to leave or looking for a better opportunity, we're obviously going to bring in the right people and we're able to provide them with a good likelihood so on and so forth. But again, we just want them to be able to follow the InMode way and do business the right way.
Kyle Rose: Great. Thank you for taking the questions.
Shakil Lakhani: Of course.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Moshe Mizrahy for any closing remarks.
Moshe Mizrahy: Thank you, operator. I want to thank everybody for joining us today. I will be happy. And I'm sure that everybody will join us next time. Thank you for your time and thank you for all the question that you ask us. See you next quarter. Thanks all.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
