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InMode's Response to DOMA Perpetual

On March 6, 2025, InMode Ltd., a prominent provider of innovative medical technologies, responded to a series of letters from DOMA Perpetual Capital Management's CEO, Pedro Escudero. In these communications, key issues surrounding InMode’s operational management and shareholder relations were brought to light. This response was released after InMode's earnings call, demonstrating the company's commitment to addressing shareholder concerns directly.

Addressing Claims and Clarifying Strategies

InMode's letter sought to clarify several misconceptions presented by DOMA. One significant claim discussed was whether InMode was effective in returning capital to its shareholders. The CEO responded firmly, stating that InMode is indeed a profitable entity with substantial cash flow. Since early 2022, the company has returned approximately $500 million to its shareholders by buying back nearly 30% of its own shares. InMode has consistently pursued a buy-back program, aiming to return at least 10% of its shares each year in a tax-efficient manner. The company is also exploring additional capital returns by the end of 2025 to further enhance shareholder value.

Efficiency in Capital Allocation

InMode rejected the suggestion made by DOMA calling for an immediate tender offer for 30% of the company’s shares, stating that such a move would be classified as a dividend by the Israeli IRS, subjecting it to a hefty 20% tax. The firm has asserted that its deliberate approach to capital allocation aims to maximize shareholder value while ensuring sufficient cash for operational needs and potential mergers and acquisitions (M&A).

Management Structure

The response also rebuffed DOMA's claims regarding staffing shortages, particularly in sales management. InMode insisted that it has not changed its organizational structure since 2016 and emphasized that the recent promotions within its sales team were essential for maintaining strong leadership. The CEO asserted that current managers in critical positions possess extensive experience and are capable of meeting the demands of the marketplace.

Production and Risk Management

Concerns regarding InMode’s production strategy were also addressed. PEDRO Escudero has alleged that production should be moved outside of Israel to mitigate risks. However, InMode pointed out that all of its manufacturing facilities are fully equipped and approved by regulatory authorities globally, including the FDA, ensuring compliance and high standards. The firm has established that relocating production could expose it to unnecessary risks and regulatory hurdles, as its current manufacturing procedures are both efficient and compliant.

Commitment to Innovation

When discussing R&D investments, InMode reaffirmed its ongoing commitment to organic growth and technological advancements. The company introduces at least two new platforms or indications annually and boasts a robust pipeline of over ten ongoing projects at any given time. This reinforces InMode’s reputation as a leader in the medical technologies sector and highlights its dedication to advancing healthcare through innovation.

M&A Strategy and Future Outlook

InMode’s letter concluded by addressing DOMA's suggestion to approach M&A with an increased sense of urgency. The company clarified its strategic patience in identifying suitable acquisition targets that are both synergetic and profitable. InMode is committed to exploring acquisition opportunities thoroughly while maintaining adequate cash reserves for strategic maneuvers in the future.

The exchange between InMode and DOMA underscores the importance of transparent communication with shareholders, particularly in periods of operational scrutiny. As InMode advances through 2025, its focus remains on delivering value-driven strategies while navigating the complexities of the medical technology landscape.

For more information on InMode and its product offerings, visit InMode's official website.