InMode Q3 2026: First Beat in Three Quarters, but Margin Pressure Persists

InMode delivered adjusted non-GAAP EPS of $0.37 in Q3 2026, beating consensus and snapping two consecutive quarters of missing expectations. Revenue cleared estimates but still slipped from the same quarter a year ago, leaving the company in a prolonged revenue plateau.

The headline figures carry an important asterisk. Gross margin of 78% received roughly one percentage point of lift from a non-recurring U.S. tariff refund, meaning the underlying result was somewhat softer than it appears. Investors weighing the beat should account for the fact that this particular tailwind will not repeat.

Operating margins continued to compress even with the earnings beat, with non-GAAP operating margin narrowing to 22% from 25% a year earlier. The pressure came from the ongoing restructuring of InMode's North American sales force, which lifted sales and marketing, G&A and professional services costs. Management signaled that elevated expense levels are expected to persist.

On the bright side, international capital equipment revenue increased year over year, and Asia revenues reached another quarterly record on sustained demand across key markets. The company also completed the initial launch of Morpheus8 Max, its next-generation platform, with continued growth from that product anticipated going forward.

Management reaffirmed its full-year 2026 guidance, projecting revenues of $365 million to $375 million. That reaffirmation offers some reassurance, but the guidance midpoint still implies modest sequential growth through year-end, leaving little room for further cost overruns or demand softness in the U.S. market.