Butterfly Network Reports Second Quarter 2023 Financial Results
- Reported 3.8% decrease in total revenue for Q2 2023 compared to Q2 2022
- Generated 21% top-line growth in the U.S. business and 58% growth in enterprise software annual recurring revenue
- Upcoming launch of Butterfly iQ3 and Butterfly Garden offering for AI-enabled ultrasound developers
- None.
Reports reorganization with a new plan to extend cash runway and invest in near-term growth opportunities
Highlights
-
Reported total revenue of
for the second quarter of 2023, a$18.5 million 3.8% decrease from for the second quarter of 2022, and significantly reduced losses.$19.2 million - Conducted a full strategy reevaluation with our new CEO and then created a focused and impactful plan, including a reorganization that extends our cash runway and reduces our operating expenses, growth initiatives for all phases of our business, and reinvestment in our commercial organization.
-
Generated
21% top-line growth in theU.S. business, closed two large deals with medical schools, and launched a distribution relationship with McKesson. -
Generated
58% growth in enterprise software annual recurring revenue, which has been a focus area for the Company, for the second quarter of 2023 compared to the second quarter of 2022. - Launched our AI-enabled Auto B-line Counter tool for human health and then leveraged the tool in cattle veterinary care to allow veterinarians to see 30 cm into a cattle’s chest cavity when performing lung scans and detect respiratory disease early, demonstrating the versatility of the Butterfly iQ+ and Auto B-Line Counter in multiple settings.
-
Distributed a one-month post-deployment study to trainees of the Global Health program in
Kenya with the Bill and Melinda Gates Foundation, where88% of the respondents reported finding a high risk condition,95% said they always used Butterfly to decide on a treatment plan for their patients, and81% said Butterfly influenced their decision to send a patient to a higher level of care. -
We’re also excited to announce the following upcoming developments to our products and services:
- Next year, we’ll be launching the Butterfly iQ3, our third-generation probe, which will be powered by the new p4.3 chip. iQ3 will close the perceived imaging gap between Butterfly and its competitors, double the processor speed, increase frequency settings allowing for even more applications, improve scan time and battery life, and provide many more meaningful performance-enhancing capabilities.
- Our new Butterfly Garden offering, a program providing other AI-enabled ultrasound developers access to our proprietary software development kits, or SDKs, and APIs, allowing them to integrate their applications with our imaging platform and make their apps on the Apple App Store compatible with Butterfly iQ+ probes.
- A full range of new courses in Butterfly Academy, as well as the Butterfly Certification and in-person modules which can augment self-training with virtual scan reviews and didactic training.
Joe DeVivo, Butterfly’s Chairman and CEO commented, “After my first 100 days at Butterfly, I have grown very fond of the people in this company and excited about what the technology can deliver. During the quarter we conducted a full strategy reevaluation; chose a focused, impactful plan, completed a reorganization to give us time to fund the plan, and implemented growth initiatives for all phases of our business.
“Specifically, with the reorganization, we extended our runway and reduced our operating expenses by an average of
“I believe getting back to basics with a smaller team, focusing on our strengths, and leveraging what only we can do to add value to healthcare will bring the bounce back in our step and return the company to growth. Stakeholders need a healthy and successful Butterfly. Investors deserve better performance. Employees deserve stability and a place to grow and achieve. That’s exactly what we will do.”
Guidance
Looking at the full year 2023, we are expecting revenue of at least
Second Quarter 2023 Financial Results
Second quarter total revenue of
Product revenue was
Gross profit for the second quarter was
Total operating expenses for the second quarter were
Net loss for the second quarter was
Cash, cash equivalents, and restricted cash were
A reconciliation of net loss to adjusted EBITDA for the three and six months ended June 30, 2023 and 2022 is provided in the financial schedules that are part of this press release. An explanation of these non-GAAP financial measures is also included below under the heading “Non-GAAP Financial Measures.”
Conference Call
A conference call to review the second quarter 2023 financial results and provide a business update is scheduled for August 3, 2023, at 8:30 am Eastern Time. Interested parties may access the conference call by dialing +1 (833) 470-1428 (
About Butterfly Network, Inc.
Founded by Dr. Jonathan Rothberg in 2011 and listed on the New York Stock Exchange through a business combination with Longview Acquisition Corp., Butterfly created the world's first handheld, single probe, whole-body ultrasound system using semiconductor technology, the Butterfly iQ+. Butterfly's mission is to democratize medical imaging and contribute to the aspiration of global health equity, making high-quality ultrasound affordable, easy-to-use, globally accessible, and intelligently connected, including for the 4.7 billion people around the world lacking access to ultrasound. Through its proprietary Ultrasound-on-Chip™ technology, Butterfly is paving the way for earlier detection and remote management of health conditions around the world. The Butterfly iQ+ can be purchased online today by healthcare practitioners in
Butterfly iQ+ is a prescription device intended for trained healthcare professionals only.
Non-GAAP Financial Measures
In addition to providing financial measures based on generally accepted accounting principles in
Adjusted EBITDA is a key performance measure that the Company’s management uses to assess our operating performance. These non-GAAP measures facilitate internal comparisons of the Company’s operating performance on a more consistent basis. The Company uses these performance measures for business planning purposes and forecasting. The Company believes that adjusted EBITDA enhances an investor’s understanding of the Company’s financial performance as it is useful in assessing its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business.
Adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. When evaluating the Company’s performance, you should consider adjusted EBITDA alongside other financial performance measures prepared in accordance with GAAP, including net loss.
The non-GAAP financial measures do not replace the presentation of the Company’s GAAP financial results and should only be used as a supplement to, not as a substitute for, the Company’s financial results presented in accordance with GAAP. In this press release, the Company has provided a reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. A reconciliation of adjusted EBITDA to corresponding GAAP measures is not available on a forward-looking basis because the Company is unable to predict with reasonable certainty the non-cash component of employee compensation expense, changes in its working capital needs, variances in its supply chain, the impact of earnings or charges resulting from matters the Company considers not to be reflective, on a recurring basis, of its ongoing operations, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP. Management strongly encourages investors to review the Company’s financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from its expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to financial results, future performance, commercialization and plans to deploy our products and services, development of products and services, and the size and potential growth of current or future markets for its products and services. Forward-looking statements are based on the Company’s current beliefs and assumptions and on information currently available to the Company. These forward-looking statements involve significant known and unknown risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the Company’s ability to grow and manage growth effectively; the success, cost, and timing of the Company’s product and service development activities; the potential attributes and benefits of the Company’s products and services; the degree to which our products and services are accepted by healthcare practitioners and patients for their approved uses; the Company’s ability to obtain and maintain regulatory approval for its products, and any related restrictions and limitations of any approved product; the Company’s ability to identify, in-license, or acquire additional technology; the Company’s ability to maintain its existing license, manufacturing, supply, and distribution agreements; the Company’s ability to compete with other companies currently marketing or engaged in the development of products and services that the Company is currently marketing or developing; changes in applicable laws or regulations; the size and growth potential of the markets for the Company’s products and services, and its ability to serve those markets, either alone or in partnership with others; the pricing of the Company’s products and services, and reimbursement for medical procedures conducted using its products and services; the Company’s estimates regarding expenses, revenue, capital requirements, and needs for additional financing; the Company’s financial performance; the Company’s ability to raise financing in the future; and other risks and uncertainties indicated from time to time in the Company’s most recent Annual Report on Form 10-K, as amended, or in subsequent filings that it makes with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive. The Company cautions you not to place undue reliance upon any forward-looking statements, which speak only as of the date of this press release. The Company does not undertake or accept any obligation or undertake to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions, or circumstances on which any such statement is based.
BUTTERFLY NETWORK, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||||||||||||||||
(In thousands, except share and per share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended June 30, |
|
Six months ended June 30, |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
$ |
12,273 |
|
|
$ |
13,429 |
|
|
$ |
21,121 |
|
|
$ |
24,443 |
|
Software and other services |
|
|
6,214 |
|
|
|
5,786 |
|
|
|
12,842 |
|
|
|
10,346 |
|
Total revenue |
|
|
18,487 |
|
|
|
19,215 |
|
|
|
33,963 |
|
|
|
34,789 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
|
5,487 |
|
|
|
6,799 |
|
|
|
9,836 |
|
|
|
12,947 |
|
Software and other services |
|
|
2,078 |
|
|
|
1,844 |
|
|
|
4,116 |
|
|
|
2,927 |
|
Total cost of revenue |
|
|
7,565 |
|
|
|
8,643 |
|
|
|
13,952 |
|
|
|
15,874 |
|
Gross profit |
|
|
10,922 |
|
|
|
10,572 |
|
|
|
20,011 |
|
|
|
18,915 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
15,626 |
|
|
|
23,220 |
|
|
|
32,277 |
|
|
|
46,843 |
|
Sales and marketing |
|
|
9,728 |
|
|
|
16,438 |
|
|
|
19,761 |
|
|
|
31,640 |
|
General and administrative |
|
|
14,660 |
|
|
|
18,677 |
|
|
|
25,678 |
|
|
|
37,477 |
|
Other |
|
|
2,172 |
|
|
|
692 |
|
|
|
8,605 |
|
|
|
942 |
|
Total operating expenses |
|
|
42,186 |
|
|
|
59,027 |
|
|
|
86,321 |
|
|
|
116,902 |
|
Loss from operations |
|
|
(31,264 |
) |
|
|
(48,455 |
) |
|
|
(66,310 |
) |
|
|
(97,987 |
) |
Interest income |
|
|
2,027 |
|
|
|
260 |
|
|
|
3,811 |
|
|
|
270 |
|
Change in fair value of warrant liabilities |
|
|
620 |
|
|
|
12,805 |
|
|
|
413 |
|
|
|
17,968 |
|
Other income (expense), net |
|
|
(60 |
) |
|
|
(388 |
) |
|
|
(44 |
) |
|
|
(488 |
) |
Loss before provision for income taxes |
|
|
(28,677 |
) |
|
|
(35,778 |
) |
|
|
(62,130 |
) |
|
|
(80,237 |
) |
Provision for income taxes |
|
|
(6 |
) |
|
|
23 |
|
|
|
81 |
|
|
|
41 |
|
Net loss and comprehensive loss |
|
$ |
(28,671 |
) |
|
$ |
(35,801 |
) |
|
$ |
(62,211 |
) |
|
$ |
(80,278 |
) |
Net loss per common share attributable to Class A and B common stockholders, basic and diluted |
|
$ |
(0.14 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.40 |
) |
Weighted-average shares used to compute net loss per share attributable to Class A and B common stockholders, basic and diluted |
|
|
204,895,341 |
|
|
|
199,399,356 |
|
|
|
203,737,044 |
|
|
|
199,200,909 |
|
BUTTERFLY NETWORK, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except share and per share amounts) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
June 30, |
|
December 31, |
||||
|
|
2023 |
|
|
2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
166,806 |
|
|
$ |
162,561 |
|
Marketable securities |
|
|
— |
|
|
|
75,250 |
|
Accounts receivable, net |
|
|
17,781 |
|
|
|
14,685 |
|
Inventories |
|
|
86,825 |
|
|
|
59,970 |
|
Current portion of vendor advances |
|
|
10,207 |
|
|
|
35,182 |
|
Prepaid expenses and other current assets |
|
|
10,212 |
|
|
|
9,489 |
|
Total current assets |
|
|
291,831 |
|
|
|
357,137 |
|
Property and equipment, net |
|
|
29,209 |
|
|
|
31,331 |
|
Non-current portion of vendor advances |
|
|
15,441 |
|
|
|
— |
|
Operating lease assets |
|
|
20,566 |
|
|
|
21,567 |
|
Other non-current assets |
|
|
7,541 |
|
|
|
7,535 |
|
Total assets |
|
$ |
364,588 |
|
|
$ |
417,570 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
8,386 |
|
|
$ |
7,211 |
|
Deferred revenue, current |
|
|
13,725 |
|
|
|
15,856 |
|
Accrued purchase commitments, current |
|
|
531 |
|
|
|
2,146 |
|
Accrued expenses and other current liabilities |
|
|
23,197 |
|
|
|
26,116 |
|
Total current liabilities |
|
|
45,839 |
|
|
|
51,329 |
|
Deferred revenue, non-current |
|
|
6,026 |
|
|
|
4,957 |
|
Warrant liabilities |
|
|
4,957 |
|
|
|
5,370 |
|
Operating lease liabilities |
|
|
28,699 |
|
|
|
29,966 |
|
Other non-current liabilities |
|
|
1,362 |
|
|
|
588 |
|
Total liabilities |
|
|
86,883 |
|
|
|
92,210 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
18 |
|
|
|
17 |
|
Class B common stock |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
935,833 |
|
|
|
921,278 |
|
Accumulated deficit |
|
|
(658,149 |
) |
|
|
(595,938 |
) |
Total stockholders’ equity |
|
|
277,705 |
|
|
|
325,360 |
|
Total liabilities and stockholders’ equity |
|
$ |
364,588 |
|
|
$ |
417,570 |
|
BUTTERFLY NETWORK, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Six months ended June 30, |
||||||
|
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(62,211 |
) |
|
$ |
(80,278 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
4,305 |
|
|
|
2,190 |
|
Stock-based compensation expense |
|
|
14,109 |
|
|
|
18,015 |
|
Change in fair value of warrant liabilities |
|
|
(413 |
) |
|
|
(17,968 |
) |
Other |
|
|
(651 |
) |
|
|
137 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(3,293 |
) |
|
|
(909 |
) |
Inventories |
|
|
(26,855 |
) |
|
|
(29,344 |
) |
Prepaid expenses and other assets |
|
|
(615 |
) |
|
|
(3,493 |
) |
Vendor advances |
|
|
9,534 |
|
|
|
11,330 |
|
Accounts payable |
|
|
1,390 |
|
|
|
(2,437 |
) |
Deferred revenue |
|
|
(1,062 |
) |
|
|
3,979 |
|
Accrued purchase commitments |
|
|
(1,615 |
) |
|
|
— |
|
Change in operating lease assets and liabilities |
|
|
196 |
|
|
|
1,118 |
|
Accrued expenses and other liabilities |
|
|
(2,557 |
) |
|
|
(569 |
) |
Net cash used in operating activities |
|
|
(69,738 |
) |
|
|
(98,229 |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities |
|
|
(297 |
) |
|
|
— |
|
Sales of marketable securities |
|
|
76,484 |
|
|
|
— |
|
Purchases of property and equipment, including capitalized software |
|
|
(2,223 |
) |
|
|
(11,578 |
) |
Sales of property and equipment |
|
|
10 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
73,974 |
|
|
|
(11,578 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options and warrants |
|
|
136 |
|
|
|
810 |
|
Other financing activities |
|
|
— |
|
|
|
(101 |
) |
Net cash provided by financing activities |
|
|
136 |
|
|
|
709 |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
4,372 |
|
|
|
(109,098 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
166,828 |
|
|
|
426,841 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
171,200 |
|
|
$ |
317,743 |
|
BUTTERFLY NETWORK, INC. |
||||||||||||||||
GROSS PROFIT AND GROSS MARGIN |
||||||||||||||||
(In thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
$ |
18,487 |
|
$ |
19,215 |
|
$ |
33,963 |
|
$ |
34,789 |
|
|||
Cost of revenue |
|
|
7,565 |
|
|
8,643 |
|
|
13,952 |
|
|
15,874 |
|
|||
Gross profit |
|
$ |
10,922 |
|
$ |
10,572 |
|
$ |
20,011 |
|
$ |
18,915 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Gross margin |
|
|
59.1 |
% |
|
55.0 |
% |
|
58.9 |
% |
|
54.4 |
% |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
$ |
1,392 |
|
$ |
677 |
|
$ |
2,679 |
|
$ |
1,103 |
|
|||
% of revenue |
|
|
7.5 |
% |
|
3.5 |
% |
|
7.9 |
% |
|
3.2 |
% |
|||
BUTTERFLY NETWORK, INC. |
|||||||||||||||||
ADJUSTED EBITDA |
|||||||||||||||||
(In thousands) |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
||||||||||||
|
Included on the condensed consolidated statements of operations and comprehensive loss as: |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
Net loss |
|
$ |
(28,671 |
) |
|
$ |
(35,801 |
) |
|
$ |
(62,211 |
) |
|
$ |
(80,278 |
) |
Interest income |
Interest income |
|
|
(2,027 |
) |
|
|
(260 |
) |
|
|
(3,811 |
) |
|
|
(270 |
) |
Change in fair value of warrant liabilities |
Change in fair value of warrant liabilities |
|
|
(620 |
) |
|
|
(12,805 |
) |
|
|
(413 |
) |
|
|
(17,968 |
) |
Other expense (income), net |
Other income (expense), net |
|
|
60 |
|
|
|
388 |
|
|
|
44 |
|
|
|
488 |
|
Provision for income taxes |
Provision for income taxes |
|
|
(6 |
) |
|
|
23 |
|
|
|
81 |
|
|
|
41 |
|
Stock-based compensation |
Cost of revenue, R&D, S&M, and G&A |
|
|
9,924 |
|
|
|
9,285 |
|
|
|
14,109 |
|
|
|
18,015 |
|
Depreciation and amortization |
Cost of revenue, R&D, S&M, and G&A |
|
|
2,194 |
|
|
|
1,350 |
|
|
|
4,305 |
|
|
|
2,190 |
|
Other |
Other |
|
|
2,172 |
|
|
|
692 |
|
|
|
8,605 |
|
|
|
942 |
|
Adjusted EBITDA |
|
|
$ |
(16,974 |
) |
|
$ |
(37,128 |
) |
|
$ |
(39,291 |
) |
|
$ |
(76,840 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230803456922/en/
Investors
Heather Getz
hgetz@butterflynetinc.com
Source: Butterfly Network, Inc.
FAQ
What are Butterfly Network, Inc.'s financial results for the quarter ended June 30, 2023?
What growth initiatives did Butterfly Network, Inc. highlight?
What are the upcoming developments announced by Butterfly Network, Inc.?