Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Butterfly Network Inc (BFLY, Financial) achieved the highest quarterly revenue in its history with $21.5 million, marking a 16% year-over-year growth.
- The company successfully launched the iQ3 in Canada and plans to expand its international reach with a launch event in London.
- Butterfly Network Inc (BFLY) has reduced its annual cash burn to under $50 million and extended its cash runway into 2027.
- The company is seeing strong demand for its products, with a 37% increase in volume excluding large deals from the previous year.
- Butterfly Network Inc (BFLY) is building a robust AI ecosystem with 15 Butterfly Garden partners, enhancing its competitive edge in the ultrasound market.
Negative Points
- The company faced a challenging comparison due to two large non-recurring medical school deals from the previous year.
- Despite revenue growth, the gross margin percentage remained flat at 59% due to higher software amortization and inefficiencies associated with the iQ3 launch.
- The company is still operating at a loss, with an adjusted EBITDA loss of $8.1 million for the quarter.
- International revenue growth was partially offset by lower average selling prices due to a higher mix of sales to distributors.
- Butterfly Network Inc (BFLY) faces significant competition and regulatory challenges, particularly in its efforts to revoke exemptions for competitors under the RoHS directive.
Q & A Highlights
Q: Can you provide insights on the iQ3 launch success in the US and expectations for the international launch?
A: Joseph DeVivo, CEO, explained that the iQ3 launch has been successful across various channels, including e-commerce and direct sales. The product has seen strong acceptance in multiple specialties, with 75% of US sales being iQ3. Internationally, Canada was the first market to launch iQ3, with positive results. The company plans to launch in Europe by the end of the third quarter, with a launch event in London on September 8.
Q: How is the sales pipeline developing, and can you quantify it compared to last year?
A: Joseph DeVivo noted that the sales pipeline coverage is at its highest, providing confidence in meeting forecasts. While specific numbers weren't provided, the pipeline is robust, covering multiple times the forecast, which reduces reliance on any single large order.
Q: What are the expected revenue contributions from Butterfly Garden and Powered by Butterfly initiatives?
A: Joseph DeVivo mentioned that while it's challenging to quantify, the company expects to start feeling revenue contributions from these initiatives in 2025. Heather Getz, CFO, added that some licensing revenue is being recognized in 2024, with expectations for growth in 2025 as partners commercialize their offerings.
Q: Are there any structural shifts in ultrasound with AI integration, and what are the drivers?
A: Joseph DeVivo highlighted a broad realization that AI significantly enhances ultrasound usage, especially in less-trained hands. AI is seen as a major accelerant for deploying advanced imaging cost-effectively. The Gates Foundation's investment in ultrasound AI for third-world countries underscores the growing importance of this technology.
Q: Regarding the RoHS revocation letter, what would be considered a mission accomplished?
A: Joseph DeVivo stated that success would be establishing a date beyond which piezoelectric handheld devices cannot be sold, given that Butterfly's iQ3 can perform all necessary functions without hazardous materials. The goal is to align with the original intent of the RoHS directive, despite potential political challenges.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
