Financial Data and Key Metrics Changes - The company reported record revenue of $23.4 million for Q2 2025, representing a 9% increase compared to the previous year, driven by higher average selling prices and sales of semiconductor chips [16][20] - Gross margins reached an all-time high of 64%, up from 59% in the prior year, attributed to higher average selling prices and improved software and services margins [20] - Adjusted EBITDA loss improved to $6.2 million from $8.1 million in the same period last year, reflecting a 24% improvement [20][24] Business Line Data and Key Metrics Changes - Product revenue was $16.6 million, a 13% increase year-over-year, primarily due to higher average selling prices and chip sales [18] - Software and other services revenue remained flat at $6.8 million, impacted by lower renewals of individual subscriptions and implementation services revenue [19] - Total Annual Recurring Revenue (ARR) grew slightly, led by an increase in enterprise software subscription ARR [19] Market Data and Key Metrics Changes - U.S. revenue was $17.2 million, essentially flat year-over-year, affected by lower probe volume despite higher average selling prices [17] - International revenue increased by 19% to $6.2 million, driven by the international launch of iQ3 and geographic expansion [17] Company Strategy and Development Direction - The company is focusing on larger deals and expanding its enterprise and medical school pipeline, despite delays in closing some larger deals [6][22] - The launch of the next-generation software platform, Compass AI, is expected to enhance documentation processes and improve enterprise sales [27][28] - The company is optimistic about the long-term growth potential of handheld ultrasound technology and its ability to drive worldwide adoption [34] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic headwinds affecting purchase decisions, particularly in the U.S. hospital and enterprise channels [22][60] - The company has adjusted its full-year revenue guidance to a range of $91 million to $95 million, reflecting the need to close delayed larger deals [23][24] - Management remains confident in the company's value proposition and believes it will thrive in a cost-contained healthcare environment [5][34] Other Important Information - The company announced the departure of its CFO, Heather Gatz, who will transition to an advisory role until early 2026 [13][15] - The Butterfly Garden initiative is entering its commercial phase, with new AI tools expected to enhance clinical use [9][11] Q&A Session Summary Question: Competitive landscape and headwinds - Management clarified that the guidance revision was not due to competition but rather delays in larger deals, emphasizing that they are pioneering new market segments [36][38] Question: Software subscription revenue trends - Management indicated that individual subscription renewals face challenges, while enterprise software is growing, aided by the upcoming Compass AI [42][44] Question: Guidance assumptions and enterprise side impact - Management noted that delays in global health deals and enterprise sales have led to a conservative guidance adjustment, but they remain optimistic about future opportunities [54][56] Question: Home care pilot program details - Management shared that the home care program has shown significant reductions in readmissions, and they are working to finalize commercial agreements [65][67] Question: IQ Station and P5 updates - Management confirmed that IQ Station will compete with existing ultrasound carts, and the P5 technology is expected to significantly enhance image quality [91][93]

Company Performance - Butterfly Network, Inc. reported a quarterly loss of $0.06 per share, which was better than the Zacks Consensus Estimate of a loss of $0.07, representing an earnings surprise of +14.29% [1] - The company posted revenues of $23.38 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2%, but showing an increase from $21.49 million year-over-year [2] - Over the last four quarters, Butterfly Network has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Movement and Outlook - Butterfly Network shares have declined approximately 45.2% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is -$0.07 on revenues of $24.42 million, and for the current fiscal year, it is -$0.27 on revenues of $97.39 million [7] Industry Context - The Medical Info Systems industry, to which Butterfly Network belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Butterfly Network's stock performance [5]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) Butterfly Network achieved record revenue and gross margins in Q2 2025, focusing on core business growth and innovation [CEO Commentary & Strategic Focus](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Focus) Butterfly Network achieved its strongest revenue quarter in company history at $23.4 million in Q2 2025, alongside record gross margins of 64% and the lowest cash use of $7.1 million. The company is focused on scaling its core business, unlocking new revenue streams, and leading the shift in handheld ultrasound technology with upcoming innovations like Compass AI, P5 chip, and fourth-generation technology - Q2 2025 marked the strongest revenue quarter in Company history at **$23.4 million**, with record gross margins of **64%** and lowest cash use at **$7.1 million**[2](index=2&type=chunk) - Strategic focus includes scaling the core business, unlocking new revenue streams, and innovating with upcoming Compass AI software, P5 chip, and fourth-generation technology[2](index=2&type=chunk) [Recent Operational and Strategic Highlights](index=1&type=section&id=Recent%20Operational%20and%20Strategic%20Highlights) Butterfly Network reported 9% YoY revenue growth and 64% gross margins in Q2, alongside reduced cash usage. Key operational advancements include expanding the Butterfly Garden partner portfolio, launching new educational resources like the Aorta Exam Protocol and MSK VUE, and significant clinical research findings. The company also announced the upcoming Q3 launch of Compass AI and progress in its Butterfly HomeCare pilot program | Metric | Q2 2025 | | :----- | :------ | | Quarterly Revenue | $23.4 million | | YoY Growth | 9% | | Gross Margins | 64% | | Quarterly Cash Used | $7.1 million | - Two new partners added to Butterfly Garden, and three existing partners received FDA clearance for AI-powered clinical applications (iCardio, HeartFocus by DESKi, Deep Echo), with HeartFocus expected to launch in Q3[5](index=5&type=chunk) - New educational resources released: Aorta Exam Protocol on ScanLab™ and MSK VUE, an AI-powered musculoskeletal ultrasound training app for Butterfly devices[5](index=5&type=chunk) - Announced Compass AI, a next-generation, cloud-based enterprise software platform, expected to launch in Q3 to optimize documentation processes with advanced AI tools and automated voice control[5](index=5&type=chunk) - Concluded Butterfly HomeCare pilot program, demonstrating meaningful reductions in readmissions for congestive heart failure patients, now working toward the first commercial agreement[5](index=5&type=chunk) [Q2 2025 Financial Performance](index=2&type=section&id=Q2%202025%20Financial%20Performance) The company reported Q2 2025 financial results, detailing revenue, profitability, operating expenses, net loss, and cash position [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Total revenue for Q2 2025 was $23.4 million, a 9% increase year-over-year. U.S. revenue remained flat at $17.2 million, influenced by semiconductor chip deliveries and higher average selling prices, offset by lower probe sales. International revenue grew 19% to $6.2 million, driven by both price and volume following the iQ3 international launch in Q3 2024 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Total Revenue | $23.4 million | $21.5 million | +9% | | U.S. Revenue | $17.2 million | N/A | Flat | | International Revenue | $6.2 million | N/A | +19% | - U.S. revenue was essentially **flat** due to semiconductor chip deliveries to an Octiv partner and higher average selling prices, partially offset by lower probe sales volume[6](index=6&type=chunk) - International revenue increased due to both price and volume, driven by the international launch of iQ3 during the third quarter of 2024[6](index=6&type=chunk) [Profitability Metrics](index=2&type=section&id=Profitability%20Metrics) Gross profit for Q2 2025 increased to $14.9 million from $12.6 million in the prior year, with gross margin improving to 63.7% from 58.6%. This improvement was primarily attributed to higher average selling prices and enhanced software and other services margins due to reduced software amortization and lower hosting costs | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Gross Profit | $14.9 million | $12.6 million | +18.3% | | Gross Margin | 63.7% | 58.6% | +5.1 percentage points | - Increase in gross margin primarily due to higher average selling prices and improved software and other services margins from a reduction in software amortization and lower hosting costs[7](index=7&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses for Q2 2025 were $31.0 million, a 4% increase from $29.8 million in the prior year. However, excluding stock-based compensation and other expenses, operating expenses remained essentially flat at $23.1 million compared to $23.4 million in Q2 2024 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Total Operating Expenses | $31.0 million | $29.8 million | +4% | | Operating Expenses (excl. stock-based comp & other) | $23.1 million | $23.4 million | -1.3% (flat) | [Net Loss and Adjusted Financial Metrics](index=2&type=section&id=Net%20Loss%20and%20Adjusted%20Financial%20Metrics) Butterfly Network reported a net loss of $13.8 million in Q2 2025, an improvement from $15.7 million in the prior year. Adjusted EBITDA loss also improved to $6.2 million from $8.1 million, and Adjusted EPS improved to $(0.03) from $(0.05) year-over-year | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Loss | $(13.8) million | $(15.7) million | -12.2% | | Adjusted EBITDA Loss | $(6.2) million | $(8.1) million | -23.5% | | Adjusted EPS | $(0.03) | $(0.05) | -40% | [Cash and Cash Equivalents](index=2&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, Butterfly Network held $148.1 million in cash and cash equivalents | Metric | As of June 30, 2025 | | :----- | :------------------- | | Cash and Cash Equivalents | $148.1 million | [Outlook and Corporate Updates](index=2&type=section&id=Outlook%20and%20Corporate%20Updates) The company provided fiscal year 2025 guidance and announced a key executive transition [Fiscal Year 2025 Guidance](index=2&type=section&id=Fiscal%20Year%202025%20Guidance) Butterfly Network revised its full-year 2025 revenue guidance to $91 million to $95 million, representing approximately 13% growth. The company also improved its Adjusted EBITDA guidance, projecting a loss of $32 million to $37 million | Metric | FY 2025 Guidance | | :----- | :--------------- | | Revenue | $91 million - $95 million (approx. 13% growth) | | Adjusted EBITDA Loss | $32 million - $37 million | [Chief Financial and Operations Officer Transition](index=4&type=section&id=Chief%20Financial%20and%20Operations%20Officer%20Transition) Heather Getz resigned as Chief Financial and Operations Officer, effective August 1, 2025, to pursue other interests. Megan Carlson, Chief Accounting Officer and SVP of Finance and Accounting, will assume interim principal financial and accounting officer roles. The company has initiated a search for a permanent replacement - Heather Getz resigned as Chief Financial and Operations Officer, effective August 1, 2025, with her resignation not resulting from any disagreement regarding company operations or policies[13](index=13&type=chunk) - Megan Carlson, Chief Accounting Officer and Senior Vice President of Finance and Accounting, will assume the roles of principal financial and accounting officer on an interim basis[14](index=14&type=chunk) - Butterfly has begun the process of engaging a search firm to assist in identifying Ms. Get's replacement[15](index=15&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) This section provides details on the conference call, company overview, non-GAAP measures, forward-looking statements, and contact information [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) Butterfly Network scheduled a conference call and webcast for August 1, 2025, at 8:00 am ET to discuss Q2 2025 financial performance and operational progress. Dial-in and webcast details were provided, along with information for a telephone replay - A conference call and webcast to discuss second quarter 2025 financial performance and operational progress is scheduled for 8:00 am ET on August 1, 2025[19](index=19&type=chunk) - Details for US domestic, international, and global dial-in numbers, along with access codes and webcast link, were provided, with a telephone replay available until August 15, 2025[20](index=20&type=chunk) [About Butterfly Network](index=4&type=section&id=About%20Butterfly%20Network) Butterfly Network, Inc. is a digital health company transforming medical imaging with its proprietary Ultrasound-on-Chip™ semiconductor technology and software solutions. The company launched its first handheld ultrasound system, Butterfly iQ, in 2018, followed by iQ+ in 2020 and iQ3 in 2024, which earned the Best Medical Technology award at the 2024 Prix Galien USA Awards. Butterfly aims to democratize healthcare by providing affordable, accessible imaging through advanced hardware, intelligent software, AI, services, and education, with devices commercially available globally - Butterfly Network is a healthcare company driving a digital revolution in medical imaging with its proprietary Ultrasound-on-Chip™ semiconductor technology and ultrasound software solutions[21](index=21&type=chunk) - Launched Butterfly iQ (2018), iQ+ (2020), and iQ3 (2024), with the iQ3 earning Best Medical Technology at the 2024 Prix Galien USA Awards[21](index=21&type=chunk) - Aims to democratize healthcare by addressing critical global healthcare challenges through affordable, accessible imaging, combining advanced hardware, intelligent software, AI, services, and education[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company presents non-GAAP financial measures, including adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EPS, to help investors understand core operating results and compare financial performance across periods. These measures are used by management for business evaluation, planning, and forecasting, as they exclude items not representative of core business. The company emphasizes that non-GAAP measures should supplement, not replace, GAAP results and provides reconciliations - Non-GAAP financial measures (adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EPS) are provided to assist readers in understanding core operating results and comparing financial performance over multiple periods[23](index=23&type=chunk)[24](index=24&type=chunk) - These non-GAAP measures are key performance indicators used by management for business planning and forecasting, facilitating internal comparisons by excluding items not representative of the core business[25](index=25&type=chunk) - Non-GAAP financial measures are not prepared in accordance with GAAP, should not be considered in isolation, and are intended as a supplement to, not a substitute for, GAAP financial results[26](index=26&type=chunk)[27](index=27&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements regarding financial results, future performance, product commercialization, and market growth, which are based on current beliefs and assumptions. These statements involve significant risks and uncertainties that could cause actual results to differ materially, including factors related to growth management, product development, regulatory approvals, competition, and intellectual property. Readers are cautioned not to place undue reliance on these statements, and the company does not undertake to update them - This press release includes forward-looking statements regarding financial results, future performance, commercialization plans, product development, and market growth, based on current beliefs and assumptions[28](index=28&type=chunk) - These statements involve significant known and unknown risks and uncertainties and other factors that could cause actual results to differ materially, including factors like growth management, product development, regulatory approval, competition, and intellectual property rights[28](index=28&type=chunk)[29](index=29&type=chunk) - Readers are cautioned not to place undue reliance upon any forward-looking statements, and the company does not undertake or accept any obligation to release publicly any updates or revisions[29](index=29&type=chunk) [Contacts](index=7&type=section&id=Contacts) Contact information for investor relations was provided, including Liz Learned Snyder (Director, Communications & Public Relations) and Steve Halper (Managing Director, LifeSci Advisors) - Investor relations contacts provided: Liz Learned Snyder (Director, Communications & Public Relations, Butterfly) and Steve Halper (Managing Director, LifeSci Advisors)[30](index=30&type=chunk) [Condensed Consolidated Financial Statements](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the unaudited condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2025, and 2024, detailing revenue, cost of revenue, gross profit, operating expenses, and net loss | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Revenue | $23,383 | $21,487 | $44,608 | $39,143 | | Gross Profit | $14,891 | $12,586 | $28,272 | $22,863 | | Total Operating Expenses | $30,991 | $29,818 | $62,838 | $62,715 | | Loss from Operations | $(16,100) | $(17,232) | $(34,566) | $(39,852) | | Net Loss | $(13,834) | $(15,706) | $(27,801) | $(37,467) | | Net Loss per Common Share (basic & diluted) | $(0.06) | $(0.07) | $(0.12) | $(0.18) | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, outlining assets, liabilities, and stockholders' equity | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Current Assets | $253,747 | $192,613 | | Total Assets | $313,278 | $256,082 | | Total Current Liabilities | $44,666 | $48,215 | | Total Liabilities | $80,472 | $87,250 | | Total Stockholders' Equity | $232,806 | $168,832 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net Cash Used in Operating Activities | $(18,844) | $(30,667) | | Net Cash Used in Investing Activities | $(1,249) | $(1,837) | | Net Cash Provided by Financing Activities | $79,454 | $0 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | $59,361 | $(32,504) | | Cash, Cash Equivalents, and Restricted Cash, End of Period | $152,151 | $106,146 | [Adjusted Gross Profit and Adjusted Gross Margin Reconciliation](index=11&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Margin%20Reconciliation) This section provides the reconciliation of GAAP gross profit and gross margin to adjusted gross profit and adjusted gross margin for the three and six months ended June 30, 2025, and 2024, primarily by adding back write-downs and write-offs of inventories | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross Profit | $14,891 | $12,586 | $28,272 | $22,863 | | Gross Margin | 63.7% | 58.6% | 63.4% | 58.4% | | Add: Write-downs and write-offs of inventories | $14 | $0 | $66 | $0 | | Adjusted Gross Profit | $14,905 | $12,586 | $28,338 | $22,863 | | Adjusted Gross Margin | 63.7% | 58.6% | 63.5% | 58.4% | [Adjusted EBITDA and Adjusted EPS Reconciliation](index=12&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EPS%20Reconciliation) This section presents the reconciliation of GAAP net loss to adjusted EBITDA and adjusted EPS for the three and six months ended June 30, 2025, and 2024, by adjusting for stock-based compensation, inventory write-downs, changes in fair value of warrant liabilities, other expenses, interest, taxes, and depreciation/amortization | Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Loss | $(13,834) | $(15,706) | $(27,801) | $(37,467) | | Stock-based compensation | $5,864 | $5,859 | $12,148 | $11,383 | | Change in fair value of warrant liabilities | $(620) | $(620) | $(1,446) | $(413) | | Depreciation and amortization | $2,082 | $2,633 | $4,442 | $5,217 | | Adjusted EBITDA | $(6,153) | $(8,134) | $(15,219) | $(21,288) | | Adjusted EPS | $(0.03) | $(0.05) | $(0.07) | $(0.12) |

Butterfly Network (BFLY) FY Conference Summary Company Overview - Butterfly Network is focused on revolutionizing medical imaging, particularly ultrasound technology, by making it more accessible and cost-effective through semiconductor innovations [8][9][21] Industry Insights - The ultrasound market is projected to grow significantly, with the core point-of-care ultrasound market estimated at $600 million and the broader market potentially reaching $8 billion [50] - There is a notable lack of access to medical imaging globally, with two-thirds of the world lacking access to ultrasound [7] Key Financials - The company projects a 20% growth for the year, targeting revenues between $96 million and $100 million, with an EBITDA loss [8] - The first quarter of 2025 saw a revenue of $25 million, reflecting the anticipated growth trajectory [8] Technological Innovations - Butterfly Network utilizes MEMS semiconductor technology, allowing for a compact, cost-effective ultrasound device that can be used by various healthcare professionals [19][21] - The company has launched its third generation of ultrasound devices, with plans for a fourth generation expected by 2026 [39][41] - The device's capabilities are enhanced through a cloud-based software ecosystem, which allows for continuous updates and improvements [25][26] AI Integration - Butterfly has developed AI tools that assist in ultrasound scanning, including automatic bladder volume measurement and lung assessments for congestive heart failure [33] - The company is opening its ecosystem to third-party developers, allowing for the creation of additional AI applications that can be integrated with Butterfly devices [34] Market Position and Strategy - Butterfly Network claims the largest installed base for handheld ultrasound devices, surpassing competitors like GE and Philips [36] - The company is actively pursuing partnerships and licensing opportunities for its semiconductor technology, expanding its market reach beyond healthcare [62][63] Educational Initiatives - Approximately 70% of medical schools in the U.S. are incorporating Butterfly devices into their training programs, fostering a new generation of healthcare professionals skilled in ultrasound [55][56] - The company is developing educational tools to assist students in learning ultrasound techniques, enhancing their practical skills [58][59] Future Outlook - Butterfly Network aims to expand its presence in home healthcare by training nurses to perform ultrasound scans, potentially creating new revenue streams [61] - The company is committed to leveraging its $300 million investment in semiconductor technology to explore opportunities in various sectors, including wearables and non-healthcare applications [63] Conclusion - Butterfly Network is positioned as a disruptive force in the ultrasound market, with a strong focus on innovation, accessibility, and education, aiming to transform how ultrasound technology is utilized in healthcare and beyond [49][50]

Core Viewpoint - Tempus AI and Butterfly Network are two AI-driven healthcare companies that are transforming diagnostics through their innovative approaches, with Tempus focusing on precision oncology and Butterfly on point-of-care imaging [1] Company Performance - Tempus AI's shares have increased by 55.4% over the past year, while Butterfly Network's shares have surged by 114.8%, significantly outperforming the Medical Info Systems industry's gain of 13.6% and the S&P 500's rise of 10.8% [2] Tempus AI Highlights - Revenue Growth and Margin Expansion: Tempus AI reported a 75.4% year-over-year revenue increase in Q1 2025, with its data licensing segment growing by 58%, contributing to overall profitability [6][8] - Positive EBITDA Outlook: The company is on track to achieve adjusted EBITDA profitability in 2025, narrowing its adjusted EBITDA loss to $16.2 million from $43.9 million a year earlier, reflecting strong revenue growth and disciplined spending [7] - Strategic Partnerships and Contract Backlog: Tempus AI secured a $200 million deal with AstraZeneca and Pathos, alongside a remaining contract value of over $1 billion, ensuring predictable revenues and financial stability [8][9] Butterfly Network Highlights - Strong Financial Performance: Butterfly Network achieved 20% year-over-year revenue growth in Q1 2025, with gross margins rising to 63% and adjusted EBITDA loss narrowing to $9.1 million [10] - Diversified Product Portfolio: The company has expanded its offerings under CEO Joseph DeVivo, introducing multiple probes and the Butterfly Garden AI marketplace, which diversifies revenue streams [11] - International Growth: Despite challenges, Butterfly Network's international revenues grew by 9% year-over-year, supported by pricing gains and partnerships with over 800 NGOs [12] Valuation Comparison - Tempus AI has a forward price-to-sales (P/S) ratio of 7.90, while Butterfly Network's ratio is 5.00, indicating that Butterfly is attractively valued compared to the industry average of 5.51 [13] - Analysts suggest a 10.55% upside for Tempus AI based on price targets, while Butterfly Network's average target indicates a potential increase of 94.86% [14][16] Investment Recommendation - Butterfly Network is currently rated a Zacks Rank 2 (Buy), presenting a more compelling investment case compared to Tempus AI, which holds a Zacks Rank 3 (Hold), due to its improving financials and lower valuation [18]

Core Viewpoint - The article emphasizes the importance of investing in high-quality growth and momentum stocks that are reasonably priced, with a focus on long-term performance and market outperformance [1]. Group 1: Investment Strategy - The investment strategy involves focusing on growth and momentum stocks that are expected to outperform the market over the long term [1]. - The analyst has a history of advising investors to buy at market lows, specifically mentioning a recommendation in March 2009 during the financial crisis, which led to significant market gains [1]. Group 2: Market Performance - From 2009 to 2019, the S&P 500 increased by 367%, while the Nasdaq saw an increase of 685%, highlighting the potential for substantial returns in the stock market [1]. Group 3: Investor Guidance - The article aims to assist investors in making money through investments in high-quality growth stocks, indicating a commitment to guiding investors towards profitable opportunities [1].

Financial Data and Key Metrics Changes - The company reported a revenue of $21.2 million for Q1 2025, reflecting a 20% growth compared to the previous year [13][14] - Gross profit increased to $13.4 million, a 30% rise from $10.3 million in the prior year, with gross margin improving to 63% from 58% [16] - Adjusted EBITDA loss improved from $13.2 million a year ago to $9.1 million, marking a 31% improvement [16][20] Business Line Data and Key Metrics Changes - Product revenue reached $14.2 million, up 25% year-over-year, driven by higher sales volume [14] - Software and other services revenue was $7.1 million, an 11% increase, attributed to higher enterprise software revenue [15] - The mix of revenue from software and services decreased to 33% as product revenue growth outpaced software revenue [15] Market Data and Key Metrics Changes - U.S. revenue was $16.6 million, a 24% increase year-over-year, while international revenue rose 9% to $4.6 million [14] - The company is focusing on expanding its presence in Asia and Latin America, as well as high-potential global health markets [11] Company Strategy and Development Direction - The company is diversifying its product offerings, including the introduction of the AI marketplace Butterfly Garden and the chip licensing program Octave [5][24] - The company aims to maintain leadership in digital, cloud-connected, open platform, and EMR integrated systems through continued R&D investment [6] - The strategy includes targeting medical schools for personal probe purchases, similar to Apple's approach with laptops [8][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic headwinds, particularly from USAID funding cuts affecting global health initiatives, but remains optimistic about future growth [12][20] - The company expects to maintain its full-year guidance of approximately 20% revenue growth despite uncertainties in healthcare funding [21] - Management emphasized the long-term value of its technology, which is seen as a more affordable solution compared to traditional ultrasound systems [21][22] Other Important Information - The company completed a secondary public offering generating $81 million, which will support ongoing investments and growth initiatives [17] - The upcoming launch of Compass 2.0 software is anticipated to enhance operational efficiency and create new revenue streams [29] Q&A Session Summary Question: Can you discuss the process for securing the second hospital enterprise contract? - Management highlighted the groundswell of demand from doctors for Butterfly technology, leading to institutional adoption and integration into hospital networks [37][40] Question: What is the funnel for additional opportunities with medical schools? - The company is seeing strong interest from medical schools in one-to-one probe programs, with discussions focused on budget allocations for the upcoming fiscal year [42][44] Question: How impactful have the publications from Rochester and Rutgers been on the hospital channel? - The publications have opened conversations at the C-suite level in hospitals, highlighting the widespread adoption of Butterfly technology among affiliated doctors [51][52] Question: What is the split between price and volume in U.S. product sales? - The split is approximately 80% volume and 20% price, with significant price increases observed in international markets [73] Question: How is the company managing currency risks? - The company reported virtually no foreign currency risk, indicating a stable financial position despite currency fluctuations [61]

Financial Performance - Butterfly Network, Inc. reported a quarterly loss of $0.06 per share, better than the Zacks Consensus Estimate of a loss of $0.09, and compared to a loss of $0.07 per share a year ago, indicating an earnings surprise of 33.33% [1] - The company posted revenues of $21.23 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.58%, but showing an increase from year-ago revenues of $17.66 million [2] - Over the last four quarters, Butterfly Network has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Butterfly Network shares have declined approximately 25% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] - The company's current Zacks Rank is 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $24.46 million, and for the current fiscal year, it is -$0.32 on revenues of $97.54 million [7] - The trend of estimate revisions for Butterfly Network is currently favorable, which could influence future stock movements [5][6] Industry Context - The Medical Info Systems industry, to which Butterfly Network belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Revenue for Q1 2025 reached $21.2 million, a 20% increase compared to $17.7 million in Q1 2024[10] - Gross margin improved to 63%, up 4.8 percentage points from 58.2% in Q1 2024[10] - Operating expenses decreased by 3% from $32.9 million to $31.8 million[10] - Adjusted EBITDA loss improved by 31%, from $(13.2) million to $(9.1) million[10] - Cash and cash equivalents increased to $155.2 million, up from $88.8 million[10] - The company reaffirmed its 2025 revenue guidance of $96 - $100 million, representing approximately 20% growth, and an EBITDA loss of $37 - $42 million[11] Business Updates - The company is focused on medical education, hospital systems, and international expansion within its core POCUS business[6,7,8] - Butterfly signed 5 partners in the portfolio and has over 25 prospects in the pipeline[14] - Two new partners were signed in Q1, bringing the total to 23 portfolio companies, with the first partners on track to commercialize FDA-cleared apps this year[17] - Butterfly HomeCare is piloting virtual chronic care management with a leading Medicare Advantage provider, showing early results with no rehospitalizations for patients with congestive heart failure[22]

Financial Data and Key Metrics Changes - The company reported a revenue of $21.2 million for Q1 2025, reflecting a 20% growth compared to the previous year [13] - Adjusted EBITDA loss improved from $13.2 million in Q1 2024 to $9.1 million in Q1 2025, marking a 31% improvement [17] - Gross profit increased by 30% to $13.4 million, with gross margin rising to 63% from 58% [16] Business Line Data and Key Metrics Changes - Product revenue reached $14.2 million, a 25% increase year-over-year, driven by higher sales volume [14] - Software and other services revenue was $7.1 million, up 11% from the prior year, attributed to higher enterprise software revenue [15] - The mix of revenue from software and services decreased to 33% as product revenue growth outpaced software revenue [15] Market Data and Key Metrics Changes - U.S. revenue was $16.6 million, a 24% increase year-over-year, while international revenue increased by 9% to $4.6 million [14] - The company is focusing on expanding its presence in Asia and Latin America, as well as high-potential global health markets [11] Company Strategy and Development Direction - The company is diversifying its product offerings, including the introduction of the AI marketplace Butterfly Garden and the chip licensing program Octave [5] - The strategy includes targeting medical schools for personal probe purchases, similar to Apple's approach with laptops [8] - The company aims to launch Compass 2.0 software in the second half of 2025, enhancing its service offerings [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth despite economic headwinds, particularly in global health funding [12] - The company maintains its full-year guidance of approximately 20% revenue growth and adjusted EBITDA loss between $37 million and $42 million [21] - Management highlighted the importance of maintaining a disciplined approach to expense control while investing in growth areas [21] Other Important Information - The company has completed a secondary public offering, generating $81 million in net proceeds to support ongoing investments [18] - The company is closely monitoring potential tariff impacts, estimating minimal exposure due to its manufacturing and assembly locations [19][20] Q&A Session Summary Question: Positive momentum with the second hospital enterprise contract - Management discussed the groundswell of activity within health systems, leading to increased adoption of Butterfly technology [38][40] Question: Opportunities with schools for one-to-one programs - Management noted strong interest from medical schools in adopting one-to-one probe programs, creating recurring revenue opportunities [44][45] Question: Impact of clinical benefits publications on hospital channel - Management indicated that publications have opened doors to C-suite discussions, enhancing the company's visibility and credibility [52][54] Question: Competitive displacement with IQ3 - Management clarified that the adoption of IQ3 is more about choosing a winner rather than displacing an incumbent, as the market is still developing [70] Question: Price and volume split in U.S. product sales - The company reported an 80% volume and 20% price split in U.S. product sales, with international markets seeing a higher price impact [74] Question: Updates on active partnerships and applications - Management shared insights on ongoing partnerships, including advancements in brain-computer interface technology [77][82] Question: Timing for medical schools to adopt new programs - Management explained that decisions typically occur at the end of the first calendar quarter or in the second quarter, aligning with school budget cycles [85][88]