Butterfly Network(BFLY) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Butterfly Network achieved record revenue and gross margins in Q2 2025, focusing on core business growth and innovation CEO Commentary & Strategic Focus 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] - 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] Recent Operational and Strategic Highlights 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] - New educational resources released: Aorta Exam Protocol on ScanLab™ and MSK VUE, an AI-powered musculoskeletal ultrasound training app for Butterfly devices[5] - 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] - Concluded Butterfly HomeCare pilot program, demonstrating meaningful reductions in readmissions for congestive heart failure patients, now working toward the first commercial agreement[5] Q2 2025 Financial Performance The company reported Q2 2025 financial results, detailing revenue, profitability, operating expenses, net loss, and cash position Revenue Analysis 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] - International revenue increased due to both price and volume, driven by the international launch of iQ3 during the third quarter of 2024[6] Profitability Metrics 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] Operating Expenses 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 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 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 The company provided fiscal year 2025 guidance and announced a key executive transition Fiscal Year 2025 Guidance 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 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] - 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] - Butterfly has begun the process of engaging a search firm to assist in identifying Ms. Get's replacement[15] Additional Information This section provides details on the conference call, company overview, non-GAAP measures, forward-looking statements, and contact information Conference Call Details 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] - 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] About Butterfly Network 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] - Launched Butterfly iQ (2018), iQ+ (2020), and iQ3 (2024), with the iQ3 earning Best Medical Technology at the 2024 Prix Galien USA Awards[21] - Aims to democratize healthcare by addressing critical global healthcare challenges through affordable, accessible imaging, combining advanced hardware, intelligent software, AI, services, and education[22] Non-GAAP Financial Measures 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][24] - 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] - 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][27] Forward-Looking Statements 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] - 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][29] - 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] 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] Condensed Consolidated Financial Statements 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 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 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 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 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 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) |