Butterfly Network(US:BFLY)2025-10-31 11:32Revenue and Sales Performance - Units fulfilled increased by 221 units, or 4.7%, for the three months ended September 30, 2025 compared to the same period in 2024, driven by higher probe sales volume in US sales channels [89]. - Total revenue for the three months ended September 30, 2025 was $21.5 million, a 4.5% increase from $20.6 million in the same period of 2024, with product revenue increasing by $1.0 million, or 7.5% [104]. - Product revenue increased by $5.9 million, or 14.9%, for the nine months ended September 30, 2025, driven by semiconductor chip deliveries and higher average selling prices in international markets [114]. Expenses and Profitability - Cost of product revenue increased by $17.5 million, or 288.3%, for the three months ended September 30, 2025, primarily due to a non-recurring charge for excess and obsolete inventory [107]. - Gross profit for the three months ended September 30, 2025 was a loss of $3.8 million, compared to a profit of $12.2 million in the same period of 2024 [103]. - Research and development expenses for the three months ended September 30, 2025 were $8.7 million, representing 40.5% of total revenue [103]. - Total operating expenses for the three months ended September 30, 2025 were $31.4 million, or 146.0% of total revenue [103]. - Net loss for the three months ended September 30, 2025 was $34.0 million, compared to a net loss of $16.9 million in the same period of 2024 [103]. - Research and development expenses decreased by $2.0 million, or 7.0%, for the nine months ended September 30, 2025, primarily due to a reduction in personnel costs [119]. - Sales and marketing expenses increased by $4.1 million, or 13.8%, for the nine months ended September 30, 2025, driven by higher personnel and employment-related costs [120]. - General and administrative expenses decreased by $1.9 million, or 6.2%, for the nine months ended September 30, 2025, primarily due to reductions in insurance and personnel costs [121]. - Other expenses increased by $1.8 million, or 49.8%, for the nine months ended September 30, 2025, driven by higher legal costs due to litigation [122]. Cash Flow and Liquidity - The company reduced its annual cash requirements by approximately $180 million, to less than $50 million annually [85]. - Net cash used in operating activities decreased by $16.9 million, or 43.7%, for the nine months ended September 30, 2025, due to improvements in net loss and working capital cash usage [130]. - Net cash provided by financing activities increased by $79.5 million for the nine months ended September 30, 2025, primarily from the net proceeds of an $81.0 million public share offering [132]. - As of September 30, 2025, the company had cash and cash equivalents of $144.2 million, with expectations that existing cash will meet liquidity and capital expenditure needs for at least the next 12 months [124]. - The company raised $81.0 million through the issuance of 27.6 million shares of Class A common stock on January 31, 2025 [124]. Inventory and Charges - As of September 30, 2025, the company recognized an additional $17.4 million non-recurring charge for excess and obsolete inventory due to technological advancements and changes in the product portfolio [134]. - Cost of revenue as a percentage of revenue increased from 41.2% to 62.9% for the nine months ended September 30, 2025, primarily due to a $17.4 million excess and obsolete inventory charge [118]. Market and Economic Conditions - The company does not expect cash flows to be significantly affected by a sudden change in market interest rates, including an immediate change of 100 basis points [137]. - Inflation has not had a material effect on the company's business, but rising costs due to inflationary pressures may not be fully offset by price increases [138]. - The company operates primarily in the U.S. and executes most transactions in U.S. dollars, with limited foreign currency translation risk [139]. Accounting Policies - There have been no material changes to the critical accounting policies and estimates disclosed in the 2024 Annual Report [135]. - The company did not identify any significant recently issued accounting pronouncements that may impact its financial position [136].