Butterfly Network(US:BFLY)2024-08-02 00:35Financial Data and Key Metrics Changes - Butterfly Network reported Q2 2024 revenue of $21.5 million, representing a 16% year-over-year growth, marking the highest quarterly revenue in the company's history [7][23] - Adjusted EBITDA loss improved to $8.1 million from a loss of $17 million in the same period last year, driven by higher revenue and cost reductions [27] - Gross profit was $12.6 million, a 15% increase compared to $10.9 million in Q2 2023, with gross margin percentage remaining relatively flat at 59% [26] Business Line Data and Key Metrics Changes - Product revenue was $14.6 million, up 19% year-over-year, primarily driven by higher average selling prices and volume, with approximately 50% of total volume being iQ3 [25] - Software and other services revenue was $6.9 million, a 10% increase year-over-year, but the mix decreased to 32% of total revenue [25][26] - Total annual recurring revenue (ARR) was flat year-over-year, with enterprise software subscription ARR growing 24% [26] Market Data and Key Metrics Changes - U.S. revenue was $14.8 million, a 3% increase year-over-year, but grew 25% when excluding large medical school deals from the previous year [24] - International revenue increased 57% year-over-year to $5.2 million, driven by higher probe volume, although average selling price was lower due to a higher mix of sales to distributors [24] Company Strategy and Development Direction - The company aims to accelerate growth in its core business, expand market accessibility, invest in R&D, and execute strategies to drive profitability [6] - Butterfly is focusing on building a sustainable revenue model through partnerships with medical schools and expanding its presence in international markets [13][20] - The company is developing an AI ecosystem through partnerships, enhancing its competitive position in the ultrasound market [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting broad-based revenue growth and strong clinical acceptance across multiple specialties [38] - The company anticipates continued double-digit growth in 2024 and beyond, with a focus on operational efficiencies and extending cash runway into 2027 [31][30] - Management noted the importance of AI in expanding ultrasound usage and improving patient care, particularly in low-resource settings [48] Other Important Information - Butterfly regained compliance with the New York Stock Exchange minimum bid price rule [30] - The company is actively working on overturning the exemption for hazardous substances in ultrasound devices in Europe, which could significantly impact the market [21][22] Q&A Session Summary Question: Insights on iQ3 launch success and international expectations - Management noted broad-based success in the U.S. with 75% of sales being iQ3, and expressed excitement about the upcoming launch in Europe [38][40] Question: Sales pipeline and revenue contributions from Butterfly Garden - Management indicated that the sales pipeline coverage is at a high level, providing confidence for future growth, with expectations for revenue contributions from Butterfly Garden partners to build in 2025 [42][45] Question: Clarification on volume and price metrics - Management clarified that the 37% volume growth excludes large grant-based deals from the previous year, demonstrating strong core demand for products [53][54] Question: iQ3 contribution metrics - Approximately 50% of total volume in the quarter was iQ3, with about 75% domestically [56]