Butterfly Network(US:BFLY)2022-08-03 15:24Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $19.2 million, a 16% increase compared to Q2 2021, marking the highest quarterly revenue to date [13][38] - Product revenue was $13.4 million, a 3% increase year-over-year, driven by higher average selling prices and volume in veterinary and international markets [39] - Subscription revenue reached $5.8 million, growing approximately 66% over the prior year, with a subscription mix of 30% of total revenue, up 9 percentage points from Q2 2021 [41] - Adjusted gross profit was $11.2 million, compared to $8.3 million in the prior year, with an adjusted gross profit margin of 58.5%, up from 50.2% in Q2 2021 [43][44] - Adjusted EBITDA loss was $37.8 million, compared to a loss of $28.5 million in the same period last year [46] - Cash and cash equivalents as of June 30 were $311 million, with plans to reduce cash expenses by approximately $3 million per month [47][48] Business Line Data and Key Metrics Changes - The company is focusing on four strategic pillars: hospitals and health systems, international markets, home-based care, and veterinary medicine [15][19][26][33] - Growth in hospitals and health systems was supported by software sales and deeper penetration with existing customers [19] - Internationally, partnerships with Zebra Medical and others have expanded Butterfly's reach in markets like South Africa, Israel, and the Middle East [21][22] - Home-based care initiatives are underway, with Butterfly being used for various assessments, including bladder scanning and heart failure [26][31] Market Data and Key Metrics Changes - The company is seeing traction in both developed and developing markets, with significant partnerships and deployments in regions like Sub-Saharan Africa and the U.K. [24][23] - The veterinary market is expanding, with partnerships established with Petco and Texas Tech University School of Veterinary Medicine [33][34] Company Strategy and Development Direction - Butterfly is shifting the paradigm of care by integrating ultrasound into clinical workflows, aiming to become as ubiquitous as the stethoscope [9][10] - The company is refining its investment strategy based on customer feedback and macroeconomic conditions, leading to a reduction in cash spend and an extended cash runway [11][48] - The focus is on targeted investments in technology, clinical studies, and commercial partnerships to drive growth [12][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue acceleration for the second half of the year, supported by a strong pipeline and operational improvements [14][50] - The company reaffirmed its revenue guidance of $83 million to $88 million for the year, with improved adjusted EBITDA guidance [49] - Management acknowledged challenges in the economic environment but emphasized effective business operations and customer realization of Butterfly's value [37] Other Important Information - The company is committed to improving access to imaging in low-resource countries, with ongoing projects supported by the Bill and Melinda Gates Foundation [25] - The company is exploring adjacent markets, including veterinary medicine, to broaden its impact and revenue streams [33] Q&A Session Summary Question: Revenue guidance and seasonality in Q3 - Management indicated that Q3 is typically softer than Q4, but momentum from Q2 is expected to provide strength in Q3 compared to the prior year [56] Question: Drivers of revenue growth in the second half - Management highlighted the growing recognition of ultrasound's value in workflows and the evolution of solutions like Compass software as key drivers for revenue growth [58][59] Question: Partnership with Baylor Scott & White and revenue contribution - The partnership is seen as a foundational element for realizing the value of ultrasound in clinical workflows, with expectations for revenue contributions as the software is adopted [63][64] Question: Status of the commercial team build-out - The structure of the sales organization remains unchanged, with plans to continue adding territories to drive revenue growth [67] Question: Cash burn and future cash flow positivity - Management has not publicly disclosed targets for cash flow positivity but emphasized that actions taken have positively impacted cash runway [68]