Butterfly Network(BFLY) - 2023 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $15.5 million, essentially flat compared to the prior year period [48] - Gross profit was $9.1 million in Q1 2023, compared to $8.3 million in the prior year period, with a gross profit margin of 59% [49] - Adjusted EBITDA loss was $22.3 million, an improvement from a loss of $39.7 million for the same period in 2022 [49] Business Line Data and Key Metrics Changes - Product revenue was $8.8 million, a decrease of 20% versus Q1 2022, driven by lower volume across all segments except global health [22] - Software and services revenue was $6.6 million, growing by 45% over the prior year period, with software and services making up 43% of total revenue [22] Market Data and Key Metrics Changes - U.S. direct business saw a 15% increase driven by higher subscription revenue [48] - There was softness in other channels, including e-commerce, international distribution, and veterinary [48] Company Strategy and Development Direction - The company aims to leverage its Ultrasound-on-Chip technology to enhance accessibility and ease of use for medical professionals [14] - A focus on AI applications is central to the company's strategy, with plans to monetize AI algorithms across its large installed base [41] - The company is committed to evaluating its strategy under new leadership and will provide updated guidance in the next earnings call [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged disruptions in Q1 due to leadership changes and a reduction in force, but expects sequential revenue growth in Q2 [23] - The company has a solid cash position, with cash and cash equivalents of $198 million as of March 31, 2023 [3] - Management expressed optimism about the potential for growth in the home care market and the importance of software monetization [94] Other Important Information - The company has signed significant deals with large medical institutions to deploy its solutions, enhancing medical education and training [18] - The recent FDA approval of new tools is expected to drive further adoption and market penetration [19] Q&A Session Summary Question: What is the outlook for the U.S. commercial team? - The U.S. direct channel is expected to continue showing strength, with recent deals signed with major medical schools [87] Question: How is the company addressing the home care opportunity? - The home and offsite market is seen as a massive opportunity, with ongoing efforts to define regulatory pathways with the FDA [94] Question: What is the strategy for software monetization? - The company plans to create different levels of software bundles to monetize new capabilities as they are developed [53]