Butterfly Network(US:BFLY)2024-02-29 04:39Financial Data and Key Metrics Changes - Revenue for Q4 2023 was $16.5 million, down from $19 million in Q4 2022, primarily due to lower volume, partially offset by higher prices [10] - Total annual revenue for 2023 was $65.9 million, exceeding expectations of at least $64 million, with direct sale revenues growing 10% and 11% year-over-year in Q4 and full year respectively [17][21] - Adjusted EBITDA loss for Q4 2023 was $15.7 million, an improvement from a loss of $27.7 million in Q4 2022, driven by cost reductions [31] - Gross profit excluding a non-cash write-down was $9.4 million in Q4 2023, with a gross profit margin of 57%, up 210 basis points compared to Q4 2022 [110] Business Line Data and Key Metrics Changes - Product revenue was $10.2 million in Q4 2023, a decrease of 20% compared to Q4 2022, largely due to lower volume in e-commerce and international distribution [12] - Software and services revenue was $6.4 million in Q4 2023, flat compared to the prior year, with a mix of 39% of total revenue, an increase of approximately 5 percentage points year-over-year [27] - Total annual recurring revenue grew by 4%, led by a 35% increase in enterprise software, now representing 41% of total ARR [28] Market Data and Key Metrics Changes - U.S. sales totaled $11 million, slightly higher than the prior year, driven by increased average selling prices and higher revenue from software and subscriptions [11] - Total international sales declined by 24% year-over-year to $4.6 million, primarily due to the absence of large orders that occurred in 2022 [11] Company Strategy and Development Direction - The company aims for double-digit growth in 2024 while efficiently investing in technology and commercial teams [5] - Focus on expanding market opportunities through new product launches and partnerships, including the introduction of the iQ3 and AI solutions [6][7] - Plans to drive adoption in medical schools and expand into new international markets, particularly in Asia [64][69] Management's Comments on Operating Environment and Future Outlook - Management views 2023 as a transition year, with a solid path for growth established for 2024 and beyond [19] - The company has maintained a strong cash position, extending its cash runway into 2026 while continuing to invest in the business [22] - Management expects mid-single-digit growth in Q1 2024, with acceleration anticipated in the second half of the year as new sales resources ramp up [35] Other Important Information - The company has successfully launched the iQ3, which doubles processing power and enhances image quality, positioning it competitively in the market [23][41] - The company is actively pursuing regulatory approvals for its products in international markets, including the EU and Canada [49][65] Q&A Session Summary Question: Will iQ3 drive an acceleration in the replacement cycle within the customer base? - Management confirmed a trade-in path for health system partners and e-commerce customers to upgrade to iQ3 [57] Question: How is the direct sales team structured compared to last year? - The sales team has increased by 30% to 50%, with a focus on efficiency and capital use while ramping up sales efforts [58][80] Question: What is the timeline for quantifying iQ3's impact on sales? - Management anticipates having visibility on iQ3's performance by the end of Q2 2024, with a growing pipeline of opportunities [88][89]