Butterfly Network Reports Third Quarter 2024 Financial Results
Delivered Quarterly Revenue of
Raises Full Year Revenue and Adjusted EBITDA Guidance
-
Delivered quarterly Revenue of
$20.6 million in Q3, representing 33% YoY growth -
Reduced Q3 Net Loss by 38% and
Net Cash Used in Operations by 50% -
Launched iQ3 in
Europe and opened new markets inIndonesia ,the Netherlands , andBelgium - Announced the formation of Octiv™, a wholly owned subsidiary focused on bringing Butterfly’s chip to new sectors
DeVivo continued, "What’s more, while delivering strong results today, the Butterfly team has also kept our eye on the future. We remain fully committed to the strategic growth pillars we introduced at our
Recent Operational and Strategic Highlights:
-
Butterfly’s Return-on-Investment Validation:
Published a case study demonstrating that University of Rochester Medical Center’s system-wide deployment of Butterfly is enhancing patient care and financial performance. Additional research by Dr.
Stephen Erickson atJefferson Healthcare shows Butterfly devices pay for themselves quickly for individual practitioners, as well. -
Medical Education Progress: Announced
Kansas City University as the firstU.S. medical school to leverage Butterfly ScanLab™ as the foundation of its POCUS curriculum. -
International Market Expansion:
Launched Butterfly iQ3 in
Europe , and opened new markets inIndonesia ,the Netherlands , andBelgium . -
Butterfly Veterinary Advancements: Announced data from
Kansas State University withBeef Cattle Institute on chute-side management of bovine respiratory disease, confirming the value of Butterfly in creating a new decision-making process for cattle operations globally. -
Butterfly Garden Growth: Signed two new Butterfly Garden partners, bringing the portfolio to 17 companies. On
October 28, 2024 , HeartFocus by Deski announced the commercial launch of its AI-powered cardiac training app. - Butterfly HomeCare Pilot Announcement: In the fourth quarter 2024, Butterfly HomeCare is set to begin a pilot for virtual chronic care management with a leading Medicare Advantage provider to improve heart failure outcomes through AI-powered imaging.
- Octiv™ Subsidiary Formation Announcement: as a next step to monetize the full value of Powered by Butterfly™, the Company plans to form Octiv – a wholly-owned subsidiary dedicated to bringing Butterfly’s proprietary chip to new sectors. With the creation of Octiv, the Company’s goal is to increase access to capital from new investors, while unlocking value for current Butterfly shareholders.
-
European Union’s Restriction of Hazardous Substances (RoHS) Update: Butterfly leadership met with the officials responsible for the RoHS exemptions revision on
September 11, 2024 inBrussels . During the discussion, Butterfly’s revocation was welcomed with significant support from theEuropean Commission representatives. Subsequently, onOctober 23, 2024 , Butterfly re-submitted its revocation request, providing additional information and details suggested by theEuropean Commission .
Three Months Ended
Revenue: Total revenue was
-
Product revenue was
$13.5 million , an increase of 55% versus the prior year period, driven by the 37% increase in units fulfilled year-over-year and the iQ3’s higher selling price. -
Software and other services revenue was up 5% year-over-year at
$7.0 million . Software and other services mix was 34% of revenue and decreased by 9 percentage points versus the prior year due to the higher product revenue achieved this quarter. Enterprise as a percentage of software revenue increased 5 percentage points year-over-year.
Gross profit: Gross profit was
Operating expenses: Operating expenses were
Total operating expenses excluding stock-based compensation and Other expense were
Net loss: Net loss was
Adjusted EBITDA: Adjusted EBITDA loss was
Adjusted EPS: Adjusted EPS was (
Cash, cash equivalents, and restricted cash: Cash, cash equivalents, and restricted cash were
Guidance
Increased Revenue Guidance and improved Adjusted EBITDA guidance for the Fiscal Year 2024 to:
-
Revenue guidance of
$79 million to$81 million or over 20% growth -
Improved adjusted EBITDA guidance by
$5 million to a loss of$42 million -$40 million
Reconciliation of GAAP to Adjusted
Reconciliations of gross margin to adjusted gross margin and of net loss to adjusted EBITDA and adjusted EPS for the three and nine months ended
Conference Call
A conference call and webcast to discuss third quarter 2024 financial performance and operational progress is scheduled for
US domestic callers: +1 (833) 470-1428
Global Dial-In Numbers: https://www.netroadshow.com/events/global-numbers?confId=71022
Access Code: 668983
After the live webcast, the call will be archived on Butterfly’s Investor Relations page. In addition, a telephone replay of the call will be available until
Access Code: 736364
About
Founded by Dr.
Non-GAAP Financial Measures
In addition to providing financial measures based on generally accepted accounting principles in
The non-GAAP financial measures included in this press release are key performance measures that our management uses to assess our operating performance. These non-GAAP measures facilitate internal comparisons of our operating performance on a more consistent basis. We use these performance measures for business planning purposes and forecasting. We believe that these non-GAAP measures enhance an investor’s understanding of our financial performance as they are useful in assessing our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.
The non-GAAP financial measures included in this press release may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. When evaluating the Company’s performance, you should consider adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EPS alongside other financial performance measures prepared in accordance with GAAP, including gross profit, gross margin, net loss, and EPS.
The non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. In this press release, we have provided reconciliations of adjusted gross profit to gross profit, adjusted gross margin to gross margin, and adjusted EBITDA and adjusted EPS to net loss, the most directly comparable GAAP financial measures. Reconciliations of our non-GAAP financial measures to corresponding GAAP measures are not available on a forward-looking basis because we are unable to predict with reasonable certainty the non-cash component of employee compensation expense, changes in our working capital needs, variances in our supply chain, the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
Forward Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Our actual results may differ from our expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predict,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expectations with respect to financial results, future performance, commercialization and plans to deploy our products and services, development of products and services, and the size and potential growth of current or future markets for our products and services. Forward-looking statements are based on our current beliefs and assumptions and on information currently available to us. These forward-looking statements involve significant known and unknown risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside our control and are difficult to predict. Factors that may cause such differences include, but are not limited to: our ability to grow and manage growth effectively; the success, cost, and timing of our product and service development activities; the potential attributes and benefits of our products and services; the degree to which our products and services are accepted by healthcare practitioners and patients for their approved uses; our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any approved product; our ability to identify, in-license, or acquire additional technology; our ability to maintain our existing license, manufacturing, supply, and distribution agreements; our ability to compete with other companies currently marketing or engaged in the development of products and services that we are currently marketing or developing; changes in applicable laws or regulations; the size and growth potential of the markets for our products and services, and our ability to serve those markets, either alone or in partnership with others; the pricing of our products and services, and reimbursement for medical procedures conducted using our products and services; our estimates regarding expenses, revenue, capital requirements, and needs for additional financing; our financial performance; our ability to raise financing in the future; and other risks and uncertainties indicated from time to time in our most recent Annual Report on Form 10-K or in subsequent filings that we make with the
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share amounts) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
$ |
13,538 |
|
|
$ |
8,753 |
|
|
$ |
39,478 |
|
|
$ |
29,874 |
|
Software and other services |
|
|
7,023 |
|
|
|
6,668 |
|
|
|
20,227 |
|
|
|
19,510 |
|
Total revenue |
|
|
20,561 |
|
|
|
15,421 |
|
|
|
59,705 |
|
|
|
49,384 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
|
6,065 |
|
|
|
3,929 |
|
|
|
17,739 |
|
|
|
13,765 |
|
Software and other services |
|
|
2,263 |
|
|
|
2,110 |
|
|
|
6,870 |
|
|
|
6,226 |
|
Total cost of revenue |
|
|
8,328 |
|
|
|
6,039 |
|
|
|
24,609 |
|
|
|
19,991 |
|
Gross profit |
|
|
12,233 |
|
|
|
9,382 |
|
|
|
35,096 |
|
|
|
29,393 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
8,844 |
|
|
|
12,130 |
|
|
|
28,975 |
|
|
|
44,409 |
|
Sales and marketing |
|
|
9,607 |
|
|
|
9,012 |
|
|
|
29,713 |
|
|
|
28,776 |
|
General and administrative |
|
|
9,353 |
|
|
|
11,560 |
|
|
|
29,868 |
|
|
|
37,239 |
|
Other |
|
|
1,675 |
|
|
|
9,243 |
|
|
|
3,639 |
|
|
|
17,848 |
|
Total operating expenses |
|
|
29,479 |
|
|
|
41,945 |
|
|
|
92,195 |
|
|
|
128,272 |
|
Loss from operations |
|
|
(17,246 |
) |
|
|
(32,563 |
) |
|
|
(57,099 |
) |
|
|
(98,879 |
) |
Interest income |
|
|
1,221 |
|
|
|
1,903 |
|
|
|
4,023 |
|
|
|
5,714 |
|
Interest expense |
|
|
(319 |
) |
|
|
— |
|
|
|
(928 |
) |
|
|
— |
|
Change in fair value of warrant liabilities |
|
|
(1,239 |
) |
|
|
3,511 |
|
|
|
(826 |
) |
|
|
3,924 |
|
Other income (expense), net |
|
|
717 |
|
|
|
(217 |
) |
|
|
517 |
|
|
|
(256 |
) |
Loss before provision for income taxes |
|
|
(16,866 |
) |
|
|
(27,366 |
) |
|
|
(54,313 |
) |
|
|
(89,497 |
) |
Provision for income taxes |
|
|
58 |
|
|
|
2 |
|
|
|
78 |
|
|
|
82 |
|
Net loss and comprehensive loss |
|
$ |
(16,924 |
) |
|
$ |
(27,368 |
) |
|
$ |
(54,391 |
) |
|
$ |
(89,579 |
) |
Net loss per common share attributable to Class A and B common stockholders, basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.44 |
) |
Weighted-average shares used to compute net loss per share attributable to Class A and B common stockholders, basic and diluted |
|
|
212,774,085 |
|
|
|
206,740,234 |
|
|
|
211,109,792 |
|
|
|
204,749,108 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
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|
|
|
|||
|
|
|
|
|
||||
|
|
2024 |
|
2023 |
||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
93,758 |
|
|
$ |
134,437 |
|
Accounts receivable, net |
|
|
20,621 |
|
|
|
13,418 |
|
Inventories |
|
|
73,271 |
|
|
|
73,022 |
|
Current portion of vendor advances |
|
|
4,351 |
|
|
|
2,815 |
|
Prepaid expenses and other current assets |
|
|
7,492 |
|
|
|
7,571 |
|
Total current assets |
|
|
199,493 |
|
|
|
231,263 |
|
Property and equipment, net |
|
|
21,176 |
|
|
|
25,321 |
|
Intangible assets, net |
|
|
9,266 |
|
|
|
10,317 |
|
Non-current portion of vendor advances |
|
|
15,082 |
|
|
|
15,276 |
|
Operating lease assets |
|
|
14,606 |
|
|
|
15,675 |
|
Other non-current assets |
|
|
5,649 |
|
|
|
6,422 |
|
Total assets |
|
$ |
265,272 |
|
|
$ |
304,274 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
3,651 |
|
|
$ |
5,090 |
|
Deferred revenue, current |
|
|
16,425 |
|
|
|
15,625 |
|
Accrued purchase commitments, current |
|
|
131 |
|
|
|
131 |
|
Accrued expenses and other current liabilities |
|
|
22,585 |
|
|
|
23,425 |
|
Total current liabilities |
|
|
42,792 |
|
|
|
44,271 |
|
Deferred revenue, non-current |
|
|
7,035 |
|
|
|
7,394 |
|
Warrant liabilities |
|
|
1,652 |
|
|
|
826 |
|
Operating lease liabilities |
|
|
21,030 |
|
|
|
22,835 |
|
Other non-current liabilities |
|
|
10,931 |
|
|
|
8,895 |
|
Total liabilities |
|
|
83,440 |
|
|
|
84,221 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
19 |
|
|
|
18 |
|
Class B common stock |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
965,839 |
|
|
|
949,670 |
|
Accumulated deficit |
|
|
(784,029 |
) |
|
|
(729,638 |
) |
Total stockholders’ equity |
|
|
181,832 |
|
|
|
220,053 |
|
Total liabilities and stockholders’ equity |
|
$ |
265,272 |
|
|
$ |
304,274 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Nine months ended |
||||||
|
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(54,391 |
) |
|
$ |
(89,579 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation, amortization, and impairments |
|
|
7,835 |
|
|
|
8,332 |
|
Non-cash interest expense |
|
|
926 |
|
|
|
— |
|
Write-down of inventories |
|
|
15 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
15,794 |
|
|
|
20,924 |
|
Change in fair value of warrant liabilities |
|
|
826 |
|
|
|
(3,924 |
) |
Gain on lease termination |
|
|
— |
|
|
|
(214 |
) |
Other |
|
|
945 |
|
|
|
(478 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(8,158 |
) |
|
|
711 |
|
Inventories |
|
|
(264 |
) |
|
|
(34,046 |
) |
Prepaid expenses and other assets |
|
|
681 |
|
|
|
2,354 |
|
Vendor advances |
|
|
(1,342 |
) |
|
|
15,646 |
|
Accounts payable |
|
|
(1,440 |
) |
|
|
1,092 |
|
Deferred revenue |
|
|
441 |
|
|
|
(423 |
) |
Accrued purchase commitments |
|
|
— |
|
|
|
(1,934 |
) |
Change in operating lease assets and liabilities |
|
|
(549 |
) |
|
|
(671 |
) |
Accrued expenses and other liabilities |
|
|
94 |
|
|
|
(3,509 |
) |
Net cash used in operating activities |
|
|
(38,587 |
) |
|
|
(85,719 |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of marketable securities |
|
|
— |
|
|
|
(297 |
) |
Sales of marketable securities |
|
|
— |
|
|
|
76,484 |
|
Purchases of property, equipment, and intangible assets, including capitalized software |
|
|
(2,286 |
) |
|
|
(3,271 |
) |
Sales of property and equipment |
|
|
36 |
|
|
|
10 |
|
Net cash (used in) provided by investing activities |
|
|
(2,250 |
) |
|
|
72,926 |
|
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options and warrants |
|
|
— |
|
|
|
228 |
|
Net cash provided by financing activities |
|
|
— |
|
|
|
228 |
|
Net decrease in cash, cash equivalents, and restricted cash |
|
|
(40,837 |
) |
|
|
(12,565 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
138,650 |
|
|
|
166,828 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
97,813 |
|
|
$ |
154,263 |
|
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN (In thousands) (Unaudited) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Three months ended |
|
|
Nine months ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenue |
|
$ |
20,561 |
|
|
$ |
15,421 |
|
|
$ |
59,705 |
|
|
$ |
49,384 |
|
Cost of revenue |
|
|
8,328 |
|
|
|
6,039 |
|
|
|
24,609 |
|
|
|
19,991 |
|
Gross profit |
|
$ |
12,233 |
|
|
$ |
9,382 |
|
|
$ |
35,096 |
|
|
$ |
29,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
59.5 |
% |
|
|
60.8 |
% |
|
|
58.8 |
% |
|
|
59.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-downs and write-offs of inventories |
|
|
97 |
|
|
|
— |
|
|
|
97 |
|
|
|
— |
|
Adjusted gross profit |
|
$ |
12,330 |
|
|
$ |
9,382 |
|
|
$ |
35,193 |
|
|
$ |
29,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin |
|
|
60.0 |
% |
|
|
60.8 |
% |
|
|
58.9 |
% |
|
|
59.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
$ |
1,632 |
|
|
$ |
1,448 |
|
|
$ |
4,862 |
|
|
$ |
4,127 |
|
% of revenue |
|
|
7.9 |
% |
|
|
9.4 |
% |
|
|
8.1 |
% |
|
|
8.4 |
% |
ADJUSTED EBITDA AND ADJUSTED EPS (In thousands, except share and per share amounts) (Unaudited) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Included on the condensed consolidated statements of operations and comprehensive loss as: |
|
Three months ended |
|
Nine months ended |
|||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net loss |
Net loss |
|
$ |
(16,924 |
) |
|
$ |
(27,368 |
) |
|
$ |
(54,391 |
) |
|
$ |
(89,579 |
) |
|
Stock-based compensation |
R&D, S& |
|
|
4,411 |
|
|
|
6,815 |
|
|
|
15,794 |
|
|
|
20,924 |
|
|
Write-downs and write-offs of inventories |
Cost of revenue |
|
|
97 |
|
|
|
— |
|
|
|
97 |
|
|
|
— |
|
|
Change in fair value of warrant liabilities |
Change in fair value of warrant liabilities |
|
|
1,239 |
|
|
|
(3,511 |
) |
|
|
826 |
|
|
|
(3,924 |
) |
|
Other |
Other |
|
|
1,675 |
|
|
|
9,243 |
|
|
|
3,639 |
|
|
|
17,848 |
|
|
Other expense (income), net |
Other income (expense), net |
|
|
(717 |
) |
|
|
217 |
|
|
|
(517 |
) |
|
|
256 |
|
|
Adjusted net loss |
|
|
|
(10,219 |
) |
|
|
(14,604 |
) |
|
|
(34,552 |
) |
|
|
(54,475 |
) |
|
Interest income |
Interest income |
|
|
(1,221 |
) |
|
|
(1,903 |
) |
|
|
(4,023 |
) |
|
|
(5,714 |
) |
|
Interest expense |
Interest expense |
|
|
319 |
|
|
|
— |
|
|
|
928 |
|
|
|
— |
|
|
Provision for income taxes |
Provision for income taxes |
|
|
58 |
|
|
|
2 |
|
|
|
78 |
|
|
|
82 |
|
|
Depreciation and amortization |
Cost of revenue, R&D, S& |
|
|
2,618 |
|
|
|
4,027 |
|
|
|
7,835 |
|
|
|
8,332 |
|
|
Adjusted EBITDA |
|
|
$ |
(8,445 |
) |
|
$ |
(12,478 |
) |
|
$ |
(29,734 |
) |
|
$ |
(51,775 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EPS |
|
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.27 |
) |
|
Weighted average shares used to compute adjusted EPS |
|
|
|
212,774,085 |
|
|
|
206,740,234 |
|
|
|
211,109,792 |
|
|
|
204,749,108 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241101201836/en/
Investors
Chief Financial and Operations Officer, Butterfly
investors@butterflynetwork.com
Source: