Achieves 14% Revenue Growth - Exceeding
Expectations Raises Full Year Guidance
- Delivered record first quarter Revenue of $17.7 million
- Reduced Net Loss by 35% and Net Cash Used in Operations by
52%
- Successfully launched next generation device Butterfly iQ3™ and
training app ScanLab™
- Received European Union Medical Device Regulation (EU MDR)
certification
Butterfly Network, Inc. (NYSE: BFLY) (“Butterfly” or the
“Company”), a digital health company transforming care with
handheld, whole-body ultrasound and intuitive software, today
announced financial results for the first quarter ended March 31,
2024, and provided a business update.
Joseph DeVivo, Butterfly’s Chairman and CEO said, “We achieved
our strongest first quarter in Butterfly’s history with all
channels contributing. Our business returned to growth with a 22%
increase in probe volume following the successful commercial launch
of our third-generation handheld system, Butterfly iQ3™, which was
available for only half of the quarter in the US market. Revenue
increased 14% over last year’s first quarter while we improved our
execution and increased efficiency across our operations, leading
to a reduction in our quarterly use of cash by half. These results
came on the heels of us over-achieving our fourth quarter 2023
expectations. We are so encouraged by our first quarter results
that we are confidently increasing our guidance for 2024.
DeVivo continued, “Building on this progress, we recently
received EU MDR certification, which will enable Butterfly to
roll-out a number of advanced features on our Butterfly iQ+™ in the
European market, as we continue to progress towards launching the
iQ3 in Canada and Europe in 2024. Our success is also supported by
the launch of our new AI-powered educational application ScanLab™,
which complements Butterfly’s full suite of educational products
and helps drive adoption, further fueling growth. And finally,
Butterfly Garden, our partnership ecosystem enabling third-party AI
development on our platform, recognized the first successful
commercialization of a product developed using our technology.
“We had a number of positive announcements, a successful product
launch, and reached important milestones this quarter. Our work
strengthened our position as the leading point-of-care ultrasound
company, and we look forward to building on our strong start
throughout 2024.”
Recent Operational Highlights:
- Received FDA Clearance for and Launches Next-Generation
Butterfly iQ3™: On February 13, 2024, Butterfly announced the
commercial launch of its third-generation handheld point-of-care
ultrasound system, Butterfly iQ3, which received FDA clearance
ahead of schedule in January 2024.
- Received EU MDR Certification for Butterfly iQ+: On
March 20, 2024, Butterfly announced the attainment of its EU MDR
certificate for the Butterfly iQ+ ultrasound system. This
additional certification allows Butterfly to release important new
features to all existing and prospective European customers,
including Pulse Wave Doppler in a number of presets and its
AI-enabled Auto B-Line Counter.
- Published White Paper on iQ Slice™ and iQ™ Fan: the
paper proposed new clinical protocols using the advanced automated
tools to reduce the number of scans needed in an exam and enhance
diagnostic efficiency. It can be accessed at:
https://www.butterflynetwork.com/resources.
- Launched Ultrasound Education Offering ScanLab™: On
January 15, 2024, Butterfly launched Scanlab™, an AI-powered
educational application for ultrasound scanning practice that joins
Butterfly’s full suite of education products.
- First Butterfly Garden Commercialization: On April 23,
2024, ThinkSono released ThinkSono AI Training and became
Butterfly’s first partner in Butterfly Garden to commercialize an
offering.
- Hosted Investor Day: On March 18, 2024, Butterfly hosted
an Investor Day at the New York Stock Exchange that featured
presentations from members of Butterfly’s executive and senior
leadership team, providing insights into the Company’s product,
software and services portfolio within its core point-of-care
ultrasound market, as well as its strategic initiatives to expand
into new markets. A replay of the event can be accessed under
Archived Events at:
https://ir.butterflynetwork.com/events-and-presentations/default.aspx
Three Months Ended March 31, 2024 Financial Results
Revenue: Total revenue was $17.7 million, up from $15.5
million in the first quarter of 2023. U.S. revenue was $12.2
million, up 19% from prior year, driven by the launch of iQ3,
higher probe sales and higher average selling prices. International
sales increased 14% year-over-year to $4.2 million, primarily due
to higher probe volume partially offset by lower average selling
prices due to a higher mix of sales to distributors. Other revenue
contributed $1.3 million.
- Product revenue was $11.3 million, an increase of 28% versus
the prior year period, driven by the 22% increase in units
fulfilled year-over-year.
- Software and other services revenue was down 4% year-over-year
at $6.4 million. Software and services mix was 36% of revenue and
decreased by 7 percentage points versus prior year due to the
higher product revenue achieved this quarter.
Gross profit: Gross profit was $10.3 million versus gross
profit of $9.1 million in the prior year period. Gross margin
decreased to 58.2% from 58.7% in the prior year period, primarily
due to product mix, reflecting a higher proportion of product
revenues, and higher amortization which reduced margin by
approximately 170 basis points, partially offset by higher average
selling prices.
Operating expenses: Operating expenses were $32.9
million, down 25% from $44.1 million in the prior year period, due
to previously announced reductions in force, as well as non-payroll
spending rationalization across all areas.
Total operating expenses excluding stock-based compensation and
Other expense were $26.0 million, compared to $33.5 million in the
first quarter of 2023, representing a decrease of 22%.
Net loss: Net loss was $21.8 million, compared to $33.5
million in the prior year period.
Adjusted EBITDA: Adjusted EBITDA loss was $13.2 million,
compared to $22.3 million in the prior year period.
Adjusted EPS: Adjusted EPS was ($0.07), compared to
($0.11) in the prior year period.
Cash, cash equivalents, and restricted cash: Cash, cash
equivalents, and restricted cash were $116.8 million as of March
31, 2024.
Guidance
Increased guidance for the Fiscal Year 2024 to:
- $75 million to $80 million or approximately 15-20% Revenue
growth
- Adjusted EBITDA loss of $55 million - $50 million
A reconciliation of net loss to adjusted EBITDA and adjusted EPS
for the three months ended March 31, 2024, and 2023 is provided in
the financial schedules that are part of this press release. An
explanation of these non-GAAP financial measures is also included
below under the heading “Non-GAAP Financial Measures.”
NYSE Listing Standards
On April 26, 2024, we received a notification letter from the
New York Stock Exchange (the “NYSE”) advising us that because the
average closing price of the Company’s common stock was less than
$1.00 over a consecutive 30 trading-day period, we are not in
compliance the NYSE listing standards. The Company’s common stock
will continue to be listed and traded on the NYSE, subject to our
compliance with other NYSE continued listing standards.
Butterfly has a period of six months following the receipt of
the notification to regain compliance with the minimum price
criteria. The Company plans to regain compliance through a recovery
in the stock price and, if the stock price does not recover within
the applicable cure period, through a reverse stock split. The
Delisting Notice does not affect the ongoing business operations of
the Company or its reporting requirements with the Securities and
Exchange Commission.
Conference Call
A conference call and webcast to discuss first quarter 2024
financial results and operational progress is scheduled for 5:00 pm
ET on May 1, 2024. The conference call will be broadcast live in
listen-only mode via a webcast on Butterfly’s Investor Relations
website at Events & Presentations. Individuals interested in
listening to the conference call on their telephone may do so by
dialing in approximately ten minutes prior to start time:
US domestic callers: +1 (833) 470-1428 Global
Dial-In Numbers:
https://www.netroadshow.com/events/global-numbers?confId=63404
Access Code: 497756
About Butterfly Network
Founded by Dr. Jonathan Rothberg in 2011, Butterfly Network is a
digital health company with a mission is to democratize medical
imaging by making high-quality ultrasound affordable, easy-to-use,
globally accessible, and intelligently connected, including for the
4.7 billion people around the world lacking access to ultrasound.
Butterfly created the world's first handheld single-probe,
whole-body ultrasound system using semiconductor technology,
Butterfly iQ. The company has continued to innovate, leveraging the
benefits of Moore’s Law, to launch its second generation Butterfly
iQ+ in 2020, and third generation iQ3 in 2024 – each with increased
processing power and performance enhancements. The disruptive
technology has been recognized by TIME’s Best Inventions, Fast
Company’s World Changing Ideas, CNBC Disruptor 50, and MedTech
Breakthrough Awards, among other accolades. With its proprietary
Ultrasound-on-Chip™ technology, intelligent software, and
educational offerings, Butterfly is paving the way to mass adoption
of ultrasound for earlier detection and remote management of health
conditions around the world. Butterfly devices are commercially
available to trained healthcare practitioners in areas including,
but not limited to, parts of Africa, Asia, Australia, Europe, the
Middle East, North America and South America; to learn more about
available countries, visit:
https://www.butterflynetwork.com/choose-your-country.
Non-GAAP Financial Measures
In addition to providing financial measures based on generally
accepted accounting principles in the United States of America
(“GAAP”), we provide additional financial measures that are not
prepared in accordance with GAAP (“non-GAAP”). The non-GAAP
financial measures included in this press release are adjusted
EBITDA and adjusted EPS. We present non-GAAP financial measures in
order to assist readers of our financial statements in
understanding the core operating results that our management uses
to evaluate the business and for financial planning purposes. Our
non-GAAP financial measures provide an additional tool for
investors to use in comparing our financial performance over
multiple periods.
Adjusted EBITDA and adjusted EPS 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 adjusted EBITDA and adjusted EPS 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.
Adjusted EBITDA and adjusted EPS may not be comparable to
similarly titled measures of other companies because they may not
calculate these measures in the same manner. Adjusted EBITDA and
adjusted EPS 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 EBITDA and
adjusted EPS alongside other financial performance measures
prepared in accordance with GAAP, including 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 EBITDA and adjusted EPS to net
loss, the most directly comparable GAAP financial measures.
Reconciliations of adjusted EBITDA and adjusted EPS 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, the size and potential growth
of current or future markets for our products and services and
expectations of regaining compliance with the NYSE listing
requirements. 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, as amended, or in
subsequent filings that we make with the Securities and Exchange
Commission. We caution that the foregoing list of factors is not
exclusive. We caution you not to place undue reliance upon any
forward-looking statements, which speak only as of the date of this
press release. We do not undertake or accept any obligation or
undertake to release publicly any updates or revisions to any
forward-looking statements to reflect any change in our
expectations or any change in events, conditions, or circumstances
on which any such statement is based.
BUTTERFLY NETWORK,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share
and per share amounts)
(Unaudited)
Three months ended March
31,
2024
2023
Revenue:
Product
$
11,291
$
8,848
Software and other services
6,365
6,628
Total revenue
17,656
15,476
Cost of revenue:
Product
5,096
4,349
Software and other services
2,284
2,038
Total cost of revenue
7,380
6,387
Gross profit
10,276
9,089
Operating expenses:
Research and development
10,720
16,651
Sales and marketing
10,378
10,034
General and administrative
10,442
11,019
Other
1,357
6,432
Total operating expenses
32,897
44,136
Loss from operations
(22,621
)
(35,047
)
Interest income
1,511
1,784
Interest expense
(300
)
—
Change in fair value of warrant
liabilities
(207
)
(207
)
Other (expense) income, net
(141
)
17
Loss before provision for income
taxes
(21,758
)
(33,453
)
Provision for income taxes
3
87
Net loss and comprehensive loss
$
(21,761
)
$
(33,540
)
Net loss per common share attributable to
Class A and B common stockholders, basic and diluted
$
(0.10
)
$
(0.17
)
Weighted-average shares used to compute
net loss per share attributable to Class A and B common
stockholders, basic and diluted
208,873,449
202,565,877
BUTTERFLY NETWORK,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share amounts)
(Unaudited)
March 31,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
112,652
$
134,437
Accounts receivable, net
13,914
13,418
Inventories
74,494
73,022
Current portion of vendor advances
3,979
2,815
Prepaid expenses and other current
assets
8,234
7,571
Total current assets
213,273
231,263
Property and equipment, net
24,425
25,321
Intangible assets, net
9,967
10,317
Non-current portion of vendor advances
15,169
15,276
Operating lease assets
15,325
15,675
Other non-current assets
6,129
6,422
Total assets
$
284,288
$
304,274
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
5,808
$
5,090
Deferred revenue, current
14,464
15,625
Accrued purchase commitments, current
131
131
Accrued expenses and other current
liabilities
21,139
23,425
Total current liabilities
41,542
44,271
Deferred revenue, non-current
7,217
7,394
Warrant liabilities
1,033
826
Operating lease liabilities
22,252
22,835
Other non-current liabilities
8,240
8,895
Total liabilities
80,284
84,221
Commitments and contingencies
Stockholders’ equity:
Class A common stock $.0001 par value;
600,000,000 shares authorized at March 31, 2024 and December 31,
2023; 184,214,377 and 181,221,794 shares issued and outstanding at
March 31, 2024 and December 31, 2023, respectively
18
18
Class B common stock $.0001 par value;
27,000,000 shares authorized at March 31, 2024 and December 31,
2023; 26,426,937 shares issued and outstanding at March 31, 2024
and December 31, 2023
3
3
Additional paid-in capital
955,382
949,670
Accumulated deficit
(751,399
)
(729,638
)
Total stockholders’ equity
204,004
220,053
Total liabilities and stockholders’
equity
$
284,288
$
304,274
BUTTERFLY NETWORK,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended March
31,
2024
2023
Cash flows from operating activities:
Net loss
$
(21,761
)
$
(33,540
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation, amortization, and
impairments
2,584
2,111
Non-cash interest expense
299
—
Write-down of inventories
(81
)
—
Stock-based compensation expense
5,524
4,185
Change in fair value of warrant
liabilities
207
207
Other
244
(708
)
Changes in operating assets and
liabilities:
Accounts receivable
(751
)
1,077
Inventories
(1,391
)
(9,437
)
Prepaid expenses and other assets
(376
)
(3,175
)
Vendor advances
(1,057
)
2,260
Accounts payable
703
(1,561
)
Deferred revenue
(1,338
)
(1,536
)
Accrued purchase commitments
—
(1,615
)
Change in operating lease assets and
liabilities
(163
)
175
Accrued expenses and other liabilities
(3,310
)
(1,695
)
Net cash used in operating
activities
(20,667
)
(43,252
)
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
(1,138
)
(1,342
)
Sales of property and equipment
—
10
Net cash (used in) provided by
investing activities
(1,138
)
74,855
Cash flows from financing activities:
Net cash provided by financing
activities
—
—
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(21,805
)
31,603
Cash, cash equivalents, and restricted
cash, beginning of period
138,650
166,828
Cash, cash equivalents, and restricted
cash, end of period
$
116,845
$
198,431
BUTTERFLY NETWORK,
INC.
GROSS PROFIT AND GROSS
MARGIN
(In thousands)
(Unaudited)
Three months ended March
31,
2024
2023
Revenue
$
17,656
$
15,476
Cost of revenue
7,380
6,387
Gross profit
$
10,276
$
9,089
Gross margin
58.2
%
58.7
%
Depreciation and amortization
$
1,585
$
1,287
% of revenue
9.0
%
8.3
%
BUTTERFLY NETWORK,
INC.
ADJUSTED EBITDA
(In thousands)
(Unaudited)
Included on the condensed consolidated
statements of operations and comprehensive loss as:
Three months ended March
31,
2024
2023
Net loss
Net loss
$
(21,761
)
$
(33,540
)
Stock-based compensation
R&D, S&M, and G&A
5,524
4,185
Change in fair value of warrant
liabilities
Change in fair value of warrant
liabilities
207
207
Other
Other
1,357
6,432
Other expense (income), net
Other (expense) income, net
141
(17
)
Adjusted net loss
(14,532
)
(22,733
)
Interest income
Interest income
(1,511
)
(1,784
)
Interest expense
Interest expense
300
—
Provision for income taxes
Provision for income taxes
3
87
Depreciation and amortization
Cost of revenue, R&D, S&M, and
G&A
2,584
2,111
Adjusted EBITDA
$
(13,156
)
$
(22,319
)
Adjusted EPS
$
(0.07
)
$
(0.11
)
Weighted average shares used to compute
adjusted EPS
208,873,449
202,565,877
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501128961/en/
Investors Heather Getz Chief Financial and Operations
Officer, Butterfly hgetz@butterflynetinc.com
Neal Nagarajan IR Agency Representative, Sloane & Company
(301) 273-5662 nnagarajan@sloanepr.com
Butterfly Network (NYSE:BFLY)
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