Post by icemandios on Aug 3, 2022 13:01:43 GMT
Butterfly Network Reports Second Quarter 2022 Financial Results
Record Revenue with Momentum in Both Domestic and International Markets
Butterfly Network, Inc. (NYSE: BFLY) (“Butterfly”), a digital health company transforming care with handheld, whole-body ultrasound, today announced financial results for the quarter ended June 30, 2022, and provided a business update.
Highlights
Reported total revenue of $19.2 million for the second quarter ended June 30, 2022, representing a 16.4% increase from $16.5 million for the second quarter ended June 30, 2021 and a 23% increase sequentially.
Baylor Scott & White, in Texas, began a scaled deployment of Butterfly’s Compass software – an initiative that has started within the critical care and emergency departments at Baylor Scott & White Medical Center – Temple, Baylor University Medical Center in Dallas, and Baylor Scott & White Medical Center - Hillcrest in Waco.
Zebra Medical, a leading medical device manufacturer and distributor largely serving the fields of oncology, pain management, and dialysis, is now a distribution partner to bring Butterfly to healthcare professionals in South Africa – for those serving human health as well as animal health.
Partnership with Bill & Melinda Gates Foundation (announced in first quarter) to improve maternal and fetal health in Sub-Saharan Africa with Butterfly iQ+ is on track, as we distributed 500 probes to mid-level practitioners in Kenya during the second quarter and 500 probes to be distributed in South Africa in the second half of the year.
Continued momentum in veterinary markets through a 4-year partnership with Texas Tech University School of Veterinary Medicine and addition of University of Pennsylvania’s School of Veterinary Medicine to our student program customer list.
Working with Yale University, patients at home are using Butterfly to scan their own bladder for bladder volume.
Tightly managed our expenses in the quarter, informed by the better understanding of our strategic investment priorities.
Implemented a plan for future cost savings of approximately $3 million per month when fully implemented, giving us an extended cash runway.
“This past quarter has been an important one for our progress and trajectory as an organization. Not only are we piloting the growth of a truly disruptive technology, we’re also at the heart of our evolution as a young public company – continuing to build upon the changes we made last year in how we operate, innovate and bring value to the healthcare ecosystem,” said Dr. Todd Fruchterman, Butterfly’s President and Chief Executive Officer. “Our team is laser-focused on making Butterfly Easy, Everywhere and Economical, embodied in a well-defined strategy to help us deliver our value to the global healthcare ecosystem.” Fruchterman continued, “These three core principles are how we will drive adoption and realize our vision. Mindful of what matters most to our customers and the long-term success of Butterfly, we were able to reduce our expenses in the quarter, informed by a better understanding of our strategic investment priorities.”
“To ensure our ability to achieve the Company’s mission at scale we also have adopted a plan to extend our cash runway,” Fruchterman added. “This plan includes improved efficiencies and targeted reductions in our workforce, aligned to our strategic priorities. The talent and mission-driven dedication of our team has made these decisions challenging on a personal level, but I am confident these changes strengthen our position to capture the value of our market leading innovation and set us up for a future where Butterfly is the standard of care, everywhere.”
The Company is reiterating its full year revenue guidance in the range of $83 to $88 million and increasing its Adjusted EBITDA guidance to a loss of $155 to $145 million from a loss of $195 to $175 million to reflect the impact of our capital preservation plan.
Second Quarter 2022 Financial Results
Second quarter total revenue increased 16.4% to $19.2 million from $16.5 million in the second quarter of 2021. Product revenue increased 3.2% to $13.4 million from $13.0 million in the second quarter of 2021. Subscription revenue increased 65.3% to $5.8 million from $3.5 million in the second quarter of 2021.
Gross profit for the second quarter of 2022 was $10.6 million, compared to gross profit of $8.2 million in the second quarter of 2021. Adjusted gross profit was $11.2 million for the second quarter of 2022, compared to an adjusted gross profit of $8.3 million in the second quarter of 2021.
Total gross margin for the quarter was 55.0%, compared to 49.8% in the second quarter of 2021. Adjusted gross margin was 58.5%, compared to 50.2% in the second quarter of 2021.
Total operating expenses for the quarter were $59.0 million, compared to $44.9 million in the second quarter of 2021, representing an increase of 31.4% primarily due to higher payroll expenses and incremental investment in our research & development and business infrastructure compared to the second quarter of 2022.
Net loss for the second quarter of 2022 was $35.8 million, compared to a net loss of $2.9 million during the second quarter of 2021. Adjusted EBITDA was a loss of $37.8 million during the second quarter of 2022, compared to a loss of $28.5 million in the second quarter of 2021.
Cash and cash equivalents were $310.8 million as of June 30, 2022.
A reconciliation of Adjusted EBITDA to net loss, Adjusted gross profit to gross profit, and Adjusted gross margin to gross margin for the three months ended June 30, 2022 and 2021, 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.”
Conference Call
A conference call to review the second quarter 2022 financial results and provide a business update is scheduled for August 3, 2022, at 8:30 am Eastern Time. Interested parties may access the conference call by dialing +1(844) 200-6205 (U.S.) or +1 (929) 526-1599 (Outside U.S.) and referencing Access Code: 741669. Additionally, a link to a live webcast of the call will be available in the Investors section of Butterfly's website.
About Butterfly Network, Inc.
Founded by Dr. Jonathan Rothberg in 2011 and listed on the New York Stock Exchange through a business combination with Longview Acquisition Corp., Butterfly created the world's first handheld, single probe whole-body ultrasound system using semiconductor technology, the Butterfly iQ+. Butterfly's mission is to democratize medical imaging and contribute to the aspiration of global health equity, 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. Through its proprietary Ultrasound-on-Chip™ technology, Butterfly is paving the way for earlier detection and remote management of health conditions around the world. The Butterfly iQ+ can be purchased online today by healthcare practitioners in the United States, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
Butterfly iQ+ is a prescription device intended for trained healthcare professionals only.
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (“GAAP”), the Company provides additional financial metrics that are not prepared in accordance with GAAP (“non-GAAP”). The non-GAAP financial measures included in this press release are Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin. The Company presents non-GAAP financial measures in order to assist readers of its condensed consolidated financial statements in understanding the core operating results that its management uses to evaluate the business and for financial planning purposes. The Company’s non-GAAP financial measures, Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin, provide an additional tool for investors to use in comparing our financial performance over multiple periods.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin are key performance measures that the Company’s management uses to assess our operating performance. These non-GAAP measures facilitate internal comparisons of the Company’s operating performance on a more consistent basis. The Company uses these performance measures for business planning purposes and forecasting. The Company believes that Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin enhance an investor’s understanding of the Company’s financial performance as they are useful in assessing its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin 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, Adjusted gross profit and Adjusted gross margin alongside other financial performance measures prepared in accordance with GAAP, including net loss, gross profit, and gross margin.
The non-GAAP financial measures do not replace the presentation of the Company’s GAAP financial results and should only be used as a supplement to, not as a substitute for, the Company’s financial results presented in accordance with GAAP. In this press release, the Company has provided a reconciliation of Adjusted EBITDA to net loss, Adjusted gross profit to gross profit, and Adjusted gross margin to gross margin, the most directly comparable GAAP financial measures. A reconciliation of Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin to corresponding GAAP measures is not available on a forward-looking basis because the Company is unable to predict with reasonable certainty the non-cash component of employee compensation expense, changes in its working capital needs, variances in its supply chain, the impact of earnings or charges resulting from matters the Company considers not to be reflective, on a recurring basis, of its ongoing operations, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP. Management strongly encourages investors to review the Company’s financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Financial Data
Record Revenue with Momentum in Both Domestic and International Markets
Butterfly Network, Inc. (NYSE: BFLY) (“Butterfly”), a digital health company transforming care with handheld, whole-body ultrasound, today announced financial results for the quarter ended June 30, 2022, and provided a business update.
Highlights
Reported total revenue of $19.2 million for the second quarter ended June 30, 2022, representing a 16.4% increase from $16.5 million for the second quarter ended June 30, 2021 and a 23% increase sequentially.
Baylor Scott & White, in Texas, began a scaled deployment of Butterfly’s Compass software – an initiative that has started within the critical care and emergency departments at Baylor Scott & White Medical Center – Temple, Baylor University Medical Center in Dallas, and Baylor Scott & White Medical Center - Hillcrest in Waco.
Zebra Medical, a leading medical device manufacturer and distributor largely serving the fields of oncology, pain management, and dialysis, is now a distribution partner to bring Butterfly to healthcare professionals in South Africa – for those serving human health as well as animal health.
Partnership with Bill & Melinda Gates Foundation (announced in first quarter) to improve maternal and fetal health in Sub-Saharan Africa with Butterfly iQ+ is on track, as we distributed 500 probes to mid-level practitioners in Kenya during the second quarter and 500 probes to be distributed in South Africa in the second half of the year.
Continued momentum in veterinary markets through a 4-year partnership with Texas Tech University School of Veterinary Medicine and addition of University of Pennsylvania’s School of Veterinary Medicine to our student program customer list.
Working with Yale University, patients at home are using Butterfly to scan their own bladder for bladder volume.
Tightly managed our expenses in the quarter, informed by the better understanding of our strategic investment priorities.
Implemented a plan for future cost savings of approximately $3 million per month when fully implemented, giving us an extended cash runway.
“This past quarter has been an important one for our progress and trajectory as an organization. Not only are we piloting the growth of a truly disruptive technology, we’re also at the heart of our evolution as a young public company – continuing to build upon the changes we made last year in how we operate, innovate and bring value to the healthcare ecosystem,” said Dr. Todd Fruchterman, Butterfly’s President and Chief Executive Officer. “Our team is laser-focused on making Butterfly Easy, Everywhere and Economical, embodied in a well-defined strategy to help us deliver our value to the global healthcare ecosystem.” Fruchterman continued, “These three core principles are how we will drive adoption and realize our vision. Mindful of what matters most to our customers and the long-term success of Butterfly, we were able to reduce our expenses in the quarter, informed by a better understanding of our strategic investment priorities.”
“To ensure our ability to achieve the Company’s mission at scale we also have adopted a plan to extend our cash runway,” Fruchterman added. “This plan includes improved efficiencies and targeted reductions in our workforce, aligned to our strategic priorities. The talent and mission-driven dedication of our team has made these decisions challenging on a personal level, but I am confident these changes strengthen our position to capture the value of our market leading innovation and set us up for a future where Butterfly is the standard of care, everywhere.”
The Company is reiterating its full year revenue guidance in the range of $83 to $88 million and increasing its Adjusted EBITDA guidance to a loss of $155 to $145 million from a loss of $195 to $175 million to reflect the impact of our capital preservation plan.
Second Quarter 2022 Financial Results
Second quarter total revenue increased 16.4% to $19.2 million from $16.5 million in the second quarter of 2021. Product revenue increased 3.2% to $13.4 million from $13.0 million in the second quarter of 2021. Subscription revenue increased 65.3% to $5.8 million from $3.5 million in the second quarter of 2021.
Gross profit for the second quarter of 2022 was $10.6 million, compared to gross profit of $8.2 million in the second quarter of 2021. Adjusted gross profit was $11.2 million for the second quarter of 2022, compared to an adjusted gross profit of $8.3 million in the second quarter of 2021.
Total gross margin for the quarter was 55.0%, compared to 49.8% in the second quarter of 2021. Adjusted gross margin was 58.5%, compared to 50.2% in the second quarter of 2021.
Total operating expenses for the quarter were $59.0 million, compared to $44.9 million in the second quarter of 2021, representing an increase of 31.4% primarily due to higher payroll expenses and incremental investment in our research & development and business infrastructure compared to the second quarter of 2022.
Net loss for the second quarter of 2022 was $35.8 million, compared to a net loss of $2.9 million during the second quarter of 2021. Adjusted EBITDA was a loss of $37.8 million during the second quarter of 2022, compared to a loss of $28.5 million in the second quarter of 2021.
Cash and cash equivalents were $310.8 million as of June 30, 2022.
A reconciliation of Adjusted EBITDA to net loss, Adjusted gross profit to gross profit, and Adjusted gross margin to gross margin for the three months ended June 30, 2022 and 2021, 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.”
Conference Call
A conference call to review the second quarter 2022 financial results and provide a business update is scheduled for August 3, 2022, at 8:30 am Eastern Time. Interested parties may access the conference call by dialing +1(844) 200-6205 (U.S.) or +1 (929) 526-1599 (Outside U.S.) and referencing Access Code: 741669. Additionally, a link to a live webcast of the call will be available in the Investors section of Butterfly's website.
About Butterfly Network, Inc.
Founded by Dr. Jonathan Rothberg in 2011 and listed on the New York Stock Exchange through a business combination with Longview Acquisition Corp., Butterfly created the world's first handheld, single probe whole-body ultrasound system using semiconductor technology, the Butterfly iQ+. Butterfly's mission is to democratize medical imaging and contribute to the aspiration of global health equity, 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. Through its proprietary Ultrasound-on-Chip™ technology, Butterfly is paving the way for earlier detection and remote management of health conditions around the world. The Butterfly iQ+ can be purchased online today by healthcare practitioners in the United States, Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the United Kingdom.
Butterfly iQ+ is a prescription device intended for trained healthcare professionals only.
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (“GAAP”), the Company provides additional financial metrics that are not prepared in accordance with GAAP (“non-GAAP”). The non-GAAP financial measures included in this press release are Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin. The Company presents non-GAAP financial measures in order to assist readers of its condensed consolidated financial statements in understanding the core operating results that its management uses to evaluate the business and for financial planning purposes. The Company’s non-GAAP financial measures, Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin, provide an additional tool for investors to use in comparing our financial performance over multiple periods.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin are key performance measures that the Company’s management uses to assess our operating performance. These non-GAAP measures facilitate internal comparisons of the Company’s operating performance on a more consistent basis. The Company uses these performance measures for business planning purposes and forecasting. The Company believes that Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin enhance an investor’s understanding of the Company’s financial performance as they are useful in assessing its operating performance from period-to-period by excluding certain items that the Company believes are not representative of its core business.
Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin 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, Adjusted gross profit and Adjusted gross margin alongside other financial performance measures prepared in accordance with GAAP, including net loss, gross profit, and gross margin.
The non-GAAP financial measures do not replace the presentation of the Company’s GAAP financial results and should only be used as a supplement to, not as a substitute for, the Company’s financial results presented in accordance with GAAP. In this press release, the Company has provided a reconciliation of Adjusted EBITDA to net loss, Adjusted gross profit to gross profit, and Adjusted gross margin to gross margin, the most directly comparable GAAP financial measures. A reconciliation of Adjusted EBITDA, Adjusted gross profit and Adjusted gross margin to corresponding GAAP measures is not available on a forward-looking basis because the Company is unable to predict with reasonable certainty the non-cash component of employee compensation expense, changes in its working capital needs, variances in its supply chain, the impact of earnings or charges resulting from matters the Company considers not to be reflective, on a recurring basis, of its ongoing operations, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to the Company’s results computed in accordance with GAAP. Management strongly encourages investors to review the Company’s financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
Financial Data