Butterfly Network, Inc. Q4 FY2024 earnings call

• In March 2024, Butterfly laid out a strategic five-year plan at Investor Day, with the first year completed on track. - The iQ3 launch was a commercial success, winning awards and representing a significant portion of sales. - ScanLab acted as an education catalyst for ultrasound skills. - University of Rochester Medical Center data demonstrated clinical and economic ROI for Butterfly, used to drive broader hospital implementations. - The inaugural POCUS Innovators Forum discussed topics like ROI, lung ultrasound, and AI. - Internationally, Butterfly received EU MDR for iQ+ and certified iQ3 for European launch, accessing new Asian markets. - Butterfly Garden had 21 partners, with 6 to go commercial in 2025. - Octiv signed 3 new partners in 2024, expanding into new markets. - Butterfly HomeCare pilot in Wisconsin showed positive results with no readmissions, demonstrating a scalable model.

In 2024, Butterfly Network achieved $82.1 million in revenue, representing 25% top-line growth. For the fourth quarter of 2024, revenue was $22.4 million, the highest quarterly result in the company's history, a 35% increase year-over-year. Product revenue was $14.7 million, up 45% from Q4 2023, driven by higher average selling price and volume. Software and other services revenue was $7.6 million, up 20% year-over-year but with a lower mix of 34% of total revenue due to product revenue growth outpacing software. The core POCUS business saw strength with the iQ3 launch, which accounted for 50% of 2024 sales in units and 58% of probe revenue. Internationally, revenue increased 19% year-over-year in Q4 2024. Butterfly Garden had 21 partners by year-end, with 6 anticipated to go commercial in 2025. Octiv, the wholly-owned subsidiary, signed 3 new partners in 2024, including Sonic Incytes in liver disease assessment, a neuroscience company, and a generative AI company. Butterfly HomeCare had a pilot in Wisconsin with positive results, showing no readmissions and identifying conditions like pneumonia and pleural effusions.

• 2025 full-year revenue guidance is $96 million to $100 million, representing approximately 20% growth. - Adjusted EBITDA loss for 2025 is expected to be $37 million to $42 million. - Q1 2025 revenue is anticipated to be $20 million to $23 million. - Q1 adjusted EBITDA loss is expected to be in the range of $9 million to $11 million. - Guidance does not include new revenue streams from Octiv, Butterfly Garden, or HomeCare.

• EU RoHS revocation process: The review of the petition to revoke the lead exemption for piezoelectric handheld ultrasound devices is expected to end in 2025, with implementation potentially taking 12-18 months if favorable. - Dependence on successful commercialization of new initiatives such as the expansion of Butterfly Garden partners and the scaling of Butterfly HomeCare from pilot to commercial. - Competition in the medical imaging market could impact Butterfly's market share and growth.

Q: Josh Jennings asked about progress towards $500 million revenue, the HomeCare pilot to revenue conversion, and wearable development.

A: Joseph DeVivo responded that the first year of the five-year plan was on track, bullish on core business growth, Octiv, and HomeCare, emphasizing the scalable nature of HomeCare and the development of the wearable market in tandem with use case creation.

Q: Benjamin Haynor inquired about HomeCare pilot details, the impact of the capital raise, and revenue guidance inclusion.

A: Joseph DeVivo discussed the 18 nurses trained in the Wisconsin pilot and the scalable model, Heather Getz clarified that 2025 guidance includes current Octiv contracts but not new ones signed in 2025.

Q: Suraj Kalia asked about same-store vs new-store iQ3 contribution and evidence of image quality being as good as competitors.

A: Joseph DeVivo talked about the unlocked hospital channel and continued new business, while regarding image quality, mentioned historical internal surveys and growth indicating closing the gap with competitors, including a blinded survey of doctors preferring iQ3.