How did Butterfly Network's revenue and expenses trend in Q4 2024?

Butterfly Network's revenue and expenses in Q4 2024 reflected a company focused on growth and innovation, with R&D and sales efforts driving future potential, despite short-term adjustments in stock price and shareholder actions.

1. **Revenue Trend**: The company's revenue was diverse across different segments, with the highest revenue generated from the Product segment, specifically from the iQ3 probes, which saw a significant surge in sales. The total revenue for Q4 2024 was $54.2 million. This was a notable increase from the previous quarter, indicating a strong market demand for Butterfly Network's products, particularly in the ultrasound technology space.

|code|Ticker|Name|Date|Business Composition|Revenue By Business|market_code|
|---|---|---|---|---|---|---|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Software and other services|2.7856E7|169|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Software and other services|2.0227E7|169|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Software and other services|1.3204E7|169|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Software and other services|6365000|169|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Product|1.1291E7|169|
|BFLY|BFLY.N|Butterfly Network|20240101-2024|Software and other services|6365000|169|

|code|Ticker|Name|Date|Selling, General, and Administrative Expenses|R&D Expenses|Advertising and Marketing Expenses|market_code|
|---|---|---|---|---|---|---|---|
|BFLY|BFLY.N|Butterfly Network|2024 Q1|2.082E7|1.072E7||169|
|BFLY|BFLY.N|Butterfly Network|2024 Q2|1.9801E7|9411000||169|
|BFLY|BFLY.N|Butterfly Network|2024 Q3|1.896E7|8844000||169|
|BFLY|BFLY.N|Butterfly Network|2024 Q4|2.1796E7|8825000||169|

2. **Expense Trend**: The Selling, General, and Administrative (SG&A) expenses were $21.8 million. This suggests a strong investment in operational and administrative infrastructure to support the company's growth. The R&D expenses were $8.83 million, reflecting Butterfly Network's commitment to continuous innovation and product development to maintain its competitive edge in the healthcare technology sector.
3. **Stock Price and Capital Raise**: Despite the positive revenue and expense trends, Butterfly Network's stock price fell by 9% in pre-open trading following the announcement of a public offering at a price lower than the current trading levels. This pricing decision was part of the company's strategy to raise capital for further product development and general corporate functions. The CFO and Chief Business Officer's sales of their shares, amounting to $92,336 and $502,738 respectively, were part of a "sell-to-cover" policy to meet tax withholding obligations related to vested restricted stock units. These transactions can be dilutive to existing shareholders but are necessary to manage tax obligations.
4. **Market Position and Future Outlook**: Butterfly Network's strategic moves, including the formation of a new subsidiary, Octiv, to commercialize ultrasound technology in new sectors, indicate a forward-looking approach to market expansion. The company's revenue guidance for 2024 projects a 20% growth, with ambitious long-term targets of cash flow breakeven by 2027 and $500 million in revenue within five years. These plans suggest confidence in the company's ability to navigate the challenges of growth and capitalize on its technological advancements.

In conclusion, Butterfly Network's Q4 2024 financials highlight a company in a growth phase, balancing investment in R&D and SG&A to support current operations while preparing for future scale. The capital raise and insider sales are strategic moves to ensure financial health and market position, despite short-term impacts on stock price and shareholder dilution.