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What factors drove the changes in Butterfly Network's revenue and profit?

What does Butterfly Network do and what are its main business segments?

- **Revenue Growth**: Q3 2025 revenue up 5% YoY to $21.5M, driven by higher ASPs and volume.
- **AI Success**: AI tools reduce hospital stays by 30%, with Compass AI launching Q4 2025.
- **Product Innovation**: P5.1 chip entering production; Apollo AI chip for edge computing to launch in 2026.
- **Pipeline Momentum**: 200+ deals in pipeline, delayed by macro factors but optimistic for 2026 closure.
- **Risks**: Government shutdown and regulatory delays; $17.4M inventory write-off impacting margins.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue of $21.5 million, up 5% YoY, driven by higher ASPs and volume in the U.S. and international markets.
- **AI Strategy Success**: AI tools like HeartFocus and Garden ecosystem are improving clinical workflows, with a JAMA study showing 35% better clinical management and $750K cost savings.
- **Product Innovation**: P5.1 chip entering production, offering superior imaging quality; Apollo AI chip for edge computing to launch in H2 2026.
- **Pipeline Momentum**: 200+ deals in pipeline, delayed by macroeconomic factors, but optimistic for 2026 closure.

**【CFO Financial Commentary】**
- **Financial Highlights**: Adjusted gross margin 63.9%, up from 60% YoY; EBITDA loss $8.1M, slightly improved vs. $8.4M YoY.
- **Challenges**: $17.4M noncash inventory write-off due to iQ3 outperformance; software renewals lagging.
- **Cash Position**: $148M cash, trailing 12-month use $31.5M; FY25 guidance: $91-95M revenue, $32-35M EBITDA loss.

**【Q&A Key Highlights】**
- **Pipeline Activity**: Deals delayed by macroeconomic factors, but no loss of intent; 2026 budget cycle may accelerate closures.
- **AI Impact**: Compass AI launch Q4 2025 to enhance enterprise adoption; Apollo AI chip for local AI processing.
- **Regulatory & Market Risks**: Government shutdown risks to FDA submissions; P5.1 chip launch in H2 2026 faces no direct competition.
- **Home Care Pilot**: Commercial agreement pending; focuses on education, data management, and AI integration.

Butterfly Network, Inc. (BFLY) Q3 2025 Earnings Call Transcript

- **Record Revenue Growth**: $23.4M Q2 revenue (+9% YoY), driven by international expansion and higher ASPs.
- **Gross Margin Milestone**: 64% gross margin, up from 59% YoY, reflecting cost efficiency and chip sales.
- **Software Innovation**: Launch of Compass AI to simplify documentation, with potential to accelerate enterprise adoption.
- **HomeCare Breakthrough**: Pilot program reduced readmissions by ~50%, with commercial rollout expected Q4.
- **Macro Caution**: Adjusted full-year guidance to $91-95M due to delayed deals, but EBITDA loss narrowed by $5M.
- **Strategic Expansion**: Butterfly Garden AI apps entering commercial phase, creating new revenue streams and clinical workflows.

**【Management Opening Remarks】**
- CEO Joseph DeVivo highlighted record Q2 revenue of $23.4 million, a 9% year-over-year increase, driven by higher ASPs and international expansion. Gross margin reached an all-time high of 64%.
- CFO Heather Getz announced her transition to an advisory role, with Megan Carlson appointed as Interim CFO. Getz emphasized the company's financial discipline and cash position of $152 million.

**【CEO Commentary】**
- **Revenue Growth**: Delivered highest quarterly revenue in company history ($23.4M) with U.S. revenue flat at $17.2M (due to delayed deals) and international revenue up 19% to $6.2M.
- **Gross Margin Expansion**: 64% gross margin (vs. 59% prior year), driven by ASPs and chip sales.
- **Strategic Initiatives**: 
  - **Compass AI Launch**: Next-gen software to simplify documentation, expected Q4 deployment.
  - **HomeCare Pilot Success**: Reduced readmissions by ~50%, with commercial agreement anticipated Q4.
  - **Butterfly Garden Expansion**: FDA-cleared AI apps (HeartFocus, MSK VUE) entering commercial phase.
- **Guidance Adjustment**: Full-year revenue revised to $91-95M (down from prior range) due to macro delays, but EBITDA loss narrowed to $32-37M.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: 
  - Product: $16.6M (+13% YoY)
  - Software & Services: $6.8M (flat YoY)
- **Gross Profit**: $14.9M (+18% YoY), driven by ASPs and cost efficiencies.
- **Adjusted EBITDA**: Loss of $6.2M (vs. $8.1M prior year), with cash burn of $7M.
- **ARR Growth**: Enterprise software ARR increased, offsetting individual subscription churn.

**【Q&A Highlights】**
- **Macro Environment**: Delays in U.S. hospital and global health deals due to funding uncertainty. CFO Megan Carlson noted $5M EBITDA improvement despite revenue revision.
- **Competitive Landscape**: No direct competition in enterprise-scale POCUS deployments; Butterfly is "blazing trails" with system-wide implementations.
- **HomeCare Model**: Program fee-based revenue (per patient) + scan-based fees. First state launch expected Q4, with potential $40-60M annual revenue for one customer.
- **Butterfly Garden Flywheel**: AI apps (e.g., HeartFocus) enable new clinical workflows, accelerating POCUS adoption and creating recurring software revenue.
- **iQ Station Strategy**: Targeting $2B POCUS cart market with cost-effective, high-quality alternative to traditional ultrasound systems.


Butterfly Network, Inc. (BFLY) Q2 2025 Earnings Call Transcript

- **20% Revenue Growth**: Q1 2025 revenue up 20% to $21.2M, driven by U.S. sales and iQ3 probe premiumization.
- **Margin Expansion**: Gross margin improved to 63%, EBITDA loss narrows 31% YoY to $9.1M.
- **Strategic Wins**: 2nd enterprise hospital deal signed; Home Care pilot achieves 0% CHF readmissions.
- **Octiv Momentum**: 25+ chip licensing prospects, including generative AI leader; first FDA-cleared AI apps launch Q3.
- **Tariff Mitigation**: $1.5M max annual impact at 36% rate, offset by inventory buffer and diversification.


**【CEO Opening Remarks】**
- Q1 2025 revenue grew 20% YoY to $21.2M, driven by U.S. sales and higher iQ3 probe pricing.
- Gross margin improved to 63% (vs. 58% prior year), with adjusted EBITDA loss narrowing to $9.1M (-31% YoY).
- Strategic initiatives: 
  - 2nd enterprise hospital customer signed, committing to 600+ probes.
  - Butterfly Home Care pilot shows 0% readmission rate for CHF patients.
  - Octiv chip licensing pipeline expanded to 25+ prospects, including generative AI partners.
  - Butterfly Garden AI marketplace now has 23 partners, with FDA-cleared apps launching Q3.

**【CFO Financial Breakdown】**
- Product revenue: $14.2M (+25% YoY), driven by iQ3 volume and higher ASPs.
- Software & services: $7.1M (+11% YoY), led by enterprise software subscriptions.
- Tariff impact: $1.5M annualized at 36% rate, manageable via inventory buffer.
- Cash position: $155M post-$81M equity raise, supporting 20%+ FY25 revenue growth guidance.

**【Q&A Highlights】**
- **Hospital Enterprise Strategy**: 2nd deal won through groundswell of Butterfly adoption among clinicians, with Rochester-style ROI studies accelerating C-suite buy-in.
- **Product Mix**: iQ3 now >50% of probe sales, with iQ+ strong in medical schools and e-commerce.
- **School Channel Momentum**: 25K+ new med students annually, with 1:1 probe programs now in 10+ schools.
- **Regulatory & Economic Risks**: Global health funding delays (e.g., USAID cuts) impacting Q1 NGO partnerships, but enterprise software diversification mitigates risk.


Butterfly Network (BFLY)-2 May 25-2025 Q1 Earnings call transcript

- **Revenue Growth Accelerates**: 2024 revenue up 25% to $82.1M, driven by iQ3 adoption (50% of sales) and 35% Q4 jump to $22.4M.
- **Profitability Improves**: Adjusted EBITDA loss narrows 42% to $38.9M, with 16% opex reduction.
- **Strategic Wins**: 21 AI partners signed, 5 Octiv deals inked, and HomeCare pilot proves cost savings with 0 readmissions.
- **2025 Outlook**: $96M-$100M revenue target with focus on health system sales and software bundling.
- **Innovation Pipeline**: P5 chip, iQ station, and wearable device in development to expand into cart-based and chronic care markets.

**【CEO Opening Remarks】**
- **2024 Performance Highlights**: Achieved $82.1M revenue (25% YoY growth) and improved adjusted EBITDA loss to $38.9M (42% improvement). iQ3 device accounted for 50% of total sales and 58% of Pro revenue, with higher ASPs than prior models.
- **Strategic Initiatives**: Launched iQ3 in Europe, signed 21 Butterfly Garden AI partners, and expanded Octiv partnerships into neuroscience and generative AI. HomeCare pilot in Wisconsin reduced readmissions and demonstrated cost savings.
- **2025 Outlook**: Focus on scaling core business through health system sales and software/hardware bundles. Expect $96M-$100M revenue (20% YoY growth) with adjusted EBITDA loss of $37M-$42M.

**【CFO Financial Breakdown】**
- **Q4 2024 Results**: 
  - Revenue: $22.4M (35% YoY growth), highest quarterly in company history.
  - Gross Profit: $13.7M (61% margin), up from $9.4M (57% margin) in Q4 2023.
  - Adjusted EBITDA: -$9.1M (36% improvement vs. -$15.7M prior year).
- **Full Year 2024**: 
  - Total ARR growth: 8% in enterprise software subscriptions.
  - Operating expense reduction: 16% YoY due to rightsizing.
  - Cash balance: $92.8M post-January 2025 $81.7M follow-on offering.

**【Q&A Key Takeaways】**
- **HomeCare Expansion**: Wisconsin pilot trained 18 nurses, scanning 200+ patients with 0 readmissions. Scaling via telemedicine and AI tools for chronic care.
- **Octiv Strategy**: 5 partnerships in development, targeting liver disease, neuroscience, and generative AI. First commercial contributions expected in 2025.
- **Product Pipeline**: Next-gen P5 chip in development; iQ station for cart-based imaging; wearable device in early stages post-market validation.
- **Capital Allocation**: $81.7M raise to fund growth without compromising fiscal discipline. No new revenue streams included in 2025 guidance.


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