Strong Revenue Growth Driven by Increased
Demand for Butterfly Network’s Solution
Gross Margin Above 50% and Adjusted Gross
Margin Above 45% Reflecting Benefits of the New Butterfly iQ+
Supply Chain
Butterfly Network, Inc. (NYSE: BFLY) (“Butterfly”), an
innovative digital health company that is working to democratize
medical imaging and contribute to the aspiration of global health
equity, today announced financial results for the quarter ended
March 31, 2021 and provided a corporate update.
First Quarter 2021 Highlights:
- Reported revenue of $12.4 million in the first quarter of 2021,
compared to $8.7 million in the first quarter of 2020.
- Reported gross profit of $6.4 million and a gross margin of
51.6%. Adjusted gross margin of 47.8%.
- Made significant investments in the commercial team, including
doubling the sales force, as the company continued to expand its
market presence.
- Built a dedicated commercial team around our veterinary
solution, Butterfly iQ Vet.
- Formed strategic collaborations with Sientra Health, a leading
aesthetics company.
“This year is off to a great start with healthy growth and
increased customer excitement about the insights delivered by
Butterfly’s unique technology and our potential to advance medical
imaging beyond current use cases,” said Dr. Todd Fruchterman,
Butterfly’s President and Chief Executive Officer. “During the
quarter we made excellent progress expanding our commercial and
organizational capabilities, driving partnerships that expand our
reach across different care settings and specialties, as well as
creating a dedicated team to transform veterinary medicine.”
Fruchterman added, “I am excited by the breadth of opportunities in
front of us to democratize imaging, drive fundamental change in
healthcare across care settings, and advance global health
equity.”
First Quarter 2021 Financial Results
First quarter revenue increased 43.5% to $12.4 million from $8.7
million in the first quarter of 2020. Product revenue increased
33.1% to $9.6 million from $7.2 million in the first quarter of
2020. Subscription revenue increased 94.9% to $2.8 million from
$1.5 million in the first quarter of 2020.
Gross profit for the first quarter of 2021 was $6.4 million,
compared to a gross profit of negative $0.8 million in the first
quarter of 2020. Adjusted gross profit, which includes a one-time
adjustment for warranty accrual methodology, was $5.9 million.
Total gross margin for the quarter was 51.6%, compared to a
negative 9.6% in the first quarter of 2020. Adjusted gross margin
was 47.8%, compared to a negative 9.4% in the first quarter of
2020.
Operating expenses were $60.2 million, compared to $23.7 million
in the first quarter of 2020, representing an increase of 154.1%
primarily due to growth and changes in headcount and costs
associated with our business combination.
Net loss was $0.7 million, compared to a net loss of $24.4
million during the first quarter of 2020.
EBITDA was a loss of $53.3 million in the first quarter of 2021,
compared to a loss of $24.2 million in the first quarter of 2020.
Adjusted EBITDA was a loss of $26.5 million during the first
quarter of 2021, compared to a loss of $21.5 million in the first
quarter of 2020.
Cash and cash equivalents and marketable securities were $545.3
million as of March 31, 2021.
2021 Financial Guidance
- Revenue is expected to be approximately $76 million to $80
million, or approximately 64% to 73% growth year-over-year.
- Gross margin is expected to be approximately 43% to 47%.
Adjusted gross margin is expected to be approximately 42% to
46%.
- Net loss is expected to be approximately $135 million to $155
million. Adjusted EBITDA loss is expected to be $140 million to
$160 million.
A reconciliation of non-GAAP EBITDA and Adjusted EBITDA to net
loss, Adjusted gross profit to gross profit, and Adjusted gross
margin to gross margin for the 2021 financial guidance 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.”
Butterfly may incur charges, realize gains or losses, incur
financing costs or interest expense, or experience other events in
2021 that could cause actual results to vary materially from this
guidance.
Strategic Collaborations and Commercial Expansion
Sientra Health has partnered with Butterfly to promote Butterfly
iQ+ into their plastic surgery market. The partnership was launched
at The Aesthetics Meeting and we believe it will allow Butterfly to
reach a specialized market segment through an experienced
partner.
Butterfly iQ Vet is designed to address a need for
accessibility, affordability, and capability in the veterinary
market. Butterfly is investing in a dedicated veterinary team to
commercialize, market, and scale the iQ Vet solution to transform
animal health.
Conference Call
A conference call to review the first quarter 2021 financial
results is scheduled for May 13, 2021 at 8:30 AM Eastern Time.
Interested parties may access the conference call by dialing (844)
558-0160 (U.S.) or (236) 714-3222 (International) and referencing
Conference ID 5883063. Additionally, a link to a live webcast of
the call will be available in the Investor Relations section of
Butterfly's website at Butterfly Network, Inc. - Events &
Presentations - Events
About Butterfly Network, Inc.
Founded by Dr. Jonathan Rothberg in 2011, and recently 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 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 and qualified 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
EBITDA, Adjusted EBITDA, Adjusted gross profit and Adjusted gross
margin. The Company presents non-GAAP financial measures in order
to assist readers of its 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, EBITDA, 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.
EBITDA, 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 EBITDA, 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.
EBITDA, 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. EBITDA, 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 EBITDA, 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 EBITDA and 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 EBITDA, 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.
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. The Company’s
actual results may differ from its 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,”
“believes,” “predicts,” “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, the
Company’s expectations with respect to financial results, future
performance, development of products and services, potential
regulatory approvals, anticipated financial impacts and other
effects of the Company’s business combination on its business, and
the size and potential growth of current or future markets for its
products and services. These forward-looking statements involve
significant risks and uncertainties that could cause the actual
results to differ materially from those discussed in the
forward-looking statements. Most of these factors are outside the
Company’s control and are difficult to predict. Factors that may
cause such differences include, but are not limited to: the impact
of COVID-19 on the Company’s business; the ability to recognize the
anticipated benefits of the business combination; the Company’s
ability to grow and manage growth profitably; the success, cost and
timing of the Company’s product and service development activities;
the potential attributes and benefits of the Company’s products and
services; the Company’s ability to obtain and maintain regulatory
approval for its products, and any related restrictions and
limitations of any approved product; the Company’s ability to
identify, in-license or acquire additional technology; the
Company’s ability to maintain its existing license, manufacture,
supply and distribution agreements; the Company’s ability to
compete with other companies currently marketing or engaged in the
development of products and services that the Company is currently
marketing or developing; changes in applicable laws or regulations;
the size and growth potential of the markets for the Company’s
products and services, and its ability to serve those markets,
either alone or in partnership with others; the pricing of the
Company’s products and services and reimbursement for medical
procedures conducted using its products and services; the Company’s
estimates regarding expenses, revenue, capital requirements and
needs for additional financing; the Company’s financial
performance; the Company’s ability to raise financing in the
future; and other risks and uncertainties indicated from time to
time in the Company’s filings with the Securities and Exchange
Commission. The Company cautions that the foregoing list of factors
is not exclusive. The Company cautions you not to place undue
reliance upon any forward-looking statements, which speak only as
of the date of this press release. The Company does 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 the Company’s expectations or any change in events,
conditions or circumstances on which any such statement is
based.
BUTTERFLY NETWORK, INC. CONSOLIDATED BALANCE SHEETS
(In thousands) March 31, December 31,
2021
2020
Assets Current assets:
Cash and cash equivalents $
18,850
$
60,206
Marketable securities
526,441
—
Accounts receivable, net
5,237
5,752
Inventories
36,128
25,805
Current portion of vendor advances
9,170
2,571
Prepaid expenses and other current assets
9,358
2,998
Total current assets $
605,184
$
97,332
Property and equipment, net
7,254
6,870
Non-current portion of vendor advances
32,535
37,390
Other non-current assets
2,505
5,599
Total assets $
647,478
$
147,191
Liabilities, convertible preferred stock and stockholders’
equity (deficit) Current liabilities:
Accounts
payable $
5,268
$
16,400
Deferred revenue, current
9,548
8,443
Accrued purchase commitments, current
22,890
22,890
Accrued expenses and other current liabilities
14,666
21,962
Total current liabilities $
52,372
$
69,695
Deferred revenue, non-current
4,014
2,790
Convertible debt
—
49,528
Loan payable
—
4,366
Warrant liabilities
133,214
—
Accrued purchase commitments, non-current
19,660
19,660
Other non-current liabilities
2,055
2,146
Total liabilities $
211,315
$
148,185
Convertible preferred stock
—
360,937
Total stockholders’ equity (deficit) $
436,163
$
(361,931)
Total liabilities, convertible preferred stock and stockholders’
equity (deficit) $
647,478
$
147,191
BUTTERFLY NETWORK, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except shares and per share
amounts) Three months ended March 31,
2021
2020
Revenue: Product
$
9,595
$
7,209
Subscription
2,848
1,461
Total revenue $
12,443
$
8,670
Cost of revenue:
Product
5,648
9,262
Subscription
379
244
Total cost of revenue $
6,027
$
9,506
Gross Profit $
6,416
$
(836)
Gross Margin
51.6%
(9.6%)
Operating expenses: Research and development $
15,716
$
12,516
Sales and marketing
9,808
5,915
General and administrative
34,640
5,242
Total operating expenses
60,164
23,673
Loss from operations $
(53,748)
$
(24,509)
Interest income $
239
$
199
Interest expense
(638)
(5)
Change in fair value of warrant liabilities
54,112
—
Other income (expense), net
(631)
(29)
Loss before provision for income taxes $
(666)
$
(24,344)
Provision for income taxes
24
10
Net loss and comprehensive loss $
(690)
$
(24,354)
Net loss per common share attributable to common stockholders,
basic and diluted
(0.01)
(4.07)
Weighted-average shares used to compute net loss per share
attributable to common stockholders, basic and diluted
105,916,706
5,979,232
BUTTERFLY NETWORK, INC. RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (In thousands)
(Unaudited) EBITDA and Adjusted EBITDA
Three months ended March 31,
2021
2020
Net loss
(690)
(24,354)
Add: Interest income
(239)
(199)
Interest expense
638
5
Change in fair value of warrant liabilities
(54,112)
—
Other expense, net
631
29
Provision for income taxes
24
10
Depreciation and amortization
458
285
EBITDA
(53,290)
(24,224)
Stock based compensation
20,298
2,683
Executive transition costs
5,398
—
Warranty liability policy change
(560)
—
Transaction costs
1,653
—
Adjusted EBITDA
(26,501)
(21,541)
Gross Profit and Adjusted Gross Profit Three
months ended March 31,
2021
2020
Revenue $
12,443
$
8,670
Cost of revenue
6,027
9,506
Gross profit $
6,416
$
(836)
Gross margin
51.6%
(9.6%)
Add:
Depreciation and amortization
89
22
Warranty liability policy change
(560)
—
Adjusted gross profit $
5,946
$
(814)
Adjusted gross margin
47.8%
(9.4%)
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version on businesswire.com: https://www.businesswire.com/news/home/20210513005378/en/
Investors Agnes Lee 650.677.9138 alee@butterflynetinc.com
Media media@butterflynetwork.com
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