Butterfly Network(BFLY) - 2024 Q3 - Quarterly Report

Revenue and Growth - Total revenue for the three months ended September 30, 2024, was $21.487 million, representing a 31.8% increase compared to$ 15.421 million for the same period in 2023[83]. - Units fulfilled increased by 1,249 units, or 36.6%, for the three months ended September 30, 2024, compared to the same period in 2023, with significant growth in international distributor volume[81]. - Product revenue increased by $4.8 million, or 54.7%, for the three months ended September 30, 2024 compared to the same period in 2023, driven by higher sales across nearly all channels and increased international probe sales[97]. - Software and other services revenue rose by$ 0.4 million, or 5.3%, for the three months ended September 30, 2024, primarily due to higher enterprise software revenue and increased licensing revenue[99]. - Product revenue increased by $9.6 million, or 32.1%, for the nine months ended September 30, 2024, with a notable impact from the iQ3 probe's higher selling price[107]. Expenses and Profitability - Research and development expenses for the three months ended September 30, 2024, were$ 8.844 million, accounting for 43.0% of total revenue[95]. - The gross profit margin for the three months ended September 30, 2024, was 59.5%, compared to 60.8% for the same period in 2023[95]. - Loss from operations for the three months ended September 30, 2024, was $(17.246) million, representing an 83.9% loss margin[95]. - Research and development expenses decreased by$ 3.3 million, or 27.1%, for the three months ended September 30, 2024, attributed to reductions in personnel costs and efficiencies[101]. - Sales and marketing expenses increased by $0.6 million, or 6.6%, for the three months ended September 30, 2024, driven by higher sales commissions[102]. - General and administrative expenses decreased by$ 2.2 million, or 19.1%, for the three months ended September 30, 2024, primarily due to reductions in stock-based compensation and professional service fees[103]. - Research and development expenses decreased by $15.4 million, or 34.8%, for the nine months ended September 30, 2024, mainly due to personnel cost reductions[110]. - Sales and marketing expenses increased by$ 0.9 million, or 3.3%, for the nine months ended September 30, 2024, primarily related to marketing expenses for new product launches[111]. Cash Flow and Financial Position - The company reduced its annual cash requirements by approximately $180 million, bringing it to less than$ 50 million annually, with cash expected to last into 2027[78]. - As of September 30, 2024, the company utilized $8.3 million of cash and cash equivalents, with a remaining balance of$ 93.8 million[117]. - Net cash used in operating activities decreased by $47.1 million, or 55.0%, for the nine months ended September 30, 2024, compared to the same period in 2023[122]. - The decrease in net cash used in operating activities was primarily driven by a reduction of$ 36.9 million in net loss adjusted for non-cash items and $10.2 million in net working capital cash usage[122]. - Fixed office lease payment obligations totaled$ 28.9 million as of September 30, 2024, with $3.6 million due within the next 12 months[119]. - Net cash provided by investing activities decreased by$ 75.2 million for the nine months ended September 30, 2024, compared to the same period in 2023, mainly due to the sale of marketable securities in 2023[123]. - Net cash provided by financing activities decreased by $0.2 million for the nine months ended September 30, 2024, with no significant financing activities during this period[125]. - The company had restricted cash of$ 4.0 million to secure a letter of credit for one of its leases[118]. - Cash used for changes in accounts receivable increased by $8.9 million, impacting overall cash flow[122]. - The company expects to pay approximately 20% of its inventory supply agreements obligations using vendor advances[119]. - The company had no off-balance sheet arrangements as of September 30, 2024[120]. Future Outlook - The company expects to continue investing in product and software development, clinical, and regulatory capabilities to drive future growth[90]. - The company anticipates a shift in revenue mix towards software and other services as device adoption increases, although the mix may remain flat or decrease in 2024 due to the launch of the iQ3 device[86]. - The company expects to continue incurring losses and negative cash flows for a few years while commercializing existing and new products[115]. - The company plans to seek non-dilutive capital in the form of licensing, grants, or debt before potentially raising equity capital to reach profitability[78].