8-K: Butterfly Network Achieves Record Revenue in Q4 2024, Reduces Net Loss by 59%

Butterfly Network reports record quarterly revenue of $22.4 million, a 35% year-over-year increase, and a 59% reduction in net loss for Q4 2024.

Summary

• Butterfly Network announced its financial results for the fourth quarter and year ended December 31, 2024.
• The company achieved a record quarterly revenue of $22.4 million, representing a 35% year-over-year growth compared to $16.5 million in Q4 2023.
• The net loss for Q4 2024 was reduced by 59% compared to the prior year period.
• Net cash used in operations decreased by 76% in Q4 2024.
• A successful public offering closed on January 31, 2025, generating net proceeds of $81.7 million.
• For the full year 2024, revenue reached $82.1 million, a 25% increase from $65.9 million in 2023.
• The company is providing revenue guidance of $96 million to $100 million for fiscal year 2025, representing approximately 20% growth.
• Adjusted EBITDA loss is projected to be between $37 million and $42 million for fiscal year 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth, reduced losses, and a successful capital raise. The company's strategic initiatives and partnerships also contribute to a favorable sentiment.

Positives

• Record quarterly revenue of $22.4 million, up 35% year-over-year.
• Net loss reduced by 59% in Q4 2024.
• Net cash used in operations decreased by 76% in Q4 2024.
• Successful capital raise of $81.7 million strengthens the balance sheet.
• Gross margin improved significantly to 61.4%.
• Initiation of a promising pilot program for virtual chronic care management.
• Revenue guidance for 2025 indicates continued growth.

Negatives

• Software and other services mix decreased by 4 percentage points versus the prior year due to the higher product revenue achieved this quarter.
• Adjusted EBITDA loss of $9.1 million for the quarter.
• The company is still operating at a net loss, although it has been significantly reduced.

Risks

• The EU commission is identifying a third party to review the petition, with a recommendation expected by the end of 2025 regarding the European Unions Restriction of Hazardous Substances (RoHS).
• If the EU commission recommendation is favorable, implementation may take 12-18 months.
• The company's ability to achieve its revenue and adjusted EBITDA guidance for fiscal year 2025 is subject to various risks and uncertainties.

Future Outlook

Butterfly Network anticipates revenue between $96 million and $100 million for fiscal year 2025, representing approximately 20% growth. The company expects an adjusted EBITDA loss between $37 million and $42 million for the same period.

Management Comments

• Joseph DeVivo, Butterfly's President, Chief Executive Officer and Chairman commented, 2024 was a year of focused execution against the strategy we introduced at our March 2024 Investor Day.
• DeVivo continued, As we enter 2025, Butterfly steps into its next era. With strong revenue momentum, a successful capital raise, and a reinforced financial position, we have the ability to invest in strategic initiatives while maintaining a clear path to cash flow independence.

Industry Context

Butterfly Network's focus on portable, AI-powered ultrasound aligns with the broader trend of digital health and point-of-care diagnostics. The company's partnerships and expansion into chronic care management reflect the industry's move towards value-based care and remote patient monitoring.

Comparison to Industry Standards

• Butterfly Network's revenue growth of 25% for the full year 2024 is strong compared to some established medical device companies, but it is important to consider that Butterfly is still in a growth phase.
• Companies like Siemens Healthineers and GE Healthcare have much larger revenue bases but may not be growing as rapidly in certain segments.
• The gross margin of 61.4% is competitive with other medical device companies, but it is important to monitor this metric as the company scales its operations.
• The adjusted EBITDA loss indicates that the company is still investing heavily in growth, which is common for companies in the digital health space.

Stakeholder Impact

• Shareholders will benefit from the company's revenue growth and improved financial performance.
• Employees may see increased opportunities as the company scales its operations.
• Healthcare practitioners will have access to advanced imaging technology.
• Patients may experience improved care through the use of Butterfly's products and services.

Next Steps

• Continue to execute against the five-year plan introduced at the March 2024 Investor Day.
• Invest in strategic initiatives to accelerate growth across core point-of-care ultrasound business, Octiv, and Butterfly HomeCare.
• Scale operations in 2025 and beyond.
• Await the EU commission's recommendation regarding the RoHS revocation submission.

Key Dates