10-K: Butterfly Network Reports Fiscal Year 2024 Results, Demonstrating Revenue Growth and Reduced Net Losses

Butterfly Network's 10-K filing reveals a year of revenue growth, strategic shifts, and ongoing efforts to democratize healthcare through innovative ultrasound technology.

Summary

• Butterfly Network, Inc., a digital health company, filed its Form 10-K for the fiscal year ended December 31, 2024.
• The company focuses on transforming care through portable, semiconductor-based ultrasound technology.
• Butterfly's Ultrasound-on-Chip technology enables affordable and accessible medical imaging.
• Total revenue for 2024 was $82.1 million, compared to $65.9 million in 2023.
• Net losses decreased to $72.5 million in 2024 from $133.7 million in 2023.
• The company employs approximately 190 employees as of January 31, 2025, and sells products in over 30 countries.
• Butterfly is expanding its reach into hospital-at-home workflows and remote patient monitoring.
• The company is also focused on clinical education to accelerate the adoption of point-of-care ultrasound (POCUS).

Sentiment

Score: 7

Explanation: The document presents a mixed sentiment. While revenue growth and reduced losses are positive, the company still faces significant challenges and risks. The capital raise is a positive sign, but the ongoing litigation and reliance on sole suppliers are concerning.

Positives

• Revenue increased by 24.5% from 2023 to 2024.
• Net losses significantly decreased, indicating improved financial performance.
• Units fulfilled increased, showing growing adoption of Butterfly devices.
• The company is expanding into new markets, such as home care settings.
• Butterfly is committed to global health initiatives, providing access to medical imaging in underserved communities.
• The company raised additional capital through a public offering in January 2025, strengthening its financial position.

Negatives

• The company has incurred significant losses since inception and has an accumulated deficit of $802.1 million as of December 31, 2024.
• Software and other services mix decreased by 5.3 percentage points, to 33.9% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
• The company relies on limited or sole suppliers for some materials and components used in its products, creating supply chain risks.
• The company is subject to a securities class action lawsuit and stockholder derivative actions.

Risks

• The company's success depends on market acceptance of its products and services.
• Medical device development is costly and involves continual technological change.
• The company operates in highly competitive markets.
• The company is subject to extensive government regulation.
• The company is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy and data protection.
• Increased cybersecurity requirements, vulnerabilities, and threats pose a risk to the company's systems and data.
• The company may be subject to product liability claims.
• The company is currently subject to a securities class action lawsuit and stockholder derivative actions.

Future Outlook

Butterfly envisions a future where its imaging technology is fully integrated into hospital-at-home workflows, improving remote monitoring and management of patients' health conditions from the comfort of their homes. The company plans to develop future applications, subject to appropriate marketing authorization, to leverage its unique hardware foundation and commitment to improving its software using AI. Simultaneously, it plans to enhance its software capabilities, pursuing regulatory authorizations as necessary, with new features to support clinical procedures.

Management Comments

• We are helping streamline and optimize deployment of ultrasound at scale across hospital systems with our Compass software that integrates into health system infrastructures, and connects across all departments and specialties.
• We envision a future where Butterflys imaging technology is fully integrated into hospital-at-home workflows, improving remote monitoring and management of patients health conditions from the comfort of their homes.

Industry Context

The announcement aligns with industry trends such as the shift to outside-the-hospital or in-home medical care, affordability, harnessing of AI and deep learning, collaboration through the cloud, disruptive medical innovation, and increasing access to care. Butterfly's Ultrasound-on-Chip technology differentiates it from competitors using traditional piezoelectric crystal technology.

Comparison to Industry Standards

• The global ultrasound market has been dominated by traditional cart-based devices, which typically range from $30,000 to $120,000 or more per new device.
• More recently, POCUS and handheld devices have been introduced with an average price point of $10,000, based on $3,000 to $7,000 per probe.
• Butterfly iQ+ is listed at approximately $2,700, while Butterfly iQ3 is valued at approximately $3,900 per device, making them among the lowest-cost handheld ultrasound devices on the market.
• Competitors include established market participants offering conventional ultrasound systems, such as the top five manufacturers of legacy cart-based incumbent ultrasound devices.

Legal Proceedings

• The company is currently subject to a securities class action lawsuit and stockholder derivative actions, the unfavorable outcomes of which may have a material adverse effect on its financial condition, results of operations, and cash flows.

Stakeholder Impact

• The company's performance and strategic direction will impact shareholders, employees, customers, and suppliers.
• The company's global health initiatives aim to improve access to medical imaging for underserved communities.

Next Steps

• The company plans to develop future applications, subject to appropriate marketing authorization, to leverage its unique hardware foundation and commitment to improving its software using AI.
• Simultaneously, it plans to enhance its software capabilities, pursuing regulatory authorizations as necessary, with new features to support clinical procedures.
• It also plans to further enhance workflow automations for its Compass software, in order to more deeply integrate its platform with healthcare systems, as it works with these customers to deploy Butterfly in their organizations.
• In order to pave the way for future phases of its HomeCare Services Business, it anticipates it will need to validate the at-home applications through focused clinical trials and also seek additional regulatory authorizations.

Key Dates