Butterfly Network Inc Q1 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Joshua Jennings - Cowen - Analyst : Hi, good morning. Thanks for taking the questions, and congratulations, Joe, on joining the Butterfly team.

Question: Joshua Jennings - Cowen - Analyst : I was hoping to ask --. Great. Morning, Heather, Darius. I wanted to maybe just review, I guess, the details on the US commercial team and maybe just to remind us of the US sales infrastructure, sounds like, Joe, you maybe reevaluating the commercial strategy in the US and globally, but just have a better handle on kind of the combination of direct sales reps and distributors anything incremental or sort of detail that you can share would just be helpful to understand where that commercial team sits and how that could evolve over the course of 2023? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 11, 2023 / 12:30PM, BFLY.N - Q1 2023 Butterfly Network Inc Earnings Call

Question: Joshua Jennings - Cowen - Analyst : Understood. Thanks for that. And was hoping to also just get a better understanding of the hardware and software pipeline initiatives anything you can share to what investors should be expecting in 2023 in terms of new capabilities, features of this software or for the next-gen Butterfly iQ system?

Question: Joshua Jennings - Cowen - Analyst : That's great to hear. I wanted to ask about the home opportunity. I know the team has been working on regulatory pathways with the FDA to open up at that home indication for your patients self-scanning or even provider scanning in the home. Any progress there? And anything you can share just on the timeline from when do you think that work with the FDA will be done and you'll have a defined path forward in terms of what's going to be required?

Question: Joshua Jennings - Cowen - Analyst : No understandable. Thanks for that. And then last question, just on -- wanted to just ask about the Blueprint software package, enterprise software. The software revenue line is performing very nicely since I was introduced, I think, last year. Can you just help us understand -- I know part of this strategy is in the facilitating deployment but also Blueprint could act as a Trojan horse. And there's some hospital systems that have -- are adopting Blueprint in front of the Butterfly iQ handheld devices and other capabilities there. Maybe just help us better understand that opportunity in the United States just Blueprint as a standalone software solution for hospital systems, exclusive of the devices? And how it's been contributing to the software and other services revenue growth over the last couple of quarters? Thanks for taking my questions.

Question: Joshua Jennings - Cowen - Analyst : Fantastic. Thanks a lot Joe.

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Morning, everyone. Can you hear me all right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 11, 2023 / 12:30PM, BFLY.N - Q1 2023 Butterfly Network Inc Earnings Call

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Perfect. Joe, Darius, Heather --. Joe, welcome aboard. Pleasure to connect with you over the phone today. So Joe, lot of commentary you have provided, and I appreciate the fact that you're just getting your feet wet and there are a lot of unknowns out there, I totally understand. Joe, one of the things you mentioned is repositioning the company. I think so I'm paraphrasing here. As a technology enabled software company or AI enables something you had said. Moving forward, Joe, would you advise us to start looking at the software component of the business that line item specifically in terms of the ROI on these strategic initiatives rather than the handheld is being placed per se? As an ultimate driver of software, how would you advise we start looking whether Q2, Q3 onwards in terms of these two-line items?

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Fair enough. Joe, again, maybe a preemptive question, so please forgive me for that. Our math is, the rough software rents per handheld are like 400-ish. I don't have it in front of me, but somewhere in that ballpark. I guess let's say x revenues, software revenues per handheld, let's assume a metric like that. Joe, as you think about the remapping the company right, whether it's 12, 18, 24 months, hence, how much do you think is the additional leverage you have? Can x to 1.5x, 2x, or how do you think about this is the target where we have to get basically to monetize or upsell, like you had said, with all these new apps, B-line and presumably others coming online shortly?

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Got it. Thank you for taking my questions, Joe, and welcome aboard.

Question: Neil Chatterji - B. Riley - Analyst : Hey, good morning. Thanks for taking our questions, and welcome, Joe, and congratulations on the new role. First off, just -- I'm curious with ChatGPT and just Generative AI, just curious if you could just talk about how the AI in your platform and with your various tools maybe reflects any of that and the potential to leverage that on the Butterfly enterprise software platform, whether it's diagnostically, or with off-site workloads, or billings. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 11, 2023 / 12:30PM, BFLY.N - Q1 2023 Butterfly Network Inc Earnings Call

Question: Neil Chatterji - B. Riley - Analyst : Great thanks for that. And then just on the pilot programs with the large medical centers. Just kind of curious how that compares to past strategies and how that might be a new model to replicate. I think in the past, you've had kind of physician champions that helped (technical difficulty) run device pilots in certain departments. But how might this be different with Blueprint versus the device deployments?

Question: Neil Chatterji - B. Riley - Analyst : I was talking about the large medical center. I was talking about (multiple speakers) [initiatives and] clinical projects.

Question: Neil Chatterji - B. Riley - Analyst : Got it.

Question: Neil Chatterji - B. Riley - Analyst : Sure. And then just one other follow-up here. Just in terms of the -- I think last quarter you talked about adding 1,000 new Blueprint accounts, just kind of curious how that track in the first quarter and how that activity is kind of going forward, including with the recent Cloud 2.0 launch?

Question: Neil Chatterji - B. Riley - Analyst : Great. That's it from me.

Question: Danielle Antalffy - UBS - Analyst : Hey. Good morning, everyone. Thanks so much for taking the question. Joe, congrats on the role in joining the team there.

Question: Danielle Antalffy - UBS - Analyst : I'm curious, Joe, given your background in this industry, as we think about the goal of Butterfly and eventually home care and things like that, how you think about the competitive barriers to entry here? GE Healthcare did recently buy Caption Health. So just curious about how you think about the competitive moats and where Butterfly can sustain a competitive advantage in that regard.

Question: Danielle Antalffy - UBS - Analyst : Okay. Yes. No, that's great. And then just Heather, maybe this is a question for you. Just as we think about the models appreciate, pausing giving guidance for now, but just from a capital need perspective, how we should be thinking about where Butterfly is as you're sort of reevaluating the strategy here?

Question: Danielle Antalffy - UBS - Analyst : Cash.

Question: Danielle Antalffy - UBS - Analyst : Okay. Thank you, guys, so much.