Butterfly Network Inc Q2 2023 Earnings Call Transcript

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

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Good morning, Joe, Heather. Can you hear me all right?

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Perfect. Hey, Joe, it's refreshing to hear a clear plan of attack here, especially given everything going on. Few comments caught my attention, Joe. I was wondering if you could give some additional color. So first and foremost, you mentioned in your prepared remarks perceived image gap that would be bridged by iQ3, can you help us understand how should we think about objectively measuring, this gap has been closed? And specifically on iQ3, how do you all think about the competitive landscape, whether it's market share, initial uptake, just some additional color there would be great.

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : I have other two questions, and I'll hop back in queue. So Joe, for you, your comments about embedding UOC in implantables caught my attention. I can think of a couple of examples. Just where does my -- but I'd love to understand you didn't throw that comment out there by chance, you all have thought through that and it would be a first-of-its-kind love for you to give, just an additional peek inside the tent of how you all are thinking about it, any initial applications? And Heather, if I could, the 50% investment increase in the commercial activity, maybe just set the baseline for us. At least to the US, how many reps reproductivity, territory coverage, just if you could give us some guideposts would be great. Folks, thank you for taking my questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 03, 2023 / 12:30PM, BFLY.N - Q2 2023 Butterfly Network Inc Earnings Call

Question: Suraj Kalia - Oppenheimer & Co. - Analyst : Thank you.

Question: Neil Chatterji - B. Riley Securities - Analyst : Hi, good morning. Thank you for taking our questions. Maybe just on the new guidance, two questions here. One, could you just maybe elaborate on the large initial international deals and other one-time orders from '22, and how pursuing those types of deals might differ in the back half and beyond? And then secondly, could you just maybe talk about the dynamic of customers waiting for the next-gen iQ3 launch next year versus ways to maybe incentivize them to continue to purchase iQ+ and make it easy to upgrade?

Question: Neil Chatterji - B. Riley Securities - Analyst : Sure. I mean, maybe just on that second part of that question, just in terms of the iQ3 actually launch next year and if customers are waiting, I think you also in the prepared remarks talked about ways to make that -- the upgrade easier and still be able to purchase iQ+ now. So maybe just elaborate on that.

Question: Neil Chatterji - B. Riley Securities - Analyst : Great. Maybe just one quick follow-up here in terms of getting back to basics here and in terms of commercial strategy and execution, kind of curious what that means for a few things. So one on the e-commerce strategy, the enterprise software strategy, and then lastly, I don't think we touched on as much today, but just kind of the Butterfly iQ in the home or self-scanning or how does iQ3 maybe change that or is there other things in the pipeline? Thanks.

Question: Neil Chatterji - B. Riley Securities - Analyst : Great. I appreciate that color. That's it for me. Thanks.

Question: Josh Jennings - TD Cowen - Analyst : Hi, good morning. Joe and Heather, wanted to just start off on the Butterfly iQ3, just to make sure we're clear on where that development program stands. No, I didn't -- it seemed to catch for my understanding from this call is that you already crossed the threshold where this imaging quality improvement is in hand or is other still -- what are the development steps left and are there any regulatory hurdles that need to be cleared? And I guess the reason I'm asking is just with this Osborne effect that you guys are calling out for the second half of '23 and then the launch of iQ3 in 24, do you think could that Osborne effect last into '24 as we think about updating our models and our year estimates or is this an early 2024 launch?

Question: Josh Jennings - TD Cowen - Analyst : Excellent. So is that submission on the time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 03, 2023 / 12:30PM, BFLY.N - Q2 2023 Butterfly Network Inc Earnings Call

Question: Josh Jennings - TD Cowen - Analyst : That's outstanding. And then how early can you start showcasing the iQ3 and the improvements to key opinion leaders and/or your customer base? Are you able to market this in front of approval?

Question: Josh Jennings - TD Cowen - Analyst : Excellent. It's great to hear. And one of the reason I asked, I think I believe from our consultants, feedback on the iQ+ and the potential for image quality improvement may not have just cleared that expectation hurdle, but it sounds like iQ3, you've already cleared that hurdle that closing of the perceived imaging gap has been accomplished and now it's just a matter of getting regulatory approval and launching, just to be 100% clear.

Question: Josh Jennings - TD Cowen - Analyst : That's outstanding. Thanks for those details. And then just how should we be thinking about the potential of iQ3 launch next year to enhance or pull forward the replacement cycle, just thinking about adopters in '19, '20, '21, even '22 and their drive to -- I think it's pretty clear that this should enhance the replacement cycle or pull it forward. But any just high-level thoughts for '24 and '25 about the replacement cycle contributions to revenue growth?

Question: Josh Jennings - TD Cowen - Analyst : Great. Thanks so much for answering the questions.

Question: Danielle Antalffy - UBS - Analyst : Hey, good morning, guys. Thanks so much for taking the question. Joe, you touched on this a little bit with Josh's question, but just any color you can give on the go-to-market strategy for the iQ3, is it something you'll go to your existing customer base with first? Is it something that you're going to try to win new accounts with? And also on the pricing side of things if you guys have ironed that out and that's all for me. Thanks.

Question: Danielle Antalffy - UBS - Analyst : Just on pricing. I know you guys (multiple speakers) yeah, just on price if this is something -- yeah.

Question: Danielle Antalffy - UBS - Analyst : Okay.

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