BFLY Q2 2024: Record Revenue on 75% iQ3 Adoption
- Strong iQ3 adoption and revenue momentum: Domestic sales saw around 75% of units being iQ3, indicating robust market acceptance and an ASP uplift, which helped drive record quarterly revenue and broad-based consumption.
- Robust and diversified sales pipeline: The company’s sales funnel is described as having high coverage across multiple channels (e-commerce, inside sales, direct health system deals), providing confidence in sustaining and exceeding forecasted results.
- Emerging AI ecosystem and scalable partnerships: Initiatives like Butterfly Garden and Powered by Butterfly are set to unlock recurring revenue streams and non-dilutive financing opportunities as partner solutions become commercial, positioning the company for accelerated growth in 2025.
- Uncertainty in Pipeline Metrics: Executives were not able to provide clear quantitative details on the sales pipeline, leaving future revenue largely uncertain.
- Delayed Impact of New Licensing Revenue: The contributions from Butterfly Garden and Powered by Butterfly channels were not material in 2024 and are expected to ramp up only in 2025, raising concerns about near-term revenue diversification.
- Regulatory and RoHS Revocation Risks: The ongoing efforts to overturn the RoHS exemption face uncertainty including potential political and lobbying challenges, which could delay or disrupt market shifts toward Butterfly’s cleaner technology.
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iQ3 Launch
Q: How is iQ3 performing in U.S. & abroad?
A: Management highlighted that the iQ3 launch is driving strong demand—about 75% of U.S. sales units were the iQ3, and international traction is building with a successful debut in Canada and a scheduled European launch. -
Sales Pipeline
Q: What is the current sales pipeline?
A: They emphasized a very healthy pipeline that far exceeds forecasts, providing strong confidence in future revenues, though no precise figures were disclosed. -
Partnership Revenue
Q: When will partnership revenue pick up?
A: Licensing revenue from the Butterfly Garden and Powered by Butterfly programs is modest in 2024 but is expected to accelerate and contribute notably by the end of 2025. -
Volume vs. Revenue
Q: Clarify volume versus revenue growth differences?
A: Management explained that excluding one-time medical school deals, volume grew around 37% while domestic revenue increased by 25%, reflecting a beneficial mix of higher prices and strong demand. -
iQ3 Penetration
Q: What percentage of sales is iQ3?
A: Overall, nearly 50% of the total volume was iQ3, with domestically reaching about 75%, underscoring robust product adoption. -
AI Integration
Q: How is AI impacting ultrasound?
A: AI is seen as a major accelerator in making ultrasound more accessible and effective, enhancing imaging capabilities and broadening the user base significantly. -
RoHS Revocation
Q: What signals the RoHS revocation push?
A: Management is pushing for a definitive phase-out of piezo-based devices by obtaining a revocation that would set a target date to transition fully to clean CMUT technology, though the exact timeline remains undetermined.
Research analysts covering Butterfly Network.