Q3 2022 Butterfly Network Inc Earnings Call
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[music].
Hello, everyone and thank you for joining that portfolio to make what Q3 2022 earnings call. My name is diaries and I'll be the operator for today before handing you over to your host Heather I would like to remind you that you would like to ask a question during the Q&A session at the end of the Cold Peace Press Star followed.
By one on your telephone keypad now.
The purge of hardening yield, but your host Heather. Please go ahead.
Good morning, and thank you for joining us today earlier. This morning, <unk> released financial results for the third quarter ended September 32022, and provided a business update.
Elyse an earnings presentation, which include a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures.
Currently available on the investors section of the company's website at IR Dot butterfly network Dot com.
Hi, Heather Getz Executive Vice President and Chief Financial Officer of Butterfly alongside Dr. Todd approximate but our vice President and Chief Executive Officer will host.
This morning's call.
During today's call, we'll be making certain forward looking statements.
This may include among other things expectations.
Expect the financial result, future performance.
<unk> and commercialization of products and services potential regulatory approvals aside and potential growth.
Our current or future markets for our products and services and the impact of the COVID-19 pandemic on our business.
These forward looking statements are based on current information assumptions and expectations and are subject to change and involve a number of known and unknown risks uncertainties and other factors that may cause actual results to differ materially from those contained in the forward looking statements.
These and other risks are described in our filings made with the Securities and Exchange Commission.
You are cautioned not to place undue reliance on these forward looking statements and the company disclaims any obligation to update such statements.
As a reminder, this call is being webcast live and recorded and we will be referencing a slide presentation in conjunction with our remarks, there may be a short delay between the live telephone audio and the presentation being shared.
It is a truly remarkable and transformative device.
By putting an ultrasound on a semiconductor chip.
<unk> became a disruptor in the industry based on our innovation and hardware alone.
We're proud to say we are leading in the handheld ultrasound segment today and we continue to invest in this area to maintain our edge.
Our technology works and it keeps getting better.
Some of our initial learnings in the market. However made us recognize that we were not where we needed to be in order to realize the full value of our technology and the impact of healthcare.
So we went to work on our enterprise level software and workflow solutions.
We have spent the last year investing heavily in the development of our software solutions blueprint in Congress.
Significant progress in software development has created best in class image management, and workflow software across ultrasound platforms, both internal and external to butterfly.
As a result, we have gone from software that was objectively lagging to software that is now highly valued and we continue to innovate and pushed beyond the status quo based on what we're learning from our customers. We know that software is the enterprise enabler.
We are proud that enterprise level of software development has now become a positive differentiator for butterfly.
A platform for our solution and a catalyst for providers to begin their journey of care transformation.
But given the significant strains on practitioners throughout the healthcare system, we've learned that they need specialty applications that are highly focused streamlined.
Easy to learn and easy to use.
The burden of learning an ultrasound cannot be put on them.
All practitioners don't want to learn nor do they have time to become experts and ultrasound.
So we have reorganized our product clinical and commercial teams around the coordinated pursuit of specialty applications that only butterfly can enable.
Providers want to quickly learn the applications that are most relevant to their practice and that will dramatically improve their ability to care for their patients and streamline their workflow.
And a butterfly, we are committed to delivering our technology in a way that accomplishes. This.
We are developing clinical partnerships that will provide clear evidence to support an application specific adoption and usage that is relevant and impactful.
Our backlog of applications deep proprietary and unique to butterfly.
Our strategy in roadmap are confidential for obvious reasons.
Will be revealed as we launched them.
We realized that this challenge for the outside world to monitor our progress.
But we believe long term value as maximize.
Hitting the market with tailored solutions that are unique to butterfly without competitive distractions.
With the hardware and software now working complementary to one another butterfly has truly become the practical application of ultrasound information into the workflow.
Experience with a butterfly is fundamentally different than any other ultrasound device that has come before us.
With butterfly providers now have the ability to use ultrasound to guide their assessment instead of doing an ultrasound to confirm their decision.
This is what separates us from the pack.
This is what butterfly and semiconductor based ultrasound makes possible.
And it's this distinction that we believe will lead to a major shift in how medicine is practiced.
On how care is delivered across all settings. We expected this ship to take time, because leading people through behavior change takes time, both in practice and implementation.
But just as others are experiencing within the industry, the budgeting and workforce pressures have intensified resulting in implementation delays.
Some of our future partners are simply delaying implementation and commitments until they can catch up on people.
We are prioritizing the appropriate coordination for successful launches and rollout over the speed of short term revenue generation that doesn't meet our long term objective.
With that said the signals we are receiving.
And the conversations we are having in the market reassert that butterflies message is clearly resonating and that we have the ability to fundamentally change the care experience for providers and patients alike without carriers delivered across all settings.
And with that context, I'd like to discuss our business performance and briefly comment on the third quarter high level of financials.
From a revenue perspective, we ended Q3 with $19.6 million and quarterly revenues.
34% increase versus the third quarter of 2021.
While this was our highest quarterly revenue to date and an acceleration in our revenue growth over our first half levels.
It is lower than our internal expectations due to increased challenges at the macro level.
Heather will speak to this more.
But the broader macro environment is waging a toll on health systems.
The environment has placed additional demand on frontline health care workers and management that has pushed out their inevitable innovation in the very near term.
The impact of this environment, it's causing a delay in our growth and as a result, we are adjusting our guidance to $73 million to $76 million.
Because we have proactively and fully offset this lower revenue, but the expense reductions there is no change to our adjusted EBITDA loss.
While our top line revenues reflect the market dynamics. We have discussed were also acutely aware of the opportunities it creates for butterfly, because we have a tool that quickly becomes part of the solution for hospitals and clinicians we are confident that our business is foundational.
Strong and growing based upon these five things.
First the texture of our revenue shows that we are growing where it matters.
[noise] health systems and software and services.
Hospitals, realizing and they need to have the right infrastructure in place to manage and use our technology, one oversight device management Credentialing and QA solutions.
That's critical first steps to technology, leading to care transformation.
Firefly delivers here.
Second.
There has improved customer inclined experience that is driving increasing usage and validity to our vision.
Or we.
We are meeting our customers, where they are with our blueprint encompass enterprise software.
As well as building a pipeline of applications and product introductions that fit the needs of enterprise customers individual practitioners and patients.
Or.
We have a building pipeline of leading institutions coming up engaged with to drive specific applications with accelerating adoption and.
In the coming periods.
While we are not going to project large client yields in the near term our backlog has clearly built in quality.
And said, we are giving institutions and providers the foundation upon which they can build transformational programs. They use ultrasound information to change the way carriers delivered across the continuum.
Everywhere, we evaluated the needs of patients and providers can only be best satisfied with butterfly.
To help address these market dynamics and further ensure butterfly remains well positioned to capture this value as we head into 2023 and beyond today I'd like to announce some changes to the executive leadership team.
To start.
Stacy to Archie.
Our chief commercial officer has chosen to pursue another opportunity outside of the company and will leave butterfly as of November 24th.
I would like to personally thank Stacey for her contributions to butterfly and your commitment to this organization.
She has helped lead butterfly through this time of transformation and has expanded our reach and healthcare institutions around the globe we.
We wish her the best in her future endeavors.
As a butterfly continues to grow and evolve. It is important that we continue to look at the business to make sure. It is structured optimally.
The state is departure, we took an opportunity to assess the needs of our organization to ensure we have the right structure and leadership.
As of November 1st or commercial function now broken up into two entities <unk>.
Commercial operation and commercial development.
The commercial operations function will include all commercial operations and activities for North America, and our core markets.
The commercial development function will be responsible for all marketing operations, the veterinary business and the international business and expansion.
This new structure is intended to drive focus and tighter execution for our sales and marketing teams.
With that said.
Excited to announce two new additions to the executive leadership team to lead these respective functions.
November 1st <unk> joined butterfly as senior Vice President commercial operations and Nikki Montgomery joined at Senior Vice President commercial development.
Mike and Nikki are too highly accomplished leaders with <unk> relevant experience and track records of success with the specific challenges butterflies 18 right now.
I look forward to their partnership and expertise to help us achieve our revenue goals and market adoptions.
As I said before we are making steady progress in the market and I would like to discuss some of our achievements in Q3.
This past quarter, we introduced butterflies cloud 2.0 software.
Ah launch that included several new product features and a proficiency management solution for our blueprint platform that makes it even easier to manage your workflows and analysis across an institution.
After implementation Dr. Bryon Gibbons director of ultrasound education at the Temple University School of Medicine said.
The butterfly proficiency management system will lead to more recognition of the value that butterfly brings to clinical assessment at the bedside.
We know the power that ultrasound information can bring when it is on market scale, our job is to make it as easy as possible for people to acquire that information are proficiency management tool.
That system wide and we believe this will help institutions accelerated adoption and utilization of ultrasound information and patient assessment diagnosis and treatment.
We continue to see milestone achievement in each of our four pillars that are built on our foundational principles of easy.
Everywhere and economical.
So we take a look at hospitals and health systems. For example, the butterfly solution is showcasing its relevancy across the country irrespective of geography.
See photos deals and major health systems large Ivy and in in rural Health care institutions like monument held a community based health care system in South Dakota that will know how blueprint system wide, coupled with a probe deployment.
We are now providing blueprint at Yale New Haven health and sign a new contract with Stanford that includes an expanded system footprint of our enterprise software improves.
And we continue to make progress embedding, our overarching solution and major academic medical institutions across the U S.
This includes U C Irvine, who for the fourth year in a row is utilized in butterfly for the next generation of doctors <unk>.
Each new student gets his or her own butterfly.
A one to one model, we are replicating across med schools.
Because of this the students are learning butterfly powered assessment from the beginning of their training and they will now have this skill set they become physicians and the ability to practice medicine differently.
These are significant milestones in their own right and we're just getting started with.
With that said.
Let's move on to our international pillar.
This past quarter butterfly officially deployed 500 butterfly IQ plus devices to health care practitioners in Kenya at an event.
The University.
This deployment is supported by a 5 million dollar grant from the Bill and Melinda Gates Foundation announced earlier this year that will provide 1000 healthcare workers predominantly midwives in sub Saharan Africa with the world only handheld all body ultrasound probe too.
Advanced maternal fetal health.
According to the World Health organization Regional office for Africa about 830 women die from pregnancy or childbirth related complications around the world every day with more than half of these deaths occurring in Subsaharan Africa.
A total of 500 practitioners will be trained by the end of the year in partnership with the global Ultrasound Institute, bringing ultrasound capabilities to over 50 facilities and rural underserved communities facing maternal health challenges.
This is just a phase one of this deployment.
500 probes will be deployed to South Africa early next year.
From a global health context. This is the largest appointment of medical imaging and history and we are already hearing about the life saving impact. It is having in this region for mothers and their unborn infants receiving ultrasound exam for the very first time.
Moving onto our third pillar.
Home based care.
You've heard me say as a digital health company, we are focused on a marketing information and helping more informed medical decisions.
Matter, where they take place, especially as care is moving outside of the hospital.
Until it taking more advanced assessment.
In non traditional settings butterfly is key to advancing care outside the hospital.
Where we see enormous potential for butterfly to be an invaluable tool to help monitor and manage the health of those living with chronic conditions.
This past quarter, we kicked off a clinical study for heart failure patients.
John Your Cardiovascular Institute Research Department.
This is the first of its kind feasibility study that will evaluate a novel tool developed by the butterfly.
Is designed to provide novice clinicians and patients, but the ability to assess pulmonary congestion themselves. The most common reason for morbidity and mortality and congestive heart failure patients against an established implanted device.
The value of butterfly noninvasive technology, providing similar data to an implanted device could be a tremendous opportunity for managing the care of a rapidly growing population of CHF patients.
This type of work that is demonstrating the capabilities of butterfly to transcend the lens a traditional ultrasound and its current market is what makes us confident in our strategy and confident in our ability to reach a non consumption user as an advanced.
Clinical assessment tool.
Tool that it's far more valuable to a lot more people and allows us to take advantage of our core semiconductor technology.
Because it's about using information from ultrasound technology to guide care decisions and improve the lives of people, it's not about ultrasound machines or doing ultrasound.
And finally, let's discuss our work in adjacent markets.
As many of you know, we continue to find value and market adjacent to health care, such as veterinary medicine.
This past quarter, Purdue University College of Veterinary Medicine announced that it will integrate butterfly IQ plus that into the first year of their veterinary medicine programs.
Or also excited to share at Texas Tech University will be expanding their partnership with us but.
The school of Veterinary Medicine has acquired additional butterfly IQ plus that probes to assign every incoming student with the device for the duration of their education.
We also added 10 that as a new distributor.
Regional distributor for the eastern United States, which is the largest market in terms of volume for both fat and vet hospitals in the country.
Lastly, as we help veterinarian along their journey of care transformation through the use of ultrasound information, we announced the collaboration with we Acu solutions, which will provide real time, one to one veterinary ultrasound education and care support services thoughts bottles.
We believe as strongly today as we ever have that butterfly has the power to be as ubiquitous as the stethoscope.
And its utility and patient assessment across all specialties issues and care settings.
Providers using butterfly now have access to valuable information, when and where they've never had it before then.
They now have the ability to use the information that ultrasound provides much earlier in the care of patients and care settings, where it's never existed.
Only butterfly can make that possible because our hardware enables the acquisition of information and our software makes that information usable and valuable to providers of all skill set in any setting across the entire continuum of care.
Our account to transformation at scale is on the right track and.
And we are young and agile company with fiscal discipline organizational optimization and learnings from and market experiences working to create every opportunity to accelerate growth and adoption.
Heather will speak to this further and also take a deeper dive into the financials to give you a clearer picture of the results. We are seeing thank you Todd and good morning, again running for the third quarter of 2029.
19.6 million hours, 834% increase perfect prior year period.
<unk> quarterly might need to date.
Celebrating on Thursday at 2022 level.
At less than our internal expectations.
A lot of driving it was $13.2 million an increase of 21%.
<unk> 2021.
This increase was driven by higher average selling prices and both of US and international markets. In addition, total volume with that 3% with health system volume up significantly in global health volumes more than quadrupling you try launch with the Gates Foundation in Africa.
Partially offsetting these increases with a reduction in E. Commerce. This trend of higher health system fails, partially offset by lower e-commerce inconsistent with our strategy driving adoption and health system.
The sizing our individual profiles truly commerce.
Software and services revenue.
$5 million in the third quarter slowly by approximately 71% over the prior year period.
So far the services Smith was 33% of revenue and increased by approximately seven percentage points Q.
Q3 2021.
Increase due to implementation that occurred in the corner as well as a higher installed base of products with accompanying subscription software and increased renewal.
We are encouraged by this momentum and we diversify our revenue from the aforementioned E Commerce channel and providing software and service health is done and enable more informed.
<unk>.
Overall, we believe our queue three by then it was negatively impacted by quarterly softness as well as some intensifying macros friends. When we are seeing hospitals constrained not just budget currently but also by the resources needed to implement.
Internationally revenue was also impacted by the weakening of the Euro which made our products Mark Anthony I won't touch more on these factors later when I discuss the full year guidance.
Turning out so adjusted gross profit.
Justin gross profit was $12 million in Q3, 2022 compared to $7.2 million in the prior year period.
Adjusted gross profit margin, 61% in the third quarter, which compares to 49% in Q3 2021.
This increase was primarily due to product next.
Higher proportion of subscription revenue in addition to hire device prices.
Also contributing to the increased margin tire manufacturing credit today, partially offset by the increased cost of manufacturing materials.
We expect our gross margin percentage will fluctuate poorly along with the change index equal prize and subscription fails. We believe the point order will have a slightly higher percentage of five <unk> Avenue and as such we anticipate gross margin percentage by a few hundred maintenance point we.
We do however expect that.
For 10 failed for sending it by mail and gross margin percentage will increase for the full year 2022 2021.
For the first quarter of 2022 I just can he that was a mass of $32.9 million compared with a loss of $33.5 million for the same period in 2021.
The improvement and adjusted EBITDA loss, driven by increased adjusted gross margin dollars.
I mentioned positive product Nick N I S PS.
Partially offsetting need benefits for investments in a commercial and orange and.
We build out our commercial operations and Fox.
Moving to our capital resources.
September 30th 2022, cash and cash equivalents, including restricting cash for $273 million monthly.
Monthly operating use the cash with $15 million in the third quarter down from over $18 million in the first half.
In addition to our year to date operating in Texas are September 30th cash condition when impacted by 21 annual bonus payouts capital expenditures and about out of our headquarters.
Annual renewal of insurance premium and inventory purchase applications.
Q3, we implemented the previously announced plan to reduce cash expenses by approximately $36 million annualized when fully implemented by year end. In addition to this plan we continue to evaluate all spending to ensure the lines to Mister <unk>.
Butterfly.
Looking at our 2022 guidance interesting butterfly, a strong and the long term opportunity and available market for our products it's clear.
And many of our industry Nowadays intensifies labor constraints in the third quarter and associated budget pressures from the temporary labor costs half lemonade client side implementation capabilities and cause health and adoption of medical technology more broadly.
As we do not have a nice day <unk>.
Will immediately reversed and the fourth corner and this time, it's fast along with our changing sails leadership. We believe it is prudent to revise our full year guidance is $73 million to $76 million.
However, due to the actions taken in <unk>, an additional control measures. We are able to reiterate are interested EBITDA guidance in the range of a loss of $155 million to $145 million.
We need to be realistic about the macro and micro environment, where it is at it started on health system and how it affects our ability to grow quickly as we're changing the way health care is delivered.
Having a strong market strategy that we can build on and optimize against is essential.
Awesome, having an environment, where hospitals are able to invest in resources and greater budget is also important.
Until then we will remain laser focused on extending our leadership position that clearly differentiated butterfly, while working against the headwind are they difficult macro environment.
To close.
<unk> continued top line growth in the third quarter tightly managed expenses and reduce cash consumption. Our plan will allow us to navigate the headlines on the macro environment, while still realizing that vision admission a butterfly, we had a solid cash position and we plan to continue to invest in a targeted manner.
To maintain our momentum and continued to capitalize on this attractive market opportunity.
That I will turn the call back over to Todd for closing remarks.
Thank you Heather.
Butterfly is a game changing technology solution for the current state of health care.
Our technology works and our value Israel.
It is my hope that you walk away from this call, having a better understanding of our cats and.
An appreciation for how we are navigating the market with our innovative technology and our ability to manage the foundational elements of the business to weather external factors.
We understand the elements needed for the success of the butterfly solution hardware software and connectivity and.
And we are meeting our customers, where they are and providing a blueprint to using ultrasound information to catalyzed care transformation.
Fundamental to all of these achievements because our people.
I'd like to thank them for their incredible hard work and commitment to this organization and to each other.
Our employees are dedicated to our mission and want to help realize our vision to impact the lives of people all around the globe are leadership and organization changes well.
To ensure their success.
And the challenging time for health care with increasing demands and a workforce that is stretched thin.
Butterfly is ultimately a solution that efficiently delivers better more informed lower cost care.
And while we continue to evolve or go to market and investment strategy to provide accelerated revenue growth and adoption.
Treatments this past quarter still demonstrated that butterflies message is resonating broadly.
As we finish up this year and move into 2023 are charged it to continue to work this journey with physicians and care providers to get them to think about butterfly technology and solution differently.
To get them to understand that butterfly is the evolution, what they have previously known or been exposed to about ultrasound and butterflies accessibility is abuse and broad utility is the only solution out there that makes the evolution possible in all settings and geography.
It's y butterfly.
And with that we will open it up to questions.
Thank you. So you would like to ask a question <unk> followed by on the new telephone keypad. If you change your mind peaceful thoughtful by two <unk>.
Fantastic question <unk>, so that staff hopefully one.
Oh first question comes from just <unk>. Please go ahead, you should let us know.
Hi, Good morning, Thank you for taking the questions.
Was hoping to restart Tommy.
Just to ask about the the seals funnel.
If anything we can sure uhm.
Quantitatively qualitatively about health and spilling out it sounds like.
You are getting in front of more and more new high profile accounts and maybe there's just a tobacco brown just some delays in finalizing contracts with one of <unk>.
Understand how to steal someone's been developing and what to the visibility you have.
Within that pipeline.
Good morning, Josh.
So absolutely G. The VCR pipeline building, we also see the <unk> of the revenue so to look at.
Where revenues coming from as it was from hardware software and our services.
We see positive momentum.
And each of those aspects b are lining up implementations and.
Continuing build named Charles final. So I don't know how about if you want to call him Yeah sure Uhm. Good morning, Josh I I'd also like to just empathize <unk>.
Kind of delays that we're seeing are causing a push out in <unk> not people opting out of our product. So I think that's an important item tonight as well.
Thanks, a lot and I wanted to just think about 2023, I mean, I know <unk> 2022.
What're flies foundation has evolved very nicely.
Behind the scenes, but then you.
You guys will be able to everything that was happening to 2021, just in terms of building up a blueprint.
Platform, adding an accomplice in can you continue.
To.
Add add to the to the technology.
2023 in a couple of months how would you Hello.
Let's think about butterflies positioning relative to the start of 2022 in any.
Drivers that we should be considering as we as we model our our.
Four ketchup or models.
Yeah.
Gosh I think.
When you look at 2023.
Better impacting us this year with a budgetary constraints N N. The macro environment. We believe are mainly transitory shall we do looks at to be able to add her 2023, a strong it I've been here progressive obviously improvement be.
Okay for next year and driving our product will be medical education, a continuation on about of our software as well as global health and I think we're well positioned to take advantage of those areas.
Hi, do you want to add anything.
Josh I would just say that.
No I think every.
Every minute of every day that we're in the market.
We made progress and our customers.
Understanding to where they can benefit and use the technology makes progress I think as we look at the headlines I mean.
Everybody is seen as something as you look at the headwind at the end of the day hospitals have to figure out how to take care of patients and you know as a care continues to evolve itself.
So what the next evolution of care is I don't think it's going back to where it was but as it continues to evolve they are gonna be looking into technologies that help them do that better butterfly clearly comes out as part of the solution is you start looking into more cost effective efficient care that helps drive better quality. So you know it seem very positive.
Trends moving into 23, if you look at our fundamental elements of our technology continues to advance it and its performance we continue to understand how it's being absorbed by our customers in helping them get on the journey faster, where we're looking in and segmenting as we we get to the areas that we're making.
The greatest impact Heather mentioned will focus on <unk> Global health software enablement of the work flow and the adoption and utilization of the technology. So I think with the activities or seen in the market as we finished 22 with where we see the the the macro.
Of all the and and twenty-three.
Or optimistic continued progress and twenty-three moving forward.
Understood. Thank you just one last quick sales.
Sales leadership change you can can you help us better understand just how it is still strategy to commercials trying to use them for the past six to 12 months in.
And the <unk> new leaders cause.
What type of direction, you're gonna take a computer on Oprah W. B T. B D. As they're just getting on board, but let me hold on response would be appreciated thanks for taking my questions.
Sure absolutely thank God, but if you think about what we're trying to do if you just take a step back.
We didn't invent ultrasound.
Our technology is enabling others to re imagine how they use ultrasound and and what that means in the health care environment. So we have elements of our solution that make it a complex multi level style. So we've understood as we've been out in the marketplace that what we need to do with our customers in order to get them on the journey.
It's complex part of what we're doing here is bringing in the leadership and understand how to work through these complex conversations in the market reduce that simplicity and help our organization be successful, we're doing that both with our leadership and with our organizational structure to help our people and help our customers drive.
Two efficiency and effectiveness more rapidly more efficiently and more enjoyably. So we are we are we are breaking that Ford. So the commercial operations is really getting around.
Ultimate solution.
In helping our customers to.
Implement that and realize the value of it sooner across the entire continuum of cat with a heavy focus on North America. We also understand that we need to continue to develop our technology to take more of the burden onto our solutions that we need to understand how to deliver that through our technology across.
Hardware and software.
And across geography, so our commercial development organization, while the greater focus on how we do that how we support our commercial on selling activities and how we incorporate new and novel things into our platforms to help people get on their journeys faster. So this is comments from and this is what I talk about with us being out in.
The market. This comes from a lot of learning by not just talking about it being out there and we're really trying to learn.
Be nimble and agile and help enable success of the company and our customers and part of that is through the organizational change in the leadership change.
Once again, thanks for the.
Thanks.
The next question comes from New <unk>. Please go ahead <unk>.
Right.
Thanks for taking questions <unk> I guess first off just wondering if you could maybe just talk more about the Yale and Stanford blueprint deals and and and and just you know more broadly with a sales funnel I.
How much are the.
Mix of opportunities more software based.
Start versus say, a hardware department and software.
You know I think I would.
Take a step back and say if you think about how we how we need to and where the market is you know talks about meeting our customers where they are and if you think about where our customers are right. There are people in an institution that are charged with managing and <unk> and disseminating point of care ultrasound alright and.
When they think about how do you do that it's kind of been put on them because they have some expertise and then people realize there is value of that what we're doing with our software is healthy experts both expert teach and be able to help monitor the progress of how they disseminate that technology.
<unk> and then help institutions architect how they want to use the technology to deliver better care and then to help novices utilized elements of that information into delivering better care. So if you just so fundamentally in order to bring this to life you need a backbone to make that happen.
That's where we learned thoughtful we're implementing so our software really helps institutions experts and users go down their journey and that comes back to fundamentally that our technology is revolutionary because it allows you to use ultrasound ultrasound information and acquire it differently.
But our hardware acquires the information our software makes it user usable both and the device and in in in the application and then we have an element of the connectivity that makes that makes the information valuable in the context that you have it which allows the information to <unk>.
Travel across the continuum, which then brings it into your ability to deliver cares transformation. So it's really important that we're not selling a widget and a device right like this isn't like you back it up and saw an ultrasound machine and let people use it we are giving people the opportunity to re imagine an N F L.
Benefit from ultrasound information in order to do that are in market learning how to help to see how we need to create some of the lines across the dos to help our customers crosspiece things to think about how they can imagine care differently. So it's important for us to put the software and.
Partner with them help them understand how they're currently using ultrasound how they they can evolve in the future to use ultrasound how butterfly can help them use ultrasound information differently. So it's a software hardware enterprise.
Solution cell and so that's what's happening at Stanford, that's what's happening at Yale and that's our approach to helping people move forward with the journey.
[noise], so often several questions that his staff hope I wanted to know telephone keypad.
It's P. As you have no questions at this stage, so I'm just gonna.
<unk> one question from Neely cannot I'm, just going to open his line up again.
Hey, guys sorry.
Follow ups, yeah, just in terms of the speed.
The help you're spending environment just curious it from like you know at the customer level you're seeing.
You know any nuances there you know.
Are those labor and budget pressures more you know.
Is it widely spread or are you seeing it more of a community health system side versus say the academic medical centers side and have you seen any kind of new mitigation strategies.
It's it's really hospital or hospital, some folks had managed their finances well uhm.
Three the pandemic into this pandemic and others have not and then you know I think it's a pretty consistent theme across most of the health systems with the burn out.
The the clinicians and hospital staff, so even though <unk> have the budget often don't have the resources, because they're not selling to put another burden.
On their staff.
So we are seeing it fairly widespread obviously, we still did have at nice revenue in Q3. So it it's not everywhere, but it's definitely more prevalent and became more prevalent and cheese right.
No I think we see it.
It's definitely a macro trend right, but I think in general you know health care is is institution by institution difference of the conversations that we're in and I think that's why we say we meet our customers where they are both with with our economic challenges are with their workflow challenges are what their technology child.
Are we see it as an opportunity because there's a lot of flexibility and the butterfly solution. It really can help you solve the problem that you want us all and you know that's a blessing and a curse for us in the sense that we're getting people to understand that it also brings some complexity. This out at the end of the day is far more an offer.
Tuna do then it is a challenge and we just you know or or early in the journey Uhm, we see positive signs across every aspect of the journey and we definitely believe that at the end of the day, regardless of where you are is that health institution butterfly will be part of your solution moving forward.
Got it thanks.
Oh, just one one more followed in terms of the <unk> off the top line guidance. So is that reflective mostly macroenvironment or are you just begging.
Some disruptive impact the commercial we should changeover organizational restructuring.
Look I think I think it's just a combination of all I think we're trying to I think we're trying to be good partners. We're trying to be prudent about how we go about doing this we're really optimistic we have lots of good signals you know and I think we're early right. So we you know when when when we look at something.
It you know every option kind of has an opposite reaction right, where we're building were growing and so we wanted to be a prudent about the impact of the macro environment. The complexity of the south the changes that were making organizationally and we just wanted to be cautious moving forward, we're very optimistic about how things are going where.
Getting very positive signals, but we also want to be realistic and good partners in the marketplace.
[noise] alright. Thanks, that's that's it for me.
Okay. Thanks.
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