Q1 2024 Butterfly Network Inc Earnings Call

Unknown Executive: Excuse me, everyone. Please remain holding, and the conference will begin momentarily. Again, please remain holding. The conference will begin momentarily. St. Mary's Hospital, Nevada, Nevada Sanchez, Paula LeClair, Joshua Jennings, Unknown Attendee, Darius Shahida, Joshua Jennings, Unknown Attendee, Nevada Sanchez, Paula LeClair, Good afternoon. Thank you for attending the Butterfly Network first quarter 2024 earnings call. My name is Victoria, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end.

Excuse me everyone. Please remain holding and the conference will begin momentarily again, please remain holding the conference will begin momentarily.

[music].

Unknown Executive: If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Heather Getz. Thank you. You may proceed, Heather.

Victoria: Good afternoon. Thank you for attending the butterfly Networks' first quarter 2024 earnings call. My name is Victoria and I'll be your moderator today, all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if he would like to ask a question. Please press.

Victoria: Star followed by one on your telephone keypad I would now like to pass the conference over to your host Heather Getz. Thank you you May proceed Heather.

Heather C. Getz: Good afternoon, and thank you for joining us today. Earlier today, Butterfly released financial results for the first quarter ended March 31, 2024, and provided a business update. The Release and Earnings Presentation, which includes a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures, are currently available on the Investors section of the company's website at ir.butterflynetwork.com. I, Heather Getz, Chief Financial and Operations Officer at Butterfly, alongside Joseph DeVivo, Butterfly's Chairman and Chief Executive Officer, will host this afternoon's call.

Heather C. Getz: Good afternoon, and thank you for joining us today.

Heather C. Getz: Earlier today Butterfly released financial results for the first quarter ended March 31st 2024, and provided a business update.

Heather C. Getz: The earnings presentation, which includes a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures are currently available on the investors section of the company's website at IR Dot butterfly network Dot com.

Heather C. Getz: Heather Getz, Chief financial and operations officer at Butterfly, alongside Joseph Devivo, butterflies, Chairman and Chief Executive Officer.

Heather C. Getz: This afternoon's call.

Heather C. Getz: During today's call, we will be making certain forward-looking statements. These statements may include, among other things, expectations with respect to financial results, future performance, development and commercialization of products and services, potential regulatory approvals, and the size and potential growth of current or future markets for our products and services. These forward-looking statements are based on current information, assumptions, and expectations that 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.

Heather C. Getz: During today's call, we will be making certain forward looking statements. These statements may include among other things expectations with respect to financial results future performance.

Heather C. Getz: And commercialization of products and services potential regulatory approvals and the size and potential growth of current or future markets for our products and services.

Heather C. Getz: These forward looking statements are based on current information assumptions and expectations that 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.

Heather C. Getz: 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 audio and the presentation being shown. On the same page, you will also be able to access the webcast live and the replay once the call has completed. Joe?

Heather C. Getz: These and other risks are described in our filings made with the Securities and Exchange Commission.

Heather C. Getz: You are cautioned not to place I think reliance on these forward looking statements and the company disclaims any obligation to update such statements.

Heather C. Getz: As a reminder, this call is being webcast live and recorded and we will be referencing a slide presentation in conjunction with our remarks.

Heather C. Getz: There may be a short delay between a live audio and the presentation being sure.

Heather C. Getz: On the same page you will also be able to access the webcast live and replay once the call is completed.

Heather C. Getz: I would now like to turn the call over to Joe.

Heather C. Getz: Joe.

Joseph M. DeVivo: So, good afternoon, everyone, and thank you for joining us for our first quarterly 2024 conference. We've had a really good quarter and a perfect start to what will be a great year for Butterfly. We delivered 14% revenue growth, which was above expectations, and we are now raising revenue and earnings guidance for the full year. Our IQ three launch proved everything we were hoping for and marks a major shift in the competitive landscape for the health system market.

Joe: So good afternoon, everyone.

Joe: Thank you for joining us for our first quarter 2024 conference call.

Joe: We've got a really good quarter and a perfect start.

Speaker Change: It'll be a great year for butterflies.

Joe: We delivered 14% revenue growth, which was above expectations and are now raising revenue and earnings guidance for the full year.

Joe: Our IQ3 launch ever.

Joe: Everything we were hoping for and marks a major shift in competitiveness for the health system market.

Joseph M. DeVivo: With our building momentum from recent product launches, along with a robust line of new products and services, we feel confident we will be able to sustain this growth for the foreseeable future. Our ongoing efforts to streamline and become more cash efficient will continue through 2024, extending our cash runway well into 2026.

Joe: With our building momentum from recent product launches along with a robust lineup of new products and services coming.

Joe: We feel confident we'll be able to sustain this growth for the foreseeable future.

Joe: Our ongoing efforts to streamline and become more cash efficient.

Joe: Continue through 2024, extending our cash runway.

Joe: <unk> into 2026.

Joseph M. DeVivo: So elaborating further on the quarter, revenue came in at $17.7 million, or 14% over the last year's first quarter, with a 22% increase in probe volume, and all channels contributed. These results come on the heels of us overachieving our fourth quarter 2023 expectation. Even more, our first quarter 24 was the best first quarter in Butterfly's history, even beating 2022's of 15.6 million. We were able to achieve these results through improved execution and do it more efficiently. We actually used half the cash we did last year.

Joe: So elaborating further on the quarter revenue came in at $17 7 million or 14% over the last years first quarter with a 22% increase improved volume in all channels contributed.

Joe: These results come on the heels of us over achieving our fourth quarter 2020 expectations.

Joe: Even more our first quarter 'twenty four was the best first quarter and butterflies history.

Joe: Even beating 2020 twos of $15 6 million.

Joe: We were able to achieve these results through improved execution and do it more efficiently.

Joe: We used to have the cash we did last year.

Joseph M. DeVivo: So 14% revenue growth, the highest first quarter ever, using significantly less cash year-over-year. Now that's progress. We had a number of significant achievements during the course, the most notable of which was IQ3 winning FDA clearance early in January. And we were ready. We launched IQ3 ahead of schedule, delivering even more momentum. Our operations team did a marvelous job producing high-quality inventory. And our marketing team executed a flawless launch with so many online activations occurring throughout the quarter.

Joe: So 14% revenue growth.

Joe: First quarter ever using significantly less cash year over year.

Speaker Change: That's progress.

Speaker Change: We had a number of significant achievements in the quarter.

Speaker Change: The most notable of which was IQ3 winning FDA clearance early in January and we were ready. We launched Q3 ahead of schedule delivering even more momentum our operations team did a marvelous job producing high quality inventory, our marketing team executed a flawless launch with so many online activations occurring through the quarter.

Joseph M. DeVivo: I'm very proud of the team for delivering such a high-quality launch ahead of schedule. So as a reminder, as I laid out on our previous earnings call, our 2024 priorities for Butterfly are IQ3 driven growth, including going deeper into the health system. Q, Global Expansion, and three driving medical school adopters. In addition, we see further opportunities such as that So digging in further, on February 13, 2024, IQ3 became available on all of our domestic channels.

Speaker Change: I'm very proud of the team for delivering such a high quality launch ahead of schedule.

Speaker Change: So as a reminder, as I laid out on our previous earnings call. Our 2024 priorities for butterfly are one.

Speaker Change: Our Q3 driven growth <unk>.

Speaker Change: Including going deeper into health systems.

Speaker Change: Global expansion.

Speaker Change: And three driving medical school adoption.

Speaker Change: In addition, we see further opportunities such as that.

Speaker Change: So digging a little further to the launch on February 13, 2024, IQ3 became available to all of our domestic channels.

Joseph M. DeVivo: Each of our regions then proceeded to deliver an above-plan performance. U.S. revenue growth in the quarter was 19%, led by an increase in probe unit volume of 18% year over year. They were no large deal.

Speaker Change: Each of our regions then proceeded to deliver above planned performance.

Speaker Change: U S revenue growth in the quarter was 19%.

Speaker Change: Led by an increase in unit volume of 18%.

Speaker Change: Year over year.

Speaker Change: There were no large deals.

Joseph M. DeVivo: Just a groundswell of individual orders increasing on a daily basis throughout the quarter, which from my point of view is very helpful. [inaudible] And this was without IQ3 and prior to even receiving EU MDR certification for IQ+. So in other words, the growth was purely based on approved execution from our distributors and strong performance from our international direct, despite no new product in the years. Well, that's about the change for

Speaker Change: Just the groundswell of individual orders, increasing on a daily basis throughout the quarter, which in my point of view is very healthy.

Speaker Change: No International grew 14% and this was without IQ3 and prior to even receiving EU MTR certification for IQ plus.

Speaker Change: So in other words the growth was purely based on improved execution from our distributors and strong performance from our international direct team.

Speaker Change: Despite no new product in the years.

Speaker Change: Well.

Speaker Change: Thats about the change for them now.

Joseph M. DeVivo: Now that we have EUMDR certification, we'll be rolling out a cadre of advanced features on our European IQ Plus product later this month, and international results should accelerate further. So what's more, the new Butterfly IQ3 international rollout is kicking off very soon. We plan to launch IQ3 in Canada this month, and then Europe will come next later in 2024. So IQ3 was available for a half-a-quarter in the U.S. market. Sales and selling activity have been, of over 1200 IQ3 units sold, about half were brand new users to Butterfly, and half were trade-in upgrades by existing users who wanted the new technology.

Speaker Change: Now that we have <unk> certification will be rolling out a cadre of advanced features on our European IQ plus product later this month.

Speaker Change: International results should accelerate further.

Speaker Change: It's more of the new butterfly IQ3 international rollout is kicking off very soon we plan to launch IQ3 in Canada. This month.

Speaker Change: And then Europe will come next later in 2024.

Speaker Change: So why Q3 was available for a half a quarter in the U S market.

Speaker Change: Sales and selling activity has been electric.

Speaker Change: A little over 200, Q3 unit sold about half were brand new users to butterfly and half were trade in upgrades by existing users who wanted the new technology.

Joseph M. DeVivo: In every setting, IQ3 shines. We have held many private IQ3 demos for KOLs in every clinical specialty relevant to ultra, We used to hear, quote, Butterfly is great, but unquote, from several specialties, especially cardiology. But there's no more but.

Speaker Change: Every setting Q3 shine.

Speaker Change: We have held many private ICD three demos for Kols in every clinical specialty relevant to ultrasound.

Speaker Change: We used to hear quote butterfly is great, but unquote from several specialties, especially cardiology.

Speaker Change: But there is no more but.

Joseph M. DeVivo: That is now a thing of the past. At the most recent American College of Cardiology conference, our little booth was swamped with cardiologists. It was so gratifying because we heard them say, quote, I just had to come by and see if IQ three was as good as everyone says it is. Now that's really nice to hear.

Speaker Change: That is now a thing of the past at the most recent American College of Cardiology Conference a little Booth was swamped with cardiologists. It was so gratifying because we heard them say quote I just had to combine and CFO Q3 was as good as everyone says it is unquote.

Joseph M. DeVivo: Our message is getting out. There's a viral buzz around our new product, and customers are reaching for it. Time and again, we put IQ three up against the competitive devices, and our image quality is just much better.

Speaker Change: That's really nice to hear our message is getting out there as the viral buzz around our new product and customers are reaching for it.

Speaker Change: But again, we've put IQ3 up against the competitive devices are image quality is just much better we have an advanced automated tools and our cost is still a fraction of the price of all competitive approach.

Joseph M. DeVivo: We have advanced automated tools, and our cost is still a fraction of the price of all competitive pro. Remember, you need to buy four of their probes for between five and $7,000 each to get to a full body. Together, that's a $20,000 to $28,000 purchase, about the same cost as an entry-level cart.

Speaker Change: I remember you need to buy for their approach between five and $7000 each to get to a full body image.

Speaker Change: Together, that's a 20 to $28000 purchase about the same cost as an entry level cart.

Joseph M. DeVivo: We also publish a white paper accessible at butterflynetwork.com slash resources on the clinical utility of IQSlice and IQSAN, detailing how these advanced tools can enable more efficient care by reducing the number of scans needed in an exam. Many ultrasound protocols are time-consuming and demanding of probe manipulation to get a series of views. With IQslice and FAN, we propose new protocols that streamline the scanning process and enhance diagnostic efficiency.

Speaker Change: We also published a whitepaper accessible at butterfly network Dot Com slosh resources on.

Speaker Change: On the clinical utility IQ slice and IQ fan detailing how these advanced tools can enable more efficient care by reducing the number of scans needed in an exam.

Speaker Change: Many ultrasound protocols are time consuming and demanding unproved manipulation to get a series of views.

Speaker Change: With IQ slice and fan we proposed new protocols that streamline the scanning process.

Speaker Change: An enhanced diagnostic efficiency.

Joseph M. DeVivo: This was also the first quarter that we began selling two probes side by side. IQ Plus remains the best selling handheld in history, and the product has a lot of life. Providers who are generalists or very price sensitive may opt to purchase IQ Plus at $26.99, while more specialized doctors, for example, those with cardiac, MSK, and vascular needs, will likely opt for the IQ-3 at $38.99.

Speaker Change: This was also the first quarter that we began selling two probes side by side.

Speaker Change: IQ plus remains the best selling handheld in history and the product has a lot of life.

Speaker Change: Providers, who are generalists or very price sensitive may opt to purchase our <unk> plus at 26 99.

Speaker Change: While more specialized doctors for example, those with cardiac M S K and vascular needs will likely opt for the IQ3 at $38 99.

Joseph M. DeVivo: No matter what, Butterfly wins because we have the lowest cost all-in-one probe and simultaneously the best handheld in image quality capabilities and cost. Plus, our probes are paired with enterprise software and educational tools to make deployment feasible at scale, and now Butterfly Garden will be constantly bringing them the best AI apps in the world. It's just simply an unbeatable offering.

Speaker Change: No matter, what butterfly wins, because we have the lowest cost all in one probe and simultaneously the best handheld and image quality capabilities and cost.

Speaker Change: Plus our probes are paired with enterprise software and educational tools to make deployment feasible at scale.

Speaker Change: And now butterfly garden will be constantly bringing them the best apps in the world.

Joseph M. DeVivo: Health systems are now taking notice, and our pipeline is growing. We have the probe, the mobile app, enterprise software, and an education portfolio. If a point of care ultrasound director is serious about building an enterprise program, they will now truly have only one choice, Butterfly, the most complete solution. In fact, we're thrilled by new data coming out of one of our largest one-to-one probe and software installations, at the University of Rochester Medical Center, which furthers the value story by demonstrating the economic benefits of Butterfly. There's much more to come on this, but they allowed us to preview a highlight.

Speaker Change: It's just simply an unbeatable offer health systems are now taking notice and our pipeline is growing.

Speaker Change: We have the probe the mobile App enterprise software and education portfolio.

Speaker Change: If a point of care ultrasound director of serious about building an enterprise program. They will now truly have only one choice butterfly. The most complete solution. In fact, we're thrilled by new data coming out of one of our largest one to one probe and software installations at the University of Rochester Medical Center, which.

Speaker Change: Further as the value story by demonstrating the economic benefits of butterfly.

Speaker Change: There's much more to come on this.

Speaker Change: But they allowed us to preview a highlight.

Joseph M. DeVivo: Since putting Butterfly in place system-wide, URMC observed significant revenue, a 116% increase in hospital revenue from point of care ultrasound in just a year and a half. And they also reduced capital expenditures when deploying our devices system-wide, looking at our software and services revenue. In total, it was down slightly.

Speaker Change: Since putting butterfly in place system wide, you RMC observed significant revenue growth.

Speaker Change: 115% increase in hospital revenue from point of care ultrasound in just a year and a half and they also reduced capital expenditures when deploying our devices systemwide.

Speaker Change: Looking at our software and services revenue in total it was down slightly.

Joseph M. DeVivo: This is temporary. Underneath that, we had a great enterprise software quarter with upsells and existing accounts up 25% from Q4'23 and overall ARR growth at 34% year-over-year. On the individual side, we anniversary the subscription promotion put in three years ago that was very successful. Much of that revenue rolls off this quarter.

Speaker Change: This is temporary.

Speaker Change: Hate that we had great enterprise software quarter with Upsells in existing accounts growing 25% from Q4, 'twenty three and overall <unk> growth at 34% year over year on.

Speaker Change: On the individual side, we anniversary the subscription promotion.

Speaker Change: In three years ago that was very successful.

Speaker Change: Much of that revenue rolled off this quarter.

Joseph M. DeVivo: I'm not worried about this at all as we've reloaded the chamber with a bunch of new software from this quarter's all-in probe cells, which will roll forward nicely and set the stage for a lot of new software to amortize over the next three years. I also explained last quarter that medical school programs would be an important growth driver for us. And we're seeing the momentum here, including upsell into over five schools in Q1, two of which were one-to-one models deploying probes to all incoming first-year students.

Speaker Change: I'm not worried about this at all as we've reloaded the chamber with a bunch of new software from this quarters all in probe sales, which will roll forward nicely and set the stage for a lot of these software to amortize over the next three years.

Speaker Change: I also explained last quarter that medical school programs would be an important growth driver for us.

Speaker Change: And we're seeing the momentum here, including upsell into over five schools in Q1, two of which were one to one model is deploying probes to all incoming first year students.

Joseph M. DeVivo: Our pipeline in this area is also growing strong, and schools are realizing the value of one-to-one models. Look, each student wants their own probe. Just last month, we were at AACOM, the largest gathering of osteopathic medical school leadership in the country. More than 30 DO school decision makers showed up for a private session to learn more about butterflies in the one to one model, and more came for the Conversations That Are Booth. ScanLabs launching Q1 is a huge part of our success here. His contribution to the quarter was also nothing short of amazing.

Speaker Change: Our pipeline in this area is also growing strong and schools are realizing the value of one to one models.

Speaker Change: Each student wants their own probe.

Speaker Change: Just last month, we were at AA com, the largest gathering of Osteopathic Medical school leadership in the country.

Speaker Change: More than 30 Dio school decision makers showed up for a private session to learn more about butterflies one to one models and more came for conversations at our booth.

Speaker Change: Skin labs launch in Q1 is a huge part of our success here is.

Speaker Change: His contribution to the quarter was also nothing short of amazing, having an ultrasound instructor side by side with the students to practice as a resource not all medical schools have.

Joseph M. DeVivo: Having an ultrasound instructor side by side with a student to practice is a resource not all medical schools have. Prospects have cited ScanLab as the reason they feel a one-to-one model is now feasible. ScanLab amplifies a student's coursework and hands-on training with AI-guided practice. It has strengthened our lead in medical education as a whole generation of students learn ultrasound and do it with their own butterfly, much like Apple built their iMac market decades earlier.

Speaker Change: Prospects have cited scan lab as the reason they feel a one to one model is now feasible.

Speaker Change: <unk> lab amplifies, our students coursework and hands on training with AI guided practice tools. It has strengthened our lead in medical education as a whole generation of students learn ultrasound and do it with their butterfly.

Speaker Change: Much like Apple built their IMAX market decades earlier.

Joseph M. DeVivo: When students learn on your platform, loyalty for years follows. The impact of ScanLab goes well beyond med schools. We have partners, distributors, and customers hosting training programs using it. Since its launch in mid-January, thousands have downloaded it.

Speaker Change: When students learn on your platform.

Speaker Change: Loyalty for years in CS.

Speaker Change: The impact of scan lab goes will be unmet schools, we are partners distributors and customers hosting training programs to using it.

Speaker Change: Since its launch in mid January thousands have downloaded at multiple institutions are using it in clinical research schools are incorporating it into their curriculum customers realize there is now an AI tool, allowing students and clinicians to practice their scanning skills on their own and it's a proven game changer for us.

Joseph M. DeVivo: Multiple institutions are using it in clinical research. Schools are incorporating it into their curriculum. And customers realize there's now an AI tool allowing students and clinicians to practice their scanning skills on their own.

Joseph M. DeVivo: And it's a proven game changer for us. We also saw growth in Butterfly Garden AI partners. We launched these streams about eight months ago in August of 2023 and saw an immediate strong inbound. This pipeline continues to grow. In Q1 2024, we added four partners. And just last month, on April 23, ThinkSono became our first partner to commercialize an education app for deep vein thrombosis assessment.

Speaker Change: We also saw growth in butterfly Garden AI partners, we launched these streams about eight months ago in August of 2023.

Speaker Change: And saw an immediate strong inbound.

Speaker Change: This pipeline continues to grow.

Speaker Change: In Q1 2024, we added four partners and just last month on April 23rd think Sano became our first partner to.

Speaker Change: To commercialize and education App for deep vein thrombosis assessment.

Heather C. Getz: It's exciting to see the rate of progress in this area. So before turning it to Heather, I'd like to give a brief update on the European Commission's effort to ban hazardous substances from electronic devices, called RoHS, or Restrictions of Hazardous Substances Directly. I mentioned that we've been in contact with the European Commission about our CHIP ultrasound as a cleaner alternative to the incumbent lead-based piezo handheld. We're pleased to have learned that they've not yet begun reviewing the lead piezo industry's request for the next exemption.

Speaker Change: It's exciting to see the rate of progress in this area.

Speaker Change: So before turning it to Heather I would like to give a brief update on the European Commission's effort to ban hazardous substances from electronic devices call Rojas or restrictions of hazardous substances directors.

Speaker Change: I've mentioned that we've been in contact with the European Commission about our chip ultrasound as a cleaner alternative to incumbent led based piece of handhelds.

Speaker Change: Were pleased to learn that they have not yet begun reviewing the led pizza industry request.

Speaker Change: For the next exemption.

Heather C. Getz: Our contact that the commission shared with us is most likely to begin at the end of this calendar year and then decide sometime in 2025. So that's terrific news for Butterfly. First, we are not late in the game. Butterfly and our SEMA technology will be fully evaluated and considered in this next round. Second, we believe it's possible that IQ3 will be approved in Europe before this evaluation process concludes. While we're very confident that even with IQ+, we would prevail, with IQ3, we feel certain that any independent valuation against all other handhelds will conclude that IQ3 is at least equivalent.

Speaker Change: Our contact that the commission shares so most likely begin at the end of this calendar year and then decide sometime in 2025.

Speaker Change: So thats terrific news for butterfly.

Speaker Change: We are not late in the game butterfly and our Sema technology will be fully evaluated and considered in this next round.

Speaker Change: Second we believe it's possible that Q3 will be approved in Europe before this evaluation process concludes.

Speaker Change: While we are very confident that even with IQ plus we would prevail with IQ3 we feel certain that any independent valuation against all other handhelds will conclude the IQ3 is that minimum equivalent.

Speaker Change: Period.

Heather C. Getz: Period. We have also further learned that the EU's seriousness in upholding this directive is strong. The more energy we are putting into this process, the more we believe the odds of prevailing are in our favor, and new sales of lead-piezo handhelds may be banned from the EU as early as 2025. The facts are simply in our favor. There's still a lot of work to do, but our confidence is growing. So with that, I'll turn it over to Heather to report more on the quarter.

Speaker Change: We are also further learn that the EU seriousness and upholding this directive is strong.

Speaker Change: The more energy, we're putting into this process. The more we believe the Asa prevailing are in our favor and new sales of led Piso handhelds may be banned from the EU as early as 2025.

Speaker Change: The facts are simply in our favor.

Speaker Change: A lot of work to do.

Speaker Change: But our confidence is growing.

Speaker Change: So with that I'll turn it over to Heather to report more on the quarter Heather.

Heather C. Getz: Thank you, and good afternoon, everyone. As Joe noted, we started 2024 strong with revenue of $17.7 million in the first quarter, a historic high mark for Butterfly, representing a 14% increase versus the prior year. This increase was driven by a 22% increase in pro volume with the launch of IQ3 and higher average selling prices, demonstrating strong demand for our products. Both the U.S. and international markets grew.

Heather C. Getz: Thank you and good afternoon, everyone. As Joe noted, we started 2024 strong with revenue of $17 $7 million in the first quarter of historic high Mark for butterfly, representing a 14% increase versus the prior year.

Heather C. Getz: This increase was driven by a 22% increase in profiling with the launch of IQ, three and higher average selling prices demonstrating strong demand for our products, but the U S and international markets Grill.

Heather C. Getz: In the U.S., we realized $12.2 million in total sales, 19% higher than the prior year period, driven by increased volume, average selling prices, and slightly higher revenue from software and subscriptions. Total International revenue increased 14% over the prior year period to $4.2 million. This was due to higher probe volume, partially offset by lower average selling prices as a result of a higher mix of sales to distributors, which carry a lower average selling price, as well as lower individual software sales through e-com. Breaking our revenue down between product and software revenue, product revenue was $11.3 million, an increase of 28% versus Q1 2023. This increase was driven by higher volumes spread across all our channels and higher average selling prices.

Heather C. Getz: We realized $12 2 million and total sales, 19% higher than the prior year period, driven by increased volume.

Heather C. Getz: Average selling prices and slightly higher revenue from software and subscriptions.

Heather C. Getz: Total international increased 14% over the prior year period to $4 $2 million.

Speaker Change: This was due to higher volume, partially offset by lower average selling prices.

Speaker Change: Of a higher mix of sales to distributors, which carry a lower average selling price as well as lower individual software sales to E com.

Speaker Change: Breaking our revenue down between product and software product revenue was $11 $3 million, an increase of 28% versus Q1 2023.

Speaker Change: This increase was driven by higher volumes spread across all our channels and higher average selling prices.

Heather C. Getz: Software and Services revenue was $6.4 million in the first quarter, down slightly versus the prior year period. Software and Services Mix was 36% of revenue, decreasing by approximately 7 percentage points versus Q1 2023. This decrease was due to lower individual subscription renewals that were largely offset by a higher installed base of subscription enterprise software as compared to the prior year, as well as renewals on the existing base of software users.

Speaker Change: Software and services revenue was $6 $4 million in the first quarter down slightly versus the prior year period.

Speaker Change: Software and services mix was 36% of revenue decreasing by approximately seven percentage points versus Q1 2020 right. This decrease was due to lower individual subscription renewals that were largely offset by a higher installed base of subscription enterprise software as compared to prior year.

Speaker Change: As well as renewables on the existing base of software engineers are.

Heather C. Getz: Our total annual recurring revenue, which is reported as part of software and other services, grew by 4% versus the prior year period. This was led by an increase in our enterprise software, which increased to 42% of our total ARR. Turning out a gross profit, gross profit was $10.2 million in Q1 2024, a 12% increase as compared to $9.1 million in the prior year period, although the Gross Margin Percentage remains relatively flat at 58% versus 59%. The slight downtick was driven by a negative impact of higher software amortization and a lower proportion of higher-margin software and other services revenue, partially offset by a higher average selling price.

Speaker Change: Total annual recurring revenue, which is reported as part of software and other services grew by 4% versus the prior year period. This is led by an increase in our enterprise software, which increased to 42% of our title II.

Speaker Change: Turning now to gross profit.

Speaker Change: Gross profit was $10 $2 million in Q1, 2024% to 12% increase as compared to $9 1 million in the prior year period.

Speaker Change: Gross margin percentage remained relatively flat at 58% versus 59%.

Speaker Change: Slight downtick was driven by a negative impact of higher software amortization and a lower proportion of higher margin software and other services revenue.

Speaker Change: Partially offset by higher average selling prices.

Heather C. Getz: Moving to EBITDA and capital resources, for the first quarter of 2024, the adjusted EBITDA loss was $13.2 million compared with a loss of $22.3 million for the same period in 2023. The $9.1 million improvement in adjusted EBITDA loss was driven by higher revenue, cost reductions, and efficiency, which led to lower payroll, consulting, and other outside services. Capital resources as of March 31st, 24, were cash and cash equivalents, including restricted cash of $117 million. Excluding $6.5 million of bonuses and other non-recurring expenses, our total use of cash in the first quarter was about $15 million.

Speaker Change: Moving to EBITDA and capital resources for the first quarter of 2024, adjusted EBITDA loss was $13 $2 million compared with a loss of $22 $3 million for the same period in 2023.

Speaker Change: The $9 $1 million improvement in adjusted EBITDA loss was driven by higher revenue cost reductions any specialty which led to lower payroll consulting and other outside services.

Speaker Change: Capital resources as of March 31, 24, our cash and cash equivalents, including restricted cash of $117 million.

Speaker Change: Excluding $6 5 million in bonus and other nonrecurring expenses, our total use of cash in the first quarter was about $15 million.

Heather C. Getz: As we have previously discussed, over the last 18 months, we have taken over $170 million of cost out of the business and have reduced our annual cash burn to approximately $60 million. Based on this, we estimate that our cash balance conservatively provides us with a runway into 2026, and we have a plan to extend it further. Before moving to guidance, I want to touch on the notification we received from the NYSC.

Speaker Change: As we have previously discussed over the last 18 months, we have taken over $170 million of cost out of the business and have reduced our annual cash burn to approximately $60 million.

Speaker Change: Based on this we estimate that our cash balance conservatively provides us with a runway into 2026, and we have a plan to extend it further.

Speaker Change: Before moving to guidance I wanted to touch on the notification we received from the NYSE.

Heather C. Getz: As you may have read in our release, we received a notification that we are out of compliance with the NYSE standard that requires a 30-day stock price moving average of at least $1. We are viewing this strictly as an administrative issue and are confident we will maintain our listing. We have six months to regain compliance. Since we believe the market has undervalued the stock and is not factoring in our first quarter results or future growth, we believe we can regain compliance with a recovery in our stock price through continued business execution.

Speaker Change: As you may have read how release, we received a notification that we are out of compliance with the NYSE standard that requires a 30 day stock price moving average of at least one dollar.

Speaker Change: We are viewing this strictly as an administrative issue and are confident we will maintain our listing.

Speaker Change: We have six months to regain compliance since we believe the market has undervalued stock and is not factoring in our first quarter results our future growth.

Speaker Change: I believe we can regain compliance with a recovery in our stock price from continued business execution.

Heather C. Getz: In the event that the market and our price do not recover in that time period, we will perform a reverse stock split. During this time, our stock will continue to trade on the New York Stock Exchange.

Speaker Change: The event that the market and our price does not recover in that time period, we will perform a reverse stock split.

Speaker Change: During this time, our stock will continue to trade on the New York Stock exchange.

Heather C. Getz: Now moving to guide, As Joe discussed, we have been executing against the roadmap we laid out in August. We launched IQ3, ScanLab, and Butterfly Garden with 13 deals. We added four new garden partners in the first quarter, and in April, Think Serno became the first garden partner to commercialize.

Speaker Change: Now moving to guidance.

Speaker Change: As Jim discussed we have been executing against the roadmap we've laid out in August.

Speaker Change: Just three scan lab and butterfly garden with 13 deals.

Speaker Change: We added four new Darden partners in the first quarter and in April. Thanks, Kevin ill became the first start and partner to commercialize. An example of what we expect to be a meaningful contributor down the line.

Heather C. Getz: An example of what we expect to be a meaningful contributor down the line. We've invested in our sales team, all while reducing our cash consumption and conservatively extending our cash flow runway into 2026. As we look into 2024, our commercial organization is humming, and we are continuing to find further efficiencies to extend our cash runway even further. In addition, we're exploring a number of opportunities for non-diluted financing, for example, grants and licensing deals, to provide us with maximum flexibility and a pathway to profitability.

Speaker Change: We've invested in our sales team.

Speaker Change: All while reducing our cash consumption and conservatively extending our cash runway into 2026.

Speaker Change: As we look into 2024.

Speaker Change: Our commercial organization is humming and we are continuing to find further efficiencies to extend our cash runway. Even further. In addition, we are exploring a number of opportunities for non dilutive financing for example, grants and licensing deals to provide us with maximum flexibility and a pathway to profitability.

Speaker Change: We will keep you updated on the spot.

Heather C. Getz: We will keep you updated on this front. For 2024 guidance, after launching iQ3 and seeing its market acceptance, we can provide more concrete and higher revenue guidance in the range of $75 to $80 million, or about 15 to 20% growth, and adjusted EBITDA guidance for the full year of a loss of $55 to $50 million. As the year progresses, we will provide updates and further clarification. Specifically, looking at Q2, which is our toughest time for the year due to a few large medical school deals that occurred in the prior year, we expect to see revenue growth around 10%, bringing us to approximately $20 million in revenue. For Q2 adjusted EBITDA, we expect a loss of approximately $12 to $13 million.

Speaker Change: For 2024 guidance after launching IQ3 and seeing if market acceptance, we can provide more concrete and higher revenue guidance in the range of $75 million to $80 million or about 15% to 20% growth in adjusted EBITDA Guide for the full year of a loss of 55 to 50 million.

Speaker Change: Ian.

Speaker Change: As the year progresses, we will provide updates and further clarification.

Speaker Change: Specifically looking at Q2, which is our toughest comp for the year due to a few large medical school deals that occurred in the prior year.

Speaker Change: We expect to see revenue growth around 10%, bringing us to approximately $20 million in revenue for Q2, adjusted EBITDA, We expect a loss of approximately 12% to $13 million.

Heather C. Getz: To summarize, we have started the year strong, and we look forward to continued growth in 2024, as well as to realize additional efficiencies that will further extend our cash runway. Additionally, we have maintained a solid cash position while investing in the business. We will continue to execute against our plan, drive adoption of iQ3 and expand the use of our product across all of our channels. Butterfly is set up to accomplish its goals with a strong base of technological and organizational assets and a team who is energized to capitalize on this attractive opportunity. And with that, I will turn the call back to Jeff.

Speaker Change: To summarize we have started the year strong and we look forward to continued growth in 2024 as well as to realize additional efficiencies that will further extend our cash runway.

Speaker Change: Additionally, we have maintained a solid cash position, while investing in the business.

Speaker Change: We will continue to execute against our plan drive adoption of <unk>, three and expand uses of our products across all of our channels butterflies.

Speaker Change: Butterflies setup to accomplish its goals with a strong base of technological and organizational assets any team who is energized to capitalize on this attractive opportunity and with that I will turn the call back to Jeff.

Speaker Change: Jeff.

Joseph M. DeVivo: Thanks, Heather. So, I've been here about a year now, and looking back, I'm proud of what we've accomplished. It was easy to recognize the enormous potential and opportunities for Butterfly. What was hard was not trying to do everything all at once and instead focusing on opportunities with the greatest impact. But that's what we did.

Jeff: Thanks, Heather so I've been here about a year now and.

Jeff: And looking back I'm proud of what we've accomplished.

Jeff: Easy to recognize the enormous potential and opportunities for butterfly was hard was not trying to do everything all at once and instead focusing on opportunities with the greatest impact.

Jeff: But that's what we've done.

Joseph M. DeVivo: For those of you following closely, you know now that the Butterfly team is delivering at all levels. Our R&D team and product teams just crushed it by hitting the mark on our new product launches this quarter. Our regulatory team delivers constantly with clearance after clearance worldwide. Our operations team consistently delivers quality products ahead of time. With the reinvestment in our commercial engine and some new talent combined into the organization, our sales and marketing teams are delivering globally and exceeding plans by a wide margin. In corporate development, we created the successful Butterfly Garden and Powered by Butterfly programs. We did all this with a streamlined organization that used half the cash within the prior year. And we're just getting started.

Speaker Change: For those of you following closely.

Speaker Change: Now that the butterfly team is delivering at all levels, our R&D team and product teams just crushed it by hitting the mark on our new product launches this quarter.

Speaker Change: Our regulatory team delivers constantly with clearance after clearance worldwide.

Speaker Change: Our operations team consistently delivers quality products ahead of time.

Speaker Change: With the reinvestment in our commercial engine and some new talent combined into the organization, our sales and marketing teams are delivering globally and exceeded plan by a wide margin.

Speaker Change: In corporate development, we created the successful butterfly garden empowered by butterfly programs.

Speaker Change: We did all of this with a streamlined organization that used half the cash had been the prior year.

Speaker Change: And we're just getting started.

Joseph M. DeVivo: As we look ahead, we will next launch IQ3 in Canada now that we've received our certificates just a few days ago. And then, with EUMDR certification this quarter as well, we will add PulseWave Doppler and other advanced features to IQ Plus in all CE Mark countries, followed by IQ3 in those countries before the end of 2024. On a global front, we also remain dedicated to our mission to democratize healthcare and continue to be the device of choice in all global health contexts.

Speaker Change: As we look ahead, we will next launch IQ3 in Canada now as we've received our certificates just a few days ago.

Speaker Change: And then with <unk> certification this quarter as well, we will add postpaid Doppler and other advanced features to IQ plus an all CE Mark countries, followed by IQ3 and those countries before the end of 2024.

Speaker Change: On a global front, we also remain dedicated to our mission to democratize healthcare and continues to be the device of choice in all global health context, just last month, we initiated phase two of our 1000 probe deployment to sub Saharan Africa under the Gates Grant we received in March 2022.

Joseph M. DeVivo: Just last month, we initiated phase two of our 1,000 probe deployment to sub-Saharan Africa under the Gates Grant we received in March 2022. In this phase, 500 probes are being distributed to improve maternal care in South Africa.

Speaker Change: And this phase 500 probes are being distributed to improve maternal care in South Africa.

Joseph M. DeVivo: Our vet business also continues to strengthen with new partnerships, and Q1 Chewy became the latest corporate partner who leveraged Butterfly in their first ever veterinary hospital. We've now partnered with the biggest names in pet retail, namely Petco, PetSmart, and Chewy, who all view Butterfly as a key part of their toolkit as they move into veterinary services. We also continue to see positive findings from Kansas State's Beef Cattle Institute researching the use of IQ Plus VET for shoot side respiratory disease management. Data will be presented at the American College of Veterinary Internal Medicine conference in June.

Speaker Change: Our vet business also continues to strengthen with new partnerships.

Speaker Change: In Q1, chewy became the latest corporate partner, who will leverage butterfly and their first ever veterinary hospitals.

Speaker Change: We have now partnered with the biggest names in pet retail, namely Petco, Petsmart, and chewy, who all of you butterfly as a key part of their toolkit as they move into the veterinary services space.

Speaker Change: We also continue to see positive findings from Kansas state's beef cattle Institute researching the use of IQ plus debt for ship side respiratory disease management.

Speaker Change: Data will be presented at the American College of Veterinary Internal Medicine conference in June.

Joseph M. DeVivo: As part of our continued efforts to best serve the specific needs of our customers, we will also soon introduce our first specialty product, IQ Plus Bladder. It will launch this quarter in the U.S. IQ Plus Bladder is a small cart-based bladder scanner with purpose-built software to make it quick and easy for nurses to get bladder volume in a hospital using our proprietary tool.

Speaker Change: Now as a part of our continued efforts to best serve the specific needs of our customers.

Speaker Change: We will also soon introduce our first specialty product IQ plus flatter.

Speaker Change: It will launch this quarter in the U S.

Speaker Change: IQ plus flatter is a small CT based plateau scanner with purpose built software to make it quick and easy for nurses to get bladder volume in a hospital using our proprietary tool.

Joseph M. DeVivo: With our new IQ Plus bladder in the U.S. coming soon, and all the momentum already discussed today, we are increasing guidance for the year. As Heather mentioned, instead of our previous guidance of low double-digit revenue growth, we are guiding to about 15 to 20% revenue growth, which we believe is sustainable in the future. With that increased growth, we will continue to reduce our cash, and I would also like to touch on our stock price. So, as you're all aware, it's been a challenging market, and in particular for small med tech. As Heather mentioned earlier, we do not believe our current price accurately reflects our business's value.

Speaker Change: With our new IQ plus bladder in the U S coming soon and all the momentum already discussed today, we are increasing guidance for the year.

Speaker Change: As Heather mentioned instead of our previous guidance of low double digit revenue growth.

Speaker Change: <unk> to about 15% to 20% revenue growth, which we believe is sustainable in the future.

Speaker Change: With that increased growth, we will continue to reduce our cash needs.

Speaker Change: I would also like to touch on our stock price.

Speaker Change: As you're all aware its been a challenging market and in particular for small med tech.

Speaker Change: As Heather mentioned earlier, we do not believe our current price accurately reflects our business value.

Joseph M. DeVivo: What we accomplished or the opportunities ahead. With the work we put into right-sizing the business last year and this quarter's strong results, we hope that the market acknowledges our return to growth and the great future of this business. As we have reinitiated growth and become more efficient, Heather and I are committed to continuing to optimize the organization. As mentioned, we have several initiatives underway for further cost efficiencies and are looking at creative opportunities for non-delivered financing, both of which will extend our runway even further and deliver upside to our current plan.

Speaker Change: What we have accomplished or the opportunities ahead.

Speaker Change: The work, we've put into right sizing the business last year and this quarter's strong results, we hope that the market acknowledges our return to growth and the great feature of this business as we have reignited growth and became more efficient Heather and I are committed to continue to optimize the organization as mentioned we have several initiatives underway for further cost efficiency.

Speaker Change: <unk> and <unk>.

Speaker Change: Looking at creative opportunities for non dilutive financings, both of which will extend our runway even further and deliver upside to our current plan.

Joseph M. DeVivo: So now I'd like to end with a brief review of our Investor Day, which was held March 18. I'm very proud of the team and the delivery of our plans for the next several years. At Investor Day, we showcased new technology, provided real-time demonstrations, communicated new business opportunities, and heard from KOLs on their deployment of Butterfly for the growing point-of-care ultrasound market. I encourage you to revisit the replay on the events page of our investor website. The URL can be seen on the current slide.

Speaker Change: So now I'd like to end with a brief review of our Investor day.

Speaker Change: It was held March 18th.

Speaker Change: I am very proud of the team and in the delivery of our plans for the next several years.

Speaker Change: At Investor Day, we showcased new technology provided real time demonstrations communicated new business opportunities and heard from Kols and their deployment of butterfly for the growing point of care ultrasound market.

Speaker Change: I encourage you to revisit the replay on the events page of our Investor website.

Speaker Change: <unk> can be seen on the current slide.

Joseph M. DeVivo: There were three takeaways I'd like to reinforce from the day. First, we are winning the race to digital and ultrasound. We have the largest handheld user base and device deployment in the world. We now have double the processing power in a very successful IQ3 launch, and we're continuing to invest in higher-power semiconductors. We showed the new capabilities of our next P5 chip, significantly increasing the mechanical impedance, while showing the Apollo chip, which will produce 10 times the processing power of IQ3.

Speaker Change: There were three takeaways I would like to reinforce from the day.

Speaker Change: First.

Speaker Change: We are winning the race to digital and ultrasound.

Speaker Change: We have the largest handheld user base and device deployment in the world.

Speaker Change: We now have double the processing power and a very successful Q3 launch and we're continuing to invest in higher power semiconductors.

Speaker Change: We showed the new capabilities of our next <unk> five chip significantly increasing the mechanical impedance, while showing the Apollo chip, which will produce 10 times the processing power of high Q3.

Joseph M. DeVivo: Each chip has an exponential leap in capabilities, and each dramatically expands our market by offering more CT light capabilities in the palm of a doctor's hand. Remember, supercomputers used to be huge. Now each one of you carries one around in your pocket.

Speaker Change: Chip has an exponential leap in capabilities and each dramatically expands our market by offering more cartilage capabilities in the palm of a doctor's hands.

Speaker Change: Remember supercomputers used to be huge.

Speaker Change: Each one of you curious went around in your pocket.

Joseph M. DeVivo: Every doctor and every nurse in the world will carry a super imaging device from Butterfly with capabilities of the most sophisticated parts in the world today. Second, Butterfly Garden and Powered by Butterfly are two programs with over 15 contracted partners, which will generate meaningful revenue for the company over the next five years. Since Butterfly is the largest data repository with over 20 million images, growing at over 30,000 new image uploads a day, ultrasound AI developers will want to partner with Butterfly for development as well as commercialization. Our garden will become the epicenter of independent global ultrasound AI development.

Speaker Change: Every doctor every nurse and the world will carry a super imaging device from butterfly with capabilities of the most sophisticated cards in the world today.

Speaker Change: Second.

Speaker Change: Garden and powered by butterfly are two programs with over 15 contract with partners, which will generate meaningful revenue for the company over the next five years.

Speaker Change: <unk> is the largest data repository with over 20 million images drilling at over 30000, new image upload a day.

Speaker Change: Ultrasound AI developers, who will want to partner with butter play for development as well as commercialization our garden will become the epicenter of independent global ultrasound AI development or.

Joseph M. DeVivo: Our Powered by Butterfly program, which licenses our chip technology, also has a major pipeline of partners interested in If we're successful in closing these deals, Butterfly's balance sheet will improve by adding non-dilutive capital through. So our Powered by Butterfly program can bring us capital while generating revenue from markets never contemplated as core to Butterfly in the past. Shatner

Speaker Change: Powered by Butterfly program, which licenses are chip technology also has a major pipeline of partners interested.

Speaker Change: If were successful in closing these deals.

Speaker Change: <unk> balance sheet will improve by adding non dilutive capital through licensing.

Speaker Change: So were powered by butterfly program to bring us capital, while generating revenue from markets never contemplated as core to butterfly in the past.

Speaker Change: So third.

Joseph M. DeVivo: Butterfly will soon be helping patients in the home by introducing butterfly home care. Butterfly Home Care will focus on helping at-risk providers manage congestive heart failure patients by empowering in-home nurses to test for pulmonary congestion. We also intend to help people with bladder insufficiency manage their catheterization at the right time by calculating their bladder volume in the home.

Speaker Change: Butterfly will soon.

Speaker Change: Be helping patients in the home by introducing butterfly homecare.

Speaker Change: Clarify homecare will focus on helping at risk providers manage congestive heart failure patients by empowering and home nurses to test for pulmonary congestion.

Joseph M. DeVivo: We also intend to help people with bladder and sufficiency manage their catheterization at the right time through calculating their bladder volume in the home.

Joseph M. DeVivo: Both of these present large new revenue opportunities for Butterfly starting in 2025. In conclusion, over the past year, we have extended the cash runway of the business and have plans to do so even further. We've reignited top-line revenue growth, and we'll continue to drive commercial success as we begin to harvest new market opportunities to grow even faster. New product and market launches will continue to power growth. So this is the investment thesis I believe investors want, and we're excited to deliver on it. So with that operator, let's open it up to questions.

Joseph M. DeVivo: Both of these present large new revenue opportunities for butterfly.

Speaker Change: Starting in 2025.

Speaker Change: In conclusion.

Speaker Change: Over the past year, we extended the cash runway of the business.

Speaker Change: And have plans to do so even further.

Joseph M. DeVivo: We've reignited topline revenue growth.

Speaker Change: And we will continue to drive commercial success as we begin to harvest new market opportunities to grow even faster.

Joseph M. DeVivo: New product and market launches will continue to power growth.

Speaker Change: So this is the investment thesis I believe investors want and we're excited to deliver on it.

Joseph M. DeVivo: So with that operator, let's open it up for questions.

Speaker Change: Of course, we will now begin the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. Our first question comes from the line of Suraj Kalia with Oppenheimer & Co. Your line is now open.

Operator: As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking a question.

Operator: Our first question comes from the line of Suraj, Kalia with Oppenheimer and co.

Suraj Kalia: Your line is now open.

Suraj Kalia: Joe, Heather, can you hear me all right? I know it's perfect with the noise.

Suraj Kalia: Joe Heather can you hear me alright.

Unknown Executive: Hopefully, you can hear me all right. Okay. No, you're good with the background noises.

Suraj Kalia: Yes, perfect noise, hopefully you can hear me okay.

Suraj Kalia: With a background noises, okay. So first and foremost congrats on a really nice start to the year.

Suraj Kalia: Been a long time coming in.

Heather C. Getz: You guys continued success.

Suraj Kalia: Joe a lot of metrics would be thrown out.

Unknown Executive: And.

Suraj Kalia: Okay. So first and foremost, congrats on a really nice start to the year. You know, been a long time coming, and I wish you guys continued success. Joe, a lot of metrics were thrown out there, and I'll let me kind of hone in on a few.

Suraj Kalia: Let me, let me kind of hone in on a few.

Suraj Kalia: 1200 or so IQ3 sold in the quarter. I hope I got that number right. Joseph Adafi. Thank you. If I could draw a graph of the adoption curve of IQ, Ross, IQ3. Do we have an idea how, you know, for the same time period, how is the adoption curve looking on a relative basis?

Suraj Kalia: The 200, or so IQ3 sold in the quarter I Hope I got that number right.

Suraj Kalia: Due to adopt.

Suraj Kalia: If I if I draw a graph of the adoption curve of IQ <unk> IQ <unk> IQ <unk>.

Speaker Change: Do we have an idea how for the same time.

Suraj Kalia: I'm period, how is the adoption curve looking on a relative basis.

Joseph M. DeVivo: Yeah, that's a hard one to calculate because there are different times. And it's also different because this is the first launch that we have where we're actually launching it on top of an existing product that's on the market. So I don't know that there's, I mean, I can ask Heather if you see any correlation from what was experienced in the past. But what we are doing is we're selling a new product at, you know, 30%, 40%, you know, higher prices. We're, we're still offering another product at a lower price. And it's been very, very, very well. So, Heather, is there anything that you can glean from the past?

Joseph M. DeVivo: Yes, that's a hard one to calculate because they are different times.

Speaker Change: And it's also different from this is the first launch that we have where we.

Joseph M. DeVivo: We're actually launching it on top of an existing product that's on the market.

Joseph M. DeVivo: So I don't know that there is I mean, I can ask Heather if you see any.

Joseph M. DeVivo: Correlation.

Heather: From from what was experienced in the past.

Heather: But what we are doing is we're selling a new product.

Heather: At 30%, 40% higher price.

Heather: We're we're still offering another product at a lower price.

Heather: And it's been very very very well received so.

Joseph M. DeVivo: Heather is there any anything that you can glean from the past.

Heather C. Getz: Yeah, I think it's to your point, having the two products out there, and we really only have a half a quarter under our belt. It's a little bit difficult to say. Other than that, the reception has been tremendous, as Joe talked about. So we'll probably have a little bit more information as we start to see some other trends and launch internationally and in Canada. But for right now, I don't think I can draw any conclusions yet.

Heather: Yes, I think to your point, having the two products out there and we really only have a half a quarter under our belt, it's a little bit difficult to say.

Heather C. Getz: Other than the the reception has been tremendous as Joe talked about so we'll probably have a little bit more information as we start to see some other trends in launch internationally and in Canada.

Heather C. Getz: But for right now.

Heather C. Getz: I don't think I can draw any conclusions yet.

Joseph M. DeVivo: Yeah, the other thing I'd say, Suraj, is that most of the revenue, a very big chunk of it was through online. We get through, you know, new orders from customers, new customers, or trade-ins for existing customers. Our pipeline for our hospital business is really filled and filled big time. But as you know, those are longer shelf life. So, you know, we're very excited about how this changes the competitive dynamic for us in the health system side. And that that portfolio is bringing in nicely. So for just the six weeks at the end of the quarter, to see the sales come in the way they have, at a very healthy drumbeat, has been encouraging.

Speaker Change: The other thing I'd say is.

Joseph M. DeVivo: The other thing I'd say is.

Joseph M. DeVivo: Most of the revenue.

Joseph M. DeVivo: Was a very big chunk of it was through online sales.

Joseph M. DeVivo: We're through new orders from customers.

Joseph M. DeVivo: New customers or trade ins for existing customers.

Joseph M. DeVivo: Our pipeline for our hospital business is really.

Joseph M. DeVivo: <unk> has really filled and filled big time, but as you know those are longer sales cycles. So.

Joseph M. DeVivo: We're very excited about how.

Joseph M. DeVivo: This changes the competitive dynamic for us and the health system side.

Joseph M. DeVivo: That portfolio is bringing nicely. So just the six weeks at the end of the quarter to see the sales come in the way they have in a very healthy drumbeat has been encouraging.

Suraj Kalia: Right. I mean, by our math, Joe, it almost looks like a little over 25% were IQ three pluses, you know, with a very rapid clip. Joe, when, in your view, what point in time and what all needs to be done to basically make IQ 3 or IQ 4 or the next generation, you know, basically make an objective evaluation head to head against cart-based systems? I guess what I'm trying to understand is how, you know, how, and when you all are planning for the next generation in terms of cart-based.

Suraj Kalia: Right I mean by our math, Joe it's almost looks like a lot.

Suraj Kalia: Over 25% for IQ3 pluses.

Suraj Kalia: Hum.

Suraj Kalia: With a very rapid clip to.

Suraj Kalia: You'll win.

Suraj Kalia: In your view.

Suraj Kalia: Point in time, and what needs to be done to basically make IQ3 or IQ for the next generation.

Suraj Kalia: Basically making objective evaluation head to head against Cart based system I guess, what I'm trying to understand is how how how we win.

Suraj Kalia: You all are planning for the next generation in terms of park based systems.

Joseph M. DeVivo: So, I think we're going to learn a lot over the next six months because now we have a handheld that can be used in all special situations across the house. And I think the question really is, when we talk to some really hardcore ultrasound people, the question is, If you had a device that was as powerful as a cart and it was in your pocket. Would you need a cart? Would you use a cart?

Suraj Kalia: So.

Joe: I think we're going to learn a lot over the next six months because now we have a handheld that can be used in all specialties.

Joseph M. DeVivo: Across the hospital.

Joseph M. DeVivo: And I think the question really is when we talk to some really hardcore ultrasound people.

Joseph M. DeVivo: Question is if.

Joseph M. DeVivo: If you had a device that was as powerful as a cart and it was in your pocket.

Joseph M. DeVivo: I think a lot of people say they still would because the workflow of the hospital is a patient going, you know, an inpatient going into a room with a specialized, you know, ultrasonographer. I think, you know, this is not putting ultrasonographers out of business. This is liberating ultrasonographers to be mobile and to go, you know, don't have to be contained in a room. But will hospitals just immediately change their workflow? I think that'll take some time.

Joseph M. DeVivo: Would you need a card would you use the card.

Joseph M. DeVivo: I think a lot of people say they still would because.

Joseph M. DeVivo: The workflow of the hospital as a patient.

Joseph M. DeVivo: And then patient going into a room to a specialized ultra sonographer.

Joseph M. DeVivo: I think.

Joseph M. DeVivo: This is not putting ultrasonography for us out of business. This is deliberating ultrasonography for us to be mobile and don't have to be contained to room, but hospitals just immediately change the workflow I think that'll that'll take some time, but.

Joseph M. DeVivo: But having the ability of doctors, wherever they are, to get any image they want of any part of the body and then be able to refer to and quickly make clinical decisions. We're seeing that time and time again at our customers. Right at the point of care, that's changing the pathway, and that's better for health care. Now, the big question is, ultrasonographers who rely on specialized imaging and carts, if they had a cart in their pocket, would they remain in their room?

Joseph M. DeVivo: But having the ability of doctors wherever they are to get any image. They want of any part of the body.

Joseph M. DeVivo: And then be able to refer and quickly make clinical decisions, we're seeing that time and time again at our customers that doctors are making decisions.

Joseph M. DeVivo: Right at the point of care, that's changing the pathway and that's better for health care.

Joseph M. DeVivo: Now the Big question is ultrasonography, who rely on specialized imaging and carts. If they had a carton their pocket would they remain in their room I don't think I know the answer to that question and I think we ask ourselves oftentimes what would happen.

Joseph M. DeVivo: I don't think I know the answer to that question. And I think we ask ourselves often, you know, what would happen. And so we're just delighted to be a part of this, this big, you know, revolutionary.

Joseph M. DeVivo: And so we're just delighted to be a part of this of this big revolutionary change.

Suraj Kalia: It's fair enough. I'll throw three quickly away, and I'll hop back in queue.

Speaker Change: That's fair enough.

Suraj Kalia: Three quick your way and I'll hop back in Q1 as for IQ3 would have been the initial key areas of uptake I E. Cardiology obgyn, just kind of give us the lay of the land there.

Suraj Kalia: One is for IQ three, what have been the initial key areas of uptake, i.e. cardiology, OBGYN, just kind of give us a lay of the land there, the question you talked about and you have been emphasizing for some time now about home care. [inaudible] You guys have seen something that maybe the street hasn't caught on to yet. If you can, you know, walk us through what makes you believe so strongly about TAM expansion.

Suraj Kalia: And Joe, the final thing is Rojas. I didn't catch that commentary completely. Sorry, I threw in a lot of things. Hopefully, you caught those. Thank you for taking my questions.

Suraj Kalia: Second question.

Suraj Kalia: You talked about you have been emphasizing for some time from your Investor day about homecare.

Suraj Kalia:

Suraj Kalia: Obviously, you guys are seeing something that maybe the street hasn't caught on to if you can walk us through what makes you believe strongly about Tam expansion.

Suraj Kalia: And Joe the final thing is Rojas.

Suraj Kalia: I didn't catch that commentary completely sorry, I threw out a lot of things hopefully your calculus. Thank you for taking my questions.

Joseph M. DeVivo: I did, my friend. So key areas of uptake. So right now, we're seeing a lot of cardiology. And that's where a lot of our new orders are coming from, because we're seeing cardiologists saying, all right, you know, I've wanted to have a high-quality image probe, but I don't want to be limited. And now they don't have to be.

Speaker Change: I did my friend, so curious of uptake so right now we're seeing a lot of cardiology.

Joseph M. DeVivo: And that's where a lot of our new orders are coming from.

Joseph M. DeVivo: Is that were seeing cardiologists and alright.

Joseph M. DeVivo: I wanted to have.

Joseph M. DeVivo: Our high quality image probe, but I don't want to be limited.

Joseph M. DeVivo: And now they don't have to be so that's an area that we've seen a lot of uptake.

Joseph M. DeVivo: So that's an area that we've seen a lot of uptake. We are seeing more uptake in the emergency room, where we've always been strong. And then we're seeing updates in critical care. So in those areas, we're doing really well. And we're doing really well in the specialized areas that we hadn't served as well in the past. And amazingly, you know, our IQ plus sales are still quite vibrant

Joseph M. DeVivo: We are seeing more uptake in the emergency room, where we've always been strong.

Joseph M. DeVivo: And then we're seeing update and critical care.

Joseph M. DeVivo: So in those areas, we're doing really well and we're doing really well in the specialized areas that we hadn't served us well in the past.

Joseph M. DeVivo: And amazingly, our IQ plus sales are still quite vibrant so we are.

Joseph M. DeVivo: So we're meeting more needs of more customers, which is very positive. Around home care, you know, we've gotten really good at teaching people how to do well. We have the tools in Academy, we have the tools with our certified program, and we have the tools with ScanLab.

Joseph M. DeVivo: We're meeting more needs of more customers, which is very positive.

Joseph M. DeVivo: Around home care.

Joseph M. DeVivo: Got really good at teaching people how to do ultrasound, we have the tools.

Joseph M. DeVivo: Academy, we have the tools with our certified program and we have the tools, but scandalous.

Joseph M. DeVivo: And, you know, about 80% of hospitals were penalized last year due to congestive heart failure. And we believe that there's a lower cost way to manage discharges and to keep patients in their home by checking their pulmonary congestion. We've done a study at a major health center that is being concluded this year, and it'll show that using our pulmonary application, which is an AI-powered beeline counter, that makes it very easy for a health care professional to use our probe to manage those patients in the home that will have the opportunity to help providers, at-risk providers, to keep congestive heart failure patients in the home and manage the progression or subsiding of their congestive heart failure symptoms based upon diuretics in the home.

Joseph M. DeVivo: And.

Joseph M. DeVivo: About 80% of hospitals.

Joseph M. DeVivo: Sure.

Joseph M. DeVivo: Were penalised last year due to congestive heart failure readmission.

Joseph M. DeVivo: And we believe that there is a lower cost way to manage.

Joseph M. DeVivo: Discharges in.

Joseph M. DeVivo: Key patients in their home.

Joseph M. DeVivo: My checking their pulmonary congestion we've done a study at a major health center that is being <unk>.

Joseph M. DeVivo: Concluded this year and it will show that using our pulmonary application, which is an AI powered beeline counter.

Joseph M. DeVivo: That makes it very easy for our health care professional use our pro to manage those patients in the home that will have the opportunity to help <unk>.

Joseph M. DeVivo: Providers at risk providers to keep congestive heart failure patients in the home.

Joseph M. DeVivo: <unk> manage the debt.

Joseph M. DeVivo: Progression.

Joseph M. DeVivo: Sure.

Joseph M. DeVivo: Subsiding of their congestive heart failure symptoms based upon diabetics in the home. So there is there is a pathway where a nurse in the home can do it there is a pathway where through telemedicine.

Joseph M. DeVivo: So there is a pathway where a nurse in the home can do it. There's a pathway where, through telemedicine, the patient can do it themselves. And then there's a pathway, of course, to wearables, as we've discussed, which is in our future and a good part of it. So sometimes, in order to move the market, you've got to, you know, wipe yourself off, stand up, and go do it yourself.

Joseph M. DeVivo: Patient can do it themselves and then there's a pathway of course to Wearables as we've discussed.

Joseph M. DeVivo: Which is.

Joseph M. DeVivo: And our future and a good part of it so sometimes in order to move the market you've got you got it.

Joseph M. DeVivo: You got a wipe yourself off standup and go do it yourself and we've been able to train people in the past and we're very confident that we can provide some services helped take on some risk and drive.

Joseph M. DeVivo: And we've been able to train people in the past, and we're very confident that we can provide some services, help take on some risks, and drive a key part of the health care economy and the health care market. The third on RoHS is basically this, Siraj. We've had much more dialogue with the European Commission this quarter. We've gotten feedback from them, and the feedback is this. One, they haven't even taken up the exemption, the refreshing of the existing exemption for the lead-peso ultrasound. So what that means is that we are in the game. We didn't miss it. They're not at the tail end of it. And then we're just butting in. They haven't started yet.

Joseph M. DeVivo: A key part of the health care.

Joseph M. DeVivo: Economy and health care market.

Joseph M. DeVivo: The third on Rojas is basically this suraj.

Joseph M. DeVivo: Had.

Joseph M. DeVivo: Much more dialogue with the European Commission this quarter.

Joseph M. DeVivo: We've gotten feedback from them and the feedback is this one they haven't even taken up the.

Joseph M. DeVivo: The exemption.

Joseph M. DeVivo: The refreshing of the existing exemption.

Joseph M. DeVivo: For the led piece of ultrasound industry. So what that means is.

Joseph M. DeVivo: That we are in the game.

Joseph M. DeVivo: We didn't miss it theyre not at the tail end of it and then we're just putting in they havent started.

Joseph M. DeVivo: So that's great news for us, Raj, because it means that we are now in the game, and we will be fully evaluated. We were not fully evaluated during the last time; we were not, as a company, aware of this exemption process. Now that we are, we've already submitted data that would refute any claim that we are not. And so we feel very good because we're a part of the process where the probability of success is much higher.

Joseph M. DeVivo: So thats great news for us for us because it means that we are now in the game and we will be fully evaluated we were not fully evaluated during the last.

Joseph M. DeVivo: At time, we were not as a company are aware of it.

Joseph M. DeVivo: This exemption process.

Joseph M. DeVivo: We are we've already submitted data.

Joseph M. DeVivo: That would refute any claim that we are not equivalent.

Joseph M. DeVivo: And so we feel very good because we are a part of the process.

Joseph M. DeVivo: That the probability of success is much higher second.

Joseph M. DeVivo: Second, because they're gonna be evaluating it at the end of 24, that means if everything goes the way we expect it to go regarding CE marking clearance or EOMDR clearance for IQ3, then IQ3 will actually be the technology that we'll be comparing against the older Lead-Piso handheld ultrasound device. So given the fact that A, they haven't even started, and B, when they do, it's a good possibility that IQ 3 will be a part of the evaluation.

Joseph M. DeVivo: Because theyre going to be evaluating at the end of 'twenty four.

Joseph M. DeVivo: That means like if everything goes the way we expect it to go regarding CE, marking clearance or <unk> clearance.

Joseph M. DeVivo: Of Q3.

Joseph M. DeVivo: Then IQ3 will actually be the technology that we will be comparing against the.

Joseph M. DeVivo: The older led piso handheld ultrasound devices.

Joseph M. DeVivo: Given the fact that a they haven't even started and when they do its a good possibility that IQ3 will be a part of the evaluation.

Joseph M. DeVivo: We've gone from being kind of, hey, this is some possible upside, but we don't know, you know, where it is. And we've also learned that they're very committed to this directive, and they've made tough decisions in the past, and they're not afraid to make tough decisions in this area in the future. It's given us the confidence to feel, you know what? We actually think, based upon an appropriate independent review and their conviction of this law, then it's more probable that we'll see them suspending sales of handheld LED PISO devices than not.

Joseph M. DeVivo: We've gone from being kind of Hey, this is some possible upside, but we don't know.

Joseph M. DeVivo: Where it is and we've also learned that Theyre very committed to this directive and they've made tough decisions in the past.

Joseph M. DeVivo: Not afraid to make making tough decisions.

Joseph M. DeVivo: In this area in the future it has given us the confidence to feel you know what we actually think based upon an appropriate independent review and their conviction on this law.

Joseph M. DeVivo: It's more probable that we will see them suspending sales of handheld led piso devices than not.

Joseph M. DeVivo: And they had said that they would start the evaluation process at the end of 24, and they would hopefully conclude it sometime in 25. So, I mean, just looking at those, if you're willing to be positive in the future, I think the probability is a little bit more in our favor that they may take those off the market with our measure of accrual.

Joseph M. DeVivo: And they had said that they would start the evaluation process at the end of 'twenty four and they would hopefully conclude sometime in 'twenty five so I mean.

Joseph M. DeVivo: Just looking at those if you're willing to be positive in the future I think the probability is a little bit more in our favor that they may take those off the market with our measure of equivalency.

Suraj Kalia: Great stuff. Congratulations on the project.

Speaker Change: Great Congrats on the progress.

Joseph M. DeVivo: Thank you. Thank you. I appreciate you.

Speaker Change: Thank you. Thank you appreciate it.

Operator: Thank you for your questions. Our next question comes from the line of Josh Jennings with TD Kellen.

Speaker Change: Thank you for your question.

Operator: Our next question comes from the line of Josh Jennings with TD Cowen.

Joshua Thomas Jennings: Your line is now open.

Joshua Thomas Jennings: Hi, good evening. Thanks for taking the questions and congratulations on the nice start to the year and the strong early demand for IQ3. I wanted to just start with a follow-up question to Suraj's inquiry on the home care initiative and home admitting and thinking about 2025, when revenues may start to flow from that home channel. I was hoping, Joe, you could help us understand, I guess, the business model a little bit better and just how will Butterfly generate revenues?

Joshua Thomas Jennings: Hi, good evening, thanks for taking the questions and congratulations on the nice start to the hearing.

Joshua Thomas Jennings: Early demand for IQ3.

Joshua Thomas Jennings: Wanted to just start with a follow up question Suraj is inquiry on the homecare initiative in whom I'm missing.

Joshua Thomas Jennings: Thinking about 2025, where revenues may start to flow from at home home channel.

Joshua Thomas Jennings: Joe you could help us understand I guess, the business model, a little bit better just butterfly generate revenues is it going to be mutually sales of probes or IQ.

Joshua Thomas Jennings: Is it going to be sales of probes or IQ plus or IQ threes to home care services, or could there be a recurring revenue model or a CLIC model? I just wanted to get a better sense that that initiative is starting next year already.

Joshua Thomas Jennings: Q3's, two home care services.

Joshua Thomas Jennings: Could there be a recurring revenue model or click models, just wanted to get a better sense.

Joshua Thomas Jennings: <unk> initiatives kicking in next year already.

Joseph M. DeVivo: Terrific. Thank you, Josh.

Speaker Change: Terrific. Thank you Josh and thanks for thanks for the question.

Josh: Yes, we're focusing not on device sales.

Joseph M. DeVivo: We are focusing on service revenue and some potential taking a risk or success based upon the delivery of the clinical.

Joseph M. DeVivo: And thanks for the question. Yeah, we're not focusing on device sales. We're focusing on service revenue and some potential taking of risk or success based upon, you know, the delivery of the clinical, you know, the clinical objectives. So, you know, again, hospitals are penalized due to these readmissions. There's a very finite cost to those readmissions, and we envision everything from either there being a service revenue that we would charge for the delivery of that service or, you know, a combination of service revenue and success based upon minimizing the risk and keeping those patients out of the hospital.

Joseph M. DeVivo: The clinical objectives. So again hospitals are penalized due to these readmissions theres, a very finite cost to those readmissions.

Joseph M. DeVivo: And we envision everything from.

Joseph M. DeVivo: Either they're being a service revenue that we would charge for the delivery of that service.

Joseph M. DeVivo: Sure.

Joseph M. DeVivo: A combination of service revenue and success based upon minimizing the risk and keeping those patients out of the hospital.

Joshua Thomas Jennings: Great and wanted to follow up on the University of Rochester report about the significant increase in revenue capture for POCUS exams. It sounds like this may be a stake in the ground. I know there's been some kind of theoretical potential revenue capture channel with Butterfly Compass. Does it put the formal stake in the ground and allow you to mark this more heavily? Or is this a well-understood metric that's already been in play? And I guess then the second layer of the question is, are there even more revenue capture potential if hospitals are using, like Rochester, using Butterfly probes along with Compass software?

Joseph M. DeVivo: Great.

Speaker Change: Wanted to follow up on the University of Rochester.

Speaker Change: Got it.

Joshua Thomas Jennings: Reported about the significant increase in revenue capture for for focus exams.

Joshua Thomas Jennings: It sounds like this may be a stake in the ground I know theres been a theoretical.

Joshua Thomas Jennings: A potential revenue capture channel with butterfly encompass.

Joshua Thomas Jennings: It does it put the foremost taken the ground and allow you to Mark. This is more heavily or is this a <unk>.

Joshua Thomas Jennings: Well understood.

Joshua Thomas Jennings: Metric.

Joshua Thomas Jennings: It's already been in play and I guess in the second layer to the question is are there even more revenue capture potential if hospitals are using like Rochester youre using butterfly.

Joshua Thomas Jennings: Probes along with accomplished software.

Joshua Thomas Jennings: Yes.

Joseph M. DeVivo: Yeah, that's a great question. I think it has to do with where this is a view into things to come.

Speaker Change: Yes, that's a great question I think I think it has to do where this is a.

Joseph M. DeVivo: And the things to come.

Joseph M. DeVivo: When we sell Compass, you know, we learned that hospitals are not capturing all of their all of their ultrasound revenue. And what we see pretty consistently is that of all the ultrasound scans they do, especially in point of care, they're only capturing about 35% to full reimbursement. And it's just based upon either not having a process or software in place to capture that revenue, training, etc. But when hospitals deploy Compass, they capture a significant amount more of the revenue, well above the 35%. And we don't have anything. What I'm telling you is more anecdotal and experiential, but we're getting the 60, 70, you know, 80%.

Joseph M. DeVivo: When we sell compass, we learned that that hospitals are not capturing all of their all of their ultrasound revenue and what we see pretty consistently.

Joseph M. DeVivo: As of all the ultrasound scans, they do especially in point of care. They are only capturing about 35%.

Joseph M. DeVivo: Two a full reimbursement and it's just based upon either not having a process or a software in place to capture that revenue training et cetera, when when hospitals deploy compass they capture a significant.

Joseph M. DeVivo: More of the revenue well above the 35%.

Joseph M. DeVivo: We don't have anything what I'm, telling you is more anecdotal and experiential, but we're getting the 60 70, 80% and so we're seeing a very quick ROI of our software deployment and Thats been very positive what's unique about Rochester as Dave actually deployed a one to one model where they've they've probably deployed.

Joseph M. DeVivo: And so we're seeing a very quick ROI on our software deployment, and that's been very positive. What's unique about Rochester is they've actually deployed a one-to-one model where they've probably deployed, I don't know, I think it's between 700 or 800 probes throughout their health system. And then they have the Compass software out that is actively capturing, A, the proficiency of all the new users coming on and a process of education that they're very well putting in place.

Joseph M. DeVivo: <unk>.

Joseph M. DeVivo: I think it's between 7% or 800 probes throughout their health system.

Joseph M. DeVivo: And then they have the compass.

Joseph M. DeVivo: Software.

Joseph M. DeVivo: That's that is actively capturing a the proficiency of all the new users coming on in a process of education that theyre very well putting in place but.

Joseph M. DeVivo: But, B, you know, you're seeing the classic standard point-of-care ultrasound department having a similar uptake in revenue based upon capture. But now, because of the all-in, one-to-one model, we're seeing nontraditional POCUS departments who are deploying ultrasound doing so and capturing additional ultrasound revenue. So it's, in the first year, it's a significant increase in revenue. And interestingly, you know, people in the past who've been critical of this saying point-of-care ultrasound NROI would say, hey, you're doing these scans, but you're taking scans away from radiology. I can't quote you the numbers because they haven't given me the clearance to do that.

Joseph M. DeVivo: Youre seeing.

Joseph M. DeVivo: Plastic standard point of care ultrasound department, having a similar uptake and revenue based upon the capture but now because of the all in one to one model, we're seeing non traditional focus departments, who are deploying ultrasound.

Joseph M. DeVivo: Doing so and capturing additional ultrasound revenue so.

Joseph M. DeVivo: In the first year, it's a significant increase in revenue and interestingly people in the past who have been critical of this thing a point of care ultrasound.

Joseph M. DeVivo: Roy.

Speaker Change: I would say hey.

Joseph M. DeVivo: Youre doing these scans that you are taking scans away from radiology I can't quote the numbers because they haven't given me the clearance to do that but radiology as an individual sub specialty.

Joseph M. DeVivo: But radiology as an individual subspecialty, this revenue was up very healthfully on its own. So point of care ultrasound didn't take anything from radiology. What point of care ultrasound did for URMC was help them make better clinical decisions sooner. I've heard time and time again, recently, a young child who had some chest pain; they did a scan immediately identified that there was an aortic stricture downstream, and they went right into surgery because the doctor had a butterfly or someone who had difficulty evacuating their bladder.

Joseph M. DeVivo: Revenue was up very healthily on its own so point of care ultrasound didn't take anything from radiology with point of care ultrasound did for UMC is help them make better clinical decision sooner I've heard time and time again.

Joseph M. DeVivo: Recently, a young child, who has.

Joseph M. DeVivo: Added some chest pain. They did into scan immediately identify that there is an aortic stricture downstream and they go right into surgery, because the doctor had a butterfly or someone who had a difficulty evacuating their bladder and the doctor right, then and there used it scanned the bladder and they find the tumor and they go right in this.

Joseph M. DeVivo: And the doctor right then and there uses it to scan the bladder, and they find a tumor, and they go right into surgery. That is what point of care ultrasound does. And the doctors at URMC are absolutely thrilled. It's been a tough learning curve, though.

Joseph M. DeVivo: That is what point of care ultrasound does.

Joseph M. DeVivo: It makes it and the doctors at UMC are absolutely thrilled it's been a tough learning curve you go through a whole new process you go through a whole new deployment, but now all of a sudden they can see things. They never saw before they can help their patients sooner and there is just and I've asked them for the anecdotal and then of course.

Joseph M. DeVivo: You go through a whole new process, you go through a whole new deployment, but now, all of a sudden, they can see things they never saw before. They can help their patients sooner. And I've asked them for the anecdotal evidence and then, of course, the more specific, you know, a larger trend, but time and time again, empowering a doctor to be able to do an earlier diagnosis is more fun and gratifying for the doctor and is much better for the patient.

Joseph M. DeVivo: The more specific.

Joseph M. DeVivo: Larger trends, but time and time again, empowering a doctor to be able to do an earlier diagnosis is more fun and gratifying for the Doctor and is much better for the patient.

Joshua Thomas Jennings: Excellent. Let me last.

Joseph M. DeVivo: Excellent.

Joseph M. DeVivo: To.

Joshua Thomas Jennings: Questions, just thinking about or just hearing about the non-dilutive financing options that both you and Heather mentioned. Maybe you could elaborate on both of those. And then just to tie in, you talked at the investor meeting about the company reaching profitability by 2027 but requiring financing to get there. Maybe you could include in your answer just how, maybe remind us of that path to profitability and just how non-dilutive financing could impact that pathway.

Joshua Thomas Jennings: Questions just thinking about we're just hearing about.

Joseph M. DeVivo: Thanks for taking all the questions.

Joshua Thomas Jennings: Non dilutive financing options that both you and Heather mentioned, maybe you could elaborate on both of those and then I missed it.

Joseph M. DeVivo: <unk> you talked at the Investor meeting about.

Joseph M. DeVivo: The company, reaching profitability by 2027, but requiring financing to get there.

Joseph M. DeVivo: Included in your answers talent, maybe to remind us of that path to profitability and just how the non dilutive financing could could impacted pathway. Thanks for taking the questions.

Joshua Thomas Jennings: Awesome, Josh. Thank you.

Joseph M. DeVivo: Yeah.

Speaker Change: Awesome, Josh Thank you.

Joseph M. DeVivo: So, you know, the premise of our Powered By program is, you know, we've invested upwards of a half a billion dollars in our semiconductor program, and we focus that, you know, that primary market on Point of Care Ultrasound. And we're making the products that you all know about, and also the chip technology that is delivering exponential improvement over time. What we've learned is that our semiconductors, with our MEMS technology, have real applicability in other markets. You know, you've seen the Market with Brain-Computer Interface by Forest Neurotech.

Joshua Thomas Jennings: So.

Joshua Thomas Jennings: Premise of our powered by <unk> program is <unk>.

Joseph M. DeVivo: Invested over.

Joseph M. DeVivo: A half a billion dollars.

Joseph M. DeVivo: In our semiconductor program.

Joseph M. DeVivo: And we've focused that that primary market.

Joseph M. DeVivo: In point of care ultrasound, and we're making the products that you all know about and also the chip technology that.

Joseph M. DeVivo: As delivering exponential.

Joseph M. DeVivo: <unk> overtime.

Joseph M. DeVivo: What we've learned is our semiconductors with our Mems technology.

Joseph M. DeVivo: Has real applicability in other markets you know you've seen the <unk>.

Joseph M. DeVivo: The market with brain computer interface with with Forest Neuro Tech.

Joseph M. DeVivo: And we're seeing them, and that deal contributes nicely. What we're also seeing is that there are other markets, and one of them that is very interesting is in drug activation using the method we're using. And if we prove that, we could do, and what's also fascinating is that a lot of researchers are breaking apart ultrasound carts and trying to go through all of this work to tune it to a different place and a different attenuation for these different types of therapies they're studying. Because our ultrasound is chip-based, we have tremendous flexibility in just making software changes to change frequencies and power settings to be able to do many different clinical applications.

Joseph M. DeVivo: And we're seeing them in that deal contribute nicely.

Joseph M. DeVivo: What we're also seeing is that there are other markets and one of them that is very interesting.

Joseph M. DeVivo: And drug activation using.

Joseph M. DeVivo: We are using ultrasound.

Joseph M. DeVivo: And if we prove that we can do and what's also fascinating is a lot of the researchers are breaking apart.

Joseph M. DeVivo: You sound carts and trying to go through all of this work to tune it to a different place in a different attenuation for these.

Joseph M. DeVivo: The different types of therapies they are studying.

Joseph M. DeVivo: Because our ultrasound as chip base, we have tremendous flexibility and just making software changes the change frequencies power settings to be able to do many different clinical applications. So.

Joseph M. DeVivo: So it's not entirely far-fetched that, you know, we did get $3 million of license revenue in our porous neurotech deal. If there's a large market and there's a big appetite for the technology, we may be able to extract more license revenue. And by monetizing our power buy and the current investment and creating new markets for these new applications, if we accomplish what we set out to do, some of that balance sheet need to get us to profitability can be done in a non-dilutive way.

Joseph M. DeVivo: It is not entirely.

Joseph M. DeVivo: Farfetched that we did get $3 million of license revenue in our forest Neuro Tech deal. If there is a large market and there is.

Joseph M. DeVivo: Big appetite to have the technology, we may be able to extract more license revenue.

Joseph M. DeVivo: And by monetizing our powered by in the current investment in creating new markets.

Joseph M. DeVivo: For new for these new applications.

Joseph M. DeVivo: If we set out if we accomplish what we set out to do.

Joseph M. DeVivo: Some of that balance sheet needs to get us to profitability can be done in a non dilutive way.

Joseph M. DeVivo: So we are really focused on that. We have great people with great energy talking to great partners. And that's something I think investors need, you know, or should appreciate. Now, this whole concept that there's this finite cash and we're running out of cash and what's going to happen with the company is a bunch of gibberish.

Joseph M. DeVivo: So we are really focused on that we have great people with great energy talking to great partners and and.

Joseph M. DeVivo: And that's something I think investors need or should appreciate this whole concept that there is finite cash and we're running out of cash and what's going to happen with the company as a bunch of gibberish.

Joseph M. DeVivo: We are growing our revenue, and we are reducing our cash burn. We have a lot of opportunities to be able to monetize things, and we are really focused on preserving shareholder value. We don't just want to dilute everybody and be at these prices. We're focusing really hard on getting ourselves to extend our cash runway as best as possible and creating shareholder value during this difficult time. But our R&D team is delivered. We've recaptured our momentum, and we think our ability to control our destiny is in our hands. I appreciate that. Thanks, Joe.

Joseph M. DeVivo: We are growing our revenue we are reducing our cash burn we have a lot of opportunities to be able to.

Joseph M. DeVivo: To monetize things.

Joseph M. DeVivo: And we are really focused on preserving shareholder value. We don't just want to delude everybody in NPA at these prices were focusing really hard on getting ourselves to extend our cash runway as best as possible and creating shareholder value. During this difficult time, but our R&D team has delivered we've re.

Joseph M. DeVivo: Capture our momentum and we think our ability to control our destiny.

Joseph M. DeVivo: Is in our hands.

Joseph M. DeVivo: Appreciate that thanks, Joe.

Joe: Thanks, Josh.

Joshua Thomas Jennings: Thank you for your question. There are no additional questions waiting at this time. I would now like to pass the conference back to Joe DeVivo for any closing remarks.

Speaker Change: Thank you for your question.

Joseph M. DeVivo: There are no additional questions waiting at this time I would now like to pass the conference back to Joe did the vivo for any closing remarks.

Joseph M. DeVivo: All right, everyone. Thank you for being with us on this call. We continue to be very excited. As I mentioned to you many times, this is going to be a great year for Butterfly, and we're off to a good start. So, thank you for your support.

Joseph M. DeVivo: Alright, everyone. Thank you for being with us on this call.

Joseph M. DeVivo: We continue to be very excited as I mentioned to you. Many times this is going to be.

Joseph M. DeVivo: A great year for butterfly and we're off to a good start so thank you for your support.

Operator: That concludes today's call. Thank you for your participation, and enjoy the rest of your day.

Speaker Change: That concludes today's call. Thank you for your participation and enjoy the rest of your day.

Operator: Okay.