Butterfly Network, Inc. (NYSE:BFLY) Q2 2023 Earnings Call Transcript - Page 3 of 6 - InvestingChannel

Butterfly Network, Inc. (NYSE:BFLY) Q2 2023 Earnings Call Transcript

Joseph DeVivo: Heather, you take the first. I’ll take the second.

Heather Getz: Okay. Sounds good. So when you look at last year, we had a pretty big push into international markets through distributors, and they occurred throughout 2022. And they had their initial stocking orders. And what we’re seeing is that they’re continuing to sell through those initial stocking orders. And we haven’t had those same large initial orders repeated in 2023. So we would expect to the extent that we stay in those markets that we would see that pick up at the point in time in which they sell through. And the part about rig, I’m not quite sure I understood your question about the end of ’23.

Joseph DeVivo: Well, I can — I think I can take that second part. So — what we wanted to do is to provide guidance of where we saw the business run rate was today. Now don’t get us wrong. We love large deals, and we want to close large deals. But also, we didn’t want to guide to something that we didn’t have control over the timing. There are some things that we’re working on, and we actually even just mentioned a large global Health win, which will be another large deal, which we love. It’s just the predictability of them. And then when you have them in your run rate, they are hard to anniversary because it’s not a consistent deployment of large deals. So — what we wanted to do is just present to you, hey, here’s where we’re going to come in if things just go as it is and we don’t close the NextAR [ph] deal.

And then truthfully, as we — and as I have greater comfort with the business, as I have more of a track record, and I can see more of the pulse, I’ve only been here 100 days. And so I have – I haven’t had enough time to see the length of our sales cycle and to understand how to trust the metrics to predict to the future. And so I wanted to create just a baseline just to be conservative. But yes, we’re going to be hunting a lot of things. And I actually think there’s an opportunity to build a large bundled enterprise strategy, but it’s not mature it’s not enough time for me to be able with credibility to tell you what will happen when. So I hope that’s helpful, and I’m happy to try to continue to elaborate if I didn’t really answer your question.

Neil Chatterji: Sure. I mean maybe just on that kind of the second part of that question, just in terms of the launch next year and if customers are waiting, I think you also kind of in the prepared remarks, also kind of talked about ways to make that you have great easy and still be able to purchase IQ Plus now. So just maybe just elaborate on that.

Joseph DeVivo: Yes, sure. So usually, our fourth quarter sales are pretty robust. And so — but as we get closer to Q3, there is risk that people may hold off. And so we’re planning for that. But we’re also communicating to our team that there’ll be a clear upgrade path. So if someone has purchased something for a particular value, that value can be placed towards the cost of IQ3, and then we’ll work to make it really simple for users to upgrade. So — and they won’t be out of pocket any additional dollars. It’s just a normal thing that capital equipment companies go through when they’re getting close to those launches. So we just want to address it head on and not react but actually plan. And I think that’s what we’re doing.

Neil Chatterji: Great. Maybe just one quick follow-up here. Just in terms of kind of getting back to basics here in terms of commercial strategy and execution, kind of curious what that means for a few things. So one, on the e-commerce strategy, the enterprise software strategy? And then lastly, I don’t think we touched on it much today, but just kind of the Butterfly IQ [ph] in the home or self-scanning — or how does Q3 maybe change that? Or is there — are there other things in the pipeline?

Joseph DeVivo: There’s a lot of things in the pipeline. I’m a big fan of our e-commerce strategy. It’s been able to help us build the brand very quickly. You know who we’re competing against. And so there’s no misunderstanding in the marketplace who these companies are. And so e-com has allowed Butterfly to go big and go fast and has allowed us to communicate and continue to communicate relationships with our customers, and we’re going to continue that. I think our messaging by having more to offer and more products offer is going to make the overall effect of e-commerce more potent. You can only sell the same things for so long over and message it over and over. So as you come up with new value propositions, that channel and that ability to connect directly to the customer is very powerful.

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