Butterfly Network, Inc. (NYSE:BFLY) Q2 2023 Earnings Call Transcript - Page 4 of 6 - InvestingChannel

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

Regarding enterprise software, enterprise office is a winner. The team did a great job in the pivot and the product is excellent. And we we’re selling each account $100,000, $200,000 in account. So to get to $7.7 million, there’s a lot. And actually, each one of those accounts as they add departments grows in their overall revenue. So we’re increasing accounts. And then as they’re having successful to software, they’re adding more and more apartments and then that price is going up higher. So — and if you look at the ARR chart, it’s not lumpy, and it doesn’t — it’s a very good upward sloping straight chart because we’re booking revenue in period, not at one time. So our enterprise sales as our software gets more and more adopted, we’re going to now focus on linking our software with our hardware and other services and continue to sell bigger and bigger deals.

I think we’ve gotten past the credibility mark of, hey, is this software really creating value. Now we’re going to be wrapping it with hopefully larger deals in health systems, and that’s where we’re certainly encouraging our team. So regarding Q3, Q3 is next generation. I think it’s going to be water rises, and so do all the ships and all the products will benefit from a product that can do it all. And I think — and not only can do it all, but it could do some things that nothing else has been done before an ultrasound — kind of [indiscernible] press the button and scanning in the body is pretty amazing, and I look forward to starting to show the images, the thought leaders in the market as we get closer to launch because ultrasound is so hard.

You have to be able to have that flashlight in the cave to find exactly what you want to get. And then you have to know what it is that you found. And so the challenge here is we’re bringing it to people who haven’t been classically trained in ultrasound and health care professionals who are at the point of care in the field and the ambulance. And so we need to make it easier for them to at a minimum, be able to acquire that image because with our teleguidance capability, we can move that image to a remote caregiver who immediately can diagnose. And so when we talk about getting into the home, if we can have an auto capture capability where there’s not this this art of having to search for the anatomy. But if it’s easy for a patient in the home to just place a device on wherever it is, the abdomen their chest, et cetera, press a button, have a scan, and then that scans sent to a third party who can — or a remote physician who can immediately — whether it’s immediate or whether it’s an ongoing type of management, then that really changes the game and changes the model.

And that’s why we’re a software-enabled technology company because we have this great technology, but software is what extracts the additional value out of it, just like we talked about in vet. I mean normally, it’s up to 10 centimeters of depth that you’re scanning in a human body. But to get to 30 centimeters that’s a whole different game. And so our software tunes it and sends different energy into the probe and creates that type of image. So we are going to get into the home. We are going to get into skilled nursing facilities, nursing homes. We are going to get into the battlefield. We are going to get into places where the injury or the patient is and not just has to come into a hospital and then have a cart and then go through a time laden process.

Every single health system is looking for ways to reduce readmissions. We’re looking for ways to manage chronic care patients in the home. And remote patient monitoring is a massive business that’s fully reimbursed and has been growing and will continue to grow because it works and it allows patients to be managed in lower-cost care settings. And so as we go with our IQ3 and with this new type of easily to scan technology, that’s also going to transfer and translate into our wearables. And as our wearables come in, then people can place devices and do the same. So this is a part of a multipronged strategy. Butterfly has been investing in technology for years. And as I mentioned on my first call, it was just so giddy when I sat with the team and saw what they created.

And I’m very excited about the focused strategy now. We played in their game. We’ve come into this market, which is a mature ultrasound market, competing against big companies who have wraparound GPO contracts who have ways to bundle and leverage and price and do all these different things. And so to get into the hospital setting alone as a little company, we have to do things differently and better. And we’ve proved that we can get into a mature market and we can win. Now, we’re going to continue to win in that mature market but we’re going to build the market, especially as we just mentioned in the home with remote patient monitoring and wearables and self-scanning that they can’t do because crystals can’t do this, only the type of technology we have does.

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