Butterfly Network, Inc. (BFLY): Business Model Canvas [10-2024 Updated]
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Butterfly Network, Inc. (BFLY) Bundle
Butterfly Network, Inc. (BFLY) is revolutionizing the medical imaging landscape with its innovative approach to ultrasound technology. By leveraging affordable and portable solutions, Butterfly Network enhances diagnostic accessibility for a wide range of healthcare providers. In this blog post, we will dissect the company's business model canvas, exploring its key partnerships, value propositions, and revenue streams that drive its success in the healthcare sector.
Butterfly Network, Inc. (BFLY) - Business Model: Key Partnerships
Collaborations with healthcare systems
Butterfly Network collaborates with several healthcare systems to integrate its ultrasound technology into clinical practice. Notable partnerships include collaborations with major healthcare providers such as the University of California, San Francisco (UCSF) and the University of Pennsylvania. These collaborations aim to enhance diagnostic capabilities and streamline workflows within healthcare settings.
As of September 30, 2024, Butterfly Network reported a significant increase in product revenue, which reached $39.5 million for the nine months ended September 30, 2024, up from $29.9 million in the same period in 2023, a 32.1% increase.
Partnerships with technology providers
Butterfly Network has established strategic partnerships with various technology providers to enhance its product offerings. These partnerships focus on integrating advanced imaging software and cloud-based solutions. Collaborations with companies such as AWS (Amazon Web Services) facilitate the deployment of Butterfly's cloud-based solutions, enabling remote diagnostics and data management.
In the nine months ended September 30, 2024, software and services revenue was reported at $20.2 million, a slight increase from $19.5 million in the same period in 2023, reflecting a 3.7% growth.
Relationships with regulatory bodies
Butterfly Network maintains active relationships with regulatory bodies such as the FDA and CE marking authorities in Europe to ensure compliance with medical device regulations. These relationships are crucial for the approval of new products and features. Regulatory compliance has been a significant focus, especially with the introduction of new ultrasound devices like the iQ3 probe, which received FDA clearance in 2023.
The company recorded a total operating loss of $57.1 million for the nine months ended September 30, 2024, compared to $98.9 million for the same period in 2023, indicating a focused effort on cost management while navigating regulatory landscapes.
Alliances with distribution networks
Butterfly Network has formed alliances with various distribution networks to expand its market reach. These alliances include partnerships with medical supply distributors and online healthcare platforms, enhancing accessibility to its products. The company reported an increase in international revenue, which totaled $13.6 million for the nine months ended September 30, 2024, compared to $9.7 million in the prior year, reflecting a strategic push into global markets.
| Partnership Type | Key Partners | Impact on Revenue | Notes |
|---|---|---|---|
| Healthcare Systems | UCSF, University of Pennsylvania | $39.5M (2024 YTD) | Enhanced diagnostic capabilities |
| Technology Providers | AWS | $20.2M (2024 YTD) | Cloud-based solutions integration |
| Regulatory Bodies | FDA, CE Marking Authorities | N/A | Compliance for product launches |
| Distribution Networks | Medical supply distributors | $13.6M (International Revenue) | Expanded global market reach |
Butterfly Network, Inc. (BFLY) - Business Model: Key Activities
Development of innovative ultrasound technology
Butterfly Network focuses on developing cutting-edge ultrasound technology, exemplified by its handheld Butterfly iQ device. The company reported a product revenue of $13.5 million for Q3 2024, marking a 54.7% increase compared to $8.8 million in Q3 2023.
The company has invested significantly in research and development (R&D) to enhance its ultrasound capabilities, spending approximately $8.8 million in Q3 2024, a decrease of 27.1% from $12.1 million in Q3 2023. This reflects a shift in focus towards operational efficiency while continuing to innovate in ultrasound technology.
Manufacturing and quality control of devices
Manufacturing is a critical activity for Butterfly Network, ensuring high-quality production of its ultrasound devices. The cost of product revenue for Q3 2024 was $6.1 million, up from $3.9 million in Q3 2023, indicating a 54.4% increase. This rise is attributed to higher device sales and increased warranty accruals associated with the products sold.
The company emphasizes stringent quality control measures throughout its manufacturing process to maintain the reliability and performance of its devices, contributing to customer satisfaction and competitive advantage in the healthcare market.
Marketing and sales efforts to healthcare providers
Butterfly Network employs targeted marketing and sales strategies to reach healthcare providers effectively. For Q3 2024, sales and marketing expenses amounted to $9.6 million, a 6.6% increase compared to $9.0 million in Q3 2023. This increase is driven by enhanced sales commissions and marketing efforts related to new product launches, such as the iQ3 and iQ+ Bladder devices.
The company is focused on building strong relationships with healthcare systems and practitioners to drive adoption and usage of its ultrasound technology, thereby increasing its market penetration.
Continuous research and development
Continuous investment in R&D remains a cornerstone of Butterfly Network's business strategy. Over the nine months ended September 30, 2024, R&D expenses totaled approximately $29 million, a decrease of 34.8% from $44.4 million during the same period in 2023. This reduction is primarily due to personnel cost savings from a workforce reduction implemented in the previous year.
The company anticipates that as its product offerings expand, R&D will shift towards enhancing software services and integrating artificial intelligence into its ultrasound technology, further differentiating its products in the healthcare market.
| Activity | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | % Change |
|---|---|---|---|
| Product Revenue | $13.5 | $8.8 | 54.7% |
| R&D Expenses | $8.8 | $12.1 | -27.1% |
| Sales & Marketing Expenses | $9.6 | $9.0 | 6.6% |
Butterfly Network's business model is heavily reliant on continuous innovation, effective manufacturing practices, strategic marketing, and robust R&D investments to maintain its competitive position in the rapidly evolving healthcare technology landscape.
Butterfly Network, Inc. (BFLY) - Business Model: Key Resources
Proprietary ultrasound technology (iQ3 probe)
The iQ3 probe is a significant technological advancement in medical imaging, allowing for portable and high-quality ultrasound imaging. In 2024, product revenue from the sale of ultrasound devices, including the iQ3 probe, reached approximately $39.5 million for the nine months ended September 30, 2024, reflecting an increase of 32.1% compared to $29.9 million for the same period in 2023.
The iQ3 probe's introduction has contributed to an increase in sales, with a notable product revenue increase of 54.7% in Q3 2024 compared to Q3 2023, amounting to $13.5 million.
Skilled workforce in engineering and healthcare
Butterfly Network employs a skilled workforce that includes approximately 360 employees as of mid-2024, with a strong focus on engineering and healthcare professionals. This workforce is essential for product development, regulatory compliance, and customer support. The company has made strategic reductions in its workforce to streamline operations, resulting in reduced personnel costs by $10.6 million year-over-year.
Strong brand presence in medical imaging
Butterfly Network has established a strong brand presence in the medical imaging field, particularly with its innovative ultrasound devices. This brand strength is reflected in its increased market share and revenue growth, with total revenue reaching $59.7 million for the nine months ended September 30, 2024, up from $49.4 million in the same period of 2023. The company's marketing efforts, including the launch of the iQ3 and iQ+ Bladder, have contributed to enhanced brand visibility.
Financial resources for R&D and marketing
As of September 30, 2024, Butterfly Network reported cash and cash equivalents of $93.8 million. The company has allocated significant financial resources toward research and development (R&D), spending approximately $28.9 million in R&D for the nine months ended September 30, 2024. This investment is crucial for the ongoing development of new products and enhancements to existing technology.
Sales and marketing expenses for the same period totaled $29.7 million, reflecting a 3.3% increase compared to the previous year. The financial commitment to R&D and marketing is essential for maintaining competitive advantages and driving growth in the medical imaging market.
| Key Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Product Revenue | $13.5 million | $8.8 million | 54.7% |
| Total Revenue | $20.6 million | $15.4 million | 33.3% |
| R&D Expenses | $8.8 million | $12.1 million | -27.1% |
| Sales and Marketing Expenses | $9.6 million | $9.0 million | 6.6% |
| Cash and Cash Equivalents | $93.8 million | N/A | N/A |
Butterfly Network, Inc. (BFLY) - Business Model: Value Propositions
Affordable and portable ultrasound solutions
Butterfly Network offers a range of ultrasound devices, notably the iQ3, which is designed for affordability and portability. The iQ3 probe retails at approximately $2,000, making it significantly cheaper than traditional ultrasound machines, which can cost upwards of $100,000. This pricing strategy aims to democratize access to medical imaging technologies across various healthcare settings, including clinics and remote locations.
Real-time imaging with mobile technology
The iQ3 device integrates with mobile technology, allowing for real-time imaging and diagnostics. The device connects to a smartphone or tablet, providing clinicians with immediate access to high-quality ultrasound images. In Q3 2024, Butterfly reported a product revenue increase of 54.7%, reaching $13.5 million from $8.8 million in Q3 2023, indicating strong demand for its mobile imaging solutions .
Enhanced accessibility to diagnostic tools
Butterfly Network's business model focuses on enhancing accessibility to diagnostic tools, particularly in underserved areas. The company reported that units fulfilled increased by 36.6% year-over-year for the three months ended September 30, 2024, attributed to the onboarding of new distribution territories internationally . This growth reflects Butterfly's commitment to expanding its reach and providing essential medical tools to a broader audience.
Integration with software for data management
Butterfly Network also emphasizes the integration of its ultrasound devices with advanced software solutions for data management. The company’s software as a service (SaaS) offerings, which include Butterfly Garden and Powered by Butterfly partnerships, showed a revenue increase of 3.7%, totaling $20.2 million for the nine months ended September 30, 2024 . This integration allows healthcare providers to manage patient data efficiently, enhancing the overall diagnostic process.
| Key Metrics | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Product Revenue | $13.5 million | $8.8 million | $4.7 million | 54.7% |
| Software and Services Revenue | $7.0 million | $6.7 million | $0.3 million | 5.3% |
| Total Revenue | $20.6 million | $15.4 million | $5.1 million | 33.3% |
| Units Fulfilled | 4,670 | 3,421 | 1,249 | 36.6% |
Butterfly Network, Inc. (BFLY) - Business Model: Customer Relationships
Direct sales approach to healthcare providers
Butterfly Network utilizes a direct sales approach to interact with healthcare providers, focusing on large-scale healthcare systems. In 2024, Butterfly Network reported product revenue of $39.5 million, a 32.1% increase compared to the previous year, driven by increased sales across various channels, including the introduction of the iQ3 probe.
Customer support and training programs
The company invests in extensive customer support and training programs, which are essential for ensuring effective use of its products. For the nine months ended September 30, 2024, Butterfly's total sales and marketing expenses were $29.7 million, reflecting a 3.3% increase from the prior year. This includes costs associated with customer training and support.
Engagement through digital platforms
Butterfly Network enhances customer engagement through digital platforms, including its Butterfly Garden and Powered by Butterfly partnerships. In 2024, software and other services revenue increased by $0.7 million or 3.7%, indicating growth in enterprise software and medical school subscriptions.
Feedback loops for product improvement
Feedback loops are integral to Butterfly's strategy for product improvement. The company actively solicits customer feedback to refine its offerings. For instance, the enterprise software revenue as a percentage of total software revenue increased by approximately 7 percentage points year-over-year.
| Category | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | % Change |
|---|---|---|---|---|
| Product Revenue | $39,478 | $29,874 | $9,604 | 32.1% |
| Software and Other Services Revenue | $20,227 | $19,510 | $717 | 3.7% |
| Total Sales and Marketing Expenses | $29,713 | $28,776 | $937 | 3.3% |
| Net Loss | $(54,391) | $(89,579) | $35,188 | 39.3% |
Butterfly Network, Inc. (BFLY) - Business Model: Channels
Direct sales to hospitals and clinics
Butterfly Network, Inc. primarily engages in direct sales to hospitals and clinics, which is a significant channel for their revenue. In the nine months ended September 30, 2024, product revenue from direct sales amounted to $39.5 million, up from $29.9 million in the same period of 2023, representing a growth of 32.1% year-over-year.
Online sales through e-commerce platforms
Online sales have become a crucial channel for Butterfly Network. The company has enhanced its e-commerce capabilities to facilitate direct-to-consumer sales. As of September 30, 2024, software and other services revenue, which includes online sales, reached approximately $20.2 million, reflecting a 3.7% increase compared to $19.5 million in 2023.
Partnerships with medical distributors
Butterfly Network has established partnerships with various medical distributors, which play a vital role in expanding their market reach. These partnerships helped the company achieve a significant increase in product sales, contributing to the overall revenue growth. The company's product revenue from these partnerships is part of the $39.5 million in total product revenue reported for the nine months ended September 30, 2024.
Participation in medical trade shows
Participation in medical trade shows is another strategic channel for Butterfly Network, aimed at increasing brand visibility and networking with potential clients. The company has actively participated in multiple trade shows in 2024, which has been reflected in the sales increase. Sales and marketing expenses, which include costs related to trade shows, amounted to approximately $29.7 million for the nine months ended September 30, 2024, compared to $28.8 million in 2023, indicating a focus on enhancing marketing efforts.
| Channel | Revenue (2024) | Revenue (2023) | Year-over-Year Growth |
|---|---|---|---|
| Direct Sales to Hospitals and Clinics | $39.5 million | $29.9 million | 32.1% |
| Online Sales | $20.2 million | $19.5 million | 3.7% |
| Partnerships with Medical Distributors | Included in Direct Sales | Included in Direct Sales | N/A |
| Sales and Marketing Expenses | $29.7 million | $28.8 million | 3.1% |
Butterfly Network, Inc. (BFLY) - Business Model: Customer Segments
Hospitals and healthcare systems
Butterfly Network targets hospitals and healthcare systems as a primary customer segment. The company has focused on expanding its market presence in large healthcare institutions, leveraging the advantages of its innovative ultrasound technology. As of September 30, 2024, Butterfly Network reported product revenue of $39.5 million for the nine months ended, reflecting a 32.1% increase from $29.9 million in the same period of the previous year. This growth is driven by the increasing adoption of the iQ3 ultrasound device across various healthcare facilities.
Private clinics and outpatient facilities
Private clinics and outpatient facilities represent another significant market for Butterfly Network. The company offers tailored solutions to these smaller healthcare providers, which often seek cost-effective and portable diagnostic tools. For the nine months ended September 30, 2024, software and other services revenue reached $20.2 million, up from $19.5 million in the prior year, indicating a steady demand for software solutions that accompany the devices.
| Customer Segment | Revenue (Nine Months Ended September 30, 2024) | Revenue (Nine Months Ended September 30, 2023) | Percentage Change |
|---|---|---|---|
| Hospitals and Healthcare Systems | $39.5 million | $29.9 million | 32.1% |
| Private Clinics and Outpatient Facilities | $20.2 million | $19.5 million | 3.7% |
Medical schools and educational institutions
Medical schools and educational institutions are also important customer segments for Butterfly Network. The company has established partnerships for educational purposes, integrating its technology into medical training programs. However, a notable impact on revenue occurred due to the absence of large grant-based deployments that had previously boosted sales in this segment. The revenue from educational partnerships is expected to stabilize as new contracts are negotiated in future academic years.
Individual healthcare practitioners
Individual healthcare practitioners utilize Butterfly Network's products for personal practices. The company has designed its offerings with the individual practitioner in mind, providing accessible ultrasound technology that enhances patient care. Despite facing challenges with renewals of individual subscriptions, the overall growth in product sales has helped mitigate these issues. As of September 30, 2024, the company reported a net loss of $54.4 million, reflecting ongoing investments to enhance product offerings and customer engagement.
Butterfly Network, Inc. (BFLY) - Business Model: Cost Structure
Manufacturing and material costs
The total cost of revenue for Butterfly Network, Inc. for the nine months ended September 30, 2024, was $24,609,000, which is a 23.1% increase from $19,991,000 in the same period of 2023. The manufacturing costs are primarily driven by:
- Product costs including manufacturing costs, personnel costs, inbound freight, packaging, warranty replacement costs, payment processing fees, and inventory obsolescence.
- For the three months ended September 30, 2024, product costs amounted to $6,065,000, up from $3,929,000 in Q3 2023, marking a 54.4% increase.
- Costs related to software and other services were $2,263,000 in Q3 2024, compared to $2,110,000 in Q3 2023, a 7.3% increase.
| Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Product Costs | $6,065 | $3,929 | 54.4% |
| Software and Other Services Costs | $2,263 | $2,110 | 7.3% |
| Total Cost of Revenue | $8,328 | $6,039 | 37.9% |
Research and development expenditures
Research and development expenses for Butterfly Network, Inc. decreased significantly, amounting to $28,975,000 for the nine months ended September 30, 2024, a reduction of 34.8% from $44,409,000 in 2023. Key points include:
- For Q3 2024, R&D expenses were $8,844,000, down from $12,130,000 in Q3 2023, reflecting a 27.1% decrease.
- The decrease was driven by $1.4 million in personnel costs due to workforce reductions and $1.3 million in facilities and software costs.
- R&D expenses accounted for 43.0% of revenue in Q3 2024 compared to 78.7% in Q3 2023.
| Period | R&D Expenses (in thousands) | % of Revenue |
|---|---|---|
| Q3 2024 | $8,844 | 43.0% |
| Q3 2023 | $12,130 | 78.7% |
| Nine months ended September 30, 2024 | $28,975 | 48.5% |
| Nine months ended September 30, 2023 | $44,409 | 89.9% |
Marketing and sales expenses
Sales and marketing expenses have shown an upward trend, totaling $29,713,000 for the nine months ended September 30, 2024, a 3.3% increase from $28,776,000 in the same period of 2023. Details include:
- For Q3 2024, marketing and sales expenses were $9,607,000, compared to $9,012,000 in Q3 2023, marking a 6.6% increase.
- The increase was primarily due to a rise in sales commissions, totaling $0.5 million, linked to higher sales and changes in the commission structure.
- Sales and marketing expenses accounted for 46.7% of revenue in Q3 2024, down from 58.4% in Q3 2023.
| Period | Sales and Marketing Expenses (in thousands) | % of Revenue |
|---|---|---|
| Q3 2024 | $9,607 | 46.7% |
| Q3 2023 | $9,012 | 58.4% |
| Nine months ended September 30, 2024 | $29,713 | 49.8% |
| Nine months ended September 30, 2023 | $28,776 | 58.3% |
Administrative and operational costs
General and administrative expenses decreased to $29,868,000 for the nine months ended September 30, 2024, a decline of 19.8% from $37,239,000 in 2023. Key points include:
- For Q3 2024, these costs were $9,353,000, down from $11,560,000 in Q3 2023, reflecting a 19.1% decrease.
- The reduction was mainly due to a $1.6 million decrease in stock-based compensation and a $0.4 million reduction in professional service fees.
- Administrative costs accounted for 45.5% of revenue in Q3 2024, down from 75.0% in Q3 2023.
| Period | Administrative Costs (in thousands) | % of Revenue |
|---|---|---|
| Q3 2024 | $9,353 | 45.5% |
| Q3 2023 | $11,560 | 75.0% |
| Nine months ended September 30, 2024 | $29,868 | 50.0% |
| Nine months ended September 30, 2023 | $37,239 | 75.4% |
Butterfly Network, Inc. (BFLY) - Business Model: Revenue Streams
Sales of ultrasound devices
For the nine months ended September 30, 2024, Butterfly Network reported product revenue of $39.478 million, representing a 32.1% increase from $29.874 million for the same period in 2023. For the three months ended September 30, 2024, product revenue was $13.538 million, a 54.7% increase compared to $8.753 million in Q3 2023.
Software subscription services
Software and other services revenue for the nine months ended September 30, 2024, increased to $20.227 million from $19.510 million in 2023, marking a 3.7% increase. In Q3 2024, software revenue was $7.023 million, up 5.3% from $6.668 million in Q3 2023.
Maintenance and support services
Maintenance and support services are included in the overall software and services revenue. The cost of software and other services revenue for the nine months ended September 30, 2024, was $6.870 million, reflecting a 10.3% increase from $6.226 million in the previous year.
Licensing agreements with third parties
Licensing revenue from partnerships, including enterprises and educational institutions, contributed to the overall software revenue increase. The enterprise software revenue as a percentage of total software revenue increased by approximately 7 percentage points year-over-year.
| Revenue Stream | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) | YTD 2024 Revenue | YTD 2023 Revenue | YTD Change (%) |
|---|---|---|---|---|---|---|
| Sales of Ultrasound Devices | $13.538 million | $8.753 million | 54.7% | $39.478 million | $29.874 million | 32.1% |
| Software Subscription Services | $7.023 million | $6.668 million | 5.3% | $20.227 million | $19.510 million | 3.7% |
| Maintenance and Support Services | N/A | N/A | N/A | $6.870 million | $6.226 million | 10.3% |
| Licensing Agreements | N/A | N/A | N/A | Included in Software Revenue | Included in Software Revenue | N/A |
Article updated on 8 Nov 2024
Resources:
- Butterfly Network, Inc. (BFLY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Butterfly Network, Inc. (BFLY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Butterfly Network, Inc. (BFLY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.