Ultrasound maker Butterfly Network trimming $2M in expenses per month amid financial challenges

Publicly traded ultrasound manufacturer Butterfly Network is trimming millions in operating expenses as it navigates through financial troubles, leaders said Thursday.

The Burlington, Massachusetts-based company recorded a net loss of $28.7 million in the second quarter, down from $35.8 million in the same period last year. Adjusted earnings—before interest, taxes, depreciation and amortization—were $17 million, down from $37.million.

Butterfly Network parted ways with its CEO in December and has conducted a “full strategy evaluation” with its new chief executive. Leaders said the refresh included a “reorganization that extends our cash runway” while reducing operating expenses.

CEO Joe DeVivo estimated that Butterfly Network is shedding $2 million in expenses each month. The company also has reduced staff and tightly managed spending, according to previous reports.

“I believe getting back to basics with a smaller team, focusing on our strengths, and leveraging what only we can do to add value to healthcare will bring the bounce back in our step and return the company to growth,” DeVivo said in a Aug. 3 quarterly earnings announcement. “Stakeholders need a healthy and successful Butterfly. Investors deserve better performance. Employees deserve stability and a place to grow and achieve. That’s exactly what we will do.”

The company launched in 2011 and today offers a handheld, single-probe, whole-body ultrasound system using semiconductor technology, called the Butterfly iQ+. An affiliate of hedge fund Glenview Capital Management later acquired the company for $1.5 billion, and it went public on the New York Stock Exchange in 2021.

But Butterfly has faced challenges since then, including debt on its balance sheet coupled with slowing sales. Revenues were about $18.5 million in the second quarter, down 3.8% from the same period last year. Total international sales, meanwhile, fell 44%, down to $3.3 million, while product revenue dropped 9%, to $12.3 million.

DeVivo and colleagues said they see reason for optimism. Butterfly is launching its third-generation probe in 2024, hoping to “close the perceived imaging gap” between competitors. It will offer double the processor speed, along with more applications, improved scan time and better battery life. Leaders also announced the new “Butterfly Garden,” granting AI companies access to its proprietary software development kits.

Butterfly is forecasting revenue of at least $64 million for 2023 and adjusted EBITDA losses of $80 million to $75 million after the reorganization efforts.