Good morning, everyone. My name is Darius Shahida, and I'm the Chief Strategy Officer of Butterfly Network. Today I'm excited to be joined by my colleague, Heather Getz, our CFO, to present to you all the meaningful progress we've been making in transforming clinical practice and why we feel Butterfly is a unique and compelling investment opportunity. Before we dive in, I will point you to our standard legal and financial disclaimers on slide two of our presentation. For those of you who are new to our story, Butterfly has created the world's lowest cost and first portable whole-body ultrasound solution. Our technology, which represents the first fundamentally new innovation in the ultrasound space in the last 50 years, put ultrasound on a semiconductor chip, obviating the need for multiple cumbersome and expensive probes.
We paired this breakthrough hardware solution with intuitive software designed with our users' and practitioners' needs in mind and empowered it with cutting-edge AI to make previously difficult and complex clinical workflows simple. Since introducing our latest product, Butterfly iQ+, the market has responded with significant enthusiasm and demand. I'm pleased to share that Butterfly is the top-selling handheld imaging solution by volume, is present in 100 of 100 top health systems in the United States, used in over one-third of medical schools in this country, and transforming care in over 100 countries worldwide. As you're going to hear today, we are operating our company with increased financial discipline that will extend our runway to 2025 and deliver strong growth with lower expenses.
To that end, we are reiterating our 2022 revenue guidance of $73 million-$76 million and EBITDA loss of $155 million-$145 million. Turning to our mission and vision, this is a slide which has not changed since we initially presented here years ago. That is that Butterfly was founded with the mission of democratizing healthcare by making medical imaging accessible to everyone such that all people everywhere get the right care, driven by the right clinical decisions at the right time. That's because the vast majority of clinical decisions are made with incomplete or imperfect information. In fact, to this day, nearly 2/3 of the world's population lacks access to simple medical imaging, and yet 80% of diagnostic dilemmas can be solved with simple imaging.
Butterfly is here to change these statistics and many others for the better by addressing the information gap and delivering powerful diagnostic insights to practitioners in a simple way wherever they may be. Butterfly is best positioned to solve these problems and improve care delivery because it is the only complete solution on the market, built from the ground up with our users' needs in mind. What started with our innovative hardware solution predicated on Ultrasound-on-Chip technology and capable of imaging the entire body with a single probe, has since evolved to encompass sophisticated enterprise software, comprehensive embedded education and training, and powerful AI to automate interpretations and diagnosis that would otherwise require advanced training.
The output of all of this effort, which required more than $0.5 billion Of investment, is a solution so powerful and versatile that it is being deployed simultaneously in the most sophisticated health systems in this country and the most austere and rural low and middle-income country settings in the world. I wanna spend a little time on competitive landscape because it's important we share with you how Butterfly's solution is truly differentiated. Legacy cart-based ultrasound companies and traditional point-of-care focus competitors have built disconnected, cumbersome, and prohibitively expensive devices, Butterfly has the most affordable, versatile, and intuitive solution on the market.
Our Ultrasound-on-Chip technology allows us to image the entire body from 1 to 10 MHz with a single probe at a fraction of the cost of any of the competitive solutions and with intuitive software and AI to deliver powerful diagnostic insights anywhere. What is more, our enterprise software solution has been built with clinicians' workflow in mind, with seamless EHR connectivity, streamlined billing and fleet management, so that health systems can deploy thousands of devices in record time and with record ease. We've got great evidence of that already in the marketplace that we're going to speak to later. By doing what the competitors cannot do, Butterfly is going to new places and users that the traditional competitors cannot go to and that were untouched by point-of-care ultrasound in the past.
From complex health systems deploying Butterfly at historic scale to partnerships with the world's leading NGOs to teach thousands of low-skilled practitioners how to use our solution, to patients self-scanning their chronic conditions from the convenience of their homes, and veterinarians enhancing every physical exam with our solution, Butterfly is transforming clinical practice across each of our four pillars. While competitors have historically focused on catering to the market of ultrasound proficient practitioners or experts, Butterfly solution is actually expanding the market to all clinicians and ultimately patients and caregivers. Going forward, we expect this market expansion to be accelerated as we innovate and introduce new products that align to our end users and their specific needs.
One of the unique benefits of our Ultrasound-on-Chip platform is that it allows us to rapidly innovate, miniaturize and deploy new form factors and technologies in ways that all other ultrasound companies simply cannot. With the most recent introduction of our iQ+ product, we already saw significant gains in image quality, performance, power consumption and advanced capabilities relative to our first product, the Butterfly iQ. This is the power of Moore's Law, which we will continue to ride and enjoy as we innovate and introduce new products going forward. As we continue to innovate and invest in the ease of use of our solution, as well as demonstrate its economic value in each of our four pillars, we're actually moving beyond the limitations of traditional point-of-care ultrasound and its related addressable market.
That expanding Butterfly's reach to new practitioners who embrace our technology as an advanced assessment tool. This expanded TAM brings with it a new set of opportunities for Butterfly to transform care where traditional ultrasound has had limited or untouched impact. Ultimately, we see the end state of our solution not only empowering all clinicians with an advanced assessment tool, but also unlocking the at-home patient monitoring and chronic disease monitoring markets, which represent an exponentially greater addressable market and one that has been untouched by simple imaging to date. This perspective on the market opportunity is very different than what you've likely seen from competition and even industry experts. That's because Butterfly is the only solution capable of unlocking the true potential of ultrasound and expanding the universe of users and overall market opportunity over time.
Why is Butterfly uniquely positioned to lead and ultimately own this greatly expanded market opportunity? The answer to this question is best articulated by the progress we're making in each and every one of our four pillars over the last year. Starting with health systems and the enterprise, we've spent the last two years investing heavily in building best in class enterprise software capabilities. These enterprise capabilities, which range from EHR integration, fleet management, auto billing, and workflow, have created the foundation upon which we can seamlessly and rapidly deploy thousands of probes in an enterprise system in record time. In fact, this past year, we not only rolled out our largest enterprise deployments in Butterfly's history with key reference sites like URMC, but we also were able to get complex health systems up and running in record time.
Our integration efforts with the University of Maryland, for example, were completed within just 14 days. To put that progress in perspective, the same integration only a year ago would have taken months or even longer. Butterfly's operating system of choice that we've built, and the technology and capabilities that we have to support the deployment of our solution and others is being shown in the market in record scale and record time. This progress we're making in health systems is exciting as it's not only a testament to the care transformation that Butterfly is driving in institutions, but it also represents a growing, high margin, recurring revenue business that is sticky and durable. In fact, once Butterfly's enterprise software is deployed within a health institution, we're effectively entrenched within that system for the long haul.
Moving to our progress in international expansion, we also saw meaningful progress and impact in this pillar with the announcement and rollout of the largest global health deployment of medical imaging in history. Our work with the Gates Foundation in Kenya proved that Butterfly solution is so simple and intuitive that we can train 500 and ultimately 1,000 midwives, none of whom had any prior ultrasound experience or knowledge, to become proficient in scanning in less than 10 weeks. These midwives have since been able to touch tens of thousands of patients, many of whom have had no access to medical imaging at all, and prevent adverse patient outcomes, ultimately saving lives. I don't want the significance of this rollout to be lost as it is proof of the market expansion that is uniquely enabled by Butterfly's ease of use.
More specifically, by focusing on the killer applications that matter most to these practitioners and that make them better at their jobs, we were able to train a record number of practitioners in a record time. I'm proud to now say that we have the training, educational, and technological capabilities to train historic scale of providers no matter how austere the setting and in record time. The playbook that we have built will be replicated in 2023 and beyond to further accelerate our market expansion, driving both commercial and clinical impact in some of the most resource-limited settings worldwide. In many respects, the home represents the final frontier and most exciting long-term opportunity for Butterfly to transform care.
When we consider the tens of billions of dollars spent in unnecessary costs and readmissions attributed to lack of surveillance of chronic illness, there is a clear and unmet need to be addressed with simple, safe imaging in the home. From congestive heart failure to renal failure and bladder monitoring, our team has already identified key clinical applications that we wish to target and are incorporating these applications into our very roadmap. Ultimately, we believe Butterfly is best positioned to address this need, and we're working actively with the FDA to pioneer a path to enable at-home use. Expect more progress on this pillar going forward. Last but not least, our progress in veterinary medicine over the past year is yet another testament to the care transformation that Butterfly is uniquely enabling.
As we have shared with you in the past, the veterinary market is one characterized by compelling economics, a grossly inadequate supply of providers, patients who cannot speak, and desperate need for cost savings. Butterfly iQ+ Vet has proven to be exactly that, as our veterinary software solution was built from the ground up with veterinarians' needs in mind. In just over 1 year after launching this business, we have already deployed iQ+ Vet in a one-to-one model across leading veterinary schools. We've gone system-wide with Petco and sold to thousands of veterinarians who are incorporating Butterfly iQ+ Vet into their standard physical exams. While this segment is not our primary focus, we expect this market to be a growing one for our business, where Butterfly can further demonstrate its value and transform clinical practice.
Now that we've reviewed key progress across each of our four pillars, I wanna take a step back to acknowledge the magnitude of the progress that we have made at the business level and the incredible team that has helped deliver these results. Yesterday, after market close, we announced measures to extend our cash runway to 2025. Today we are reiterating our 2022 revenue and EBITDA guidance as we seek to operate a leaner and more efficient business. While the decisions we made were difficult, we believe they will ultimately help better position Butterfly to transform care, deliver robust growth, and execute with fiscal discipline. We have a clear and compelling strategy that is being proven in the market, as evidenced by the progress across each of our four pillars and driving significant clinical practice change and impact.
To conclude, as we've shared today, the Butterfly journey began with a unique and disruptive Ultrasound-on-Chip hardware that has since evolved into a full imaging solution empowered with intuitive software and AI and a robust enterprise software offering. Whereas traditional point-of-care ultrasound has been limited by its prohibitive cost, complexity, lack of versatility, and others, with Butterfly, we have taken a novel approach to our offering that is focused on delivering powerful clinical insights to all practitioners in a simple way and with a single probe. The output of these efforts and the investment we have made in our overall solution is that we're expanding the overall market opportunity beyond traditional point-of-care ultrasound and expert users only and enabling the use of powerful but simple imaging by all practitioners wherever they may be.
Our progress, as evidenced across each of our four pillars, is proof that our strategy is working in the marketplace and that we are driving transformational behavior change in health systems, low and middle-income country settings, veterinary medicine, and ultimately, the path to home. Our market opportunity is extremely large, our first-mover advantage remains significant, and our technology platform is uniquely positioned for rapid deployment of new and novel innovations. All of these attributes of our business and opportunity are made more compelling by the fact that we are maintaining a high margin, recurring revenue business that is building across each of our business segments.
While behavior change and market expansion in healthcare does not happen overnight and requires a unique technology advantage, the right business model, and disciplined execution, I'm confident to say that in my five years here at Butterfly, I've never been prouder of our team and the progress we have made, and I've never been more enthusiastic about the road ahead. It is uniquely rewarding to work for a company that embodies the definition of doing well by doing good, and I thank you all for the time here today. We're now gonna turn to questions.
Thank you, Darius. Now we'll open the floor for questions.
Given the complexity of the Ultrasound-on-Chip technology, how do you get flexibility and performance and power, given that each time you wanna change it is a major new tape-out, major engineering investment, isn't it?
Yes. Hopefully you can hear me. Thank you for that question. It is indeed a major technological challenge to tape-out a new chip. We've assembled really a world-class team that has introduced this technology and commercialized this technology when other much larger companies have failed to do so. In the past, we have spoken to every couple year cadence of introducing new chipsets. We expect to continue that going forward. That's one of the unique benefits of our Ultrasound-on-Chip platform, is that it allows us to continuously improve, and we supplement and accelerate that improvement through artificial intelligence and software updates, which happen much more regularly and add value into the overall solution that our users enjoy.
You know, given what you said with respect to image quality and the ability to scan across, you know, one through 15, 10, 15 MHz, which gives you a broad range, if the image quality is so good, why do you go after GPs where there's all kinds of issues with GPs not using hand or because they don't have time, reimbursement is not clear and all that? Why not go after point of care, which is a $2 billion TAM market? If your image quality is so good, you know, basic things like line placement, cardiac compromise, respiratory compromise, would be a better way to go to improve your revenue. 'Cause when we launched Vscan, I launched Vscan a long time ago, the GP market was really tough to break into.
It's a great question. I would clarify by stating it's not that we're not going after the point-of-care ultrasound market, we are. We just believe that the market expansion opportunity outside of traditional point-of-care ultrasound is much more compelling and much larger, particularly when you consider the novel approach we've taken to our solution and how we're simplifying the solution in such a way that even general practitioners and midwives, as we've demonstrated this past year, can learn and become proficient in the solution in record time.
Strategically, what you're saying is you would rather wait to build up revenue than short term bring up the revenue and then go after these kind of esoteric applications?
No, I think what Darius was trying to say is that we're actually going after both of them simultaneously, but we're cultivating the market with the primary care to build it into more of an assessment tool as well. We're not choosing not to go after one or the other. We're actually doing both.
Okay. One last question, if I may. I mean, your losses, you said $155 million, you're spending a lot of money for an $85 million revenue. Can you say where? I mean, it's mostly on technology. Is it on distribution? Where is most of the funding going?
Yeah. We've built out a commercial sales team since going public, as well as continued to invest in R&D. As Darius mentioned, we also just put in place a plan to extend our cash runway into 2025, which included some reductions pretty much across the board. We believe that we can continue to grow the business as we've discussed with a more focused strategy on the spend.
I can ask a few questions. You mentioned earlier that there was a collaboration with the Gates Foundation. Could you please explain more about that and how it aligns with the broader strategy of Butterfly?
Sure. In many respects, the efforts that we demonstrated with the Gates Foundation in 2022, and that we will continue to demonstrate this year in 2023, really exemplify our strategy of making our solution as easy as possible. We trained 500 midwives in Kenya, many of whom were coming from counties where there was no ultrasound or any imaging for that matter. Of the 500 trainees, none had any exposure to imaging in any form. I had the privilege of being there in person, and what was particularly compelling and motivating to see is that in a matter of just five days, each of the cohorts was becoming proficient in using the Butterfly solution for three very simple but very clinically impactful scans.
Gestational age, leveraging an AI capability that we actually built in partnership with the Gates Foundation, fetal heartbeat and singleton versus multiple fetus pregnancy. If you can do those three things as a midwife, you can practice better medicine. You know, we were able to empower those 500 practitioners in such a way that months later, they're compliantly utilizing the devices on a weekly and sometimes even daily basis. It's a great testament to our strategy, and it's proof that when you simplify the solution, you don't actually have to teach practitioners ultrasound in the comprehensive and traditional sense. You can focus on the clinical applications that are actually most relevant to them in their daily practice and actually change behavior that way.
Thank you.
Thank you.
Thank you. You mentioned you have a very good penetration rate in medical schools. How sticky is that when physicians graduate and go to the general practice or go to the clinic? How sticky is their usage of Butterfly? Have you monitored that or evaluated that?
I think it's a little too soon to put out numbers on that. It's really been an effort over the last year or so. As we're training these students in med school one-for-one, they will start going out into the field now. We really don't have that data.
One thing I will say, though, is that with the number of medical schools in this country, like UC Irvine, which actually was the first to pilot a one-to-one model for their incoming students, they have renewed every single year since.
That's good.
The value they see in our solution of having those students grow up and learn medicine with a Butterfly in hand is very clear. You know, this is the Microsoft strategy for implanting its software in young professionals who then go out and are trained to use the technology throughout their career. We see it as a very strategic and durable long-term play.
Darius, you mentioned that Butterfly is being used across different health systems. Could you please share with us how the progress has been at Rochester and some of the other health systems?
Sure. You know, whereas the Gates deployment really exemplifies our strategy in international and global health markets, the work that we've been doing with the University of Rochester, also exemplifies our strategy in health systems, you know, where we've gone system-wide with our technology. As I speak, we're live at URMC with primary care, home health nursing, and their medical school as well, and we'll be rolling out more broadly over the course of the year.
The reason why I think this is such a great example of where Butterfly is going is because we have an innovative partner in Rochester that sees the value of deploying Butterfly beyond just the traditional, point of care, ultrasound opportunities within a health system, and is actually, applying the technology in places and in specialties where those earlier insights can drive better care decisions, later on in the care continuum. It's a, it's a very strategic partnership for us and one which, we're looking to replicate and will replicate with other health systems going forward.
If no other questions, I'll ask two more. The first one would be, you showed that as compared to the other options which are available, Butterfly probes are probably the most economical ones. Recently, you had an increase in the price of the probes. What led to that price increase? How have your customers been responding to that?
Yeah. I can address the second part of the question first, maybe.
Mm-hmm
...Heather, if you wanna address the first part. You know, even at $2,699 for the hardware, Butterfly's solution is an order of magnitude more affordable than any competitive offering. The value of our solution is very different than any of the competitive offerings. From the perspective of the value perceived by customers, we don't see any major issues with a $300 price increase on the hardware solution.
Right. Then which was the-.
The first question related to the intent, what actually drove the decision in the first place to raise price.
Yeah. I think.
Yeah.
As we've continued to invest in the product, as we mentioned, we in 2021 R&D, we invested, you know, close to $65 million, right? With that came advancements in the technology. We've invested even more in 2022. With those advancements comes a price increase, right? We're funding the future development of the product, and we're also closing that gap between us and the competitors.
Thank you. Just going back to funding. Right now, you have approximately $250 million cash on your balance sheet. How are you projecting your cash runway?
Yes. As we talked about yesterday, we announced a plan to extend our cash into 2025, which will allow us some flexibility as far as needs for capital in the future to extend that window to be able to raise if and when needed.
My last question would be, what excites you most about Butterfly?
Do you want to take that?
Sure.
Mm-hmm.
I mean, for me, it's really the impact potential that we're driving. Having seen firsthand, the power of this solution in some of the most rural and simultaneously some of the most complex care settings in the world, there are very few technologies which have actually driven behavior change on such a global scale and in such disparate settings. If we think about the history of medicine beyond just vaccines and the stethoscope, there are very few technologies which have had a universal impact. We ultimately see Butterfly as replacing the stethoscope, and we think that the sea change in terms of the adoption of imaging and the insights that imaging is driving across specialties and across the care continuum is a, you know, 50-plus year shift that is going to transform medicine for the better.
We're excited to be at the tip of that spear and really driving that change as we continue to innovate and invest in our solution.
I'd like to emphasize, we're changing the way care is delivered. One of Darius' slides, we talk about moving from the expert user to the novice user. When you think about being able to put that power in the hands of the patient, the consumer, and give the information needed to care for that patient in the hands of the clinician more quickly, you're delivering better care. That can be within a traditional setting or that could move into the home. That's exciting. There's not too many technologies, even too many advancements that you have the ability to be a part of something like that.
Thank you, Darius and Heather. Thank you everyone for your time. This concludes the presentation.
Thank you, everyone.