Butterfly Network, Inc.

and thank you for standing by. Welcome to the Butterfly Network second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised today's conference is being recorded. If you require any further assistance, please press star 0. And now I have the conference over to Agnes Lee, Vice President of Investor Relations. Please go ahead.

Agnes Lee Good morning, and thank you for joining us today. Earlier this morning, Butterfly released financial results for the second quarter, which ended June 30, 2021, and provided a business update. The release and earnings presentation, which include a reconciliation of management's use of non-GAAP financial measures compared to the most applicable gap measures are currently available on the investor section of the company's website at ir.butterflynetwork.com. Dr. Todd Fruchterman, Butterfly's President and Chief Executive Officer, and Stephanie Fielding, Butterfly's Chief Financial Officer, will host this morning's call. During today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, expectations with respect to financial results, future performance, development of products and services, potential regulatory approvals, anticipated financial impacts, and other effects of the business combination on our business, the size and potential growth of current or future markets for our products and services, and the potential impact of the COVID-19 pandemic on our business. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings made with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligation to update such statements. During this call, we will refer to non-GAAP financial measures, including adjusted gross margin, adjusted gross profit, and adjusted EBITDA. These financial measures are not prepared in accordance with U.S. generally accepted accounting principles or GAAPs. These non-GAAP financial measures are not intended to be considered in isolation or to substitute the results prepared in accordance with GAAP. The definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a discussion of why we present these non-GAAP financial measures are included in today's press release and at the end of the slide presentation. As a reminder, this call is being webcast live and recorded. and we will be referencing a slide presentation in conjunction with our remarks. Because there is a short delay between the live telephone audio and the presentation being shown on the webcast, for the best experience, please use either the webcast for both audio and video content, or if you dialed in by telephone, download the slides from our website and advance them yourself. To access the webcast, please visit the events section in the investor section of our website and a replay of the event will be available following the call. I would now like to turn the call over to Dr. Frechman.

Thank you, Agnes, and good morning, everyone. We appreciate you taking the time to join us today. Now in our third earnings call as a public company, we are happy to share with you the progress we've made this quarter. Following my overview of Butterfly's performance, Stephanie will walk through the details of our financial results. And as always, we will take your questions at the end. I'm very pleased with the progress that our company has made since we listed on the New York Stock Exchange earlier this year. Becoming a public company is a momentous event for all that get the chance. But for a company such as ours, it is truly enabling. since it provides us the opportunity to build, expand, and grow the value proposition of our proprietary differentiated technology, while ensuring that we have a strong operating foundation from which to execute. Being public also allows us to partner with you, our shareholders, and embark on this exciting journey together. Before we get into the quarter, I would like to share my enthusiasm for Butterfly and the impact I know we can make. In some of my earlier remarks, I have spoken about why I joined Butterfly. About six months into my journey as CEO, I want to share why I now believe to be the reason we are all excited about Butterfly and simply stated, Butterfly makes it possible. So what does that mean? Butterfly is disruptive and unique. It has the capabilities to practically unlock the power of point-of-care ultrasound in ways that inform clinical decision-making that can not only benefit patients but also impact our healthcare system as a whole. And while we are just at the beginning of our journey, today's butterfly is in fact the result of a decade of innovative work, work that has resulted in a breakthrough comprehensive solution consisting of a high quality semiconductor whole body single probe ultrasound device coupled with the three enabling elements of our software platform mobile ai and deep learning and enterprise with this our solution has the power to transform butterfly is accessible it is portable it is easy to use and it's affordable Together, those qualities empower healthcare providers to leverage the value of ultrasound information in everyday decision-making in real time at the point of care. Because seeing is knowing, and that is the true power of ultrasound. The power of butterfly is that this information can be unlocked in a practical, cost-effective way and become part of a clinician's everyday decision-making, regardless of their location or care setting. Butterfly empowers clinicians to think differently about care because Butterfly gives them the ability to make more informed decisions earlier and anywhere. This is what's extraordinary about our solution, and this is why we believe it is Butterfly that makes it possible, not just point-of-care ultrasound. While there are others that might offer the prospect of unlocking this value, only Butterfly is actually doing it. That is why we are so passionate about our technology and our mission to both democratize medical imaging and transform care all around the world. I joined this company because Butterfly is not just about ultrasound. It is about something much bigger. It is about improving medicine in every care venue, small or large, rural or urban, around the globe. Ultrasound on a chip. is the enabling technology that unleashes the full potential of imaging information that leads to better decision-making and better medicine. As more clinical knowledge is amassed, decision-making is becoming more complex, not less, and that is why clinicians need clarity so they can make accurate care decisions quickly with insights at their fingertips. Butterfly's solution provides the direct information necessary to make more informed decisions because seeing is knowing, and Butterfly makes it possible. Butterfly catalyzes behavior change by providing imaging information. This imaging information at the point of care allows practitioners to think differently about clinical workflows. And when behaviors change, we can reimagine care delivery. This is how the ultimate value of butterfly will be realized, by improving patient experience, outcomes, and health economics across a broad spectrum of clinical applications in almost any care setting. For example, we were thrilled to see butterfly doing exactly that at this year's Olympic Games in Japan. In a recent social media post, USA Swimming showed how butterfly is being used at the Olympic Village for musculoskeletal evaluations ahead of competition. Butterfly is bringing information into a setting in which ultrasound did not routinely exist, in turn helping and protecting our athletes. Pre-competition evaluations, like the one done by the USA Swimming team, show how butterfly can be used to screen and prevent injury. help to inform training and optimize performance. And consider how the portability and ease of use of a butterfly makes it possible to drive consistency of care. Now practitioners can practice the same medicine regardless of care setting because butterfly gives them the necessary information to make decisions no matter where they occur, at the hospital, in the doctor's office, in a home, or even on a sports field. We recently heard of a story that took place at a college baseball game. A pitcher on a pro track was up to bat. He hit the ball in an awkward way and reported pain in his hand. With a butterfly in the dugout, the team physician was able to do an immediate ultrasound and identify an inner metacarpal strain. Instead of being told to tough it out and risk a more serious injury, the physician was able to pinpoint the problem area immediately with a butterfly. the player went out of the game avoiding further injury and prolonged rehab that could have created a serious issue for his career. Up until this point, it had not been practical for the physician, player, and his coach to have had this depth of real-time clinical information on the field. Butterfly's portable solution makes it possible to make an informed healthcare decision irrespective of the setting, and in this instance, the athlete was able to get the right care immediately, modify activity appropriately, and ultimately return to full performance faster and healthier. This is performance reimagined. The future of medicine has arrived, and it's being delivered right now. That is what Butterfly helps make possible. Part of making something possible is making it easy, and that is one of the real advantages of Butterfly. it is easy to use. In fact, Butterfly is even making it possible for patients to participate in their care by performing their own self-examination. In a recent study published in ESC Heart Failure, the journal of the European Society of Cardiology, heart failure patients with no medical training were taught to self-perform a lung ultrasound exam using Butterfly. The study found that after a brief training session, most patients were able to perform their own lung ultrasound self-exam and that the information they provided through the butterfly was usable by their physicians. Subject to butterfly patient self-scanning receiving regulatory clearance for use, providers will be able to stay informed and manage disease more effectively by having the ability to see early signs of progression, thus providing the opportunity for quick interventions. This contrast with in person medical exams, which are so often motivated by late symptoms and morbid complications. This can become costly, less effective and lead to poor outcomes. We believe this recent study provides an important early milestone on the road to more effective at home care and patient empowerment. These innovations driven by butterfly can help change behaviors and how we think about care and its delivery. This is how butterfly will help to transform health and wellness. Butterfly removes the barrier to not having information to make more informed decisions regardless of setting. Our mission is to allow people to have access to valuable diagnostic information wherever and whenever it is needed. The time for better care is now, and butterfly makes it possible. And now, having provided some context for our journey, I'd like to turn to our results and review our Q2 2021 performance. I will also speak to our progress related to our near-term foundational goals that we introduced earlier this year. Our performance in the second quarter was solid on many fronts. We continue to see strong revenue growth with total revenue for the quarter of $16.5 million, which is a 40% increase year over year. We are encouraged by the broad demand for our solution across a wide range of customers and saw continued adoption through our core sales channels, including professional sales, direct-to-user, and distribution. This included the progress we made this quarter in medical school adoption and international commercial expansion, as well as growing our presence in veterinary medicine. And while I am happy with our performance and progress this quarter, we know that there is no version of success on our journey without our people and their tremendous efforts. That is why I would like to take a moment to recognize our outstanding team and all the hard work our growing organization has put in over the past several months, managing through all the complexities of the external environment while we expand our corporate foundation and execute upon the butterfly journey to democratize imaging and transform healthcare. In fact, we were fortunate to recently gather the entire company together to align our plans to execute on the promise and value proposition of Butterfly, And while the pandemic has limited the potential of many companies, I was proud to see the spark, energy, and collaboration in this meeting that I know will give us even more momentum for the second half of the year, ensuring that we can amplify Butterfly's impact and deliver on our objectives. Earlier this year, we set five foundational goals to help focus our efforts to grow and develop Butterfly as a company. As a reminder, these goals are to broaden and strengthen our team at Butterfly, to broaden our partnerships with clinical leaders, to align with the payer community to improve health outcomes and reduce the cost of care, to develop commercial partnerships across care settings, specialties, and geographies to deliver patient-centric, value-based healthcare, and to invest in our industry-leading innovation. Progress against these five goals is helping us to build our organization, drive societal impact, support commercial growth, and realize our vision of improving clinical care across a range of geographies, applications, and care settings. And now I will update you with regard to three of these. Given our aspirations and the complexity of the healthcare ecosystem, Butterfly cannot be successful without having the right leadership team in place, and we are pleased to share details of two recent key hires. The first is to the newly created role of Chief Technology Officer, an executive position that will report to me and lead technology innovation, product development, and information technology. Andre Stojka, our new CTO, has extensive experience with software enterprise technology solutions, including large cloud platforms. He brings a nuanced understanding of managing complex systems and of innovative product development that contains both hardware and software elements. Andre was most recently CTO at BioTelemetry, where he led the global technology and product development operations. including hardware and software product development, product management, enterprise, and product information. Before that, he held various leadership positions at IQVIA, including leading the development of the global data and machine learning cloud platform. Working directly with Andre will be David Ramsey, our newly hired Chief Information Officer, who will be responsible for continuing to ensure that we have a robust data privacy and security program, as well as the information technology infrastructure build out to support Butterfly's growth. David previously held CIO roles at Assurance Facility, which is now part of 3M, Diebold, and PSS World Medical, which is now part of McKesson. Together with the team, Andre and David will extend our strong history of leading-edge invention while enhancing our technology infrastructure to facilitate greater agility and targeted customer-centric innovation. More broadly, across the organization, our significant progress fortifying the executive team in the first half of 2021 empowers us to accelerate execution and commercialization of the butterfly solution. As commercial and clinical uptake of butterfly grows in North America and around the world, we are witnessing how having butterflies in more places makes new things possible. Earlier, I talked about how butterfly increases access to information and informs care across all settings. And one of the best ways to see the future and catalyze change in healthcare is to help create it by being a part of the clinical education and training of new practitioners. Bringing butterfly to medical schools is a major priority for us. Butterfly is now in over 100 medical schools. Our goal is to solidify butterfly from the beginning. We're doing this to ensure that practitioners of the future have the ability to make more informed clinical decisions through the power of butterfly, regardless of specialty or care setting. This quarter, Temple University purchased butterflies for all of their first year medical students and distributed them as part of their white coat ceremony, making our disruptive technology part of the journey for these future doctors right from the beginning. Temple joins a group of medical schools that are investing in equipping their students with butterflies to ensure that these young professionals have access to valuable information and learn how to use it as they train for their future careers as clinicians. It is also nice to see some of the same momentum building around animal healthcare. This quarter, we announced our first veterinary school-wide deployment with the newly established Texas Tech University School of Veterinary Medicine. As I've shared in the past, we believe Butterfly is well positioned to disrupt and help advance veterinary medicine. We see this market as an attractive area for growth beyond our core human efforts. Given the breadth of our value proposition and how Butterfly can be deployed in different systems and settings, we are excited about the opportunities that exist around the world for Butterfly's disruptive solution. Also this quarter, we established a partnership with Chindex Medical, a leading medical device distributor in Hong Kong, to commercialize our solution in this key market. Our partnership with Chindex creates our largest distributor relationship to date in Asia and helps solidify a substantial multi-year commercial commitment for the Hong Kong region. I'd like to end the discussion of our foundational principles today with our focus on innovation. Innovation is all about creating value. It is what we do. It is in our corporate DNA and will always be core to what we do at Butterfly. So I'd like to share some examples of the value we are creating at Butterfly. The value of ultrasound imaging to reduce maternal and fetal mortality is well established, yet it is not universally available to all, even in the most developed nations, even in the United States. A common restriction is the cost of the equipment and the need for advanced tools to make important calculations. Aligned with our mission of democratizing healthcare, we are particularly excited to be offering new, impactful solutions in the OB maternity space that will be delivered through an upgrade to the Butterfly IQ Plus platform. Because with Butterfly, seeing is knowing. These three new, recently introduced, advanced OB features provide critical insight into both maternal and fetal health. and they include enhanced image quality, gestational age calculation tools, and in the US and Canada, audible fetal heart tones. Practitioners can now use the butterfly solution to calculate first trimester gestational age, measure second, third trimester fetal growth, monitor fetal wellbeing throughout the pregnancy, and prepare for labor and delivery. To help understand why this is impactful, let's focus on just one of the new features, gestational age. Gestational age is the single most important determinant of fetal mortality. By giving care providers dependable access to this critical insight on a device that is both affordable and portable, Butterfly can improve the quality of care for all expectant mothers. regardless of whether a mother happens to live in a remote area or in an underserved community. Because with Butterfly, care can be enabled anywhere. With the launch of the OB maternal health solution and as part of Butterfly's global health initiative, Butterfly has partnered with Alara Health to create a playbook for leveraging this new functionality in our solution in limited resource care settings. Having our powerful diagnostic tool at hand wherever the need might be creates new use cases and makes it possible to reach entirely new groups of people in need, ranging from those who are distanced geographically from healthcare facilities to those who access is impaired by affordability, trust, or prior negative experiences. At Butterfly, we believe equity starts with access. By empowering medical professionals to help patients see their health, Butterfly is helping to build trust, inform diagnosis, and empower patients. And now, with care enabled through Butterfly and our new features, the care experienced by many expectant mothers, images of a fetus and the sound of a heartbeat, followed months later by the sound of a newborn cry, can become the norm for more expectant mothers. As I described earlier, much of the power of Butterfly will be realized through its ability to drive change in care delivery through more informed decision-making. And one of the benefits of Butterfly in unlocking the power of ultrasound information is making the device easier to use. Our Butterfly solution allows healthcare practitioners to focus on patient care rather than on performing the ultrasound itself. and future enhancements will continue to focus on improving the ease of image capture and providing assistance in image interpretation. A great example of this is the Q2 license and release in Canada of the new machine learning tool, Education View Guidance. For both lung and cardiac imaging presets, the user can receive real-time feedback on the quality of the image they are viewing through a color-coded display using artificial intelligence, helping new users accelerate their educational journey to competency. Innovative features like the OB maternal health solution and education view guidance can help make more informed care decisions, lead to better patient outcomes, and improved economics. And Butterfly's unique software platform allows us to rapidly deploy features like these now and into the future. Taken together, we hope that these foundational steps are beginning to paint the picture of acceleration at Butterfly. Through enhancing our leadership, broadening our channels, and accelerating innovation, we are actively engaged in partnership with individual physicians, industry thought leaders, and large institutions in a collaborative fashion to improve clinical practice, deliver uniformly across sites of care, and dramatically improve patient health, trust, access, and convenience. Our direction is clear. Our capabilities are growing rapidly, and our team is unified behind the opportunities to improve health and wellness that Butterfly makes possible. I will now turn the call over to Stephanie for a review of our financial results. Stephanie?