Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39292

Butterfly Network, Inc.

(Exact name of registrant as specified in its charter)


Delaware		84-4618156
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

1600 District Avenue Burlington, Massachusetts		01803
(Address of principal executive offices)		(Zip Code)

(781) 557-4800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	BFLY	The New York Stock Exchange
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share	BFLY WS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 18, 2024, the registrant had 186,147,353 shares of Class A common stock outstanding and 26,426,937 shares of Class B common stock outstanding.

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TABLE OF CONTENTS

		Page

	Cautionary Statement Regarding Forward-Looking Statements	3

Part I	Financial Information	4

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets (Unaudited)	4

	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

Part II	Other Information	28

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

Signatures		32

In this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company,” and “Butterfly” mean Butterfly Network, Inc. and our subsidiaries.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events or our future financial performance regarding, among other things, our plans, strategies, and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management team. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

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the success, cost, and timing of our product development activities;

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the potential attributes and benefits of our products and services;

●

our ability to obtain and maintain regulatory approval for our products, and any related restrictions and limitations of any authorized product;

●

our ability to identify, in-license, or acquire additional technology;

●

our ability to maintain our existing license, manufacturing, and supply agreements;

●

our ability to compete with other companies currently marketing or engaged in the development of ultrasound imaging devices, many of which have greater financial and marketing resources than us;

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the size and growth potential of the markets for our products and services, and the ability of each to serve those markets, either alone or in partnership with others;

●

our estimates regarding expenses, revenue, capital requirements, and needs for additional financing;

●

our ability to raise financing in the future; and

●

our financial performance.

These statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends,” similar expressions or phrases, or the negative of those expressions or phrases. The forward-looking statements are based on projections prepared by, and are the responsibility of, our management. Although we believe that our plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions relating to, among other things:

●

our growth depends on our ability to attract and retain customers;

●

our business could be harmed if we fail to manage our growth effectively;

●

our projections are subject to risks, assumptions, estimates, and uncertainties;

●

our business is subject to a variety of U.S. and foreign laws, which are subject to change and could adversely affect our business;

●

the pricing of our products and services, and reimbursement for medical procedures conducted using our products and services;

●

changes in applicable laws or regulations;

●

failure to protect or enforce our intellectual property rights could harm our business, results of operations, and financial condition;

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the ability to maintain the listing of our Class A common stock on the New York Stock Exchange; and

●

economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition, and results of operations.

These and other risks and uncertainties are described in greater detail under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), in Item 1A of Part II of this Quarterly Report on Form 10-Q, and in other filings that we make with the Securities and Exchange Commission (“SEC”). The risks described under the caption “Risk Factors” are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

BUTTERFLY NETWORK, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	102,051	$	134,437
Accounts receivable, net		16,113		13,418
Inventories		74,175		73,022
Current portion of vendor advances		4,302		2,815
Prepaid expenses and other current assets		7,836		7,571
Total current assets		204,477		231,263
Property and equipment, net		22,967		25,321
Intangible assets, net		9,617		10,317
Non-current portion of vendor advances		15,185		15,276
Operating lease assets		14,970		15,675
Other non-current assets		5,851		6,422
Total assets	$	273,067	$	304,274
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	4,514	$	5,090
Deferred revenue, current		14,751		15,625
Accrued purchase commitments, current		131		131
Accrued expenses and other current liabilities		21,386		23,425
Total current liabilities		40,782		44,271
Deferred revenue, non-current		7,360		7,394
Warrant liabilities		413		826
Operating lease liabilities		21,652		22,835
Other non-current liabilities		8,580		8,895
Total liabilities		78,787		84,221
Commitments and contingencies (Note 12)
Stockholders’ equity:
Class A common stock $.0001 par value; 600,000,000 shares authorized at June 30, 2024 and December 31, 2023; 186,037,697 and 181,221,794 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		19		18
Class B common stock $.0001 par value; 27,000,000 shares authorized at June 30, 2024 and December 31, 2023; 26,426,937 shares issued and outstanding at June 30, 2024 and December 31, 2023		3		3
Additional paid-in capital		961,363		949,670
Accumulated deficit		(767,105)		(729,638)
Total stockholders’ equity		194,280		220,053
Total liabilities and stockholders’ equity	$	273,067	$	304,274

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUTTERFLY NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Revenue:
Product	$	14,648	$	12,273	$	25,939	$	21,121
Software and other services		6,839		6,214		13,204		12,842
Total revenue		21,487		18,487		39,143		33,963
Cost of revenue:
Product		6,579		5,487		11,674		9,836
Software and other services		2,322		2,078		4,606		4,116
Total cost of revenue		8,901		7,565		16,280		13,952
Gross profit		12,586		10,922		22,863		20,011
Operating expenses:
Research and development		9,411		15,626		20,131		32,277
Sales and marketing		9,728		9,728		20,106		19,761
General and administrative		10,073		14,660		20,514		25,678
Other		606		2,172		1,964		8,605
Total operating expenses		29,818		42,186		62,715		86,321
Loss from operations		(17,232)		(31,264)		(39,852)		(66,310)
Interest income		1,291		2,027		2,802		3,811
Interest expense		(309)		—		(609)		—
Change in fair value of warrant liabilities		620		620		413		413
Other expense, net		(59)		(60)		(201)		(44)
Loss before provision for income taxes		(15,689)		(28,677)		(37,447)		(62,130)
Provision (benefit) for income taxes		17		(6)		20		81
Net loss and comprehensive loss	$	(15,706)	$	(28,671)	$	(37,467)	$	(62,211)
Net loss per common share attributable to Class A and B common stockholders, basic and diluted	$	(0.07)	$	(0.14)	$	(0.18)	$	(0.31)
Weighted-average shares used to compute net loss per share attributable to Class A and B common stockholders, basic and diluted		211,663,554		204,895,341		210,268,501		203,737,044

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUTTERFLY NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)


Three months ended June 30, 2024

	Class A			Class B
	Common			Common			Additional				Total
	Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
March 31, 2024	184,214,377	$	18	26,426,937	$	3	$	955,382	$	(751,399)	$	204,004
Net loss	—		—	—		—		—		(15,706)		(15,706)
Common stock issued upon vesting of restricted stock units	1,823,320		1	—		—		—		—		1
Stock-based compensation expense	—		—	—		—		5,981		—		5,981
June 30, 2024	186,037,697	$	19	26,426,937	$	3	$	961,363	$	(767,105)	$	194,280


Three months ended June 30, 2023

	Class A			Class B
	Common			Common			Additional				Total
	Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
March 31, 2023	177,368,499	$	18	26,426,937	$	3	$	925,604	$	(629,478)	$	296,147
Net loss	—		—	—		—		—		(28,671)		(28,671)
Common stock issued upon exercise of stock options	124,660		—	—		—		136		—		136
Common stock issued upon vesting of restricted stock units	2,227,759		—	—		—		—		—		—
Stock-based compensation expense	—		—	—		—		10,093		—		10,093
June 30, 2023	179,720,918	$	18	26,426,937	$	3	$	935,833	$	(658,149)	$	277,705


Six months ended June 30, 2024

	Class A			Class B
	Common			Common			Additional				Total
	Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
December 31, 2023	181,221,794	$	18	26,426,937	$	3	$	949,670	$	(729,638)	$	220,053
Net loss	—		—	—		—		—		(37,467)		(37,467)
Common stock issued upon vesting of restricted stock units	4,815,903		1	—		—		—		—		1
Stock-based compensation expense	—		—	—		—		11,693		—		11,693
June 30, 2024	186,037,697	$	19	26,426,937	$	3	$	961,363	$	(767,105)	$	194,280


Six months ended June 30, 2023

	Class A			Class B
	Common			Common			Additional				Total
	Stock			Stock			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
December 31, 2022	174,459,956	$	17	26,426,937	$	3	$	921,278	$	(595,938)	$	325,360
Net loss	—		—	—		—		—		(62,211)		(62,211)
Common stock issued upon exercise of stock options	124,660		—	—		—		136		—		136
Common stock issued upon vesting of restricted stock units	5,136,302		1	—		—		—		—		1
Stock-based compensation expense	—		—	—		—		14,419		—		14,419
June 30, 2023	179,720,918	$	18	26,426,937	$	3	$	935,833	$	(658,149)	$	277,705

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUTTERFLY NETWORK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six months ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(37,467)	$	(62,211)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and impairments		5,217		4,305
Non-cash interest expense		607		—
Write-down of inventories		(81)		—
Stock-based compensation expense		11,383		14,109
Change in fair value of warrant liabilities		(413)		(413)
Other		462		(651)
Changes in operating assets and liabilities:
Accounts receivable		(3,165)		(3,293)
Inventories		(1,072)		(26,855)
Prepaid expenses and other assets		165		(615)
Vendor advances		(1,396)		9,534
Accounts payable		(587)		1,390
Deferred revenue		(908)		(1,062)
Accrued purchase commitments		—		(1,615)
Change in operating lease assets and liabilities		(348)		196
Accrued expenses and other liabilities		(3,064)		(2,557)
Net cash used in operating activities		(30,667)		(69,738)

Cash flows from investing activities:
Purchases of marketable securities		—		(297)
Sales of marketable securities		—		76,484
Purchases of property, equipment, and intangible assets, including capitalized software		(1,872)		(2,223)
Sales of property and equipment		35		10
Net cash (used in) provided by investing activities		(1,837)		73,974

Cash flows from financing activities:
Proceeds from exercise of stock options and warrants		—		136
Net cash provided by financing activities		—		136
Net (decrease) increase in cash, cash equivalents, and restricted cash		(32,504)		4,372
Cash, cash equivalents, and restricted cash, beginning of period		138,650		166,828
Cash, cash equivalents, and restricted cash, end of period	$	106,146	$	171,200

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BUTTERFLY NETWORK, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Description of Business

The Company is an innovative digital health business transforming care with hand-held, whole-body ultrasound. Powered by its proprietary Ultrasound-on-Chip™ technology, the Company’s solution enables the acquisition of imaging information from an affordable, powerful device that fits in a healthcare professional’s pocket with a combination of cloud-connected software and hardware technology that is easily accessed through a mobile app.

The Company was incorporated in Delaware on February 4, 2020 as Longview Acquisition Corp. (“Longview”). Following a business combination between the Company and BFLY Operations, Inc. (formerly Butterfly Network, Inc.) on February 12, 2021 (the “Business Combination”), the Company’s legal name became Butterfly Network, Inc.

The Company operates wholly-owned subsidiaries in Australia, Germany, the Netherlands, Taiwan, and the United Kingdom.

The Company has incurred net losses and negative cash flows from operating activities in each year since inception, and we expect to continue to incur losses for at least the next few years. The Company expects its cash and cash equivalents of $102.1 million at June 30, 2024 will be sufficient to fund operations and capital requirements for at least the next twelve months from the date the condensed consolidated financial statements are issued. We may need to satisfy our future cash needs through the sale of equity securities, debt financings, working capital lines of credit or partnerships, or a combination of one or more of these sources.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the accounting disclosure rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the 2023 Annual Report on Form 10-K. All intercompany balances and transactions are eliminated upon consolidation.

The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited consolidated financial statements as of that date but does not include all disclosures, including certain notes, required by U.S. GAAP for annual reporting.

In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal and recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods. The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2024, or any other period.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. As of June 30, 2024, substantially all of the Company’s cash and cash equivalents were invested in money market accounts with one financial institution. The Company also maintains balances in various operating accounts above federally insured limits. The Company has not experienced any significant losses on such accounts and does not believe it is exposed to any significant credit risk of its cash and cash equivalents.

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As of June 30, 2024 and December 31, 2023, no customer accounted for more than 10% of the Company’s accounts receivable. No customer accounted for more than 10% of the Company’s total revenue for the three and six months ended June 30, 2024 and 2023.

Segment Reporting

The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, reviews the Company’s financial information on a consolidated basis for purposes of allocating resources and evaluating its financial performance. Accordingly, the Company has determined that it operates as a single reportable segment. Substantially all of the Company’s long-lived assets are located in the United States. Since the Company operates as a single reporting segment, all required segment reporting disclosures can be found in the condensed consolidated financial statements.

Use of Estimates

The Company makes estimates and assumptions about future events that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. Future events and their effects cannot be determined with certainty. On an ongoing basis, management evaluates these estimates and assumptions.

The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions about future events. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s use of estimates as described in the consolidated financial statements for the year ended December 31, 2023.

Operating Expenses – Other

The Company classifies certain operating expenses that are not representative of the Company’s ongoing operations as other on the condensed consolidated statements of operations and comprehensive loss. These include costs related to the Company’s reductions in force, litigation, and legal settlements. The following table summarizes the types of expenses classified as other in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Employment-related expenses	$	26	$	261	$	(30)	$	3,879
Legal-related expenses		580		1,911		1,994		4,726
Total other	$	606	$	2,172	$	1,964	$	8,605

Recent Accounting Pronouncements Issued but Not Yet Adopted

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which introduced new guidance on disclosures for reportable segments and significant segment expenses, including for entities with a single reportable segment. This guidance is effective for the Company for annual reporting periods beginning January 1, 2024 and interim periods beginning January 1, 2025. The Company is currently evaluating the impact that the adoption of this pronouncement will have on the Company’s consolidated financial statements and disclosures.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which introduced new guidance on disclosures for income taxes, including enhancements to the rate reconciliation and income taxes paid disclosures. This guidance is effective for the Company for annual reporting periods beginning January 1, 2025. The Company is currently evaluating the impact that the adoption of this pronouncement will have on the Company’s consolidated financial statements and disclosures.

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Note 3. Revenue Recognition

Disaggregation of Revenue

The Company disaggregates revenue from contracts with customers by product type and by geographical market. The Company believes that these categories aggregate the payor types by nature, amount, timing, and uncertainty of its revenue streams. The following table summarizes the Company’s disaggregated revenue (in thousands):


	Pattern of	Three months ended June 30,				Six months ended June 30,
	Recognition	2024		2023		2024		2023
By product type:
Devices and accessories	Point-in-time	$	14,648	$	12,273	$	25,939	$	21,121
Software and other services	Over time		6,839		6,214		13,204		12,842
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

By geographical market:
United States		$	17,039	$	15,491	$	30,775	$	27,496
International			4,448		2,996		8,368		6,467
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

Contract Balances

Contract balances represent amounts presented in the condensed consolidated balance sheets when the Company has either transferred goods or services to the customer or the customer has paid consideration to the Company under the contract. These contract balances include trade accounts receivable and deferred revenue. The Company recognizes a receivable when it has an unconditional right to payment, and payment terms are typically 30 days for sales on credit of product, software, and other services. The allowance for doubtful accounts was $2.2 million and $1.8 million as of June 30, 2024 and December 31, 2023, respectively. For the three months ended June 30, 2024 and 2023, the Company recognized $6.1 million and $6.3 million, respectively, of revenue that was included in the deferred revenue balance at the beginning of the period. For the six months ended June 30, 2024 and 2023, the Company recognized $11.1 million and $11.3 million, respectively, of revenue that was included in the deferred revenue balance at the beginning of the period.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2024 and December 31, 2023, the Company had $31.7 million and $32.0 million, respectively, of remaining performance obligations. As of June 30, 2024, the Company expects to recognize 60% of its remaining performance obligations as revenue in the next twelve months and an additional 40% thereafter.

Note 4. Fair Value of Financial Instruments

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

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Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

Level 2 — Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

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Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no assets or liabilities valued with Level 3 inputs.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short-term or on-demand nature of these instruments.

There were no transfers between fair value measurement levels during the periods ended June 30, 2024 and December 31, 2023.

The Company’s outstanding warrants include publicly traded warrants (the “Public Warrants”) which were issued as one-third of a warrant per unit during Longview’s initial public offering and warrants sold in a private placement to Longview’s sponsor (the “Private Warrants”). As of June 30, 2024, there were an aggregate of 13,799,357 and 6,853,333 outstanding Public Warrants and Private Warrants, respectively. Each whole warrant entitles the registered holder to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment per the warrant agreements. The warrants will expire on February 12, 2026 or earlier upon redemption or liquidation. The Company recognizes the change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2024 and 2023, the number of exercises and the amount reclassified into equity upon the exercise of the Public Warrants and Private Warrants were not significant.

The Company measures its Public Warrants using Level 1 fair value inputs based on quoted prices in active markets for the Public Warrants. Because any transfer of Private Warrants from the initial holder of the Private Warrants would result in the Private Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Private Warrant is the same as that of a Public Warrant. Accordingly, the Company measures its Private Warrants using Level 2 fair value inputs based on quoted prices in active markets for the Public Warrants.

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy (in thousands):


			Fair Value Measurement Level
	Total		Level 1		Level 2		Level 3
June 30, 2024:
Warrants:
Public Warrants	$	276	$	276	$	—	$	—
Private Warrants		137		—		137		—
Total liabilities at fair value on a recurring basis	$	413	$	276	$	137	$	—

December 31, 2023:
Warrants:
Public Warrants	$	552	$	552	$	—	$	—
Private Warrants		274		—		274		—
Total liabilities at fair value on a recurring basis	$	826	$	552	$	274	$	—

Note 5. Inventories

The following table summarizes the Company’s inventories (in thousands):


	June 30,		December 31,
	2024		2023
Raw materials	$	49,572	$	49,366
Work-in-progress		2,951		3,384
Finished goods		21,652		20,272
Total inventories	$	74,175	$	73,022

Work-in-progress represents inventory items in intermediate stages of production by third-party manufacturers. For the three and six months ended June 30, 2024 and 2023, net realizable value inventory adjustments and excess and obsolete

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inventory charges were not significant and were recognized in product cost of revenue. See Note 12 “Commitments and Contingencies” for additional information regarding the Company’s inventory supply arrangements.

Note 6. Property and Equipment, Net

The following table summarizes the Company’s property and equipment, net (in thousands):


	June 30,		December 31,
	2024		2023
Property and equipment, gross	$	45,486	$	43,516
Less: accumulated depreciation and amortization		(22,519)		(18,195)
Property and equipment, net	$	22,967	$	25,321

Note 7. Restricted Cash

The following table reconciles cash, cash equivalents, and restricted cash from the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):


	June 30,
	2024		2023
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	102,051	$	166,806
Restricted cash included within prepaid expenses and other current assets		80		380
Restricted cash included within other non-current assets		4,015		4,014
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	106,146	$	171,200

Restricted cash included within prepaid expenses and other current assets is restricted by an agreement with the Bill & Melinda Gates Foundation (“Gates Foundation”). The restriction on these funds lapses as the Company fulfills its obligations in the agreement. Restricted cash included within other non-current assets is held as collateral to secure a letter of credit for one of our office leases and is expected to be maintained as a security deposit throughout the duration of the lease.

Note 8. Accrued Expenses and Other Current Liabilities

The following table summarizes the Company’s accrued expenses and other current liabilities (in thousands):


	June 30,		December 31,
	2024		2023
Employee compensation	$	5,571	$	9,442
Customer deposits		1,767		1,613
Accrued warranty liability		382		297
Non-income tax		2,074		1,197
Professional fees		3,146		2,481
Current portion of operating lease liabilities		2,322		2,192
Other		6,124		6,203
Total accrued expenses and other current liabilities	$	21,386	$	23,425

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The following table summarizes warranty expense activity (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Balance, beginning of period	$	644	$	794	$	697	$	873
Warranty provision charged to operations		387		(7)		483		(51)
Warranty claims		(219)		—		(368)		(35)
Balance, end of period	$	812	$	787	$	812	$	787

The Company classifies its accrued warranty liability based on the timing of expected warranty activity. The future costs of expected activity greater than one year are recorded within other non-current liabilities on the condensed consolidated balance sheets.

Note 9. Stock-Based Compensation

Equity Incentive Plans

For the three and six months ended June 30, 2024, there were no significant changes to the Company’s 2012 Employee, Director and Consultant Equity Incentive Plan, as amended, (the “2012 Plan”) and the Company’s Amended and Restated 2020 Equity Incentive Plan (the “2020 Plan”). On January 1, 2024, pursuant to the terms of the 2020 Plan, the number of shares reserved for issuance was increased automatically by 4% of the number of outstanding shares of common stock as of January 1, 2024.

Stock Option Activity

The following table summarizes the changes in the Company’s outstanding stock options:


		Number of
		Options
Outstanding at December 31, 2023		7,439,187
Granted		—
Exercised		—
Forfeited		(416,448)
Outstanding at June 30, 2024		7,022,739

Generally, each award vests based on continued service per the award agreement. The grant date fair value of the award is recognized as stock-based compensation expense over the requisite service period. The grant date fair value was determined using similar methods and assumptions as those previously disclosed by the Company.

Restricted Stock Unit Activity

The following table summarizes the changes in the Company’s outstanding restricted stock units (“RSUs”):


		Number of
		RSUs
Outstanding at December 31, 2023		15,569,983
Granted		11,713,683
Vested		(4,815,903)
Forfeited		(523,363)
Outstanding at June 30, 2024		21,944,400

Generally, each award vests based on continued service per the award agreement. The grant date fair value of the award is recognized as stock-based compensation expense over the requisite service period. The grant date fair value was determined based on the fair market value of the Company’s Class A common stock on the grant date.

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Included in the table above are market-based RSUs granted in 2023 that include a service condition. The market-based conditions for these awards are objective metrics related to the Company’s stock price defined in the award agreement. The service condition for these awards is satisfied by providing service to the Company through the achievement date of the market-based conditions. The grant date fair value of the awards is recognized as stock-based compensation expense over the derived service period. The grant date fair value and derived service period were determined by using a Monte Carlo simulation with similar risk-free interest rate, expected dividend yield, and expected volatility assumptions as those used by the Company for determining the grant date fair value of its stock options.

Employee Stock Purchase Plan

The Company’s 2024 Employee Stock Purchase Plan (the “ESPP”) was approved by the Board and the Company’s stockholders in the second quarter of 2024, with 4.2 million shares of common stock initially reserved and available for issuance. Under the ESPP, each eligible employee is granted an option to purchase shares of common stock, with the purchase price paid through payroll deductions, subject to the plan’s limitations on the number and value of shares purchasable. Each offering period under the ESPP has an expected duration of 24 months, divided into four six-month purchase periods, with purchases occurring on the last business day in June and December. The purchase price per share is equal to the lower of 85% of the closing market price on the first day of the offering period, or 85% of the closing market price on the applicable purchase date. Proceeds received from the issuance of shares are credited to stockholders’ equity in the period that the shares are issued. As of June 30, 2024, no options have been granted, and no shares of common stock have been issued under the ESPP.

Stock-Based Compensation Expense

The following table summarizes the Company’s stock-based compensation expense (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Research and development	$	1,943	$	3,197		3,962		5,391
Sales and marketing		1,155		1,316		2,262		1,937
General and administrative		2,760		5,411		5,159		6,781
Total stock-based compensation expense	$	5,858	$	9,924	$	11,383	$	14,109

Prior period stock-based compensation expense that was classified as cost of revenue is now included in research and development due to the amount being insignificant.

Note 10. Net Loss Per Share

We compute net loss per share of Class A and Class B common stock using the two-class method. Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of each class of the Company’s common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of the Company’s common stock, including those presented in the table below, to the extent dilutive. Basic and diluted net loss per share were the same for each period presented as the inclusion of all potential shares of the Company’s common stock outstanding would have been anti-dilutive.

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As the Company uses the two-class method required for companies with multiple classes of common stock, the following tables present the calculation of basic and diluted net loss per share for each class of the Company’s common stock outstanding (in thousands, except share and per share amounts):


Three months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(13,745)	$	(1,961)	$	(15,706)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(13,745)	$	(1,961)	$	(15,706)
Denominator:
Weighted-average common shares outstanding		185,236,617		26,426,937		211,663,554
Denominator for basic and diluted net loss per share – weighted-average common stock		185,236,617		26,426,937		211,663,554
Basic and diluted net loss per share	$	(0.07)	$	(0.07)	$	(0.07)


Three months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(24,973)	$	(3,698)	$	(28,671)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(24,973)	$	(3,698)	$	(28,671)
Denominator:
Weighted-average common shares outstanding		178,468,404		26,426,937		204,895,341
Denominator for basic and diluted net loss per share – weighted-average common stock		178,468,404		26,426,937		204,895,341
Basic and diluted net loss per share	$	(0.14)	$	(0.14)	$	(0.14)


Six months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(32,758)	$	(4,709)	$	(37,467)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(32,758)	$	(4,709)	$	(37,467)
Denominator:
Weighted-average common shares outstanding		183,841,564		26,426,937		210,268,501
Denominator for basic and diluted net loss per share – weighted-average common stock		183,841,564		26,426,937		210,268,501
Basic and diluted net loss per share	$	(0.18)	$	(0.18)	$	(0.18)

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Six months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(54,142)	$	(8,069)	$	(62,211)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(54,142)	$	(8,069)	$	(62,211)
Denominator:
Weighted-average common shares outstanding		177,310,107		26,426,937		203,737,044
Denominator for basic and diluted net loss per share – weighted-average common stock		177,310,107		26,426,937		203,737,044
Basic and diluted net loss per share	$	(0.31)	$	(0.31)	$	(0.31)

For the periods presented above, the net loss per share amounts are the same for Class A and Class B common stock because the holders of each class are entitled to equal per share dividends or distributions in liquidation in accordance with the Certificate of Incorporation. The undistributed earnings for each year are allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings for the year had been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.

The following table summarizes the Company’s anti-dilutive common equivalent shares:


	June 30,
	2024	2023
Outstanding options to purchase common stock	7,022,739	9,262,296
Outstanding restricted stock units	21,944,400	17,738,585
Outstanding warrants	20,652,690	20,652,690
Total anti-dilutive common equivalent shares	49,619,829	47,653,571

Note 11. 401(k) Retirement Plan

The Company sponsors a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. For the three months ended June 30, 2024 and 2023, expenses for matching 401(k) contributions were $0.2 million and $0.2 million, respectively. For the six months ended June 30, 2024 and 2023, expenses for matching 401(k) contributions were $0.3 million and $0.5 million, respectively.

Note 12. Commitments and Contingencies

Commitments

Leases:

The Company primarily enters into leases for office space that are classified as operating leases. For the three months ended June 30, 2024 and 2023, total lease cost was $0.7 million and $1.0 million, respectively. For the six months ended June 30, 2024 and 2023, total lease cost was $1.5 million and $2.0 million, respectively. Total lease cost was primarily composed of operating lease costs.

Purchase Commitments:

The Company enters into inventory purchase commitments with third-party manufacturers in the ordinary course of business, including a non-cancellable inventory supply agreement with a certain third-party manufacturing vendor. The provisions of the agreement allowed the Company, once it reached a certain cumulative purchase threshold in the fourth quarter of 2021, to pay for a portion of the subsequent inventory purchases using an advance previously paid to the vendor. As of June 30, 2024, the aggregate amount of minimum inventory purchase commitments is $10.3 million, and the Company has a vendor advance asset of $1.8 million, net of write-downs, and an accrued purchase commitment liability

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of $0.1 million related to the agreement. The portion of the balances that is expected to be utilized in the next 12 months is included in current assets and current liabilities in the accompanying condensed consolidated balance sheets.

The Company applied the guidance in Topic 330, Inventory to assess the purchase commitment and related loss, using such factors as Company-specific forecasts which are reliant on the Company’s limited sales history, agreement-specific provisions, macroeconomic factors, and market and industry trends. For the three and six months ended June 30, 2024 and 2023, the Company did not recognize any additions to the accrued purchase commitment liability, or any related losses, based on its purchase commitment assessment as there were no significant changes to the assessment factors.

The Company reviews its inventory on hand, including inventory acquired under the purchase commitments, for excess and obsolescence (“E&O”) on a quarterly basis. Any E&O inventory acquired that was previously accounted for as a purchase commitment liability accrual or vendor advance write down is recorded at zero value. During the three and six months ended June 30, 2024, the Company did not acquire a significant amount of such E&O inventory. During the three months ended June 30, 2023, the Company did not acquire a significant amount of such E&O inventory. During the six months ended June 30, 2023, the Company utilized $1.6 million of the accrued purchase commitment liability and $4.5 million of the vendor advance that was previously written down to acquire such E&O inventory.

Contingencies

The Company is involved in litigation and legal matters from time to time, which have arisen in the normal course of business. Although the ultimate results of these matters are not currently determinable, management does not expect that they will have a material effect on the Company’s condensed consolidated balance sheets, statements of operations and comprehensive loss, or statements of cash flows. The Company accrues an estimated liability for legal contingencies when the Company considers a potential loss probable and can reasonably estimate the amount of the potential loss.

On February 16, 2022, a putative class action lawsuit, styled Rose v. Butterfly Network, Inc., et al. was filed in the United States District Court for the District of New Jersey. The claims are against the Company and certain of its directors and previous management as well as Longview and member of its then board of directors, alleging that the defendants made false and misleading statements and/or omissions about its post-Business Combination business and financial prospects. The alleged class consists of all persons or entities who purchased or otherwise acquired the Company’s stock between January 12, 2021 and November 15, 2021, persons who exchanged Longview shares for the Company’s common stock, and persons who purchased Longview stock pursuant, or traceable to, the Proxy/Registration Statement filed with the SEC on November 27, 2020 or any amendment thereto. The Company intends to vigorously defend against this action. The lawsuit seeks unspecified damages, together with interest thereon, as well as the costs and expenses of litigation. There is no assurance that the Company will be successful in the defense of the litigation or that insurance will be available or adequate to fund any potential settlement or judgment or the litigation costs of the action. The Company is unable to predict the outcome or reasonably estimate a range of possible loss at this time.

On June 21, 2022, a stockholder derivative action, styled Koenig v. Todd M. Fruchterman, et al. was filed in the United States District Court for the District of Delaware against the Company’s board of directors and the Company as nominal defendant. On November 28, 2023, a stockholder derivative action, styled Bhavsar v. Todd M. Fruchterman, et al. was filed in the United States District Court for the District of Delaware against the board of directors and the Company as nominal defendant. Both these actions allege violation of Section 14(a) of the Exchange Act, as amended, and Rule 14a-9 promulgated thereunder, and claims for breach of fiduciary duty, contribution and indemnification, aiding and abetting, and gross mismanagement. The lawsuits are premised upon allegedly inadequate internal controls and purportedly misleading representations regarding the Company’s financial condition, business prospects, and the Company’s November 2021 earnings announcement. The Company intends to vigorously defend against these actions. The lawsuit seeks unspecified damages, disgorgement, and restitution, together with interest thereon, as well as the costs and expenses of litigation. There is no assurance that the Company will be successful in the defense of the litigation or that insurance will be available or adequate to fund any potential settlement or judgment or the litigation costs of the action. The Company is unable to predict the outcome or reasonably estimate a range of possible loss at this time.

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Note 13. Subsequent Events

On July 1, 2024, the Company entered into an agreement with a third-party global technology and business transformation partner to optimize and lower the cost of certain non-specialized technical functions. With this agreement, the Company will have tightly knit teams located across the globe and increased access to talent. As part of the transition into this new partnership, a portion of the Company's workforce will be in lower-cost geographies, resulting in estimated annual cost savings of approximately $10 million. The Company estimates it will incur approximately $2.6 million of transition costs and $0.9 million of severance for impacted employees that continue providing transition services to the Company. These costs will be recognized in the second half of 2024, but the cash payment will be deferred and paid ratably starting in July 2025 through the end of 2028.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto contained in our 2023 Annual Report on Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described under the caption “Risk Factors” in Item 1A of Part I of our 2023 Annual Report on Form 10-K and in Item 1A of Part II of this Quarterly Report on Form 10-Q as filed with the SEC. Actual results may differ materially from those contained in any forward-looking statements.

Overview

We are an innovative digital health business transforming care through a unique combination of portable, semiconductor-based ultrasound technology, intuitive software, services and educational offerings that can make medical imaging more accessible than ever before. Butterfly’s solution enables the practical application of ultrasound information into the clinical workflow through affordable hardware that fits in a healthcare professional’s pocket and is paired with cloud-connected software that is easily accessed through a mobile application.

Butterfly iQ+ and iQ3 are ultrasound devices that can perform whole-body imaging in a single handheld probe using semiconductor technology. Our Ultrasound-on-Chip™ makes ultrasound more accessible outside of large healthcare institutions, while our software is intended to make the product easy to use, fully integrated with the clinical workflow, and accessible on a user’s smartphone, tablet, and almost any hospital computer system connected to the Internet. We aim to enable the delivery of imaging information anywhere at point-of-care to drive earlier detection throughout the body and remote management of health conditions. We market and sell the Butterfly system, which includes probes, related accessories, and software subscriptions, to healthcare systems, physicians, and healthcare providers through a direct sales force, distributors, and our eCommerce channel.

Since 2022, we have taken significant actions to reduce our cost of operations and extend our cash runway and have reduced our annual cash requirements by approximately $180 million, to less than $50 million annually. As such, we conservatively expect our cash to last into 2027. As we look forward, we expect to continue to invest in our business in order to grow revenue. Before we reach 2027, we expect to raise capital in order to reach profitability. We expect to first seek nondilutive capital in the form of grants or debt and then potentially in the form of equity securities.

Key Performance Measures

We review the key performance measures discussed below to evaluate the business and measure performance, identify trends, formulate plans, and make strategic decisions. Our key performance measures may fluctuate over time as the adoption of our devices increases, which may shift the revenue mix more toward software and other services. The quarterly metrics may be impacted by the timing of device sales.

Units fulfilled

We define units fulfilled as the number of devices whereby control is transferred to a customer. We do not adjust this measure for returns as our volume of returns has historically been low. We view units fulfilled as a key indicator of the growth of our business. We believe that this metric is useful to investors because it presents our core growth and the performance of our business period over period.

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Units fulfilled increased by 192 units, or 3.6%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was led by international where volume more than doubled from the onboarding of several new distribution territories. In the U.S., volume was lower due to two large medical school deployments that occurred in the prior year and did not repeat in 2024, partially offset by higher volume from the launch of the iQ3. Excluding the prior-year larger medical school deployments, volume increased 37%.

Software and other services mix

We define software and other services mix as a percentage of our total revenue recognized in a reporting period that is based on software subscriptions and other related services, consisting primarily of our software as a service (“SaaS”) offering. We view software and other services mix as a key indicator of the profitability of our business, and thus we believe that this measure is useful to investors.

Software and other services mix decreased by 1.8 percentage points, to 31.8% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Although our software and other services revenue increased in the

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current year, our software and other services mix decreased due to the even larger increase in product revenue realized in the current year.

Description of Certain Components of Financial Data

Revenue

Revenue consists of revenue from the sale of products, such as medical devices and accessories, and the sale of software and related services, classified as software and other services revenue on our condensed consolidated statements of operations and comprehensive loss, which are SaaS subscriptions and product support and maintenance (“Support”). SaaS subscriptions include licenses for teams and individuals as well as enterprise-level subscriptions. For sales of products, revenue is recognized at a point in time upon transfer of control to the customer. SaaS subscriptions and Support are generally related to stand-ready obligations and are recognized ratably over time.

Over time, as adoption of our devices increases through further market penetration and as practitioners in the Butterfly network continue to use our devices, we expect our annual revenue mix to shift more toward software and other services. The quarterly revenue mix may be impacted by the timing of device sales. In 2024, due to the launch of our next generation iQ3 device, we are expecting our software and other services as a percentage of total revenue to remain flat or decrease.

To date, we have invested heavily in building out our direct salesforce, with the ultimate goal of growing adoption at large-scale healthcare systems. As we expand our healthcare system software offerings and develop relationships with larger healthcare systems, we continue to expect a higher proportion of our sales in healthcare systems compared to eCommerce.

Cost of revenue

Cost of product revenue consists of product costs including manufacturing costs, personnel costs and benefits, inbound freight, packaging, warranty replacement costs, payment processing fees, and inventory obsolescence and write-offs. We expect our cost of product revenue to fluctuate over time due to the level of units fulfilled in any given period and fluctuate as a percentage of product revenue over time as our focus on operational efficiencies in our supply chain may be offset by increased prices of certain inventory components.

Cost of software and other services revenue consists of personnel costs, cloud hosting costs, and payment processing fees. Because the costs and associated expenses to deliver our SaaS offerings are less than the costs and associated expenses of manufacturing and selling our device, we anticipate an improvement in profitability and margin expansion over time as our revenue mix shifts increasingly towards software and other services. We plan to continue to invest additional resources to expand and further develop our SaaS and other service offerings.

Research and development

Research and development expenses primarily consist of personnel costs and benefits, facilities-related expenses and depreciation, fabrication services, and software costs. Most of our research and development expenses are related to developing new products and services that have not reached the point of commercialization and improving our products and services that have been commercialized. Fabrication services include certain third-party engineering costs, product testing, and test boards. Research and development expenses are expensed as incurred. We expect to continue to make substantial investments in our product and software development, clinical, and regulatory capabilities.

Sales and marketing

Sales and marketing expenses primarily consist of personnel costs and benefits, advertising, conferences and events, facilities-related expenses, and software costs. We expect to continue to make substantial investments in our sales capabilities.

General and administrative

General and administrative expenses primarily consist of personnel costs and benefits, insurance, patent fees, software costs, facilities-related expenses, and outside services. Outside services consist of professional services, legal fees, and other professional fees.

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Other

Operating expenses classified as other are expenses which we do not consider representative of our ongoing operations. These other expenses primarily consist of employee severance and benefits costs related to our reductions in force, litigation costs, and legal settlements.

Results of Operations

We operate as a single reportable segment to reflect the way our CODM reviews and assesses the performance of the business. The accounting policies are described in Note 2 “Summary of Significant Accounting Policies” in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.


	Three months ended June 30,									Six months ended June 30,
	2024				2023				2024					2023
			% of				% of					% of				% of
(in thousands)	Dollars		revenue		Dollars		revenue		Dollars			revenue		Dollars		revenue
Revenue:
Product	$	14,648	68.2	%	$	12,273	66.4	%	$		25,939	66.3	%	$	21,121	62.2	%
Software and other services		6,839	31.8			6,214	33.6				13,204	33.7			12,842	37.8
Total revenue		21,487	100.0			18,487	100.0				39,143	100.0			33,963	100.0
Cost of revenue:
Product		6,579	30.6			5,487	29.7				11,674	29.8			9,836	29.0
Software and other services		2,322	10.8			2,078	11.2				4,606	11.8			4,116	12.1
Total cost of revenue		8,901	41.4			7,565	40.9				16,280	41.6			13,952	41.1
Gross profit		12,586	58.6			10,922	59.1				22,863	58.4			20,011	58.9
Operating expenses:
Research and development		9,411	43.8			15,626	84.5				20,131	51.4			32,277	95.0
Sales and marketing		9,728	45.3			9,728	52.6				20,106	51.4			19,761	58.2
General and administrative		10,073	46.9			14,660	79.3				20,514	52.4			25,678	75.6
Other		606	2.8			2,172	11.7				1,964	5.0			8,605	25.3
Total operating expenses		29,818	138.8			42,186	228.2				62,715	160.2			86,321	254.2
Loss from operations		(17,232)	(80.2)			(31,264)	(169.1)				(39,852)	(101.8)			(66,310)	(195.2)
Interest income		1,291	6.0			2,027	11.0				2,802	7.2			3,811	11.2
Interest expense		(309)	(1.4)			—	—				(609)	(1.6)			—	—
Change in fair value of warrant liabilities		620	2.9			620	3.4				413	1.1			413	1.2
Other expense, net		(59)	(0.3)			(60)	(0.3)				(201)	(0.5)			(44)	(0.1)
Loss before provision for income taxes		(15,689)	(73.0)			(28,677)	(155.1)				(37,447)	(95.7)			(62,130)	(182.9)
Provision (benefit) for income taxes		17	0.1			(6)	(0.0)				20	0.1			81	0.2
Net loss and comprehensive loss	$	(15,706)	(73.1)	%	$	(28,671)	(155.1)	%	$		(37,467)	(95.7)	%	$	(62,211)	(183.2)	%

Comparison of the three months ended June 30, 2024 and 2023

Revenue


	Three months ended June 30,
(in thousands)	2024		2023		Change		% Change
Product	$	14,648	$	12,273	$	2,375	19.4	%
Software and other services		6,839		6,214		625	10.1
	$	21,487	$	18,487	$	3,000	16.2	%

Product revenue increased by $2.4 million, or 19.4%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by higher product revenue across all sales channels, including the impact of our recently launched next-generation iQ3 probe’s higher selling price as well as an increase in

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iQ+ probe sales internationally. The increase in product revenue was negatively impacted by two large grant-based deployments to medical schools that occurred in the prior year and did not repeat in 2024. Excluding the prior-year large medical school deployments, product revenue increased 49.7% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Software and other services revenue increased by $0.6 million, or 10.1%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by higher enterprise software and implementation revenue and increased licensing revenue from our Butterfly Garden and Powered by Butterfly partnerships, partially offset by lower renewals of individual subscriptions. Enterprise as a percentage of software revenue increased by approximately 6 percentage points year-over-year.

Cost of revenue


	Three months ended June 30,
(in thousands)	2024			2023			Change		% Change
Product	$	6,579		$	5,487		$	1,092	19.9	%
Software and other services		2,322			2,078			244	11.7
	$	8,901		$	7,565		$	1,336	17.7	%
Percentage of revenue		41.4	%		40.9	%

Cost of product revenue increased by $1.1 million, or 19.9%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily driven by higher devices sales in the current year and a higher warranty accrual with the launch of our iQ3 probe. Cost of software and other services revenue increased by $0.2 million, or 11.7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This was largely due to increased software amortization of $0.2 million.

Research and development


	Three months ended June 30,
(in thousands)	2024			2023			Change		% Change
Research and development	$	9,411		$	15,626		$	(6,215)	(39.8)	%
Percentage of revenue		43.8	%		84.5	%

Research and development expenses decreased by $6.2 million, or 39.8%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was primarily driven by reductions of $4.8 million in personnel costs resulting from our reduction in force in July 2023 and $1.2 million in engineering, facilities, and software costs related to reduced headcount.

Sales and marketing


	Three months ended June 30,
(in thousands)	2024			2023			Change		% Change
Sales and marketing	$	9,728		$	9,728		$	—	—	%
Percentage of revenue		45.3	%		52.6	%

Sales and marketing expenses were not significantly different for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

General and administrative


	Three months ended June 30,
(in thousands)	2024			2023			Change		% Change
General and administrative	$	10,073		$	14,660		$	(4,587)	(31.3)	%
Percentage of revenue		46.9	%		79.3	%

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General and administrative expenses decreased by $4.6 million, or 31.3%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was primarily driven by reductions of $2.7 million in stock-based compensation expense, $1.1 million in other personnel costs resulting from our reduction in force in July 2023, and $0.9 million in professional service fees for legal and other administrative services.

Other


	Three months ended June 30,
(in thousands)	2024			2023			Change		% Change
Other	$	606		$	2,172		$	(1,566)	(72.1)	%
Percentage of revenue		2.8	%		11.7	%

Other decreased by $1.6 million, or 72.1%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was primarily driven by a reduction of $1.3 million in legal costs due to litigation and other legal matters and a reduction of $0.2 million of employee severance and benefits costs related to reductions in force that were incurred in the prior year. These costs are not representative of our ongoing operations.

Comparison of the six months ended June 30, 2024 and 2023

Revenue


	Six months ended June 30,
(in thousands)	2024		2023		Change		% Change
Product	$	25,939	$	21,121	$	4,818	22.8	%
Software and other services		13,204		12,842		362	2.8
	$	39,143	$	33,963	$	5,180	15.3	%

Product revenue increased by $4.8 million, or 22.8%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily driven by higher product revenue across nearly all sales channels, including the impact of our recently launched next-generation iQ3 probe’s higher selling price as well as an increase in iQ+ probe sales internationally. The increase in product revenue was negatively impacted by two large grant-based deployments to medical schools that occurred in the prior year and did not repeat in 2024. Excluding the prior-year large medical school deployments, product revenue increased 39.2% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Software and other services revenue increased by $0.4 million, or 2.8%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily driven by higher enterprise software and implementation revenue, higher revenue from medical school subscriptions, and increased licensing revenue from our Butterfly Garden and Powered by Butterfly partnerships, partially offset by lower renewals of individual subscriptions. Enterprise as a percentage of software revenue increased by approximately 8 percentage points year-over-year.

Cost of revenue


	Six months ended June 30,
(in thousands)	2024			2023			Change		% Change
Product	$	11,674		$	9,836		$	1,838	18.7	%
Software and other services		4,606			4,116			490	11.9
	$	16,280		$	13,952		$	2,328	16.7	%
Percentage of revenue		41.6	%		41.1	%

Cost of product revenue increased by $1.8 million, or 18.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily driven by higher devices sales in the current year. Cost of software and other services revenue increased by $0.5 million, or 11.9%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This was largely due to increased software amortization of $0.4 million.

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Research and development


	Six months ended June 30,
(in thousands)	2024			2023			Change		% Change
Research and development	$	20,131		$	32,277		$	(12,146)	(37.6)	%
Percentage of revenue		51.4	%		95.0	%

Research and development expenses decreased by $12.1 million, or 37.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was primarily driven by reductions of $9.2 million in personnel costs resulting from our reduction in force in July 2023; $2.4 million in engineering, facilities, and software costs related to reduced headcount; and $0.4 million in consulting fees resulting from continued execution of our plan announced to better align our commercial objectives and prioritization with our existing strengths and offerings.

Sales and marketing


	Six months ended June 30,
(in thousands)	2024			2023			Change		% Change
Sales and marketing	$	20,106		$	19,761		$	345	1.7	%
Percentage of revenue		51.4	%		58.2	%

Sales and marketing expenses increased by $0.3 million, or 1.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily driven by a $0.6 million increase in marketing expenses related to the recent launches of our iQ3 probe in February 2024 and iQ+ Bladder probe in May 2024. This was partially offset by a $0.2 million reduction in software expenses.

General and administrative


	Six months ended June 30,
(in thousands)	2024			2023			Change		% Change
General and administrative	$	20,514		$	25,678		$	(5,164)	(20.1)	%
Percentage of revenue		52.4	%		75.6	%

General and administrative expenses decreased by $5.2 million, or 20.1%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was primarily driven by reductions of $4.2 million in personnel costs resulting from our reduction in force in July 2023 and $0.8 million in professional service fees for legal services.

Other


	Six months ended June 30,
(in thousands)	2024			2023			Change		% Change
Other	$	1,964		$	8,605		$	(6,641)	(77.2)	%
Percentage of revenue		5.0	%		25.3	%

Other decreased by $6.6 million, or 77.2%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was primarily driven by the nonrecurrence of $3.9 million of employee severance and benefits costs related to our January 2023 reduction in force that were incurred in the prior year and a reduction of $2.7 million in legal costs due to litigation and other legal matters. These costs are not representative of our ongoing operations.

Liquidity and Capital Resources

Since our inception, our primary sources of liquidity are cash flows from operations, proceeds from the Business Combination, and issuances of preferred stock and convertible notes. Our primary uses of liquidity are operating expenses, working capital requirements, and capital expenditures. The Company has incurred net losses and negative cash flows from operating activities in each year since inception, and we expect to continue to incur losses and negative cash flows for a few years as we continue to commercialize existing and new products and services. We expect that our existing cash

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and cash flows from operations will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.

During the three months ended June 30, 2024, the Company utilized $10.6 million of cash and cash equivalents. In the second quarter, we paid $0.6 million of legal payments due to litigation and other legal matters. As of June 30, 2024, our cash and cash equivalents balance was $102.1 million. Our future spending on capital resources may vary from those currently planned and will depend on various factors, including our rate of revenue growth and the timing and extent of spending on strategic business initiatives.

As of June 30, 2024, we have restricted cash of $4.0 million to secure a letter of credit for one of our leases, which is expected to be maintained as a security deposit for the duration of the lease. In addition, we have restricted cash of $0.1 million for an agreement with the Gates Foundation. The restriction is expected to lapse as we fulfill our obligations in the agreement with the Gates Foundation.

Our material cash requirements include contractual obligations with third parties for office leases, technology licensing agreements, and inventory supply agreements. Our fixed office lease payment obligations were $29.8 million as of June 30, 2024, with $3.6 million payable within the next 12 months. Our fixed technology license payment obligations were $15.5 million as of June 30, 2024, with $1.5 million payable within the next 12 months. Our fixed purchase obligations for inventory supply agreements were $10.3 million as of June 30, 2024, with $9.0 million payable within the next 12 months. We expect to pay for approximately 20% of the amount payable within the next 12 months using vendor advances.

As of June 30, 2024, we had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements.

Cash flows

Comparison of the six months ended June 30, 2024 and 2023

The following table summarizes our sources and uses of cash for the six months ended June 30, 2024 and 2023:


	Six months ended June 30,
(in thousands)	2024		2023
Net cash used in operating activities	$	(30,667)	$	(69,738)
Net cash (used in) provided by investing activities		(1,837)		73,974
Net cash provided by financing activities		—		136
Net decrease in cash, cash equivalents and restricted cash	$	(32,504)	$	4,372

Net cash used in operating activities

Net cash used in operating activities represents the cash receipts and disbursements related to our activities other than investing and financing activities. We expect cash provided by historical financing activities will continue to be our primary source of funds to support operating and capital expenditure needs for the foreseeable future.

Net cash used in operating activities decreased by $39.1 million, or 56.0%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was driven by reductions of $24.5 million in net loss adjusted for certain non-cash items and $14.6 million in net working capital cash usage. The decrease in net loss adjusted for certain non-cash items was primarily driven by a reduction of $24.7 million in net loss. The decrease in net working capital cash usage was primarily driven by a reduction of $16.5 million in cash used for changes in our inventory and the related vendor advances and accrued purchase commitments, partially offset by increases of $2.5 million in cash used for changes in accounts payable and accrued expenses and $0.8 million in cash used for changes in our prepaid expenses and other assets.

Net cash used in investing activities

Net cash provided by investing activities decreased by $75.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to the sale of our marketable securities in 2023.

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Net cash provided by financing activities

Net cash provided by financing activities decreased by $0.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. We did not have any significant financing activities during the six months ended June 30, 2024.

Critical Accounting Policies and Significant Judgments and Estimates

This discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, contingent assets and liabilities, and related disclosures. Our estimates are based on our historical experience and various other factors that we believe are reasonable under the circumstances, and these form the basis for making judgments about items that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to the critical accounting policies and estimates disclosed in our 2023 Annual Report on Form 10-K.

Recently Adopted Accounting Pronouncements

The Company did not identify any significant recently issued accounting pronouncements that may potentially impact our financial position and results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We did not have any floating rate debt as of June 30, 2024. Our cash and cash equivalents are comprised primarily of bank deposits and money market accounts. The primary objective of our investments is the preservation of capital to fulfill liquidity needs. We do not enter into investments for trading or speculative purposes. Due to the short-term nature and low risk profile of these investments, we do not expect cash flows to be affected to any significant degree by a sudden change in market interest rates, including an immediate change of 100 basis points, or one percentage point. Declines in interest rates, however, would reduce future investment income.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than its impact on the general economy. Nonetheless, to the extent our costs are impacted by general inflationary pressures, we may not be able to fully offset such higher costs through price increases or manufacturing efficiencies. Our inability or failure to do so could harm our business, financial condition, and results of operations.

Foreign Exchange Risk

We operate our business primarily within the United States and currently execute the majority of our transactions in U.S. dollars. We have not utilized hedging strategies with respect to such foreign exchange exposure. This limited foreign currency translation risk is not expected to have a material impact on our condensed consolidated financial statements.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.

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Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial & Operating Officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial & Operating Officer concluded that our disclosure controls and procedures were effective as of June 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are currently and may in the future be subject to legal proceedings, claims, and regulatory actions arising in the ordinary course of business. The outcome of any such matters, regardless of the merits, is inherently uncertain.

For more information about our legal proceedings and this item, see Note 12 “Commitments and Contingencies” in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 “Financial Statements” of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors

Our business, results of operations, and financial condition are subject to various risks and uncertainties including the risk factors described under the caption “Risk Factors” in our 2023 Annual Report on Form 10-K. There have been no material changes to the risk factors described in the 2023 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

Not applicable.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the three months ended June 30, 2024.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended June 30, 2024, none of our directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits

See Exhibit Index.

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EXHIBIT INDEX


Exhibit Number	Exhibit Description	Filed Herewith	Incorporated by Reference herein from Form or Schedule	Filing Date	SEC File/ Reg. Number
3.1	Third Amended and Restated Certificate of Incorporation, as amended, of the Registrant, as filed with the Secretary of the State of Delaware on June 7, 2024.		Form 8-K (Exhibit 3.1)	6/13/2024	001-39292
3.2	Amended and Restated Bylaws of Butterfly Network, Inc.		Form 8-K (Exhibit 3.2)	2/16/2021	001-39292
10.1+	Butterfly Network, Inc. 2024 Employee Stock Purchase Plan	X
10.2+	Amendment No. 2, made effective April 16, 2024, to Employment Agreement by and between Butterfly Network, Inc. and Joseph DeVivo, effective as of January 1, 2024.	X
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32.1*	Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X

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Exhibit Number	Exhibit Description	Filed Herewith	Incorporated by Reference herein from Form or Schedule	Filing Date	SEC File/ Reg. Number
101.INS	Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its Inline XBRL tags are embedded within the Inline XBRL document.	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	X
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)	X

+	Management contract or compensatory plan or arrangement.

*	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BUTTERFLY NETWORK, INC.


Date: August 1, 2024	By:	/s/ Joseph DeVivo
		Joseph DeVivo
		President, Chief Executive Officer, and Chairman of the Board


Date: August 1, 2024	By:	/s/ Heather C. Getz, CPA
		Heather C. Getz, CPA
		Executive Vice President and Chief Financial & Operations Officer

Exhibit 10.1

BUTTERFLY NETWORK, INC.

2024 EMPLOYEE STOCK PURCHASE PLAN

The purpose of the Butterfly Network, Inc. 2024 Employee Stock Purchase Plan (the “Plan”) is to provide eligible employees of Butterfly Network, Inc. (the “Company”) and each Designated Subsidiary (as defined in Section 11) with opportunities to purchase shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Common Stock”). An aggregate of 4,200,000 shares of Class A Common Stock have been approved and reserved for this purpose, plus on January 1, 2025, and each January 1 thereafter through January 1, 2033, the number of shares of Class A Common Stock reserved and available for issuance under the Plan shall be cumulatively increased by the lesser of (i) one percent 1% of the number of shares of Common Stock issued and outstanding on December 31, 2023 or (ii) such number of shares of Class A Common Stock as determined by the Administrator.

The Plan includes two components: a Code Section 423 Component (the “423 Component”) and a non-Code Section 423 Component (the “Non-423 Component”). It is intended for the 423 Component to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and the 423 Component shall be interpreted in accordance with that intent. Under the Non-423 Component, which does not qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Code, options will be granted pursuant to rules, procedures or sub-plans adopted by the Administrator designed to comply with applicable laws or to achieve tax efficiency, or other objectives for eligible employees. Except as otherwise provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component.

1.Administration. The Plan will be administered by the person or persons (the “Administrator”) appointed by the Company’s Board of Directors (the “Board”) for such purpose. The Administrator has authority at any time to: (i) adopt, alter and repeal such rules, guidelines and practices for the administration of the Plan and for its own acts and proceedings as it shall deem advisable; (ii) interpret the terms and provisions of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide all disputes arising in connection with the Plan; and (v) otherwise supervise the administration of the Plan. All interpretations and decisions of the Administrator shall be binding on all persons, including the Company and the Participants. No member of the Board or individual exercising administrative authority with respect to the Plan shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder.

2.Offerings. The Company may make one or more offerings to eligible employees to purchase Common Stock under the Plan (“Offerings”) consisting of one or more Purchase Periods. Unless otherwise determined by the Administrator, the initial Offering will begin and end on dates to be determined by the Administrator. Thereafter, unless otherwise determined by the Administrator, an Offering will be 24 months long and will begin and end on the days selected by the Administrator. The Administrator may, in its discretion, designate a different period for any Offering (which may be longer or shorter than 24 months), provided that no Offering shall

Exhibit 10.1

exceed 27 months in duration. Unless the Administrator otherwise determines, each Offering will be divided into four equal six-month Purchase Periods. Furthermore, unless as otherwise determined by the Administrator, Participants will only be permitted to participate in one Offering at a time. Unless the Administrator, in its sole discretion, chooses otherwise prior to an Offering Date, and to the extent an Offering has more than one Purchase Period and to the extent permitted by applicable law, if the Fair Market Value of the Common Stock on any Exercise Date in an Offering is lower than the Fair Market Value of the Common Stock on the Offering Date, then all participants in such Offering will automatically be withdrawn from such Offering immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering as of the first day thereof and the preceding Offering will terminate.

3.Eligibility. All individuals classified as employees on the payroll records of the Company and each Designated Subsidiary are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the “Offering Date”) they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week on a permanent basis (meaning greater than a planned five (5) month period) and have completed at least six (6) months of employment. Notwithstanding any other provision herein, individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary for purposes of the Company’s or applicable Designated Subsidiary’s payroll system are not considered to be eligible employees of the Company or any Designated Subsidiary and shall not be eligible to participate in the Plan. In the event any such individuals are reclassified as employees of the Company or a Designated Subsidiary for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals shall, notwithstanding such reclassification, remain ineligible for participation. Notwithstanding the foregoing, the exclusive means for individuals who are not contemporaneously classified as employees of the Company or a Designated Subsidiary on the Company’s or Designated Subsidiary’s payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the Company, which specifically renders such individuals eligible to participate herein. Notwithstanding the foregoing, employees of the Company or a Designated Subsidiary who are citizens or residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) shall not be eligible to participate in the Plan if: (i) the grant of an option under the Plan to such employee is prohibited under the laws of such jurisdiction; or (ii) compliance with the laws of such foreign jurisdiction would cause the 423 Component of the Plan to violate the requirements of Section 423 of the Code.

4.Participation.

(a)Participants. An eligible employee who is not a Participant in any prior Offering may participate in a subsequent Offering by submitting an enrollment form to his or her appropriate payroll location by such deadline as shall be established by the Administrator for the Offering.

Exhibit 10.1

(b)Enrollment. The enrollment form (which may be in an electronic format or such other method as determined by the Administrator) will (a) state a whole percentage or amount to be deducted from an eligible employee’s Compensation (as defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each Offering in accordance with the terms of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant’s deductions and purchases will continue at the same percentage or amount of Compensation for future Offerings, provided he or she remains eligible.

(c)Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.

5.Employee Contributions. Each eligible employee may authorize payroll deductions at a minimum of one percent (1%) of such employee’s Compensation for each pay period. The Company will maintain book accounts showing the amount of payroll deductions made by each Participant for each Offering. No interest will accrue or be paid on payroll deductions.

6.Deduction Changes. Except as may be determined by the Administrator in advance of an Offering, a Participant may not increase or decrease his or her payroll deduction during any Purchase Period, but may increase or decrease his or her payroll deduction with respect to the next Purchase Period (subject to the limitations of Section 5) by filing a new enrollment form before the next Purchase Period within such deadline as shall be established by the Administrator for the Offering). A Participant may also increase or decrease his or her payroll deduction with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form before the next Offering Date. The Administrator may, in advance of any Offering, establish rules permitting a Participant to increase, decrease or terminate his or her payroll deduction during an Offering.

7.Withdrawal. A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal to his or her appropriate payroll location. The Participant’s withdrawal will be effective as of the next business day. Following a Participant’s withdrawal, the Company will promptly refund such individual’s entire account balance under the Plan to him or her (after payment for any Common Stock purchased before the effective date of withdrawal). Partial withdrawals are not permitted. Such an employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4, provided that he or she remains eligible.

8.Grant of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option (“Option”) to purchase on the last day of a Purchase Period (the “Exercise Date”), at the Option Price (as defined below) for, the lowest of (a) a number of shares of Common Stock determined by dividing such Participant’s accumulated payroll deductions on such Exercise Date by the Option Price (as defined herein), or (b) such other lesser maximum number of shares as shall have been established by the Administrator in advance of the Offering; provided, however, that such Option shall be subject to the limitations set forth

Exhibit 10.1

below. Each Participant’s Option shall be exercisable only to the extent of such Participant’s accumulated payroll deductions on the Exercise Date. The purchase price for each share purchased under each Option (the “Option Price”) will be eighty-five percent (85%) of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less.

Notwithstanding the foregoing, no Participant may be granted an option hereunder if such Participant, immediately after the option was granted, would be treated as owning stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right to purchase shall be treated as stock owned by the Participant. In addition, no Participant may be granted an Option which permits such Participant rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds the greater of (i) $25,000; or (ii) the then current applicable limit under the Code of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.

9.Exercise of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on the Exercise Date shall be deemed to have exercised his or her Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan. Any amount remaining in a Participant’s account after the purchase of shares of Common Stock on an Exercise Date solely by reason of the inability to purchase a fractional share will be carried forward to the next Purchase Period and, if such Exercise Date is the final Exercise Date of an Offering, will be carried forward to the next Offering; any other balance remaining in a Participant’s account at the end of an Offering will be refunded to the Participant promptly.

10.Issuance of Certificates. Certificates or book-entries at the Company’s transfer agent representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their nominee for such purpose.

11.Definitions.

The term “Class B Common Stock” means shares of the Company’s Class B common stock, $0.0001 par value per share.

The term “Compensation” means the regular or basic rate of compensation.

Exhibit 10.1

The term “Common Stock” means the Class A Common Stock and the Class B Common Stock, individually or collectively, as the context requires.

The term “Designated Subsidiary” means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the Plan. The Board may so designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders. The current list of Designated Subsidiaries is attached hereto as Appendix A.

The term “Fair Market Value of the Common Stock” on any given date means the fair market value of the Common Stock determined in good faith by the Administrator, which determination shall be made by reference to the closing price on such date on the New York Stock Exchange (“NYSE”). If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price.

The terms “New Exercise Date” means Exercise Date if the Administrator shortens any Offering then in progress.

The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code.

The term “Participant” means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4.

The term “Purchase Period” means a period of time within an Offering, as may be specified by the Administrator in accordance with Section 2, generally beginning on the Offering Date or the next day following an Exercise Date within an Offering, and ending on an Exercise Date. An Offering may consist of one or more Purchase Periods.

The term “Sale Event” shall have the meaning of “Corporate Transaction” set forth in the Company’s Amended and Restated 2020 Equity Incentive Plan.

The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code.

12.Rights on Termination of Employment. If a Participant’s employment terminates for any reason before the Exercise Date for any Offering, no payroll deduction will be taken from any pay due and owing to the Participant and the balance in the Participant’s account will be paid to such Participant or, in the case of such Participant’s death, to his or her designated beneficiary as if such Participant had withdrawn from the Plan under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation that employs him or her, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation other than the Company or a Designated Subsidiary; provided, however, that if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Option will be qualified under the 423 Component

Exhibit 10.1

only to the extent that such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Participant’s Option will remain non-qualified under the Non-423 Component. An employee will not be deemed to have terminated employment for this purpose if the employee is on an approved leave of absence for military service or sickness or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise provides in writing.

13.Special Rules and Sub-Plans. Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable to the employees of a particular Designated Subsidiary whenever the Administrator determines that such rules are necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that if such special rules or sub-plans are inconsistent with the requirements of Section 423(b) of the Code, the employees subject to such special rules or sub-plans will participate in the Non-423 Component. Any special rules or sub-plans established pursuant to this Section 13 shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other Participants in the Plan.

14.Optionees Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay shall constitute such Participant a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to the Participant.

15.Rights Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution, and are exercisable during the Participant’s lifetime only by the Participant.

16.Application of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose.

17.Adjustment in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, the payment of a dividend in Common Stock or any other change affecting the Common Stock, the number of shares approved for the Plan and any share limitation set forth in Section 8 shall be equitably or proportionately adjusted to give proper effect to such event. In the case of and subject to the consummation of a Sale Event, the Administrator, in its discretion, and on such terms and conditions as it deems appropriate, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any right under the Plan or to facilitate such transactions or events:

(a)To provide for either (i) termination of any outstanding Option in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon the exercise of such Option had such Option been currently exercisable or (ii) the replacement of such

Exhibit 10.1

outstanding Option with other options or property selected by the Administrator in its sole discretion;

(b)To provide that the outstanding Options under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for similar options covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(c)To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Options under the Plan and/or in the terms and conditions of outstanding Options and Options that may be granted in the future;

(d)To provide that the Offering with respect to which an Option relates will be shortened by setting a New Exercise Date on which such Offering will end. The New Exercise Date will occur before the date of the Sale Event. The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s Option has been changed to the New Exercise Date and that the Participant’s Option will be exercised automatically on the New Exercise Date, unless the Participant has withdrawn from the Offering in advance of the New Exercise Date as provided in Section 7 hereof; or

(e)To provide that all outstanding Options shall terminate without being exercised and all amounts in the accounts of Participants shall be promptly refunded.

18.Amendment of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that without the approval within twelve (12) months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would require stockholder approval in order for the 423 Component of the Plan, as amended, to qualify as an “employee stock purchase plan” under Section 423(b) of the Code.

19.Insufficient Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that would otherwise be used to purchase Common Stock on such Exercise Date.

20.Termination of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants shall be promptly refunded. Unless terminated earlier or otherwise amended, the Plan shall automatically terminate on the ten year anniversary of the Effective Date as set forth in Section 26 of this Plan.

21.Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock.

Exhibit 10.1

22.Governing Law. This Plan and all Options and actions taken thereunder shall be governed by, and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of Delaware, applied without regard to conflict of law principles.

23.Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.

24.Tax Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan.

25.Notification Upon Sale of Shares Under the 423 Component. Each Participant agrees, by entering the 423 Component of the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two (2) years after the date of grant of the Option pursuant to which such shares were purchased or within one (1) year after the date such shares were purchased.

26.Effective Date. This Plan shall become effective upon the date of Board approval and following stockholder approval in accordance with applicable state law, the Company’s bylaws and articles of incorporation, each as amended, and applicable stock exchange rules.

Exhibit 10.1

APPENDIX A

Designated Subsidiaries

BFLY Operations, Inc.

Butterfly Network GmbH

Butterfly Network Limited

Butterfly Network Netherlands B.V.

Butterfly Network Australia PTY Ltd.

Butterfly Network Taiwan Corporation

Exhibit 10.2

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

This Second Amendment to Employment Agreement (this “Second Amendment to Employment Agreement”) is made effective as of January 1, 2024 (the “Second Amendment Effective Date”), between Butterfly Networks, Inc. (the “Company”), and Joseph DeVivo (the “Executive”).

WHEREAS, the Company and the Executive are parties to an Employment Agreement dated as of April 21, 2023, (the “Employment Agreement”) as amended by the First Amendment to Employment Agreement dated June 5, 2023 (the “First Amendment to Employment Agreement”, and the Employment Agreement, as amended, the “Amended Employment Agreement”);

WHEREAS, Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Amended Employment Agreement; and

WHEREAS, the Company and the Executive wish to further amend certain provisions of the Amended Employment Agreement by executing this Second Amendment to Employment Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Section 2(d) of the Amended Employment Agreement is hereby amended and restated in its entirety to read as follows:

“(d) Business Expenses. The Company will promptly reimburse the Executive for all reasonable business expenses incurred by the Executive in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its executives, including the costs incurred by the Executive in connection with business travel. The Executive’s expenses incurred in connection with Executive’s travel between his primary residence and the Company’s offices will also be reimbursable. The Executive will be permitted to fly, and will be reimbursed for, Business Class for business-related travel.”

2.Section 2(e) of the Amended Employment Agreement is hereby deleted in its entirety.

3.All other provisions of the Amended Employment Agreement shall remain in full force and effect according to their respective terms, and nothing contained herein shall be deemed a waiver of any right or abrogation of any obligation otherwise existing under the Amended Employment Agreement except to the extent specifically provided for herein.

4.This Second Amendment shall be construed under and be governed in all respects by the laws of the State of Delaware, without giving effect to the conflict of laws principles thereof. With respect to any disputes concerning federal law, such disputes shall be determined in

accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Third Circuit.

5.This Second Amendment to Employment Agreement may be executed in separate counterparts. When both counterparts are signed, they shall be treated together as one and the same document. PDF copies of signed counterparts shall be equally effective as originals.

[Signature page follows]

IN WITNESS WHEREOF, the parties have executed this Second Amendment to Employment Agreement to become effective as of the Second Amendment Effective Date.

COMPANY

/s/ Heather Getz

By: Heather Getz

Its: EVP & CFOO

EXECUTIVE

/s/ Joseph DeVivo

Joseph DeVivo

Exhibit 31.1

CERTIFICATIONS UNDER SECTION 302

I, Joseph DeVivo, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Butterfly Network, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2024


/s/ Joseph DeVivo
Joseph DeVivo
President, Chief Executive Officer, and Chairman of the Board

Exhibit 31.2

CERTIFICATIONS UNDER SECTION 302

I, Heather C. Getz, CPA, certify that:

I have reviewed this Quarterly Report on Form 10-Q of Butterfly Network, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2024


/s/ Heather C. Getz, CPA
Heather C. Getz, CPA
Executive Vice President and Chief Financial & Operations Officer

Exhibit 32.1

CERTIFICATIONS UNDER SECTION 906

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Butterfly Network, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report for the quarter ended June 30, 2024 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: August 1, 2024	/s/ Joseph DeVivo
	Joseph DeVivo
	President, Chief Executive Officer, and Chairman of the Board


Dated: August 1, 2024	/s/ Heather C. Getz, CPA
	Heather C. Getz, CPA
	Executive Vice President and Chief Financial & Operations Officer

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Jul. 18, 2024
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-39292
Entity Registrant Name	Butterfly Network, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-4618156
Entity Address, Address Line One	1600 District Avenue
Entity Address, City or Town	Burlington
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01803
City Area Code	781
Local Phone Number	557-4800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001804176
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A Common Stock
Entity Listings [Line Items]
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	BFLY
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		186,147,353
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share
Entity Listings [Line Items]
Title of 12(b) Security	Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share
Trading Symbol	BFLY WS
Security Exchange Name	NYSE
Class B Common Stock
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		26,426,937

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 102,051	$ 134,437
Accounts receivable, net	16,113	13,418
Inventories	74,175	73,022
Current portion of vendor advances	4,302	2,815
Prepaid expenses and other current assets	7,836	7,571
Total current assets	204,477	231,263
Property and equipment, net	22,967	25,321
Intangible assets, net	9,617	10,317
Non-current portion of vendor advances	15,185	15,276
Operating lease assets	14,970	15,675
Other non-current assets	5,851	6,422
Total assets	273,067	304,274
Current liabilities:
Accounts payable	4,514	5,090
Deferred revenue, current	14,751	15,625
Accrued purchase commitments, current	131	131
Accrued expenses and other current liabilities	21,386	23,425
Total current liabilities	40,782	44,271
Deferred revenue, non-current	7,360	7,394
Warrant liabilities	413	826
Operating lease liabilities	21,652	22,835
Other non-current liabilities	8,580	8,895
Total liabilities	78,787	84,221
Commitments and contingencies (Note 12)
Stockholders' equity:
Additional paid-in capital	961,363	949,670
Accumulated deficit	(767,105)	(729,638)
Total stockholders' equity	194,280	220,053
Total liabilities and stockholders' equity	273,067	304,274
Class A Common Stock
Stockholders' equity:
Common stock	19	18
Class B Common Stock
Stockholders' equity:
Common stock	$ 3	$ 3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Class A Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	600,000,000	600,000,000
Common stock shares issued	186,037,697	181,221,794
Common stock, shares outstanding (in shares)	186,037,697	181,221,794
Class B Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	27,000,000	27,000,000
Common stock shares issued	26,426,937	26,426,937
Common stock, shares outstanding (in shares)	26,426,937	26,426,937

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue:
Total revenue	$ 21,487	$ 18,487	$ 39,143	$ 33,963
Cost of revenue:
Total cost of revenue	8,901	7,565	16,280	13,952
Gross profit	12,586	10,922	22,863	20,011
Operating expenses:
Research and development	9,411	15,626	20,131	32,277
Sales and marketing	9,728	9,728	20,106	19,761
General and administrative	10,073	14,660	20,514	25,678
Other	606	2,172	1,964	8,605
Total operating expenses	29,818	42,186	62,715	86,321
Loss from operations	(17,232)	(31,264)	(39,852)	(66,310)
Interest income	1,291	2,027	2,802	3,811
Interest expense	(309)		(609)
Change in fair value of warrant liabilities	620	620	413	413
Other expense, net	(59)	(60)	(201)	(44)
Loss before provision for income taxes	(15,689)	(28,677)	(37,447)	(62,130)
Provision (benefit) for income taxes	17	(6)	20	81
Net loss and comprehensive loss	$ (15,706)	$ (28,671)	$ (37,467)	$ (62,211)
Net loss per common share - basic	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Net loss per common share - diluted	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Weighted-average common shares outstanding - basic	211,663,554	204,895,341	210,268,501	203,737,044
Weighted-average common shares outstanding - diluted	211,663,554	204,895,341	210,268,501	203,737,044
Product
Revenue:
Total revenue	$ 14,648	$ 12,273	$ 25,939	$ 21,121
Cost of revenue:
Total cost of revenue	6,579	5,487	11,674	9,836
Software and other services
Revenue:
Total revenue	6,839	6,214	13,204	12,842
Cost of revenue:
Total cost of revenue	$ 2,322	$ 2,078	$ 4,606	$ 4,116

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Additional Paid-In Capital	Accumulated Deficit	Class A Common Stock	Class B Common Stock	Total
Balance at beginning of the period at Dec. 31, 2022	$ 17	$ 3	$ 921,278	$ (595,938)			$ 325,360
Balance at beginning of the period (in shares) at Dec. 31, 2022	174,459,956	26,426,937
Increase (Decrease) in Stockholders' Equity
Net loss				(62,211)			(62,211)
Common stock issued upon exercise of stock options			136				136
Common stock issued upon exercise of stock options (in shares)	124,660
Common stock issued upon vesting of restricted stock units	$ 1						1
Common stock issued upon vesting of restricted stock units (in shares)	5,136,302
Stock-based compensation expense			14,419				14,419
Balance at end of the period at Jun. 30, 2023	$ 18	$ 3	935,833	(658,149)			277,705
Balance at end of the period (in shares) at Jun. 30, 2023	179,720,918	26,426,937
Balance at beginning of the period at Mar. 31, 2023	$ 18	$ 3	925,604	(629,478)			296,147
Balance at beginning of the period (in shares) at Mar. 31, 2023	177,368,499	26,426,937
Increase (Decrease) in Stockholders' Equity
Net loss				(28,671)			(28,671)
Common stock issued upon exercise of stock options			136				136
Common stock issued upon exercise of stock options (in shares)	124,660
Common stock issued upon vesting of restricted stock units (in shares)	2,227,759
Stock-based compensation expense			10,093				10,093
Balance at end of the period at Jun. 30, 2023	$ 18	$ 3	935,833	(658,149)			277,705
Balance at end of the period (in shares) at Jun. 30, 2023	179,720,918	26,426,937
Balance at beginning of the period at Dec. 31, 2023	$ 18	$ 3	949,670	(729,638)			220,053
Balance at beginning of the period (in shares) at Dec. 31, 2023	181,221,794	26,426,937			181,221,794	26,426,937
Increase (Decrease) in Stockholders' Equity
Net loss				(37,467)			(37,467)
Common stock issued upon vesting of restricted stock units	$ 1						1
Common stock issued upon vesting of restricted stock units (in shares)	4,815,903
Stock-based compensation expense			11,693				11,693
Balance at end of the period at Jun. 30, 2024	$ 19	$ 3	961,363	(767,105)			194,280
Balance at end of the period (in shares) at Jun. 30, 2024	186,037,697	26,426,937			186,037,697	26,426,937
Balance at beginning of the period at Mar. 31, 2024	$ 18	$ 3	955,382	(751,399)			204,004
Balance at beginning of the period (in shares) at Mar. 31, 2024	184,214,377	26,426,937
Increase (Decrease) in Stockholders' Equity
Net loss				(15,706)			(15,706)
Common stock issued upon vesting of restricted stock units	$ 1						1
Common stock issued upon vesting of restricted stock units (in shares)	1,823,320
Stock-based compensation expense			5,981				5,981
Balance at end of the period at Jun. 30, 2024	$ 19	$ 3	$ 961,363	$ (767,105)			$ 194,280
Balance at end of the period (in shares) at Jun. 30, 2024	186,037,697	26,426,937			186,037,697	26,426,937

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net loss	$ (37,467)	$ (62,211)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and impairments	5,217	4,305
Non-cash interest expense	607
Write-down of inventories	(81)
Stock-based compensation expense	11,383	14,109
Change in fair value of warrant liabilities	(413)	(413)
Other	462	(651)
Changes in operating assets and liabilities:
Accounts receivable	(3,165)	(3,293)
Inventories	(1,072)	(26,855)
Prepaid expenses and other assets	165	(615)
Vendor advances	(1,396)	9,534
Accounts payable	(587)	1,390
Deferred revenue	(908)	(1,062)
Accrued purchase commitments		(1,615)
Change in operating lease assets and liabilities	(348)	196
Accrued expenses and other liabilities	(3,064)	(2,557)
Net cash used in operating activities	(30,667)	(69,738)
Cash flows from investing activities:
Purchases of marketable securities		(297)
Sales of marketable securities		76,484
Purchases of property, equipment, and intangible assets, including capitalized software	(1,872)	(2,223)
Sales of property and equipment	35	10
Net cash (used in) provided by investing activities	(1,837)	73,974
Cash flows from financing activities:
Proceeds from exercise of stock options and warrants		136
Net cash provided by financing activities		136
Net (decrease) increase in cash, cash equivalents, and restricted cash	(32,504)	4,372
Cash, cash equivalents, and restricted cash, beginning of period	138,650	166,828
Cash, cash equivalents, and restricted cash, end of period	$ 106,146	$ 171,200

Organization and Description of Business

6 Months Ended

Jun. 30, 2024

Organization and Description of Business

Organization and Description of Business

Note 1. Organization and Description of Business

The Company operates wholly-owned subsidiaries in Australia, Germany, the Netherlands, Taiwan, and the United Kingdom.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Concentration of Credit Risk

Segment Reporting

Use of Estimates

Operating Expenses – Other


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Employment-related expenses	$	26	$	261	$	(30)	$	3,879
Legal-related expenses		580		1,911		1,994		4,726
Total other	$	606	$	2,172	$	1,964	$	8,605

Recent Accounting Pronouncements Issued but Not Yet Adopted

Revenue Recognition

6 Months Ended

Jun. 30, 2024

Revenue Recognition

Revenue Recognition

Note 3. Revenue Recognition

Disaggregation of Revenue


	Pattern of	Three months ended June 30,				Six months ended June 30,
	Recognition	2024		2023		2024		2023
By product type:
Devices and accessories	Point-in-time	$	14,648	$	12,273	$	25,939	$	21,121
Software and other services	Over time		6,839		6,214		13,204		12,842
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

By geographical market:
United States		$	17,039	$	15,491	$	30,775	$	27,496
International			4,448		2,996		8,368		6,467
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

Contract Balances

Transaction Price Allocated to Remaining Performance Obligations

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Note 4. Fair Value of Financial Instruments

●

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

There were no transfers between fair value measurement levels during the periods ended June 30, 2024 and December 31, 2023.

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy (in thousands):


			Fair Value Measurement Level
	Total		Level 1		Level 2		Level 3
June 30, 2024:
Warrants:
Public Warrants	$	276	$	276	$	—	$	—
Private Warrants		137		—		137		—
Total liabilities at fair value on a recurring basis	$	413	$	276	$	137	$	—

December 31, 2023:
Warrants:
Public Warrants	$	552	$	552	$	—	$	—
Private Warrants		274		—		274		—
Total liabilities at fair value on a recurring basis	$	826	$	552	$	274	$	—

Inventories

6 Months Ended

Jun. 30, 2024

Inventories

Inventories

Note 5. Inventories

The following table summarizes the Company’s inventories (in thousands):


	June 30,		December 31,
	2024		2023
Raw materials	$	49,572	$	49,366
Work-in-progress		2,951		3,384
Finished goods		21,652		20,272
Total inventories	$	74,175	$	73,022

Property and Equipment, Net

6 Months Ended

Jun. 30, 2024

Property and Equipment, Net

Property and Equipment, Net

Note 6. Property and Equipment, Net

The following table summarizes the Company’s property and equipment, net (in thousands):


	June 30,		December 31,
	2024		2023
Property and equipment, gross	$	45,486	$	43,516
Less: accumulated depreciation and amortization		(22,519)		(18,195)
Property and equipment, net	$	22,967	$	25,321

Restricted Cash

6 Months Ended

Jun. 30, 2024

Restricted Cash

Restricted Cash

Note 7. Restricted Cash

The following table reconciles cash, cash equivalents, and restricted cash from the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):


	June 30,
	2024		2023
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	102,051	$	166,806
Restricted cash included within prepaid expenses and other current assets		80		380
Restricted cash included within other non-current assets		4,015		4,014
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	106,146	$	171,200

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2024

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Note 8. Accrued Expenses and Other Current Liabilities

The following table summarizes the Company’s accrued expenses and other current liabilities (in thousands):


	June 30,		December 31,
	2024		2023
Employee compensation	$	5,571	$	9,442
Customer deposits		1,767		1,613
Accrued warranty liability		382		297
Non-income tax		2,074		1,197
Professional fees		3,146		2,481
Current portion of operating lease liabilities		2,322		2,192
Other		6,124		6,203
Total accrued expenses and other current liabilities	$	21,386	$	23,425

The following table summarizes warranty expense activity (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Balance, beginning of period	$	644	$	794	$	697	$	873
Warranty provision charged to operations		387		(7)		483		(51)
Warranty claims		(219)		—		(368)		(35)
Balance, end of period	$	812	$	787	$	812	$	787

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Stock-Based Compensation

Stock-Based Compensation

Note 9. Stock-Based Compensation

Equity Incentive Plans

Stock Option Activity

The following table summarizes the changes in the Company’s outstanding stock options:


		Number of
		Options
Outstanding at December 31, 2023		7,439,187
Granted		—
Exercised		—
Forfeited		(416,448)
Outstanding at June 30, 2024		7,022,739

Restricted Stock Unit Activity

The following table summarizes the changes in the Company’s outstanding restricted stock units (“RSUs”):


		Number of
		RSUs
Outstanding at December 31, 2023		15,569,983
Granted		11,713,683
Vested		(4,815,903)
Forfeited		(523,363)
Outstanding at June 30, 2024		21,944,400

Generally, each award vests based on continued service per the award agreement. The grant date fair value of the award is recognized as stock-based compensation expense over the requisite service period. The grant date fair value was determined based on the fair market value of the Company’s Class A common stock on the grant date.

Employee Stock Purchase Plan

Stock-Based Compensation Expense

The following table summarizes the Company’s stock-based compensation expense (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Research and development	$	1,943	$	3,197		3,962		5,391
Sales and marketing		1,155		1,316		2,262		1,937
General and administrative		2,760		5,411		5,159		6,781
Total stock-based compensation expense	$	5,858	$	9,924	$	11,383	$	14,109

Prior period stock-based compensation expense that was classified as cost of revenue is now included in research and development due to the amount being insignificant.

Net Loss Per Share

6 Months Ended

Jun. 30, 2024

Net Loss Per Share

Net Loss Per Share

Note 10. Net Loss Per Share


Three months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(13,745)	$	(1,961)	$	(15,706)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(13,745)	$	(1,961)	$	(15,706)
Denominator:
Weighted-average common shares outstanding		185,236,617		26,426,937		211,663,554
Denominator for basic and diluted net loss per share – weighted-average common stock		185,236,617		26,426,937		211,663,554
Basic and diluted net loss per share	$	(0.07)	$	(0.07)	$	(0.07)


Three months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(24,973)	$	(3,698)	$	(28,671)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(24,973)	$	(3,698)	$	(28,671)
Denominator:
Weighted-average common shares outstanding		178,468,404		26,426,937		204,895,341
Denominator for basic and diluted net loss per share – weighted-average common stock		178,468,404		26,426,937		204,895,341
Basic and diluted net loss per share	$	(0.14)	$	(0.14)	$	(0.14)


Six months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(32,758)	$	(4,709)	$	(37,467)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(32,758)	$	(4,709)	$	(37,467)
Denominator:
Weighted-average common shares outstanding		183,841,564		26,426,937		210,268,501
Denominator for basic and diluted net loss per share – weighted-average common stock		183,841,564		26,426,937		210,268,501
Basic and diluted net loss per share	$	(0.18)	$	(0.18)	$	(0.18)


Six months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(54,142)	$	(8,069)	$	(62,211)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(54,142)	$	(8,069)	$	(62,211)
Denominator:
Weighted-average common shares outstanding		177,310,107		26,426,937		203,737,044
Denominator for basic and diluted net loss per share – weighted-average common stock		177,310,107		26,426,937		203,737,044
Basic and diluted net loss per share	$	(0.31)	$	(0.31)	$	(0.31)

The following table summarizes the Company’s anti-dilutive common equivalent shares:


	June 30,
	2024	2023
Outstanding options to purchase common stock	7,022,739	9,262,296
Outstanding restricted stock units	21,944,400	17,738,585
Outstanding warrants	20,652,690	20,652,690
Total anti-dilutive common equivalent shares	49,619,829	47,653,571

401(k) Retirement Plan

6 Months Ended

Jun. 30, 2024

401(k) Retirement Plan

401(k) Retirement Plan

Note 11. 401(k) Retirement Plan

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies.

Commitments and Contingencies

Note 12. Commitments and Contingencies

Commitments

Leases:

Purchase Commitments:

Contingencies

Subsequent Events

6 Months Ended

Jun. 30, 2024

Subsequent Events

Subsequent Events

Note 13. Subsequent Events

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (15,706)	$ (28,671)	$ (37,467)	$ (62,211)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Concentration of Credit Risk

Segment Reporting

Use of Estimates

Operating Expenses - Other

Operating Expenses – Other


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Employment-related expenses	$	26	$	261	$	(30)	$	3,879
Legal-related expenses		580		1,911		1,994		4,726
Total other	$	606	$	2,172	$	1,964	$	8,605

Recent Accounting Pronouncements Issued but Not Yet Adopted

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Summary of Significant Accounting Policies

Schedule of other expenses


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Employment-related expenses	$	26	$	261	$	(30)	$	3,879
Legal-related expenses		580		1,911		1,994		4,726
Total other	$	606	$	2,172	$	1,964	$	8,605

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2024

Revenue Recognition

Schedule of disaggregated revenue


	Pattern of	Three months ended June 30,				Six months ended June 30,
	Recognition	2024		2023		2024		2023
By product type:
Devices and accessories	Point-in-time	$	14,648	$	12,273	$	25,939	$	21,121
Software and other services	Over time		6,839		6,214		13,204		12,842
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

By geographical market:
United States		$	17,039	$	15,491	$	30,775	$	27,496
International			4,448		2,996		8,368		6,467
Total revenue		$	21,487	$	18,487	$	39,143	$	33,963

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value of Financial Instruments

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy (in thousands):


			Fair Value Measurement Level
	Total		Level 1		Level 2		Level 3
June 30, 2024:
Warrants:
Public Warrants	$	276	$	276	$	—	$	—
Private Warrants		137		—		137		—
Total liabilities at fair value on a recurring basis	$	413	$	276	$	137	$	—

December 31, 2023:
Warrants:
Public Warrants	$	552	$	552	$	—	$	—
Private Warrants		274		—		274		—
Total liabilities at fair value on a recurring basis	$	826	$	552	$	274	$	—

Inventories (Tables)

6 Months Ended

Jun. 30, 2024

Inventories

Summary of inventories

The following table summarizes the Company’s inventories (in thousands):


	June 30,		December 31,
	2024		2023
Raw materials	$	49,572	$	49,366
Work-in-progress		2,951		3,384
Finished goods		21,652		20,272
Total inventories	$	74,175	$	73,022

Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2024

Property and Equipment, Net

Schedule of property and equipment, net

The following table summarizes the Company’s property and equipment, net (in thousands):


	June 30,		December 31,
	2024		2023
Property and equipment, gross	$	45,486	$	43,516
Less: accumulated depreciation and amortization		(22,519)		(18,195)
Property and equipment, net	$	22,967	$	25,321

Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2024

Restricted Cash

Summary of reconciliation of cash, cash equivalents and restricted cash

The following table reconciles cash, cash equivalents, and restricted cash from the condensed consolidated balance sheets to the condensed consolidated statements of cash flows (in thousands):


	June 30,
	2024		2023
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	102,051	$	166,806
Restricted cash included within prepaid expenses and other current assets		80		380
Restricted cash included within other non-current assets		4,015		4,014
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	106,146	$	171,200

Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Accrued Expenses and Other Current Liabilities

Schedule of accrued expenses and other current liabilities

The following table summarizes the Company’s accrued expenses and other current liabilities (in thousands):


	June 30,		December 31,
	2024		2023
Employee compensation	$	5,571	$	9,442
Customer deposits		1,767		1,613
Accrued warranty liability		382		297
Non-income tax		2,074		1,197
Professional fees		3,146		2,481
Current portion of operating lease liabilities		2,322		2,192
Other		6,124		6,203
Total accrued expenses and other current liabilities	$	21,386	$	23,425

Schedule of warranty expense activity

The following table summarizes warranty expense activity (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Balance, beginning of period	$	644	$	794	$	697	$	873
Warranty provision charged to operations		387		(7)		483		(51)
Warranty claims		(219)		—		(368)		(35)
Balance, end of period	$	812	$	787	$	812	$	787

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Stock-Based Compensation

Summary of the stock option activity


		Number of
		Options
Outstanding at December 31, 2023		7,439,187
Granted		—
Exercised		—
Forfeited		(416,448)
Outstanding at June 30, 2024		7,022,739

Summary of the restricted stock unit activity


		Number of
		RSUs
Outstanding at December 31, 2023		15,569,983
Granted		11,713,683
Vested		(4,815,903)
Forfeited		(523,363)
Outstanding at June 30, 2024		21,944,400

Schedule of stock-based compensation expense

The following table summarizes the Company’s stock-based compensation expense (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Research and development	$	1,943	$	3,197		3,962		5,391
Sales and marketing		1,155		1,316		2,262		1,937
General and administrative		2,760		5,411		5,159		6,781
Total stock-based compensation expense	$	5,858	$	9,924	$	11,383	$	14,109

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Net Loss Per Share

Schedule of calculation of basic and diluted net loss per share


Three months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(13,745)	$	(1,961)	$	(15,706)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(13,745)	$	(1,961)	$	(15,706)
Denominator:
Weighted-average common shares outstanding		185,236,617		26,426,937		211,663,554
Denominator for basic and diluted net loss per share – weighted-average common stock		185,236,617		26,426,937		211,663,554
Basic and diluted net loss per share	$	(0.07)	$	(0.07)	$	(0.07)


Three months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(24,973)	$	(3,698)	$	(28,671)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(24,973)	$	(3,698)	$	(28,671)
Denominator:
Weighted-average common shares outstanding		178,468,404		26,426,937		204,895,341
Denominator for basic and diluted net loss per share – weighted-average common stock		178,468,404		26,426,937		204,895,341
Basic and diluted net loss per share	$	(0.14)	$	(0.14)	$	(0.14)


Six months ended June 30, 2024
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(32,758)	$	(4,709)	$	(37,467)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(32,758)	$	(4,709)	$	(37,467)
Denominator:
Weighted-average common shares outstanding		183,841,564		26,426,937		210,268,501
Denominator for basic and diluted net loss per share – weighted-average common stock		183,841,564		26,426,937		210,268,501
Basic and diluted net loss per share	$	(0.18)	$	(0.18)	$	(0.18)


Six months ended June 30, 2023
					Total
	Class A		Class B		Common Stock
Numerator:
Allocation of undistributed earnings	$	(54,142)	$	(8,069)	$	(62,211)
Numerator for basic and diluted net loss per share – loss available to common stockholders	$	(54,142)	$	(8,069)	$	(62,211)
Denominator:
Weighted-average common shares outstanding		177,310,107		26,426,937		203,737,044
Denominator for basic and diluted net loss per share – weighted-average common stock		177,310,107		26,426,937		203,737,044
Basic and diluted net loss per share	$	(0.31)	$	(0.31)	$	(0.31)

Schedule of anti-dilutive common equivalent shares


	June 30,
	2024	2023
Outstanding options to purchase common stock	7,022,739	9,262,296
Outstanding restricted stock units	21,944,400	17,738,585
Outstanding warrants	20,652,690	20,652,690
Total anti-dilutive common equivalent shares	49,619,829	47,653,571

Organization and Description of Business (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023
Organization and Description of Business
Cash and cash equivalents	$ 102,051	$ 134,437	$ 166,806

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2024 segment
Summary of Significant Accounting Policies
Number of operating segments	1

Summary of Significant Accounting Policies - Operating Expenses - Other (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employment-related expenses	$ 26	$ 261	$ (30)	$ 3,879
Legal-related expenses	580	1,911	1,994	4,726
Total other	$ 606	$ 2,172	$ 1,964	$ 8,605

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue Recognition
Total revenue	$ 21,487	$ 18,487	$ 39,143	$ 33,963
United States
Revenue Recognition
Total revenue	17,039	15,491	30,775	27,496
International
Revenue Recognition
Total revenue	4,448	2,996	8,368	6,467
Devices and accessories
Revenue Recognition
Total revenue	14,648	12,273	25,939	21,121
Software and other services
Revenue Recognition
Total revenue	$ 6,839	$ 6,214	$ 13,204	$ 12,842

Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Revenue Recognition
Payment terms			30 days
Allowance for doubtful accounts	$ 2.2		$ 2.2		$ 1.8
Amount of revenue recognized	$ 6.1	$ 6.3	$ 11.1	$ 11.3

Revenue Recognition - Performance Obligations (Details) - USD ($) $ in Millions	Jun. 30, 2024	Dec. 31, 2023
Revenue Recognition
Remaining performance obligations	$ 31.7	$ 32.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Revenue Recognition
Percentage of remaining performance obligations as revenue	60.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01
Revenue Recognition
Percentage of remaining performance obligations as revenue	40.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

Fair Value of Financial Instruments (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Liabilities
Total liabilities at fair value on a recurring basis	$ 413	$ 826
Public Warrants
Liabilities
Warrants	276	552
Private Warrants
Liabilities
Warrants	137	274
Level 1
Liabilities
Total liabilities at fair value on a recurring basis	276	552
Level 1 \| Public Warrants
Liabilities
Warrants	276	552
Level 2
Liabilities
Total liabilities at fair value on a recurring basis	137	274
Level 2 \| Private Warrants
Liabilities
Warrants	$ 137	$ 274

Fair Value of Financial Instruments - Narrative (Details)	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Public Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Value of public warrants per warrant issued during IPO (as a percent)	33.33%
Outstanding warrants	13,799,357
Private Warrants
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Outstanding warrants	6,853,333
Class A Common Stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Shares called by warrants	1
Exercise price \| $ / shares	$ 11.50

Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Inventories
Raw materials	$ 49,572	$ 49,366
Work-in-progress	2,951	3,384
Finished goods	21,652	20,272
Total inventories	$ 74,175	$ 73,022

Property and Equipment, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property and Equipment, Net
Property and equipment, gross	$ 45,486	$ 43,516
Less: accumulated depreciation and amortization	(22,519)	(18,195)
Property and equipment, net	$ 22,967	$ 25,321

Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023	Jun. 30, 2023	Dec. 31, 2022
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$ 102,051	$ 134,437	$ 166,806
Restricted cash included within prepaid expenses and other current assets	80		380
Restricted cash included within other non-current assets	4,015		4,014
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$ 106,146	$ 138,650	$ 171,200	$ 166,828
Restricted Cash and Cash Equivalents, Current, Statement of Financial Position [Extensible Enumeration]	Prepaid Expense and Other Assets, Current		Prepaid Expense and Other Assets, Current
Restricted Cash and Cash Equivalents, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other Assets, Noncurrent		Other Assets, Noncurrent

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Accrued Expenses and Other Current Liabilities
Employee compensation	$ 5,571	$ 9,442
Customer deposits	1,767	1,613
Accrued warranty liability	382	297
Non-income tax	2,074	1,197
Professional fees	3,146	2,481
Current portion of operating lease liabilities	$ 2,322	$ 2,192
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total accrued expenses and other current liabilities	Total accrued expenses and other current liabilities
Other	$ 6,124	$ 6,203
Total accrued expenses and other current liabilities	$ 21,386	$ 23,425

Accrued Expenses and Other Current Liabilities - Warranty Expense Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Accrued Expenses and Other Current Liabilities
Balance, beginning of period	$ 644	$ 794	$ 697	$ 873
Warranty provision charged to operations	387	(7)	483	(51)
Warranty claims	(219)		(368)	(35)
Balance, end of period	$ 812	$ 787	$ 812	$ 787

Stock-Based Compensation (Details)	Jan. 01, 2024
Stock-Based Compensation
Percentage increase in equity awards authorized to be issued	4.00%

Stock-Based Compensation - Stock option activity (Details) - Employee Stock Option	6 Months Ended
	Jun. 30, 2024 shares
Number of Options
Outstanding at beginning of the period	7,439,187
Forfeited	(416,448)
Outstanding at end of the period	7,022,739

Stock-Based Compensation - Restricted stock unit activity (Details) - Restricted stock units	6 Months Ended
	Jun. 30, 2024 shares
Number of Restricted Stock Units
Outstanding at beginning of the period	15,569,983
Granted	11,713,683
Vested	(4,815,903)
Forfeited	(523,363)
Outstanding at end of the period	21,944,400

Stock-Based Compensation - Employee Stock Purchase Plan (Details) - 2024 ESPP Plan	6 Months Ended
	Jun. 30, 2024 Offering shares
Employee Stock Purchase Plan
Common stock reserved and available for issuance	4,200,000
Length of total offering period	24 months
Number of offering periods \| Offering	4
Length of individual offering periods	6 months
Purchase price % of closing market price on the first day of the offering period	85.00%
Purchase price % of closing market price on the day of purchase	85.00%
Number of options granted	0
Shares issued	0

Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Equity Incentive Plan
Total stock-based compensation expense	$ 5,858	$ 9,924	$ 11,383	$ 14,109
Research and development
Equity Incentive Plan
Total stock-based compensation expense	1,943	3,197	3,962	5,391
Sales and marketing
Equity Incentive Plan
Total stock-based compensation expense	1,155	1,316	2,262	1,937
General and administrative
Equity Incentive Plan
Total stock-based compensation expense	$ 2,760	$ 5,411	$ 5,159	$ 6,781

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Allocation of undistributed earnings	$ (15,706)	$ (28,671)	$ (37,467)	$ (62,211)
Numerator for basic and diluted net loss per share - loss available to common stockholders	$ (15,706)	$ (28,671)	$ (37,467)	$ (62,211)
Denominator:
Weighted-average common shares outstanding - basic	211,663,554	204,895,341	210,268,501	203,737,044
Weighted-average common shares outstanding - diluted	211,663,554	204,895,341	210,268,501	203,737,044
Basic loss per share	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Diluted loss per share	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Class A Common Stock
Numerator:
Allocation of undistributed earnings	$ (13,745)	$ (24,973)	$ (32,758)	$ (54,142)
Numerator for basic and diluted net loss per share - loss available to common stockholders	$ (13,745)	$ (24,973)	$ (32,758)	$ (54,142)
Denominator:
Weighted-average common shares outstanding - basic	185,236,617	178,468,404	183,841,564	177,310,107
Weighted-average common shares outstanding - diluted	185,236,617	178,468,404	183,841,564	177,310,107
Basic loss per share	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Diluted loss per share	$ (0.07)	$ (0.14)
Class B Common Stock
Numerator:
Allocation of undistributed earnings	$ (1,961)	$ (3,698)	$ (4,709)	$ (8,069)
Numerator for basic and diluted net loss per share - loss available to common stockholders	$ (1,961)	$ (3,698)	$ (4,709)	$ (8,069)
Denominator:
Weighted-average common shares outstanding - basic	26,426,937	26,426,937	26,426,937	26,426,937
Weighted-average common shares outstanding - diluted	26,426,937	26,426,937	26,426,937	26,426,937
Basic loss per share	$ (0.07)	$ (0.14)	$ (0.18)	$ (0.31)
Diluted loss per share	$ (0.07)	$ (0.14)

Net Loss Per Share - Anti-dilutive common equivalent shares (Details) - shares	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Net Loss Per Share
Total anti-dilutive common equivalent shares	49,619,829	47,653,571
Outstanding options to purchase common stock
Net Loss Per Share
Total anti-dilutive common equivalent shares	7,022,739	9,262,296
Outstanding restricted stock units
Net Loss Per Share
Total anti-dilutive common equivalent shares	21,944,400	17,738,585
Outstanding warrants
Net Loss Per Share
Total anti-dilutive common equivalent shares	20,652,690	20,652,690

401(k) Retirement Plan (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
401(k) Retirement Plan (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
401(k) Retirement Plan
401(k) Employer match contribution	$ 0.2	$ 0.2	$ 0.3	$ 0.5

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Commitments and Contingencies
Operating lease cost	$ 700	$ 1,000	$ 1,500	$ 2,000
Accrued Purchase Commitments, Current	131		131		$ 131
Inventory purchase commitments
Commitments and Contingencies
Minimum inventory purchase commitments			10,300
Prepaid vendor advance, net of write-downs	1,800		1,800
Accrued Purchase Commitments, Current	$ 100		$ 100
Utilization of accrual of purchase commitment liability				1,600
Utilization of vendor advance previously written down				$ 4,500

Subsequent Events (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
Subsequent Events (Details) - USD ($) $ in Thousands	Jul. 01, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Subsequent Events
Employee severance and benefits costs		$ 26	$ 261	$ (30)	$ 3,879
Subsequent event \| Employee Severance
Subsequent Events
Employee severance and benefits costs	$ 900
Subsequent event \| Employee Relocation
Subsequent Events
Estimated annual cost savings	10,000
Transition costs	$ 2,600

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