Butterfly Network, Inc. (BFLY) on Q3 2021 Results - Earnings Call Transcript
Operator: Good morning. My name is Emma and I will be the conference operator today. At this time, I would like to welcome everyone to the Butterfly Network Q3 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. Thank you. Agnes Lee, you may begin your conference.
Agnes Lee: Good morning and thank you for joining us today. Earlier this morning, Butterfly has released financial results for the third quarter, which ended September 30th 2021, and provided a business update. The release and earnings presentation, which include a reconciliation of management's use of non-GAAP financial measures, compared to the most applicable GAAP measures, are currently available on the Investors section of the Company's website at ir.butterflynetwork.com. Dr. Todd Fruchterman, Butterfly's President and Chief Executive Officer, and Stephanie Fielding, Butterfly's Chief Financial Officer, will host this morning's call. During today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, expectations with respect to financial results, future performance, development of products and services, potential regulatory approvals, anticipated financial impacts, and other effects of the business combination on our business. The size and potential growth of current or future markets for our products and services and the potential impact of the COVID-19 pandemic on our business. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our filings made with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements; and the Company disclaims any obligation to update such statements. During this call, we will refer non-GAAP financial measures, including adjusted gross margin, adjusted gross profit, and adjusted EBITDA. These financial measures are not prepared in accordance with U.S. Generally Accepted Accounting Principles or GAAP. These non-GAAP financial measures are not intended to be considered in isolation, which is substitute the results prepared in accordance with GAAP. The definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, and a discussion of why we present these non-GAAP financial measures, are included in today's press release and at the end of the slide presentation. As a reminder, this call is being webcast live and recorded, and we will be referencing a slide presentation in conjunction with our remarks. Because there was a short delay between the live telephone audio and the presentation being shown on the webcast, for the best experience, please use either the webcast for both the audio and video content, or if you've dialed in by telephone, download the slides from our website in advance from yourself. To access the webcast, please visit the Events section in the Investors section of our website and a replay of the event will be available solidly in the call. I would now like to turn the call over to Dr. Fruchterman
Todd Fruchterman: Thank you, Agnes, and good morning, everyone. We appreciate you taking the time to join us and learn of our progress this quarter. There is much for our team to be proud of as we build our foundational strength and make advancements towards realizing our vision of democratizing medical imaging and transforming care by enabling more informed clinical decision-making. And while we are improving every day based upon our most recent experiences and the current healthcare environment, we must reset expectations for revenue for the balance of the year. While our revenues for Q3 grew 44 % year-over-year. We are falling short of what's necessary to achieve the annual guidance provided by prior management one-year ago and reaffirmed by me in May of this year with the information I had having just joined the Company. F Or 2021, we now expect full-year revenue growth in the range of 30 % to 34 %. This represents good progress in our current commercial activities, and mounting user enthusiasm about Butterfly, but is offset by healthcare logistical challenges, and doctor, nurse, and medical technician fatigue concurrent with COVID conditions and its broad consequences. To understand our user base, it is important to recognize that there are multiple layers of Butterfly users. Many individual practitioners and early technology doctors are excited about our portability, affordability, and breadth of utility. We appreciate their early adoption, advocacy, and feedback. Many of them have been engaged in life-saving, practice altering work, and hold a deep understanding of how Butterfly can improve decision-making to both accelerate and enhance care delivery. A second group of users across multiple specialties is increasingly adopting Butterfly as we properly segment, educate and integrate the power of Butterfly into their respective areas of practice. Here, we are focusing on specific capabilities of this system and helping users to rapidly incorporate it into their practices and workflows. Over the coming quarters, we will continue to roll out programs targeted at specific specialties and procedural use cases, and our aligning commercial energies around doing so. Finally, because of the unique aspects of Butterfly, we are well-positioned to increasingly engage a third group of users, large, integrated health systems. Our value proposition reaches wide for the enterprise user across many divisions, departments, and sites of care. As we alone can integrate new clinical data and insights conveniently, cost-effectively and at enterprise scale. We expect our journey with hospitals and health systems to be collaborative as we work together to practically unlock valuable clinical information that will fundamentally change the course of diagnosis and treatment of patients in a variety of care settings. Such enterprise engagements require close integration to optimize enterprise workflows and systems and ensure proper compliance, security, billing integrity, and continuity. Introducing Butterfly to the enterprise is less about sales cycles and more about partnerships. And we are pleased with our current momentum among this important user audience. Across all 3 layers of customers in all geographies, we need to recognize that we are early in our journey and that commercialization, development, and clinical advancement will be iterative. One clear thread that permeates all of our customer lanes is our commitment to consistently and persistently drive ease-of-use and simplicity. Delivering ease-of-use and simplicity in all we do is a North Star for our journey, will be a clear value differentiator in the market, and is a personal commitment from our team and from me as we support doctors, nurses, and technicians, to help them more effectively transform the way they practice medicine. It's important to note that there has been a significant management evolution since projections were first made that included an aggressive back-half 2021 ramp. While we have rapidly reoriented strategy team and the Company overall to adjust to the need to shift from a direct-to-user led market approach to a more integrated commercial approach to health systems and specialties. Our near-term performance has been negatively influenced by confluence of factors. We believe that many of these factors are transitory and that our commitment to evolve and expand our commercial flotation approach, while constructively supporting behavior change in clinical practice will be a long-term competitive advantage, and one that Butterfly with its innovative solution is well-positioned to do. On a macro level, it is well understood that the healthcare community is suffering from exhaustion and severe human resource constraints resulting from the most recent COVID Delta wave, as well as overall labor shortages. Butterfly was specifically developed to support these very medical professionals and their ability to diagnose and treat more effectively, more rapidly, and more affordably. Amidst these unprecedented times, however, we have seen prospects and customers alike have to shift their attention to the pressing issues of the times rather than focusing on deploying new technology during Q4. To further respond to the needs and opportunities in the market, we have strengthened our talent as customer and prospect in engagement and augment solution ease-of-use. These changes have in 2022 and beyond, of this progress are -- The quality of the leadership team we are building, improving customer satisfaction, which is evident in our Q3 sequential uptick in net promoters scores, and our in-process discussions with large institutions to kick-start enterprise level implementations, All of which give me great optimism about future business acceleration. We believe Q3 and Q4 revenues are a lagging indicator that reflects the transitory challenges I just described. Butterfly system is uniquely positioned to deliver the value of better clinical information at the time it is needed. With it, our commitment to listen, learn, create, collaborate, and rapidly developed solutions that maximize not only the amazing utility of Butterfly, but enhance its ease of integration for those who will implement Butterfly at scale. Our goal is not simply to replace larger, more expensive technology with one that is more affordable, a goal and an obtainable goal, but it falls short of our societal and commercial aspiration. The differentiated power Butterfly, for decision-making and subsequent care planning in a practical, cost-effective way. Butterfly has the technology and capability to fundamentally change the way medical information is gathered, decisions are made, and care is delivered. With Butterfly, clinicians can dramatically improve diagnosis, accuracy, and speed, inform the course of treatment, and provide an unmatched patient experience and better outcomes, regardless of care setting. An important component of bringing Butterfly public and obtaining more than $500 million of funding was the understanding that maximum impact would be created through connectivity and collaboration with frontline healthcare professionals and industry-thought leaders. You see our commitment to that in the leadership team, we have assembled and the board members who have joined us. And in the coming quarters, you will see back in firm with institutions of scale who share our vision to dramatically improve the standard of care by deploying Butterfly as an advanced assessment tool throughout our Institute -- further support our go-to-market approach. And only a matter of months, we have reoriented our Technology Group under the leadership of CTO Andrei Stoica, to include industry-leading best practices for enterprise and workflow software development to bring an agility and speed to our enablement of larger scale enterprise collaborations. This is not only reflective of the iterative journey of co-development we are undertaking, but is demonstrative of our perpetual committed, and take more of the user burden onto the device and system. Whether it is at the platform level, the solution level, or with our investment in AI. We understand that a component requires removing implementation barriers to facilitate behavior and practice change. And at the beginning of the journey, enhancing education is critical. This is why we continue to build and optimize our team around these critical priorities. We have augmented our clinical leadership under the direction of Dr. to pave in and drive expensive clinical conversations as a means to advance the evolution for sound information into clinical workflows. We have also revamped our sales organization officer Stacey Pugh to give us the human capital necessary to more deeply engaged of complemented our internal investment in AI with an exclusive agreement with caption which I will discuss in more detail later in the call. The investment community and you cannot see the full evidence of our progress in the revenue stream in the back half of 2021. But we believe we are making significant progress and our better positioned to capture the full potential Butterfly moving forward. Despite our revenue shortfall, our adjusted gross margin, and adjusted EBITDA are projected to exceed the original plan and we continue to invest aggressively in products, people, and commercial expansion. Our underlying momentum is building and we expect to see accelerating revenue growth in 2022 indicate our complete 2022 forecast to the investment community concurrent with our Q4 earnings release and investor call. However, I will share with you today that we are confident that our rate of revenue growth for 2022, we'll exceed our projected full-year 2021 growth rate. We have made significant and measurable headway in 2021 and our team is sprinting forward. As a true growth Company, our commitment and conviction that we are here to build partner, collaborate, and co-create across all aspects of Butterfly. We will enable superior image and data capture everywhere and anywhere. From assessment in traditional healthcare channels, alternative sites of care, the home, across specialties that have never had access to timely imaging information before, and within geographies that have never had high-quality medical imaging. We know that every version of success for Butterfly starts with building a highly talented, capable team to support our vision and growth. I'd like to share a few leadership updates from this quarter. To support oversight on our growth and innovation strategy, we expanded our board with the appointment of Dr. Erica Swartz. Dr. Swartz brings a breadth of healthcare management and public versus where she led the country's public health deployment in response to the COVID-19 pandemic. She also spent 24 years in the uniform and service with the U.S. Coast Guard, serving as Chief Medical Officer and then other leadership roles. Dr. Swartz will serve on our newly formed technology committee with Dr. Roth. For and Dr. Adelman providing oversight of the role of Digi and supporting our business as we continue to scale and expand the business, we have been adding executive leadership and initiatives to accomplish this. In the third quarter, we had a Troy Quander as our Senior Vice President Regulatory and Quality. He brings over 25 years of FDA and Industry experience with a Focus on Regulatory Affairs, Compliance, Quality, and post-market surveillance teams. Troy, previously held roles at Olympus, Roche, Becton Dickinson, OraSure Technologies, Johnson & Johnson, and bioMerieux. With the addition of Troy to our existing regulatory and quality team, Butterfly further strengthened our ability to bring additional market in a compliant and timely fashion. I am very happy with the rapid evolution of the leadership team and with the addition of Troy, we have become even stronger to take us through the next part of our We also find confidence and are encouraged by the growing demonstrate Butterfly's and phases of care. Recently, The New England Journal of Medicine published an article that talked about the growing use of POCUS and factors that have led to broader adoption being driven by the advent of smaller, more affordable ultrasound machines, combined with evidence that physicians without a radiology background -- and effectively in practice. Beyond publications, there are more and more stories spanning a variety of procedural areas being told by physicians who are using Butterfly in their practices and institutions. One that I would like to highlight was presented at Pacira Biosciences ' recent Investor Day. Pacira is a specialty pharmaceutical Company that creates therapeutics to manage pain. Anesthesiologists from a leading academic -- investors through a timeline -- anesthesia during surgery. He then showed a picture of Butterfly as a disruptive technology that has enabled the broader adoption of regional anesthesia to improve patient care and post-operative recovery. Even with extensive training, it is challenging to administer regional anesthesia without complications. Butterfly changes that, with our solution and Needle Viz technology the anesthesiologist can see the targeted area, and safely administer the anesthetic. This is what Butterfly makes possible. There is more to come as we meet the needs of our customers and innovate so that Butterfly is not just accessible but present in the pocket of office. Important enabler of behavior change is ease-of-use. In August, we announced an exclusive partnership with Caption Health, the first and only FDA Ultrasound software. And the recent recipient, not only of a technology add-on payment or NTAP from CMS 21 recognition. With an AI powered Butterfly and Captions solution, specifically, our integrated solution will take on more of the burden of capturing and interpreting the ultrasound while providing practitioners with quick and relevant information about occasion cardiac state. Not only is there a significant identified cardiac conditions, but there is also considerable undetected disease in and across our communities. As a recent study from circulation heart failure showed, 46 % of heart failure patients diagnosed in the acute care settings have potential heart failure symptoms during primary care clinics visits in the previous 6 months. We believe that advanced diagnostic solutions, like the one we'll bring to market with Caption, maybe able to help identify undiagnosed heart failure earlier and bring people to therapy sooner before they get sicker, resulting in fewer unnecessary acute care visits and decreased medical cost. are expected to introduce the combined platform on Butterfly IQ + and the Needle Viz . Information is through unlocking new markets. As we evolve as a Company, global expansion will become a greater focus as the demand for Butterfly growth everywhere. We are excited to share continued momentum in the growth of our distributor relationships; a key mechanism to expand our reach. You will recall that last quarter we shared our entry into the Hong Kong region medical. True to our mission to democratize care around the world I'm pleased that through partnerships we entered into this quarter, we will make Butterfly available in Chile, and Pakistan, and through a more recent strategic partnership with Abdul Latif Jameel Health, we will bring Butterfly to the Middle East, North Africa, Turkey, and India. With these activities, we are helping to address global health equity needs by introducing Butterfly to markets that need better, more advanced technology and information of clinical care. And this is not just about creating access. One focus area for Veritas and our partner in Pakistan will be on improving health outcomes for expectant mothers. Leveraging the affordability, portability, and capabilities that are unique to the Butterfly solutions, such as the new OB tools, including the Gestational Age calculator that we launched last quarter. They will be partnering with provincial governments to aid healthcare workers to take Butterfly devices into the homes of pregnant mothers and provide access to care that otherwise is just not available. Another important driver of our growth is organic innovation. This quarter, we released a new product for the veterinary market. We launched Butterfly IQ + Vet, our second-generation veterinary ultrasound device which is designed to bring more valuable information and capabilities to veterinarians in a variety of clinical settings. The IQ + Vet have many new features. Comes with color Doppler sensitivity, a needle viz tool, and notably, was designed with a 15 % smaller probe face and a 10 % shorter probe for easier overall use and maneuvering. With the introduction of IQ + Vet, we have also expanded our market reach. The product is now available for purchase in 19 new international markets. And we continue to grow relationships in the U.S. and now the UK. We're very excited to bring value to the veterinary market in parallel with our work in human healthcare. Additionally, we announced the large scale partnership with rare breed to bring Butterfly to all of their veterinary hospitals. This adoption reflects an important change in the perception and deployment of Butterfly that is different from traditional ultrasound use in veterinary medicine. Rare breed had several experiences with Butterfly that catalyzed their decision to adopt across their hospitals. There's one instance that I would like to share with you. A veterinarian at a rare breed hospital worked with a dog which she reported due long by the owner. The veterinarian performed a physical exam and use Butterfly to perform a quick ultrasound for both lesions where the vet noticed mark sonographic differences between them. This was as the vet to perform quick, fine needle aspirates, which led to a diagnosis of a tumor. The vet then used Butterfly to ultrasound the liver and spleen to look for metastatic disease. All of this occurred during one appointment. Rather than waiting to obtain insights by referring out to a specialist, the veterinarian was able to acquire valuable information to guide an accurate diagnosis and provide information immediately to the pet owner, reducing the stress associated with waiting for yet another flavor of what Butterfly makes possible. Before I turn it over to Stephanie for a more detailed financial discussion, I want to reiterate a number of points that I think are crucial to understanding our direction. Butterfly's, great potential is to re-imagine healthcare by enabling more informed carrier decisions. The differentiated power of Butterfly is that unlocks ultrasound information in a practical, cost-effective way. Through the confluence of a transformational device that enables information acquisition and innovative software that makes the information usable. We are creating an entirely new clinical experience. And we know changing behavior requires hard work and we are now well-positioned to drive this positive change. We will relentlessly pursue simplicity and ease-of-use to enable Butterfly to be used in the broadest number of locations and setting. We don't just want to make clinicians better sonographers. We want Butterfly make practitioner’s better clinician. we are continuing to see proof points that acknowledge the use of ultrasound to a or to guide a procedure. Even with the challenges of the current environment, we continue to build momentum and are still seeing strong demand for Butterfly. And finally, in my 8 months have only grown stronger. I will turn to Stephanie to review of our financial results.
Stephanie Fielding: Thank you, Todd, and good morning, everyone. Third quarter revenues grew 44 % year-over-year to $14.6 million, an adjusted gross margin came in at 49.3%. While these numbers are healthy, they did fall short in the back-half ramp that is necessary to meet our original revenue projections. Product revenue for the quarter was $10.8 million, an increase of 25.8% from $8.6 million in the same period in 2020. Units fulfilled the main driver of product revenue were 5,556 in the quarter, compared with 3,947 in Q3 2020, an increase of 41 %. Growth was driven by increasing traction from our direct sales force, performance in our best business. New distributor relationships in Chile and Pakistan partially offset by direct-to-user sales that abated. On a related note, during the quarter, we increased the price of Butterfly IQ + to $2,399. We believe we are seeing the end of the individual early adopter curve. And we believe direct-to-user sales slowed this quarter due to a combination professional time and attention due to COVID surges and labor shortages and resulting from what we believe is a short-term reaction to our pricing actions in August. It is also a reflection of the patterns with the direct-to-user audience that we anticipated. And which validates our expanded focus on health institution. And a more tailored outreach to individual users. We have no plans to offer any hardware price promotions during the holiday season, as we did in Q4, 2020 when we introduced the Butterfly IQ +. And we are not modeling any significant acceleration in our direct-to-user trends other than normal buying patterns in Q4. We continue to enhance our customer and prospect engagement through our website, expanding commercial activities, targeting users by specialty, and by supporting their education. Subscription revenue was $3.8 million in the third quarter, growing approximately a 149 % from $1.5 million in Q3 2020. Our subscription mix, which we define as a percentage of total revenue recognized in our reporting periods that is subscription-based, was 26 % compared with 15 % in the third quarter of 2020, and 11 % as point increase. Turning now to adjusted gross profit and adjusted gross margin. Reconciliation calculations to GAAP can be found in today's press release and at the end of the slide presentation. Adjusted gross profit was $7.2 million Q3 2021 compared to adjusted gross profit of negative $2.7 million in Q3 2020 Excluded from the adjusted gross profit in Q3 2021 is a non-recurring $11.6 million loss on our purchase commitment with a third-party manufacturing vendor. Based on our current estimates, we are taking a reserve on inventory that we may not be able to use. There is no cash impact from this adjustment. In addition, such an uncertain environment is an advantage to our demand. Our adjusted gross margin was 49.3% for the third quarter and 49.2% year-to-date, which compares to an adjusted gross margin of -26.3% in Q3 2020 and -10.8% for the first three quarters of 2020. leverage as we grow and are a significant improvement in to our 2021 financial position. Operating expenses for $51.9 million for Q3 2021, an increase of $29.3 million or a 130 % compared to Q3 2020, due primarily to the build-out of our team in 2021, investments and innovation and public companies, both of the investments we are making to capitalize on the opportunities we see to transform care, as well as of the constrained spend environment in which the Company was up operating in the prior year. Loss from operations was $57 million, a decrease from negative $91.8 million in Q3 of 2020, primarily driven by higher operating expenses, offset by the increase in gross margin. Net loss was $13.6 million as compared to a net loss of $92.2 million during the third quarter of 2020. Our net loss was positively impacted by a $43 million non-operating gain due to the change in fair value of our warrant liabilities, which did not exist in 2020. Adjusted EBITDA was a loss of $33.5 million compared with a loss of $22.6 million in the same period in 2020. Adjusted EBITDA reconciliation, today's press release. Moving to our capital resources. We have a strong cash position that allows us to continue investing in our journey. As of September 30th, 2020, cash and cash equivalents and marketable securities were $468.4 million. the quarter was $23.8 million decrease from the $46.9 million reported in the second quarter of 2021, which to a Balance Sheet reclassification from our purchase commitment liability. As we have continued upgrading our product to increase reliability and position us for future transformational technology, we have determined that older raw material is likely obsolete. Consequently, we reclassified $35 million of that older raw material from reserve against the inventory to a reduction in inventory. This decrease in inventory was partially offset by additional purchases of raw materials subject to our minimum purchase commitments. In light of the theme Todd discussed earlier on the call, including the backdrop of COVID on healthcare, which has delayed system implementations and institutions, a longer sales and development cycle related to help systems adoption -- and the trends we're seeing in direct-to-user purchases. We are adjusting our 2021 guidance. To reflect our views on the current pace of 2021, total revenue is projected to be approximately $60 to $62 million or 30 % to 34 % growth year consistent performance and adjusted gross margin and slower ramp in our expenses. As a result, we have also updated these financial trends in our guidance for full-year adjusted gross margin and adjusted EBITDA. Gross margin is expected to be 28 % to 30 %, and net loss is expected to be $65 million to $75 million, assuming no change in the fair value of our warrants. Adjusted gross margin is expected to be 48 % to 50 %, and adjusted EBITDA is expected to be negative $125 million to $135 million. And with that, I will now turn it back over to Todd for summary comments.
Todd Fruchterman: Thank you, Stephanie. And thank you all for participating in Butterfly's third quarter 2021 earnings call. I would also like to thank the Butterfly team for their dedication to our mission and the excellent progress we have made in Q3. We are well on our journey of changing clinical behavior at scale. From our innovation and momentum to empower individual practitioners and care teams to our ongoing expansion across the U.S. globally, and what's Space-X even beyond. Thank you for your time today. And I look forward to providing ongoing updates as we deliver upon our mission to democratize medical imaging and to position Butterfly as an indispensable tool in healthcare. One that is truly unique in its capability anywhere and everywhere. We will now turn the call over for questions.
Operator: Your first question comes from the line of Josh Earthwright (ph) -- Josh Jennings from Cowen. My apologies. Matt Taylor from UBS. Your line is open.
Matt Taylor: Okay thanks. Good morning. Thanks for taking the question. I was wondering if you could maybe just give us a sense for what you think is the overall purchase market is this growing and maybe just talk about your share within that any updated views that you have on the market backdrop.
Stephanie Fielding: Hi, Matt. Good morning. Thanks for the question. I think we continue to believe that the PAM (ph) for the opportunity is incredibly large, given the versatility of the solution that we have. I don't say that our perspective on the opportunity has changed with any circumstances that have occurred this quarter. We continue to see signs of the market responding and we cited the New England Journal Medicine, those are the types of indications that continue to give us confidence and excitement about what we're seeing and the reactions in the market. But there is nothing short term that's adjusted our perspective on the opportunity and we continue to be excited about the size of that PAM (ph)
Todd Fruchterman: I think Matt, the other thing is, while we continue to be very excited about the opportunity, and Butterfly is not traditional evolving and working on right now. So as we look at the TAM that's considered in the market around POCUS, it's a lot around current thinking. And Butterfly's with all of its capabilities, allows a person to leverage those attributes, and you can bring it in as an adjustment tool and to a workflow tool and also use it as an advanced assessment tool, leveraging ultrasound information into clinical workflows that are informing clinical decision-making. So we see the opportunity at the POCUS -- current POCUS ham flash because of what Butterfly can do with its affordability, its portability, and its capabilities.
Operator: Your next question comes from the line of Josh Jennings with Cowen. Your line is open.
Josh Jennings: Hi. Good morning. Thanks for taking the questions.
Todd Fruchterman: Good morning, Josh.
Josh Jennings: Todd and Stephanie. Good morning. I was to -- understanding that the Q3 and Q4 results and the outlook is lagging indicator, and just was hoping to learn a little bit more about what's driving the optimism and you're talking about momentum in the business. I'm assuming it's in the enterprise channel, maybe if there any leading key indicators for the outlook than how they've evolved since the 2Q call and adjust to the risk of not be allowed to ask a follow-up and getting disconnected. Just wanted 2022 outlook, just maybe that you expect to drive 2022 for 2021 and then any other any pipeline updates or action that we should be thinking about as we move through the next 12 months. Thanks for taking all the questions.
Todd Fruchterman: All right. So thanks, Josh. I'm going to try to unpack that. So let me start, and then if I don't capture it all, you can follow up. So first, let me start by saying I think this is a lot less about things not happening, and more about things not happening yet. And so, we're seeing a lot of positive conversations -- and signals. This is really around behavior change in care evolution. So our optimism is driven a lot by the conversations that we're having in the larger institutional level about incorporating Butterfly, not as -- not just as focused solution, but as an integral way to think differently about workflows in different aspects and different functions within the hospital. So that's driving a lot of our optimism. As we think about how we are looking at the market, when Butterfly came about, it was a real technological advance. And we think that our single probe, whole body ultrasound and ultrasound on a chip provide a lot of advantages to the evolution of ultrasound information across the continuum of care. When Butterfly came to market, it was marketed as a device that was here. I think that was a great way to introduce it into the market. As we go into 2022, we are taking a much more targeted approach and a much more connected approach to the users. And both from an institutional perspective, but from a specialty perspective. How you can incorporate Butterfly more seamlessly and into workflow and into practice. So we're taking a more specialty approach and we're helping people absorb that behavior change and into the workflow. So it's like a lot of new technologies. And when you started adopting something that's new that you haven't had, it's about getting people comfortable with it and getting people to use it for specific case, and then getting people to expand with it. And we've made it available when Butterfly entered the market, now what we're doing is focusing very much on how people can get value by using it. And so with the information you can acquire from the device itself and then how we can make that information and incorporate it into the workflows. So we're going to be taking a much more specialty approach with much more focused utilization, to help people incorporated into their practices is in the workflow. We're taking a much more partnered approach with enterprises and institutions. That's really about co-development for true value realization across the entire institutional approach. And if you think about it, when you think about traditional POCUS, medicine can't be practiced differently anymore in one building versus another. And so to think that you have ultrasound machines in hospitals and you are delivering a certain level of care or getting information to make decisions and you don't have that elsewhere when so much care for being outside of the hospital is just going to be a challenge moving forward until we see as more care and more decisions are being made outside of the hospital. Even more excitement generating about Butterfly and then that is the continuum of the information be helping to drive consistency of workflow and decision-making across the continuum as being a real advantage for Butterfly. And we think -- one of the things that are really excited about that we have as a positive indicator is our customers are seeing that, too. Great. Thank you for that. And then I will just -- you mentioned alternate sites of care, or maybe not in the hospital, but how should we think about the build-out of international channels as we enter 2022, just from a high level of those channel is going to be meaningful -- more meaningful contributors in 2022 versus 2021. Absolutely, Josh. I mean, we tried to be super realistic about things. We're very early in our journey and our journey as a Company, and we're early in our journey as a technology that's evolving care. So we see in 2022 real good optimism and we see a lot of excitement in the enterprise and the institutions that I just talked to you about. We see it across the continuum of care, we see in geographical expansion to how we're thinking about both developed and developing market outside of the U.S., and is a journey across that continuum. And so we see that and then utilization of ultrasound outside of the human market. I mean, we're getting a tremendous amount of excitement for Butterfly in the veterinary market and we're very excited about 2022. And what's really cool is that people in the veterinary market are starting to think about Butterfly the same way we want people in the human market is thinking about it. How do you approach care delivery differently by incorporating Butterfly and ultrasound information into your decision-making early. And that's been really exciting. So we're really excited about multiple avenues in generating growth in 2022.
Josh Jennings: Great. And then one last later on, pipeline and we have caption coming on board. Any way you can detail when that -- I guess the full launch of the integrated platform could occur? NTAP is kicking in here, or just did. Then any other software or next-generation platform updates and just in terms of timelines, we should think that that could catalyze -- new technology actually could catalyze stronger adoption utilization trends. Thanks again.
Todd Fruchterman: Sure, Josh thanks. We're -- like I said earlier on the call, we're on track for the launch with Caption in the winter. This year, we're excited about bringing it into the market. We're really excited about bringing into the market because I think it's really just -- example pipe where we've been talking about which is taking the burden onto the device and away from the user and really getting it less about doing procedures and ultrasound and more about information and decision-making. And we think Caption really helps us demonstrate that and allows people to think about that information and influencing care decisions earlier and differently than they have in the past because it's information available that wasn't readily available broadly across that clinical situation. And so we're excited about that. You'll see that in the winter coming out here. And then as it relates to just our development pipeline, we're really excited about; I spoke about this in the call. The great progress that our technical teams have been making. We've Andrei has come in, the technical teams are realigned and I think we're making a lot of progress on our software. We're getting very close to our customer needs and being very customer - centric. And I think you'll see the normal cadence of us with software releases coming out in a timely fashion here in the near future. And then hardware releases, like we've said, in that couple year timeframe as we look at where our evolution of our technology continues to open up the differentiation and enable value creation across the continuum was getting ultrasound technology. You were really excited about how our technical organization is performing. And I think we're bringing it all together, Josh, with that behavioral change with ease-of-use, and we're starting that journey as the technical pieces are taking -- helping the device take more of the burden, we're really leaning into our clinical organization and generating data and our clinical education, helping users incorporate this technology and information into their clinical practices. And that's really where our lean for 2022 is to help accelerate our growth.
Josh Jennings: Thanks so much.
Operator: There are no further questions at this time. This concludes today's conference call. You may now disconnect.
