Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
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 | 2023 | |
Document Fiscal Period Focus | Q3 | |
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 | 180,696,581 | |
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 $11.50 per share | |
Trading Symbol | BFLY WS | |
Security Exchange Name | NYSE | |
Class B Common Stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 26,426,937 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 150,006 | $ 162,561 |
Marketable securities | 75,250 | |
Accounts receivable, net | 13,646 | 14,685 |
Inventories | 94,016 | 59,970 |
Current portion of vendor advances | 2,728 | 35,182 |
Prepaid expenses and other current assets | 8,189 | 9,489 |
Total current assets | 268,585 | 357,137 |
Property and equipment, net | 26,362 | 31,331 |
Non-current portion of vendor advances | 16,808 | |
Operating lease assets | 16,016 | 21,567 |
Other non-current assets | 6,451 | 7,535 |
Total assets | 334,222 | 417,570 |
Current liabilities: | ||
Accounts payable | 8,097 | 7,211 |
Deferred revenue, current | 15,117 | 15,856 |
Accrued purchase commitments, current | 212 | 2,146 |
Accrued expenses and other current liabilities | 21,933 | 26,116 |
Total current liabilities | 45,359 | 51,329 |
Deferred revenue, non-current | 5,273 | 4,957 |
Warrant liabilities | 1,446 | 5,370 |
Operating lease liabilities | 23,409 | 29,966 |
Other non-current liabilities | 1,316 | 588 |
Total liabilities | 76,803 | 92,210 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Additional paid-in capital | 942,915 | 921,278 |
Accumulated deficit | (685,517) | (595,938) |
Total stockholders' equity | 257,419 | 325,360 |
Total liabilities and stockholders' equity | 334,222 | 417,570 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock | 18 | 17 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
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 | 180,633,155 | 174,459,956 |
Common stock, shares outstanding (in shares) | 180,633,155 | 174,459,956 |
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 STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 15,421 | $ 19,618 | $ 49,384 | $ 54,407 |
Cost of revenue: | ||||
Total cost of revenue | 6,039 | 8,629 | 19,991 | 24,503 |
Gross profit | 9,382 | 10,989 | 29,393 | 29,904 |
Operating expenses: | ||||
Research and development | 12,130 | 22,040 | 44,409 | 68,883 |
Sales and marketing | 9,012 | 15,481 | 28,776 | 47,121 |
General and administrative | 11,560 | 16,603 | 37,239 | 54,080 |
Other | 9,243 | 2,897 | 17,848 | 3,838 |
Total operating expenses | 41,945 | 57,021 | 128,272 | 173,922 |
Loss from operations | (32,563) | (46,032) | (98,879) | (144,018) |
Interest income | 1,903 | 1,304 | 5,714 | 1,574 |
Interest expense | (2) | (2) | ||
Change in fair value of warrant liabilities | 3,511 | (9,087) | 3,924 | 8,881 |
Other income (expense), net | (217) | (898) | (256) | (1,387) |
Loss before provision for income taxes | (27,366) | (54,715) | (89,497) | (134,952) |
Provision for income taxes | 2 | 27 | 82 | 68 |
Net loss and comprehensive loss | $ (27,368) | $ (54,742) | $ (89,579) | $ (135,020) |
Net loss per common share - basic | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Net loss per common share - diluted | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Weighted-average common shares outstanding - basic | 206,740,234 | 200,172,683 | 204,749,108 | 199,528,394 |
Weighted-average common shares outstanding - diluted | 206,740,234 | 200,172,683 | 204,749,108 | 199,528,394 |
Product | ||||
Revenue: | ||||
Total revenue | $ 8,753 | $ 13,164 | $ 29,874 | $ 37,607 |
Cost of revenue: | ||||
Total cost of revenue | 3,929 | 6,534 | 13,765 | 19,481 |
Software and other services | ||||
Revenue: | ||||
Total revenue | 6,668 | 6,454 | 19,510 | 16,800 |
Cost of revenue: | ||||
Total cost of revenue | $ 2,110 | $ 2,095 | $ 6,226 | $ 5,022 |
CONDENSED CONSOLIDATED STATEM_2
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, 2021 | $ 17 | $ 3 | $ 874,886 | $ (427,215) | $ 447,691 | ||
Balance at beginning of the period (in shares) at Dec. 31, 2021 | 171,613,049 | 26,426,937 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (135,020) | (135,020) | |||||
Common stock issued upon exercise of stock options and warrants | 2,844 | 2,844 | |||||
Common stock issued upon exercise of stock options and warrants (in shares) | 1,035,574 | ||||||
Common stock issued upon vesting of restricted stock units | (106) | (106) | |||||
Common stock issued upon vesting of restricted stock units (in shares) | 1,425,979 | ||||||
Stock-based compensation expense | 28,228 | 28,228 | |||||
Balance at end of the period at Sep. 30, 2022 | $ 17 | $ 3 | 905,852 | (562,235) | 343,637 | ||
Balance at end of the period (in shares) at Sep. 30, 2022 | 174,074,602 | 26,426,937 | |||||
Balance at beginning of the period at Jun. 30, 2022 | $ 17 | $ 3 | 894,162 | (507,493) | 386,689 | ||
Balance at beginning of the period (in shares) at Jun. 30, 2022 | 172,816,532 | 26,426,937 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (54,742) | (54,742) | |||||
Common stock issued upon exercise of stock options and warrants | 2,034 | 2,034 | |||||
Common stock issued upon exercise of stock options and warrants (in shares) | 691,907 | ||||||
Common stock issued upon vesting of restricted stock units (in shares) | 566,163 | ||||||
Stock-based compensation expense | 9,656 | 9,656 | |||||
Balance at end of the period at Sep. 30, 2022 | $ 17 | $ 3 | 905,852 | (562,235) | 343,637 | ||
Balance at end of the period (in shares) at Sep. 30, 2022 | 174,074,602 | 26,426,937 | |||||
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 | 174,459,956 | 26,426,937 | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (89,579) | (89,579) | |||||
Common stock issued upon exercise of stock options and warrants | 228 | 228 | |||||
Common stock issued upon exercise of stock options and warrants (in shares) | 180,467 | ||||||
Common stock issued upon vesting of restricted stock units | $ 1 | 1 | |||||
Common stock issued upon vesting of restricted stock units (in shares) | 5,992,732 | ||||||
Stock-based compensation expense | 21,409 | 21,409 | |||||
Balance at end of the period at Sep. 30, 2023 | $ 18 | $ 3 | 942,915 | (685,517) | 257,419 | ||
Balance at end of the period (in shares) at Sep. 30, 2023 | 180,633,155 | 26,426,937 | 180,633,155 | 26,426,937 | |||
Balance at beginning of the period at Jun. 30, 2023 | $ 18 | $ 3 | 935,833 | (658,149) | 277,705 | ||
Balance at beginning of the period (in shares) at Jun. 30, 2023 | 179,720,918 | 26,426,937 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (27,368) | (27,368) | |||||
Common stock issued upon exercise of stock options and warrants | 92 | 92 | |||||
Common stock issued upon exercise of stock options and warrants (in shares) | 55,807 | ||||||
Common stock issued upon vesting of restricted stock units (in shares) | 856,430 | ||||||
Stock-based compensation expense | 6,990 | 6,990 | |||||
Balance at end of the period at Sep. 30, 2023 | $ 18 | $ 3 | $ 942,915 | $ (685,517) | $ 257,419 | ||
Balance at end of the period (in shares) at Sep. 30, 2023 | 180,633,155 | 26,426,937 | 180,633,155 | 26,426,937 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (89,579) | $ (135,020) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation, amortization, and impairments | 8,332 | 4,066 |
Stock-based compensation expense | 20,924 | 27,428 |
Change in fair value of warrant liabilities | (3,924) | (8,881) |
Gain on lease termination | (214) | |
Other | (478) | 750 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 711 | (39) |
Inventories | (34,046) | (21,421) |
Prepaid expenses and other assets | 2,354 | (498) |
Vendor advances | 15,646 | 9,555 |
Accounts payable | 1,092 | (3,121) |
Deferred revenue | (423) | 971 |
Accrued purchase commitments | (1,934) | (15,578) |
Change in operating lease assets and liabilities | (671) | 1,772 |
Accrued expenses and other liabilities | (3,509) | (240) |
Net cash used in operating activities | (85,719) | (140,256) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (297) | (75,118) |
Sales of marketable securities | 76,484 | |
Purchases of property and equipment, including capitalized software | (3,271) | (16,180) |
Sales of property and equipment | 10 | |
Net cash provided by (used in) investing activities | 72,926 | (91,298) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and warrants | 228 | 2,844 |
Other financing activities | 0 | (100) |
Net cash provided by financing activities | 228 | 2,744 |
Net decrease in cash, cash equivalents, and restricted cash | (12,565) | (228,810) |
Cash, cash equivalents, and restricted cash, beginning of period | 166,828 | 426,841 |
Cash, cash equivalents, and restricted cash, end of period | $ 154,263 | $ 198,031 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1. Organization and Description of Business The Company is an innovative digital health business transforming care with handheld, whole-body ultrasound. Powered by its proprietary Ultrasound-on-Chip™ technology, the 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. 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. Although the Company has incurred recurring losses in each year since inception, the Company expects its cash and cash equivalents will be sufficient to fund operations for at least the next twelve months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 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 2022 Annual Report on Form 10-K. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated balance sheet as of December 31, 2022, 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. Certain prior period amounts presented on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 have been reclassified to conform to the current period presentation. See the Operating Expenses – Other 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 nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2023, 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 September 30, 2023, 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. As of September 30, 2023 and December 31, 2022, 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 nine months ended September 30, 2023. One customer accounted for more than 10% of the Company’s total revenue for the three months ended September 30, 2022, and no customer accounted for more than 10% of the Company’s total revenue for the nine months ended September 30, 2022. 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 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, judgments, and assumptions. The Company bases its estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to 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, 2022. 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. To conform to current period presentation of the condensed consolidated statements of operations and comprehensive loss, the Company reclassified certain expenses presented as research and development, sales and marketing, and general and administrative in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 as other in this Quarterly Report on Form 10-Q. The following table summarizes the Company’s operating expenses reclassified as other from research and development, sales and marketing, and general and administrative (in thousands): Three months ended Nine months ended September 30, 2022 September 30, 2022 Reclassified from: Research and development $ 1,114 $ 1,114 Sales and marketing 330 330 General and administrative 1,453 2,394 Total reclassified as other $ 2,897 $ 3,838 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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Employment-related expenses $ 4,755 $ 1,860 $ 8,634 $ 1,860 Legal-related expenses 4,488 1,037 9,214 1,978 Total other $ 9,243 $ 2,897 $ 17,848 $ 3,838 See Note 12 “Reductions in Force” for additional information regarding the employment-related expenses classified as other in the condensed consolidated statements of operations and comprehensive loss. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue Recognition | |
Revenue Recognition | 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 September 30, Nine months ended September 30, Recognition 2023 2022 2023 2022 By product type: Devices and accessories Point-in-time $ 8,753 $ 13,164 $ 29,874 $ 37,607 Software and other services Over time 6,668 6,454 19,510 16,800 Total revenue $ 15,421 $ 19,618 $ 49,384 $ 54,407 By geographical market: United States $ 12,230 $ 13,582 $ 39,726 $ 37,881 International 3,191 6,036 9,658 16,526 Total revenue $ 15,421 $ 19,618 $ 49,384 $ 54,407 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 accounts receivable and deferred revenue. The Company recognizes a receivable when it has an unconditional right to payment, and payment terms are typically 60 days for sales on credit of product, software, and other services. The allowance for doubtful accounts was $0.7 million and $0.5 million as of September 30, 2023 and December 31, 2022, respectively. For the three months ended September 30, 2023 and 2022, the Company recognized $6.7 million and $5.1 million, respectively, of revenue that was included in the deferred revenue balance at the beginning of the period. For the nine months ended September 30, 2023 and 2022, the Company recognized $15.2 million and $11.2 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 September 30, 2023 and December 31, 2022, the Company had $32.0 million and $23.9 million, respectively, of remaining performance obligations. As of September 30, 2023, the Company expects to recognize 55% of its remaining performance obligations as revenue in the next twelve months and an additional 45% thereafter |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 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: ● 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. ● 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 liabilities 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 September 30, 2023 and December 31, 2022. The Company’s outstanding warrants include publicly traded warrants (the “Public Warrants”) which were issued as one The Company’s investments in marketable securities were ownership interests in mutual funds. The Company measured the equity securities using Level 1 fair value inputs based on the quoted prices in active markets for identical securities. As the securities had readily determinable fair value, unrealized gains and losses were reported as other income (expense), net on the consolidated statements of operations and comprehensive loss. Subsequent gains or losses realized upon redemption or sale of these securities were also recorded as other income (expense), net on the condensed consolidated statements of operations and comprehensive loss. The Company considered all of its investments in marketable securities as available for use in current operations and therefore classified these securities within current assets on the condensed consolidated balance sheets. The Company did not hold any equity securities as of September 30, 2023. For the three and nine months ended September 30, 2022, the Company recognized $0.6 million of unrealized losses related to equity securities still held as of September 30, 2022. 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 September 30, 2023: Warrants: Public Warrants $ 966 $ 966 $ — $ — Private Warrants 480 — 480 — Total liabilities at fair value on a recurring basis $ 1,446 $ 966 $ 480 $ — December 31, 2022: Marketable securities: Mutual funds $ 75,250 $ 75,250 $ — $ — Total assets at fair value on a recurring basis $ 75,250 $ 75,250 $ — $ — Warrants: Public Warrants $ 3,588 $ 3,588 $ — $ — Private Warrants 1,782 — 1,782 — Total liabilities at fair value on a recurring basis $ 5,370 $ 3,588 $ 1,782 $ — |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventories | |
Inventories | Note 5. Inventories The following table summarizes the Company’s inventories (in thousands): September 30, December 31, 2023 2022 Raw materials $ 72,256 41,265 Work-in-progress 905 1,962 Finished goods 20,855 16,743 Total inventories $ 94,016 $ 59,970 Work-in-progress represents inventory items in intermediate stages of production by third-party manufacturers. For the three and nine months ended September 30, 2023, net realizable value inventory adjustments and excess and obsolete inventory charges were not significant and were recognized in product cost of revenue. See Note 13 “Commitments and Contingencies” for additional information regarding the Company’s inventory supply arrangements. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, December 31, 2023 2022 Property and equipment, gross $ 42,947 $ 42,385 Less: accumulated depreciation and amortization (16,585) (11,054) Property and equipment, net $ 26,362 $ 31,331 As of September 30, 2023 and 2022, the Company excluded $0.2 million and $0.8 million, respectively, of accrued property and equipment from the cash used in investing activities on the condensed consolidated statements of cash flows. The Company fully impaired its leasehold improvements related to a lease that was terminated during the third quarter of 2023. The Company recognized an impairment loss of $1.8 million for the three and nine months ended September 30, 2023 in operating expenses on the condensed consolidated statements of operations and comprehensive loss. See Note 13, “Commitments and Contingencies” for further discussion of the terminated lease. |
Restricted Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, 2023 2022 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 150,006 $ 193,313 Restricted cash included within prepaid expenses and other current assets 243 704 Restricted cash included within other non-current assets 4,014 4,014 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 154,263 $ 198,031 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. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, December 31, 2023 2022 Employee compensation $ 9,202 $ 12,166 Customer deposits 1,281 1,135 Accrued warranty liability 269 287 Non-income tax 1,042 1,442 Professional fees 2,523 3,450 Current portion of operating lease liabilities 1,923 1,926 Estimated liability for legal contingencies 1,630 — Other 4,063 5,710 Total accrued expenses and other current liabilities $ 21,933 $ 26,116 The following table summarizes warranty expense activity (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Balance, beginning of period $ 787 $ 975 $ 873 $ 1,116 Warranty provision charged to operations 227 76 176 241 Warranty claims (293) (135) (328) (441) Balance, end of period $ 721 $ 916 $ 721 $ 916 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. |
Equity Incentive Plans
Equity Incentive Plans | 9 Months Ended |
Sep. 30, 2023 | |
Equity Incentive Plans | |
Equity Incentive Plans | Note 9. Equity Incentive Plans For the three and nine months ended September 30, 2023, 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, 2023, 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, 2023. Stock Option Activity The following table summarizes the changes in the Company’s outstanding stock options: Number of Options Outstanding at December 31, 2022 12,571,912 Granted — Exercised (180,467) Forfeited (3,797,376) Outstanding at September 30, 2023 8,594,069 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, 2022 9,961,291 Granted 15,563,473 Vested (4,830,193) Forfeited (4,721,808) Outstanding at September 30, 2023 15,972,763 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. Included in the table above are market-based RSUs 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. The following table summarizes the Company’s stock-based compensation expense (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Research and development $ 2,158 $ 3,180 $ 7,549 $ 9,596 Sales and marketing 1,109 2,021 3,046 5,920 General and administrative 3,548 4,212 10,329 11,912 Total stock-based compensation expense $ 6,815 $ 9,413 $ 20,924 $ 27,428 Prior period stock-based compensation expense that was classified as cost of revenue is now included in research and development due to the amounts being insignificant. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Net Loss Per Share | 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. 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 September 30, 2023 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (23,870) $ (3,498) $ (27,368) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (23,870) $ (3,498) $ (27,368) Denominator: Weighted-average common shares outstanding 180,313,297 26,426,937 206,740,234 Denominator for basic and diluted net loss per share – weighted-average common stock 180,313,297 26,426,937 206,740,234 Basic and diluted net loss per share $ (0.13) $ (0.13) $ (0.13) Three months ended September 30, 2022 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (47,515) $ (7,227) $ (54,742) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (47,515) $ (7,227) $ (54,742) Denominator: Weighted-average common shares outstanding 173,745,746 26,426,937 200,172,683 Denominator for basic and diluted net loss per share – weighted-average common stock 173,745,746 26,426,937 200,172,683 Basic and diluted net loss per share $ (0.27) $ (0.27) $ (0.27) Nine months ended September 30, 2023 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (78,017) $ (11,562) $ (89,579) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (78,017) $ (11,562) $ (89,579) Denominator: Weighted-average common shares outstanding 178,322,171 26,426,937 204,749,108 Denominator for basic and diluted net loss per share – weighted-average common stock 178,322,171 26,426,937 204,749,108 Basic and diluted net loss per share $ (0.44) $ (0.44) $ (0.44) Nine months ended September 30, 2022 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (117,137) $ (17,883) $ (135,020) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (117,137) $ (17,883) $ (135,020) Denominator: Weighted-average common shares outstanding 173,101,457 26,426,937 199,528,394 Denominator for basic and diluted net loss per share – weighted-average common stock 173,101,457 26,426,937 199,528,394 Basic and diluted net loss per share $ (0.68) $ (0.68) $ (0.68) 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: September 30, 2023 2022 Outstanding options to purchase common stock 8,594,069 13,740,728 Outstanding restricted stock units 15,972,763 11,578,865 Outstanding warrants 20,652,690 20,652,690 Total anti-dilutive common equivalent shares 45,219,522 45,972,283 |
401(k) Retirement Plan
401(k) Retirement Plan | 9 Months Ended |
Sep. 30, 2023 | |
401(k) Retirement Plan | |
401(k) Retirement Plan | 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 September 30, 2023 and 2022, expenses for matching 401(k) contributions were $0.2 million and $0.3 million, respectively. For the nine months ended September 30, 2023 and 2022, expenses for matching 401(k) contributions were $0.6 million and $1.1 million, respectively. |
Reductions in Force
Reductions in Force | 9 Months Ended |
Sep. 30, 2023 | |
Reductions in Force | |
Reductions in Force | Note 12. Reductions in Force During 2022 and 2023, the Company implemented plans designed to better align the Company’s commercial objectives and prioritization with its existing strengths and offerings as well as improve the Company’s efficiency by reducing operating expenses and extending liquidity. In addition to decreasing other operating expenses, these plans included reductions in force announced in July 2022, January 2023, and July 2023 representing approximately 10%, 25%, and 25% of the Company’s workforce at each announcement date, respectively. For the three months ended September 30, 2023 and 2022, the Company incurred $4.8 million and $1.9 million, respectively, of employee severance and benefit costs related to the reductions in force. For the nine months ended September 30, 2023 and 2022, the Company incurred $8.6 million and $1.9 million, respectively, of employee severance and benefit costs related to the reductions in force. As of September 30, 2023, $2.2 million of accrued employee severance and benefit costs related to the reductions in force were included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. As of December 31, 2022, the amount of accrued employee severance and benefit costs related to the reductions in force included in accrued expenses and other current liabilities on the condensed consolidated balance sheets was not significant. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Commitments Leases: The Company primarily enters into leases for office space that are classified as operating leases. The Company terminated one of its operating leases for office space and modified another during the third quarter of 2023 that increased its lease payments by $0.2 million. The Company recognized a total decrease of $4.2 million to operating lease assets, $0.7 million to the current portion of operating lease liabilities included in accrued expenses and other current liabilities, and $4.7 million to the non-current portion of operating lease liabilities on the condensed consolidated balance sheets for the lease termination and lease modification. As part of the lease termination, the Company agreed to forfeit a $0.9 million security deposit included in other non-current assets on the condensed consolidated balance sheets. The Company recognized a $0.2 million gain on lease termination within operating expenses on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023. 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 September 30, 2023, the aggregate amount of minimum inventory purchase commitments is $22.4 million, and the Company has a vendor advance asset of $2.2 million, net of write-downs, and an accrued purchase commitment liability of $0.2 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 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 months ended September 30, 2023, the Company did not acquire such E&O inventory. During the three months ended September 30, 2023, the Company utilized $0.3 million of the accrued purchase commitment liability and $0.3 million of the vendor advance that was previously written down to acquire such E&O inventory. During the nine months ended September 30, 2023, the Company utilized $1.9 million of the accrued purchase commitment liability and $4.8 million of the vendor advance that was previously written down to acquire such E&O inventory. During the three and nine months ended September 30, 2022, the Company utilized $15.6 million of the accrued purchase commitment liability and $7.6 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. (Case No. 2:22-cv-00854) was filed in the United States District Court for the District of New Jersey and was amended on November 1, 2022. 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 March 9, 2022, Fujifilm Sonosite, Inc. (“Fujifilm”) filed a complaint against the Company, styled Fujifilm Sonosite, Inc. v. Butterfly Network, Inc. On June 21, 2022, a stockholder derivative action, styled Koenig v. Todd M. Fruchterman, et al. The Company, as well as certain current and former directors and executive officers, is also involved in other legal matters for employment-related claims that have not been fully resolved and for which it is unable to predict the outcome. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | 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 2022 Annual Report on Form 10-K. All intercompany balances and transactions are eliminated upon consolidation. The condensed consolidated balance sheet as of December 31, 2022, 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. Certain prior period amounts presented on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022 have been reclassified to conform to the current period presentation. See the Operating Expenses – Other 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 nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter, the year ending December 31, 2023, or any other period. |
Concentration of Credit Risk | 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 September 30, 2023, 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. As of September 30, 2023 and December 31, 2022, 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 nine months ended September 30, 2023. One customer accounted for more than 10% of the Company’s total revenue for the three months ended September 30, 2022, and no customer accounted for more than 10% of the Company’s total revenue for the nine months ended September 30, 2022. |
Segment Reporting | 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 |
Use of Estimates | 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, judgments, and assumptions. The Company bases its estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to 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, 2022. |
Operating Expenses - Other | 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. To conform to current period presentation of the condensed consolidated statements of operations and comprehensive loss, the Company reclassified certain expenses presented as research and development, sales and marketing, and general and administrative in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 as other in this Quarterly Report on Form 10-Q. The following table summarizes the Company’s operating expenses reclassified as other from research and development, sales and marketing, and general and administrative (in thousands): Three months ended Nine months ended September 30, 2022 September 30, 2022 Reclassified from: Research and development $ 1,114 $ 1,114 Sales and marketing 330 330 General and administrative 1,453 2,394 Total reclassified as other $ 2,897 $ 3,838 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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Employment-related expenses $ 4,755 $ 1,860 $ 8,634 $ 1,860 Legal-related expenses 4,488 1,037 9,214 1,978 Total other $ 9,243 $ 2,897 $ 17,848 $ 3,838 See Note 12 “Reductions in Force” for additional information regarding the employment-related expenses classified as other in the condensed consolidated statements of operations and comprehensive loss. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of operating expenses reclassified as other | Three months ended Nine months ended September 30, 2022 September 30, 2022 Reclassified from: Research and development $ 1,114 $ 1,114 Sales and marketing 330 330 General and administrative 1,453 2,394 Total reclassified as other $ 2,897 $ 3,838 |
Schedule of other expenses | Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Employment-related expenses $ 4,755 $ 1,860 $ 8,634 $ 1,860 Legal-related expenses 4,488 1,037 9,214 1,978 Total other $ 9,243 $ 2,897 $ 17,848 $ 3,838 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue Recognition | |
Schedule of disaggregated revenue | Pattern of Three months ended September 30, Nine months ended September 30, Recognition 2023 2022 2023 2022 By product type: Devices and accessories Point-in-time $ 8,753 $ 13,164 $ 29,874 $ 37,607 Software and other services Over time 6,668 6,454 19,510 16,800 Total revenue $ 15,421 $ 19,618 $ 49,384 $ 54,407 By geographical market: United States $ 12,230 $ 13,582 $ 39,726 $ 37,881 International 3,191 6,036 9,658 16,526 Total revenue $ 15,421 $ 19,618 $ 49,384 $ 54,407 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value of Financial Instruments | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurement Level Total Level 1 Level 2 Level 3 September 30, 2023: Warrants: Public Warrants $ 966 $ 966 $ — $ — Private Warrants 480 — 480 — Total liabilities at fair value on a recurring basis $ 1,446 $ 966 $ 480 $ — December 31, 2022: Marketable securities: Mutual funds $ 75,250 $ 75,250 $ — $ — Total assets at fair value on a recurring basis $ 75,250 $ 75,250 $ — $ — Warrants: Public Warrants $ 3,588 $ 3,588 $ — $ — Private Warrants 1,782 — 1,782 — Total liabilities at fair value on a recurring basis $ 5,370 $ 3,588 $ 1,782 $ — |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventories | |
Summary of inventories | The following table summarizes the Company’s inventories (in thousands): September 30, December 31, 2023 2022 Raw materials $ 72,256 41,265 Work-in-progress 905 1,962 Finished goods 20,855 16,743 Total inventories $ 94,016 $ 59,970 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | The following table summarizes the Company’s property and equipment, net (in thousands): September 30, December 31, 2023 2022 Property and equipment, gross $ 42,947 $ 42,385 Less: accumulated depreciation and amortization (16,585) (11,054) Property and equipment, net $ 26,362 $ 31,331 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restricted Cash | |
Summary of reconciliation of cash, cash equivalents and restricted cash | September 30, 2023 2022 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 150,006 $ 193,313 Restricted cash included within prepaid expenses and other current assets 243 704 Restricted cash included within other non-current assets 4,014 4,014 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 154,263 $ 198,031 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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): September 30, December 31, 2023 2022 Employee compensation $ 9,202 $ 12,166 Customer deposits 1,281 1,135 Accrued warranty liability 269 287 Non-income tax 1,042 1,442 Professional fees 2,523 3,450 Current portion of operating lease liabilities 1,923 1,926 Estimated liability for legal contingencies 1,630 — Other 4,063 5,710 Total accrued expenses and other current liabilities $ 21,933 $ 26,116 |
Schedule of warranty expense activity | The following table summarizes warranty expense activity (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Balance, beginning of period $ 787 $ 975 $ 873 $ 1,116 Warranty provision charged to operations 227 76 176 241 Warranty claims (293) (135) (328) (441) Balance, end of period $ 721 $ 916 $ 721 $ 916 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Incentive Plans | |
Summary of the stock option activity | Number of Options Outstanding at December 31, 2022 12,571,912 Granted — Exercised (180,467) Forfeited (3,797,376) Outstanding at September 30, 2023 8,594,069 |
Summary of the restricted stock unit activity | Number of RSUs Outstanding at December 31, 2022 9,961,291 Granted 15,563,473 Vested (4,830,193) Forfeited (4,721,808) Outstanding at September 30, 2023 15,972,763 |
Schedule of stock-based compensation expense | Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Research and development $ 2,158 $ 3,180 $ 7,549 $ 9,596 Sales and marketing 1,109 2,021 3,046 5,920 General and administrative 3,548 4,212 10,329 11,912 Total stock-based compensation expense $ 6,815 $ 9,413 $ 20,924 $ 27,428 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Schedule of calculation of basic and diluted net loss per share | Three months ended September 30, 2023 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (23,870) $ (3,498) $ (27,368) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (23,870) $ (3,498) $ (27,368) Denominator: Weighted-average common shares outstanding 180,313,297 26,426,937 206,740,234 Denominator for basic and diluted net loss per share – weighted-average common stock 180,313,297 26,426,937 206,740,234 Basic and diluted net loss per share $ (0.13) $ (0.13) $ (0.13) Three months ended September 30, 2022 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (47,515) $ (7,227) $ (54,742) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (47,515) $ (7,227) $ (54,742) Denominator: Weighted-average common shares outstanding 173,745,746 26,426,937 200,172,683 Denominator for basic and diluted net loss per share – weighted-average common stock 173,745,746 26,426,937 200,172,683 Basic and diluted net loss per share $ (0.27) $ (0.27) $ (0.27) Nine months ended September 30, 2023 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (78,017) $ (11,562) $ (89,579) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (78,017) $ (11,562) $ (89,579) Denominator: Weighted-average common shares outstanding 178,322,171 26,426,937 204,749,108 Denominator for basic and diluted net loss per share – weighted-average common stock 178,322,171 26,426,937 204,749,108 Basic and diluted net loss per share $ (0.44) $ (0.44) $ (0.44) Nine months ended September 30, 2022 Total Class A Class B Common Stock Numerator: Allocation of undistributed earnings $ (117,137) $ (17,883) $ (135,020) Numerator for basic and diluted net loss per share – loss available to common stockholders $ (117,137) $ (17,883) $ (135,020) Denominator: Weighted-average common shares outstanding 173,101,457 26,426,937 199,528,394 Denominator for basic and diluted net loss per share – weighted-average common stock 173,101,457 26,426,937 199,528,394 Basic and diluted net loss per share $ (0.68) $ (0.68) $ (0.68) |
Schedule of anti-dilutive common equivalent shares | September 30, 2023 2022 Outstanding options to purchase common stock 8,594,069 13,740,728 Outstanding restricted stock units 15,972,763 11,578,865 Outstanding warrants 20,652,690 20,652,690 Total anti-dilutive common equivalent shares 45,219,522 45,972,283 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) | 3 Months Ended |
Sep. 30, 2022 | |
Customer one | Customer Concentration Risk | Revenues | |
Concentration risk (as a percentage) | 10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Operating Expenses - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Research and development | $ 12,130 | $ 22,040 | $ 44,409 | $ 68,883 |
Sales and marketing | 9,012 | 15,481 | 28,776 | 47,121 |
General and administrative | 11,560 | 16,603 | 37,239 | 54,080 |
Employment-related expenses | 4,755 | 1,860 | 8,634 | 1,860 |
Legal-related expenses | 4,488 | 1,037 | 9,214 | 1,978 |
Total other | $ 9,243 | 2,897 | $ 17,848 | 3,838 |
Prior period reclassification | ||||
Research and development | 1,114 | 1,114 | ||
Sales and marketing | 330 | 330 | ||
General and administrative | 1,453 | 2,394 | ||
Total other | $ 2,897 | $ 3,838 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Recognition | ||||
Total revenue | $ 15,421 | $ 19,618 | $ 49,384 | $ 54,407 |
United States | ||||
Revenue Recognition | ||||
Total revenue | 12,230 | 13,582 | 39,726 | 37,881 |
International | ||||
Revenue Recognition | ||||
Total revenue | 3,191 | 6,036 | 9,658 | 16,526 |
Devices and accessories | ||||
Revenue Recognition | ||||
Total revenue | 8,753 | 13,164 | 29,874 | 37,607 |
Software and other services | ||||
Revenue Recognition | ||||
Total revenue | $ 6,668 | $ 6,454 | $ 19,510 | $ 16,800 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue Recognition | |||||
Payment terms | 60 days | ||||
Allowance for doubtful accounts | $ 0.7 | $ 0.7 | $ 0.5 | ||
Amount of revenue recognized | $ 6.7 | $ 5.1 | $ 15.2 | $ 11.2 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue Recognition | ||
Remaining performance obligations | $ 32 | $ 23.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||
Revenue Recognition | ||
Percentage of remaining performance obligations as revenue | 55% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | ||
Revenue Recognition | ||
Percentage of remaining performance obligations as revenue | 45% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Total assets at fair value on a recurring basis | $ 75,250 | |
Liabilities | ||
Total liabilities at fair value on a recurring basis | $ 1,446 | 5,370 |
Public Warrants | ||
Liabilities | ||
Warrants | 966 | 3,588 |
Private Warrants | ||
Liabilities | ||
Warrants | 480 | 1,782 |
Mutual funds | ||
Assets | ||
Mutual funds | 75,250 | |
Level 1 | ||
Assets | ||
Total assets at fair value on a recurring basis | 75,250 | |
Liabilities | ||
Total liabilities at fair value on a recurring basis | 966 | 3,588 |
Level 1 | Public Warrants | ||
Liabilities | ||
Warrants | 966 | 3,588 |
Level 1 | Mutual funds | ||
Assets | ||
Mutual funds | 75,250 | |
Level 2 | ||
Liabilities | ||
Total liabilities at fair value on a recurring basis | 480 | 1,782 |
Level 2 | Private Warrants | ||
Liabilities | ||
Warrants | $ 480 | $ 1,782 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, unrealized losses | $ | $ (0.6) | $ (0.6) |
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% | |
Outstanding warrants | 13,799,357 | 13,799,357 |
Private Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding warrants | 6,853,333 | 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 | 1 |
Exercise price | $ / shares | $ 11.50 | $ 11.50 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw materials | $ 72,256 | $ 41,265 |
Work-in-progress | 905 | 1,962 |
Finished goods | 20,855 | 16,743 |
Total inventories | $ 94,016 | $ 59,970 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Property and Equipment, Net | ||||
Property and equipment, gross | $ 42,947 | $ 42,947 | $ 42,385 | |
Less: accumulated depreciation and amortization | (16,585) | (16,585) | (11,054) | |
Property and equipment, net | 26,362 | 26,362 | $ 31,331 | |
Accrued property and equipment | 200 | 200 | $ 800 | |
Operating expenses | ||||
Property and Equipment, Net | ||||
Impairments of long-lived assets | $ 1,800 | $ 1,800 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Reconciliation of cash, cash equivalents and restricted cash: | ||||
Cash and cash equivalents | $ 150,006 | $ 162,561 | $ 193,313 | |
Restricted cash included within prepaid expenses and other current assets | 243 | 704 | ||
Restricted cash included within other non-current assets | 4,014 | 4,014 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 154,263 | $ 166,828 | $ 198,031 | $ 426,841 |
Restricted Cash and Cash Equivalents, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | |||
Restricted Cash and Cash Equivalents, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued Expenses and Other Current Liabilities | ||
Employee compensation | $ 9,202 | $ 12,166 |
Customer deposits | 1,281 | 1,135 |
Accrued warranty liability | 269 | 287 |
Non-income tax | 1,042 | 1,442 |
Professional fees | 2,523 | 3,450 |
Estimated liability for legal contingencies | 1,630 | |
Current portion of operating lease liabilities | $ 1,923 | $ 1,926 |
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 | $ 4,063 | $ 5,710 |
Total accrued expenses and other current liabilities | $ 21,933 | $ 26,116 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Warranty expense activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accrued Expenses and Other Current Liabilities | ||||
Balance, beginning of period | $ 787 | $ 975 | $ 873 | $ 1,116 |
Warranty provision charged to operations | 227 | 76 | 176 | 241 |
Warranty claims | (293) | (135) | (328) | (441) |
Balance, end of period | $ 721 | $ 916 | $ 721 | $ 916 |
Equity Incentive Plans (Details
Equity Incentive Plans (Details) | Jan. 01, 2023 |
Equity Incentive Plans | |
Percentage increase in equity awards authorized to be issued | 4% |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock option activity (Details) - Stock options | 9 Months Ended |
Sep. 30, 2023 shares | |
Number of Options | |
Outstanding at beginning of the period | 12,571,912 |
Exercised | (180,467) |
Forfeited | (3,797,376) |
Outstanding at end of the period | 8,594,069 |
Equity Incentive Plans - Restri
Equity Incentive Plans - Restricted stock unit activity (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2023 shares | |
Number of Restricted Stock Units | |
Outstanding at beginning of the period | 9,961,291 |
Granted | 15,563,473 |
Vested | (4,830,193) |
Forfeited | (4,721,808) |
Outstanding at end of the period | 15,972,763 |
Equity Incentive Plans - Stock-
Equity Incentive Plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Incentive Plan | ||||
Total stock-based compensation expense | $ 6,815 | $ 9,413 | $ 20,924 | $ 27,428 |
Research and development | ||||
Equity Incentive Plan | ||||
Total stock-based compensation expense | 2,158 | 3,180 | 7,549 | 9,596 |
Sales and marketing | ||||
Equity Incentive Plan | ||||
Total stock-based compensation expense | 1,109 | 2,021 | 3,046 | 5,920 |
General and administrative | ||||
Equity Incentive Plan | ||||
Total stock-based compensation expense | $ 3,548 | $ 4,212 | $ 10,329 | $ 11,912 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Allocation of undistributed earnings | $ (27,368) | $ (54,742) | $ (89,579) | $ (135,020) |
Numerator for basic and diluted net loss per share - loss available to common stockholders | $ (27,368) | $ (54,742) | $ (89,579) | $ (135,020) |
Denominator: | ||||
Weighted-average common shares outstanding - basic | 206,740,234 | 200,172,683 | 204,749,108 | 199,528,394 |
Weighted-average common shares outstanding - diluted | 206,740,234 | 200,172,683 | 204,749,108 | 199,528,394 |
Basic loss per share | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Diluted loss per share | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Class A Common Stock | ||||
Numerator: | ||||
Allocation of undistributed earnings | $ (23,870) | $ (47,515) | $ (78,017) | $ (117,137) |
Numerator for basic and diluted net loss per share - loss available to common stockholders | $ (23,870) | $ (47,515) | $ (78,017) | $ (117,137) |
Denominator: | ||||
Weighted-average common shares outstanding - basic | 180,313,297 | 173,745,746 | 178,322,171 | 173,101,457 |
Weighted-average common shares outstanding - diluted | 180,313,297 | 173,745,746 | 178,322,171 | 173,101,457 |
Basic loss per share | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Diluted loss per share | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Class B Common Stock | ||||
Numerator: | ||||
Allocation of undistributed earnings | $ (3,498) | $ (7,227) | $ (11,562) | $ (17,883) |
Numerator for basic and diluted net loss per share - loss available to common stockholders | $ (3,498) | $ (7,227) | $ (11,562) | $ (17,883) |
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 | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Diluted loss per share | $ (0.13) | $ (0.27) | $ (0.44) | $ (0.68) |
Net Loss Per Share - Anti-dilut
Net Loss Per Share - Anti-dilutive common equivalent shares (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Net Loss Per Share | ||
Total anti-dilutive common equivalent shares | 45,219,522 | 45,972,283 |
Stock options | ||
Net Loss Per Share | ||
Total anti-dilutive common equivalent shares | 8,594,069 | 13,740,728 |
Restricted stock units | ||
Net Loss Per Share | ||
Total anti-dilutive common equivalent shares | 15,972,763 | 11,578,865 |
Outstanding warrants | ||
Net Loss Per Share | ||
Total anti-dilutive common equivalent shares | 20,652,690 | 20,652,690 |
401(k) Retirement Plan (Details
401(k) Retirement Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
401(k) Retirement Plan | ||||
401(k) Employer match contribution | $ 0.2 | $ 0.3 | $ 0.6 | $ 1.1 |
Reductions in Force (Details)
Reductions in Force (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2023 | Jan. 31, 2023 | Jul. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Employee severance and benefits costs | $ 4,755 | $ 1,860 | $ 8,634 | $ 1,860 | |||
Employee Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Reduction in force (as a percent) | 25% | 25% | 10% | ||||
Employee severance and benefits costs | 4,800 | $ 1,900 | 8,600 | $ 1,900 | |||
Employee Severance | Accrued expenses and other current liabilities | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Employee severance and benefits accrual | $ 2,200 | $ 2,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Commitments and Contingencies | |||||
Operating lease cost | $ 600 | $ 1,200 | $ 2,500 | $ 3,500 | |
Increase in operating lease payments | 200 | ||||
Decrease in operating lease assets | 4,200 | ||||
Decrease in current operating lease liability | 700 | ||||
Decrease in noncurrent operating lease liability | 4,700 | ||||
Security deposit forfeited | 900 | 900 | |||
Gain on lease termination | 200 | 214 | |||
Accrued purchase commitments, current | 212 | 212 | $ 2,146 | ||
Estimated liability for legal contingencies | 1,630 | 1,630 | |||
Accrued expenses and other current liabilities | |||||
Commitments and Contingencies | |||||
Estimated liability for legal contingencies | 1,600 | 1,600 | |||
Inventory purchase commitments | |||||
Commitments and Contingencies | |||||
Minimum inventory purchase commitments | 22,400 | ||||
Prepaid vendor advance, net of write-downs | 2,200 | 2,200 | |||
Accrued purchase commitments, current | 200 | 200 | |||
Utilization of accrual of purchase commitment liability | 300 | $ 15,600 | 1,900 | 15,600 | |
Utilization of vendor advance previously written down | $ 300 | $ 4,800 | $ 7,600 |