Good afternoon all, welcome to the Butterfly Network second quarter 2026 earnings call. My name is Adam, and I'll be your operator for today. If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand the floor to John Doherty to begin. John, please go ahead when you are ready. Good morning, thanks to all of you for joining our call today. Earlier, Butterfly released financial results for the second quarter ended June 30th, 2026. We also provided a business update. The release, which includes a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures, is currently available on the investors section of the company's website at ir.butterflynetwork.com. I, John Doherty, Chief Financial Officer of Butterfly, along with Joseph DeVivo, Butterfly's Chairman and Chief Executive Officer, will host the call this morning. During today's call, we will be making certain forward-looking statements. These statements may include, among other things, expectations with respect to financial results, future performance, development, and commercialization of products and services, potential regulatory approvals, revenue attributable to Embedded partnerships through revenue share, chip purchases or otherwise, and the size and potential growth of current or future markets for our products and services. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those contained in the forward-looking statements. These 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. As a reminder, this call is being webcast live and recorded. To access the webcast, please visit the events section of our investor website. A replay of the event will also be available on this page following the call. I would now like to turn the call over to Joe. Thanks, John. Good morning everyone, and thank you for joining our second quarter 2026 earnings call. What a great quarter it was. We closed above the top end of guidance, delivered record revenues, gross margins, and adjusted EBITDA all above where we thought we'd end up. As a result, we are raising our full year guidance, which John will share in his section. Last quarter, I shared that three engines of growth were emerging and beginning to reinforce each other. Focus, home and community care, and Embedded. What's unfolding across our business this quarter shows that flywheel is now starting to turn, and I want to walk you through each one, starting with the one that's been capturing global attention, Butterfly Embedded. The world now understands why we've been so eager to share details about the Embedded partnerships. We can finally unpack what a couple of our partners have discovered is possible with our technology. Our vision for a new category of chip-based ultrasound is unfolding right before our eyes. Midjourney's groundbreaking announcement to build a whole body scanner shocked the technology world and challenged conventional thinking in medicine. The promise of semiconductor-based imaging had never truly been appreciated until now. As I've said to you many times, we're entering into an era where ultrasound will be liberated from big imaging and expanding beyond the four walls of the health system and moving to where people are when they need it. Butterfly's Embedded actually amplifies Butterfly's core mission of democratizing imaging by partnering with companies who share that same vision. Whether it's a handheld probe, a wearable device, or a whole body imaging system, one constant remains true. Safe, low cost imaging paired with massive data capture in the AI era will transform healthcare. This is a chance to empower patients to better manage their wellbeing while creating one of the most important advances in improving human health. No patient should be surprised with their health. Six days ago, I received a call from a dear friend of mine telling me that he was just diagnosed with stage 4 colon cancer, and it had metastasized to his lungs and liver. I mean, just diagnosed? Stage 4? Are you kidding me? Do you know how long it takes for that primary tumor in his colon to develop and metastasize? Could be years. Where was his MRI? One of our employees was diagnosed with stage 2 pancreatic cancer just by chance. Had she not had a scan for another ailment, it never would've been found, since pancreatic cancer is also asymptomatic and normally found when it's too late. Now with an unusually early diagnosis, she has a chance. These stories, unfortunately, aren't rare. They're happening everywhere, every day to people we know and people we've never met. The recent untimely passing of Senator Lindsey Graham from an undiagnosed aortic aneurysm, something that could be treated with life-saving surgery if caught in time, is a sobering reminder that even people with access to the best resources in the world can fall through the cracks of the system. It's not about the imaging modality. MRI is the best imaging in the world, no question. It's about the system, the cost, the barriers, the stakeholders, and frankly, the old thinking that screening is too troublesome for the current system. Technology is changing that. Semiconductor-based imaging, mass data processing, storage, and AI will change that paradigm. It'll give you greater awareness of your health journey, help you make better decisions with your life, and be the scribe to your personal story. Another key learning this quarter is how well-suited Ultrasound-on-Chip is for neurotechnology. Probably one of the most profound uses of our chip will be the ability to image, to map, to understand, and potentially apply therapy to the brain in the future while pushing and pulling information from it. Aleph Neuro showed us two major breakthroughs in the last two months. First, they demonstrated a remarkably high-resolution 3D transcranial ultrasound of the brain using a contrast agent, showing not only that imaging through the skull is feasible, but that it may ultimately offer diagnostic insights approaching those of functional MRI. They revealed a new way to use ultrasound to track the movements of the tongue to discern speech. Each manifestation of our technology can have global impacts to health and to quality of life. This is just the beginning, everyone. Before I move to POCUS updates, I want to mention that we've signed two more Embedded partnerships in the second quarter, bringing the total to 11. Two very exciting additions. One, another BCI company developing a novel application, and another pursuing a wearable for one of the most common areas of women's health. Shifting to our POCUS business, we had several key accomplishments. We signed six more enterprise software deals deploying our Compass AI software to enable system-wide POCUS management and adherence. Many of these deals were paired with probe sales. We expect as the software is implemented, the growing base of probes will steadily follow into these systems. Since last year, our Compass AI software pipeline has increased 5 x. We are seeing the benefits of that now. Compass AI is how POCUS becomes part of the healthcare workflow, driving adoption, utilization, and earlier diagnosis. I'm very happy with the team's progress. I'm equally excited about our opportunity in government sales, including VA, DoD, HHS, and other federal agencies. In the second quarter, we received provisional authorization to sell to the full VA. We anticipate full FedRAMP certification in the third quarter, which will make us one of only 500 companies certified. The largest purchaser of U.S. healthcare is the U.S. government. This channel will soon be open to us. Our government pipeline has grown in anticipation of this accomplishment. We're ready to execute on the significant opportunity ahead. Medical schools also continue to be an important area of strategic growth for Butterfly. Today, we have a presence in more than 80% of the U.S. medical schools. We're increasingly seeing institutions move from purchasing a handful of devices to implementing a one-to-one ultrasound curriculum. Schools like Kansas City University are leading the way with first-year students now completing their entire ultrasound curriculum on Butterfly ScanLab platform. As that inaugural class completes its first year, we're already seeing insights that are helping other institutions build similar programs. In Q1, we told you we placed nearly 1,000 probes in the six medical schools. In Q2, we more than doubled that through four additional institutional partnerships. As these programs have expanded, we've started asking a bigger question. What happens after graduation? A recent survey we conducted across our medical school accounts found that while more than half say graduates frequently continue using POCUS in practice, nearly three-quarters have no pathway for graduates to keep a device into residency, and nearly 60% don't track their graduates at all. That reinforced our belief that there's an opportunity to better understand and better support new physicians as they transition from POCUS training into clinical practice. That brings me to some exciting news this quarter. We entered a new partnership with the Edward Via College of Osteopathic Medicine or VCOM. It's a novel partnership model in which not only will every VCOM student have a probe to train with, but we will partner on a long-term longitudinal insights program. As all of you know, Butterfly devices are connected to a cloud which stores image data much like your iPhone does with iCloud. We gather performance metrics on all users that help us understand usage patterns, locations, and the types of scans being performed. We're not quite ready to share the detailed logistics of the program yet, but we have an exciting plan to track and learn from the ultrasound journey that follows a one-to-one medical school program. VCOM made the investment to provide every incoming student with iQ3 devices, while Butterfly subsidized the initial distribution of iQ+ devices to get the program going. You'll see our investment reflected in the lower ASP as we've reported this quarter. We believe that's exactly the right investment to make as we establish what we think is a groundbreaking new model for medical education. This partnership represents the potential for more than $10 million in total contract value over the next four years. Regarding international, you'll see that our team had a down quarter. We believe it's really no big deal as our distribution sell-through is up meaningfully year-over-year. We had a handful of larger orders shift into quarter three, we expect a much stronger third quarter ahead. John will say more about this when he covers the financial results. One highlight we're particularly excited about is Brazil, where we recently achieved regulatory authorization. Brazil is the largest medical device market in Latin America and one of the fastest-growing ultrasound markets in the world. Meeting Brazil's regulatory requirements is a great validation of our technology and opens the door to a significant long-term growth opportunity for Butterfly in the region. I'll close out focus with Butterfly Garden. As planned, we've officially released our proprietary beam steering capabilities, including iQ Slice and Fan, to both our Garden and Embedded partners, furthering their development opportunities. In the second quarter, we added a new Garden partner focused on precision needle guidance with AI, and we expect three of our existing partner tools to become commercially available by year-end. Importantly, those three partners will launch with direct access into Butterfly's cloud, allowing their AI results to flow right into our users' existing clinical workflows without toggling to a separate application. It's an exciting milestone as Garden evolves from a developer ecosystem into a commercial AI platform. Before I turn it to John, I want to comment on our home and community care business. We are ready to begin managing our first commercial state on October 1st. Over the third quarter, we'll be training all the participating nurses in the state while we finish setting up the necessary infrastructure. We are excited for this to transition from a pilot to finally implementation. We will do everything in our power to support the success of this commercial execution and plan to discuss extending this offering to other states in the first half of 2027. We're also now in conversations to expand this service to other key partners. Butterfly Home and Community Care is finally here, and we expect revenue in the fourth quarter of 2026. With that, I'd like to turn it over to John to discuss the financial details. John. Thanks, Joe. Butterfly continued its strong and focused execution in the second quarter of 2026 with an increase in revenue driven by strong growth in our Embedded business. Core was also solid, with performance reflecting our increased and expanding focus on the enterprise market. Gross margin increased, and we saw continued improvement in operating performance with further reallocation of resources towards higher ROI opportunities and markets. Building on the operational highlights Joe just outlined, including the large TCV contracts for Compass AI and medical education and progress towards commercializing Home and Community Care, let me translate these into the financial highlights in the quarter. Record revenue attainment above the high end of consensus and above the top end of our guidance. The highest gross margin for Butterfly in its history. Adjusted EBITDA that was above consensus and our guidance range, with improvement driven by our revenue performance, higher gross margin, and continued financial discipline. Growth in probe unit sales of 23%. With that, let me move on to our results. Second quarter revenue was a record $32.6 million, an increase of 39% year-over-year. Our growth was primarily driven by Butterfly Embedded. In addition, in Core, we had strong performance in U.S. health systems and medical schools, including a large sale to VCOM, which helped to drive strong year-over-year unit volume growth, along with Compass AI sales gaining traction. Breaking things down between the U.S. and international channels, during the second quarter, U.S. revenue was $27.6 million, which was 57% higher year-over-year, driven by revenue from Embedded as well as solid demand in the Core business with unit sales up 23%. As Joe mentioned, international was down year-over-year. Total international revenue decreased by 14% year-over-year to $5 million in the quarter. We faced a tough Q2 comp against last year's record international second quarter, aided by tailwinds from the iQ3 launch. We also had a few deals expected to close in the second quarter move out into the third quarter. We expect improving performance for the balance of the year. We are excited about our recent launch into the Brazil market and continuing to expand our global footprint. As I did last quarter and will continue to do going forward, I want to provide you with the revenue split between our Core Focus business and Butterfly Embedded. We have also included this split in our 10-Q. As a reminder, the Core business includes probe sales and related software, Compass AI, other services, and in the future, home. Embedded revenue currently includes one-time NRE payments, annual license fees, revenue from SOW-driven development work, and chip sales to Embedded partners. Revenue for the second quarter was $21.9 million, an increase of 2% versus the second quarter of 2025. This increase was driven primarily by growth in volume in U.S. health and medical schools. Of note, and as Joe mentioned earlier, the core result includes the execution of a new strategic agreement with VCOM. This agreement is for four years with a potential TCV exceeding $10 million. This also included preferred pricing for the iQ+ to help secure the larger multi-year commitment to the iQ3. This investment in the alliance with VCOM is a template for Butterfly going forward to help deplete our existing iQ+ inventory while enabling broader and deeper penetration of the medical school market ahead of the launch of our next-generation probe in 2027. Sales of the iQ3 and iQ+ in the quarter were up 17% and 33% respectively year-over-year. The higher year-over-year mix of the iQ+ in the quarter and the VCOM deal result in a 12% decrease in the ASP. Butterfly Embedded revenue was $10.8 million, an increase of 439% versus the second quarter of 2025. This increase was primarily driven by the Midjourney partnership. Moving on to gross profit. Gross profit was also a record at $23.3 million in the second quarter of 2026, a 56% increase as compared to the prior year gross profit of $14.9 million. Gross profit margin percentage increased to 71% from 64% in the prior year period, a 7.7 point increase. Gross margin percentage was positively impacted by the increased mix and higher margin of Butterfly Embedded revenue. Moving to EBITDA and cash. For the second quarter of 2026, adjusted EBITDA loss was $1.4 million, compared with a loss of $6.2 million for the same period in 2025, an improvement of 78%. The improvement in adjusted EBITDA loss in the second quarter was driven by contribution from higher margin revenue and continued financial discipline. Our cash and cash equivalent balance, excluding restricted cash at the end of the second quarter, was $125 million, and the use of cash in the quarter was $13.3 million. This compares to use of cash of $7 million in the prior year quarter. We are well-positioned as we move forward to continue to invest in our business in areas where we see significant opportunities for additional growth and disruption, which includes scaling our focused business through global market and market segment expansion. Continued penetration of Compass AI as a core operating system for health systems, app releases in Butterfly Garden, and 2027 new product launches, continued AI and semiconductor innovation with the development of our fourth-generation chip, broadening Butterfly Embedded partnerships, and moving Butterfly Home and Community Care to the commercial phase. Before turning to guidance, I want to update you on the general global macroeconomic environment relative to Butterfly. We continue to monitor the conflict in the Middle East and the ripple effects on the global economy, as well as pressure from tariffs in certain markets and AI-driven supply chain shortages. We have mentioned in the past that there are some impacts to our business. However, they have been minor and we continue to manage through it and make the appropriate adjustments. Our second quarter 2026 results are indicative of this, and our third quarter and full year 2026 guidance include any expected impacts. I would now like to turn to our outlook for the third quarter of 2026 and for the calendar year ending December 31st, 2026. In the third quarter, we expect revenue in the range of $26 million- $30 million for a year-over-year increase of 30% at the midpoint. We expect an adjusted EBITDA loss in the range of $6 million- $9 million. For the full year 2026, we are increasing our guidance for both revenue and adjusted EBITDA. We expect revenue to be between $119 million and $123 million, an increase of approximately 22%- 26% over 2025. We expect our adjusted EBITDA loss to be between $19 million and $23 million. Our guidance for adjusted EBITDA in the third quarter and full year includes increased investment in key areas to support continued innovation and revenue growth in our core business and our emerging Embedded business for 2026 and beyond. In summary, we had a record quarter. We had our highest revenue for a quarter ever, and we beat both our revenue and adjusted EBITDA guidance. We are very well-positioned as we head into the second half of 2026, and as the raise to our full year guidance reflects, we look forward to continued growth this year and beyond. We remain focused on gaining share through deeper penetration of existing customers and adding new customers in our core focused business and expanding our Ultrasound-on-Chip partnerships. The business continues to get stronger across core focus and Embedded. This is happening while we continue our intense focus on driving operating efficiency across the business and return on investment. I continue to be excited about what is ahead for the company in 2026 and beyond. Now let me hand it back to Joe for some closing comments. Thanks, John. Looking ahead, we are making progress on all fronts in our mission to democratize medical imaging. The Midjourney announcement was captivating. Millions of people have viewed the announcement, and it was a trending topic on X for more than a week. Technology companies of all sizes have taken notice, and while we've always believed Butterfly was key to these conversations, we now have a spotlight in the discussions around AI, compute, and the many applications of Ultrasound-on-Chip technology. It's been an exciting last 60 days, and we finally can communicate with investors and partners about the future our technology can open. What's especially exciting is that our semiconductor roadmap is advancing not only in image quality, but also the ability to generate large data sets with our high-speed Apollo chip and push data directly into GPUs for large-scale AI processing. As new compute architectures emerge, our partners envision converging image acquisition with AI-driven data interpretation, and this vision is becoming increasingly achievable. Our Apollo platform is moving forward on schedule. We've been investing in our chip to meet the demands of both our Embedded partners and the focused business. We've now completed our primary design and are transitioning beyond research and into the development phase. We're on track with our scheduled commitments to deliver Apollo chips to Midjourney on time by the end of 2027, beginning of 2028. Just as exciting, we're continuing to make excellent progress on our next generation probe that'll be built on our P5.1 chip. The first full prototype images are outstanding, and we're on track for a first quarter 2027 launch. iQ3 already delivers best-in-class image quality and will remain our workhorse, while the P5.1 builds on that foundation with the first CMUT chip to deliver harmonic imaging. This allows an even higher level of performance that's important to certain specialties like cardiology. What we've seen so far gives us tremendous confidence in what's ahead. Our P5.1 chip is showing us better images, specifically in cardiology, than we see from our PZT handheld competitors. If this holds true, with better imaging in a handheld than our competitors, both big and small, why would anyone buy anything other than a CMUT? We are preparing for a big launch in 2027, and we'll continue that momentum by entering the cart business with iQ Station later in the same year. The flywheel is turning. We've increased our guidance for 2026. We're adding Embedded partners more frequently, and we'll be launching some key Garden partners AI tools in the second half of the year. By early 2027, we are planning for our sales force to have what's expected to be the best handheld imaging in the world, Compass AI, Garden AI apps, and then we'll march upstream into the health systems with the most holistic integrated POCUS platform to begin tapping into the existing multi-billion dollar global ultrasound cart market in health systems. On top of that, the home and community care will be going commercial. It's all coming together. I cannot be any more excited about our future. With that, Operator, please open it up for questions. As a reminder, if you'd like to ask a question on today's call, please press star followed by one on your telephone keypad now to join the queue. When preparing to ask your question, please ensure you are unmuted locally. That's star followed by one. Our first question today comes from Josh Jennings from TD Cowen. Josh, please go ahead. Your line is open. Hi, good morning, Joe and John. Thanks for taking the questions and congratulations on a strong quarter. Continue to add layers of revenue opportunities onto the story. That flywheel seems to be turning, as you called out. Wanted to touch on Embedded and then also just the POCUS core growth. Just on Embedded and just revenue visibility with the Midjourney and Aleph announcements, how should we be thinking about the cadence of Embedded revenue over the next 12-24 months, and should we expect meaningful contribution from additional partners beyond Midjourney before the larger chip and revenue-sharing opportunities materialize with that agreement? Josh, I'll take the beginning of that one. As we've said in the past, we expected Embedded to be somewhere around $7 million-$8 million per quarter, and that would fluctuate a bit up or down, $1 million or $2 million here or there. It was down a bit in the first quarter from that. Obviously, it was up in the second quarter. We expect to kind of maintain that cadence. Obviously, as we add additional partners and we go broader across Embedded, I would expect that to increase, but that's where we are right now. All I'd add is we added two additional partners, and each of these have a lot of upside to them. They're all research programs. They're programs where people are looking at building new businesses, and at any point in time, they can reach a milestone and want to go commercial, and that's a second bite of the apple for us. Our revenue in Embedded includes all of our partners, not just Midjourney, and so when we add people, there are revenue in the numbers. It's when they go commercial that we can get the big pops. There'll be some stuff coming up in the future. We'll be adding more partners, and I'd anticipate some of our current partners going commercial. This is just going to layer on top of itself. It's going to grow and the Midjourney announcement has also opened a lot of new conversations that are very exciting. I wanted to touch on that. Thanks, Joe and John. Just the level of inbound interest accelerating following the Midjourney public demonstration, the Aleph announcement, 11 Embedded partners. How many additional partnerships can the organization realistically support simultaneously? Maybe just help us understand, can you get out to 20 partnerships plus over time and support all of those efforts? I don't see in my mind at the moment a limit to the partnerships. I think the beautiful part about this is that there is commonality. There is a flywheel. We're not developing new chips for each person and then taking on all this cost and supply chain and CapEx. It's the same chip. What we're doing is building a software platform that allows them to do the work for themselves. Sometimes they'll ask us to do specific work that's right on the fringe, and then we'll do it for them. I see this evolving into something that's pretty standardized. People come in, they license our technology, they purchase our hardware. At some point in time, they buy chips and get licenses for software. If they wish some market protection and wish to purchase exclusivities, that's when those deals get bigger. When I look at companies that we emulate, they have standard pricing and standard business operating procedure. It's all into our current semiconductor platform. I don't see a limit to this. We're not a job shop. I see this as a scalable, core part of the future of imaging technology. One thing, all the development work we're also getting compensated for, it's not as if we're doing that for free. Thank you for saying that, because I think what we've done now is up until the end of 2025, we were multitasking. We would go into our core development teams and have them do things for partners. What we've done since the end of 2025 is kind of firewall off and build an organization that are dealing with our partners, and we're going to continue to do that, and it'll scale based upon our partner revenue. It doesn't affect our core business. We're continuing to make sure that Embedded grows at Embedded's pace and POCUS grows at its own pace, and Home will grow at its own pace. We're becoming more mature and sophisticated, and we're focusing on scaling ourselves to. I think we're going to see years and years of growth. This is a highly scalable opportunity. I'm standing and starting to ask one last question. I was talking about POCUS core growth in my initial inquiry, but I wanted to actually touch on the Home transition and moving through commercialization. I know you've talked in the past about that being a big revenue opportunity. I'm not sure if you reiterated anything, if I missed it on the call earlier. How should we be thinking about revenue contributions once you launch in four Qs? Is that baked into the updated guidance that you put on the tape today? Just how can that build out, and maybe what is the TAM there? I think it's pretty large. Thanks again for taking the questions. Home is built into our guidance, and obviously, it's relatively small launching and expected to launch in October. It will build from there. We have multiple millions in 2027, but for this year, it'll be certainly short of that since it's only two months. It is a very large opportunity, and it's a function of how successful we are. If the success on our pilot continues in our first commercial implementation, why would anyone not bring it everywhere else in the country? Because we're helping patients stay in these skilled nursing facilities, reduce the revolving door into health systems, reduce the overall cost of care of these patients. I think there's a whole flywheel on its own sense as it becomes understood how impactful it is to empower nurses with AI at the bedside to keep patients properly diagnosed and properly medicated as to where they are in their condition. I think it'll not just be congestive heart failure, it'll be a lot of other modalities. This whole thing ties together because as new Garden apps come out, like right now with HeartFocus, they not only can do a B-line scan, but they'll be able to do a cardiac echo at the bedside. Then in the future, they'll be able to do other types of things like deep vein thrombosis or bladder or others. It's not just about expanding it to more and more at-risk providers. It's also about expanding the use case within those providers and building this out as a whole modality that allows people to help patients where they are. Again, that's a part of our overall mission. This is a flywheel. This does compound on top of itself. The center of that bullseye is our Ultrasound-on-Chip technology. Then as we build out new AI capabilities, that grows the user base, and as we grow the user base and we have all these new outcomes, then it grows the customers to do more and more things. Again, this is just the beginning, and all the things that we've been working on, we're kind of executing across the board, and it's going to build into something meaningful. We don't like to commit on deals that we don't have signed, but the opportunity in 2027, I think, is real. We have to execute now. We have to delight everyone. We have to show that this works and that it's scalable for them. If that happens, it gets real big, real quick. Appreciate it, gentlemen. Thank you. The next question comes from Chase Knickerbocker from Craig-Hallum. Chase, your line is open. Please go ahead. Morning, everyone. Just a few questions from us. On the VCOM partnership, can you speak to how the partnership with VCOM works in terms of revenue recognition, how that flows into the Embedded business? Going forward, is there an opportunity to sign more of this type of deal? L et me just take the very first part of that. The VCOM deal was purely core. It had nothing to do with Embedded. It was really the sale of iQ+, iQ3, and related software over an extended period of time. Did that answer the question, Chase? Going forward- I can. A little bit more detail on that would be great. A bsolutely. VCOM has a desire for all their students to be able to learn ultrasound and have their own probe. I think there's a growing general consensus that when you have your own probe, you can scan yourself, scan your friends. You have opportunities to really acclimate and become educated. VCOM has made a long-term commitment on an annual basis to now stock the first-year students with the state-of-the-art technology and brand-new probes. In order to help with their objectives of having more of the upperclassmen have access, we've used our iQ+ platform, and we've subsidized those sales into those upperclassmen. We make it easier for them to onboard into this model. They didn't just want to have a part of the school in it, they wanted to have the whole school in it. We've made that available. What happens on an annual basis is they keep on staffing or supplying the next or the first class with the most recent technology. It's a great signal to the overall education market. It's a great validation of our mission, our joint mission. There'll be another announcement in the future. They have a very novel idea that we've agreed with fundamentally and that we will be supporting, but we're going to allow them to announce it to their constituents and to their students. When they announce it, we'll educate you all on what they're doing. Because of our subsidy of the iQ+ probes, that's what was reflected in the accounting of our ASP, which is, again, for us, it's the best way to make an investment, which is to put more devices into more students' hands. Thank you for that additional detail. Just one more follow-up. Going back to Embedded, could you give us some color on the components of the rev rec in the second quarter? I just think that would be helpful for modeling going forward. We've kind of laid this out before. There's multiple parts of this. There was the initial upfront payment, which was for $15 million. There was $10 million per annum for license fees, and then there was the development work with chip sales and revenue share to follow once they commercialize. We recognize that revenue as we do work against certain milestones. As we progress against work that's related to the project, we recognize the different pieces of that. In the fourth quarter of last year, when we initially signed the deal, we didn't recognize all the $15 million upfront. Obviously, we got the cash, we released that as we do work against the overall project, the overall program. We made a good amount of progress against some of the milestones in the second quarter, that resulted in the Embedded number being higher than, say, it was in the first quarter. The other thing I want to highlight on this, the overall contract that we announced back in November of last year for $74 million, I wouldn't say that's not it in total. We talked about some of this in mid-June after Midjourney had their event out in California. There is opportunity for us to certainly make additional revenue on top of that $74 million over time, subject to the amount of work we're doing, if we do additional work related to our next generation chip, and of course, when they commercialize the chip sales and revenue share. For now, it's effectively us doing work against requirements for working towards commercialization with them. That allows us, as we look at that and measure the work that we're doing, to release revenue in the respective quarters that we do it in. Just to add on that, we have 11 partners. That's one. All the other 11 are, there's revenue on software licenses, there's revenue on hardware purchases, there's revenue on semiconductor purchases, and that grows as we grow our partners. Also, as our partners are in different phases, they will then buy more and do different things. Also, we have of our other 10 partners, we do work for them also, and that revenue rolls into the number. That grows based upon where they are in their development cycle and also as we add new partners. Got it. Very helpful. Thank you for taking the questions. No problem. Thanks, Chase. The next question comes from Ben Haynor at Lake Street Capital Markets. Ben, please go ahead. Your line is open. Good morning, gentlemen. Thanks for taking the questions. First off for me, on the training and Community Care commercial launch here coming up, how large is the group that you need to train? How many patients does this plan to touch in the initial commercial state? In the first day, I think we're training between 15 and 30 nurses. I don't know the exact number, but it's something within that scope and size. Right now, until the program gets bigger, I don't think we're going to disclose the number of patients under management. I think we want to get a little more mature and a little bit more consistent before we do that. When revenue becomes meaningful. We'll translate what our revenue model is and what the scope is. Right now, I think the first state is between, these are nurses who work in skilled nursing facilities full time, and I think it's between 15 and 30, I think is the right number. It doesn't sound like a situation where you need to add immense training capacity, this is something that could go nationwide or much broader without too much on the cost side for training purposes. Training is a core competency of us, we're very fortunate that one of our best internal ultrasonographers has taken on the role of going full time into Home and Embedded, she's going to do a great job. As we scale, we have a great partner. We have several great partners in education and medical education, we leverage our internal team for as much as we can do. If we also had the wonderful opportunity to go into many states quickly, we have partnerships with state-based education organizations that would be. This is only one use case and one AI tool, the bar is much lower than what a normal training would be. The ability for us to scale quickly based upon all the nationwide partnerships we have with individual training organizations, some of those organizations are national and global. We're very confident that we could do this deployment. Once the deployment is done, we would make sure that we have the staff and the team in place to be able to maintain that, because training is not a one-time thing. The value of this program is that we are with our partners every step of the way for their journey, for training new people, managing the data, managing data transfer, managing the clinical assessments, and the whole thing. We're eating our own dog food. We're using our own stuff to deliver value side by side with our partners. Got it. That's helpful color. Maybe there's not an easy way to characterize this, but on the Butterfly Garden launches that are slated for later this year, is there anything you can share on kind of the commercialization efforts that you expect from these partners? Are they going to be making big splashes? Do they have large commercial organizations behind them? Any color there would be very helpful. Well, I think each of these companies are smaller, growth-oriented companies. They're not these large companies as of yet. We are going to help them become larger companies, we hope. I think what we've been waiting for is their FDA approvals, and also they've made a lot of requests of us to integrate more into the platform. For example, while we've built an SDK that allows them to pull data for their AI models, we've had people say, "Well, we want to use your cloud to store our own data, and we want to be able to do other types of scans and whatnot." We've been building out the robustness of our Garden platform in concert with where our partners wish it to be, and a lot of that now is kind of intersecting on the second half of the year. I think we're going to have three partners who will come online, and I think that's going to become a cadence now because there's a lot of work happening. I think what's not present in the marketplace with the consumers of the technology is how impactful AI will be for them. I think each new app points to the entirety of the apps. As you get two companies, three companies, five companies, 10 companies out there marketing their capabilities, it builds consumer awareness. It builds an identity that this exists, then there's more proof cases, and I think Garden creates its own flywheel. I've mentioned in the past that I think this is the key to crossing the chasm, to really getting the user base of ultrasound, of point-of-care ultrasound to increase because the learning curve is so high for standard ultrasound. As there's more AI capabilities, people get more and more comfortable in using this every day. I think that whole Butterfly Garden flywheel as far as getting more partners in the marketplace, it turning into revenue, it turning into increased utilization, is now on the cusp of starting, and we'll have exciting launches now each quarter going forward into 2027 and 2028. That's it for me. Thanks for all the color, and congrats on all the progress. Thanks, Ben. The next question comes from Steve Lichtman from William Blair. Steve, please go ahead. Your line is open. Thank you. Morning. Hey, Steve. Couple questions for me, Joe. Good morning. On Embedded, you've been laying out in your investor decks the many potential application areas and use cases with your current and potential partners. As you look at those buckets, those different categories, are there some that you see as generally Sort of earlier in the pipeline potential or sooner in others that might take more time in general, or is it pretty even across the board as you look out over the next few years? Well, there are a few partners where it is relatively low-hanging fruit. Our first of our two partners that we've announced publicly, one was Mendaera, which is a vascular robotics company. They were more interested in using our current sub-assembly of what we have in our tech to help create the type of image they need and using some capabilities that only exist within semiconductor-based ultrasound. They will actually be commercial soon with Butterfly. Over the next, I don't know, within the next six months, maybe sooner than that. I'll let them make their announcements, I don't want to get too far ahead. That is more about using our core technology to help amplify some really exciting novel things that they are bringing into the medical market. We also have another partner, Sonic Incytes, that does fatty liver diagnosis. That will be commercial, where the bar, again, is lower because they're using existing capabilities and implementing it into their systems. We have a set of partners that are doing a lot of primary research. I would say, I think it's four neurotechnology BCI companies now in the Garden, that they're doing work that is nuts. They're doing work where they are looking at ways of understanding the brain that have never been done before. I think that has a longer timeline to seeing something in the marketplace. Because there's not only the technology of feasibility, there'll be, I'm sure, a long regulatory path in order to get there. Now, I will say a couple of people have more consumer-based ideas. Some are focused on chronic diseases, but some are focused on behavioral. The bar might be a lot lower, but we'll see. Some of them have really novel clinical applications that I think are probably easier to prove than the brain. They just have to be done. I think just like in any portfolio, we have some things that are pretty near, we have some things that are probably medium-term, and things are way out. The stuff that's way out is, I think the opportunities are the markets are so large, it's hard to calculate. It's a whole portfolio of things. On top of that, we're talking to a lot of new companies in the last 60 days that we hadn't talked to before, that are very heavily resourced. You never know if one of those catches on, it could be a Midjourney type of hit the ground running hard, and that can happen at any time. The Midjourney announcement definitely woke up or built awareness of our capabilities in the large healthcare community and also the big tech community. While a lot of our partnerships so far have been with earlier stage companies, obviously Midjourney is a medium stage company with a lot of revenue. We're talking to a lot of very well-funded companies, you never know, one of those can kind of change the calculus like Midjourney did. Really helpful. Thanks for that color. Just secondly, on home care, I think you've talked in the past about the business model being different for Butterfly in that channel. How are you thinking about that revenue model and what it'll look like with these customers? Just secondly, what milestones are you looking for with this first customer to get you comfortable to kind of put the foot down on expanding to additional customers? Two great questions. The first question is simple. We will charge a fee for the size of the population we manage. We won't go into the mechanisms of that fee, but as the patient population increases, the amount that we charge to manage that population will increase with it. That's one set of consistent revenue. There will be a charge for every scan that's done, because there's a read associated to it and work that we have to do. There'll be kind of a fixed component based upon the size of the population, and then there'll be a variable component based upon how many of the scans that are done. As that matures, that model is just very simple. You add patients, your fixed kind of revenue goes up. Of course, as you're adding patients, your variable scan revenue goes up. As that matures, we'll be able to kind of unpack that for you. What was the second half, the second question? First was the revenue. What was the second question? Just in terms of the milestones. [crosstalk] 100%. 100%. Within this patient population, we're focusing on congestive heart failure patients. Over the last decade, it's become really aware to fee-for-service payers that there's a revolving door between nursing homes and health institutions. Someone goes in a nursing home, their care might not necessarily be consistent with their disease progression. They then have to be put in an ambulance, sent to the hospital, and cared for, have their diuretic managed, and then they get sent back to the nursing home only three to six months later to have that occur again and again and again. There have been now capitated payments, there have been penalties, and there have been incentives on reducing the cost of care for those patients. What we are targeting is a reduction in admissions and readmissions for congestive heart failure patients. Nationwide, if you're a diagnosed congestive heart failure patient in a skilled nursing facility, you're probably getting admitted or readmitted in 25%-35%, you'll see a readmission rate or admission rate for that population. What we are targeting is a reduction of that readmission rate. We've set goals. We were very productive in the pilot, but it was a smaller, of course, population. What they want to see is, are we able to maintain the type of success of keeping patients healthier and in the bed and stable longer? If those results translate, I forget the absolute number, but when you look at how much at-risk providers have to pay for readmissions, it's pretty astronomical. I think our chronic care is, I don't know, 70%-80% of our healthcare costs. It's the lion's share of healthcare is managing these chronic illnesses. When you reduce an admission or a readmission of these patients, I don't want to say it goes right to the bottom line because I don't fully understand, I don't want to profess their economics, but by reducing the readmission rate by 5%-10%, the economic impact to these at-risk providers is significant. That's where we think, as we sit back and we look at the macro picture of democratizing medical imaging and bringing medical imaging to the patient's bedside, we think that earlier diagnosis and managing patients where they are probably going to be one of the largest reductions in overall healthcare costs by simply democratizing earlier diagnosis. The learning curve is high, the bar has been high, and it's a complete shift of behavior. That's why we are doing home, because we've developed the skills and the capabilities of deploying this technology. Again, we're eating our own dog food. We're going to do it ourselves. We're going to take risks with these at-risk providers, and we're going to show them that we can reduce these readmissions. When we do, there is a component where if we're successful in reducing it by a certain factor, then we are going to actually also be rewarded by a percentage of those savings. Of course, if we don't, then it goes the other way, and we bear more cost of it too. We are going with some risk, and we're doing it gladly because we understand what this technology is capable of doing. The moment these pilots and the early implementation actually starts showing the real cost savings, that's when these at-risk providers are going to jump in with both feet because that's just a lot of money that'll hit their bottom line by doing what we want to do and everyone wants. That's everyone live healthier, better lives, be able to deal with things when they occur, empower caregivers where the patients are, and not have to have these significantly recurrent high-cost incidences. This is a very big deal, because it's not just what it means in revenue to Butterfly, but I think we can reduce the market development time, and we can educate people on the power that this can have a lot sooner. Really helpful. Thanks, Joe, congrats on the continued progress. The next question comes from [Raylin Konakuty] from Freedom Brokers. [Raylin], your line is open. Please go ahead. Hi, John. Hi, Joe. Thank you for your taking of time. It was a great quarter, I can see. I have multiple questions as well. Thank you for taking the question. First question is about the next generation probe and the cart market entry. You have talked about the harmonics chip. It's in production at TSMC. We are expecting the first launch in early 2027. We can see that iQ Station is also targeting cart markets later that year. You said that once Butterfly achieves that harmonic imaging, there will be no reason to buy a single-dimension handheld device. This is a very, very great claim that essentially argues for market share capture across the entire central system. My question is about the quantification of that. Can you please quantify the addressable market you are targeting with the new probe versus the current iQ3, and give us a sense of expected price point? Thank you. Well, I have to tip the hat to my other analyst friends. That was the best question today. Fabulous question. A lot there to unpack. I'll do the best that I can. First of all, when the digital camera reached five and seven megapixels and had an equivalent image to film, what happened to the film market? Why would people still use an analog device from a handheld standpoint? We've asked ourselves, once our image quality is better than other handheld PZT devices, literally, why would you use them? Whether they're three-in-one or they're specific to a certain application, they're not networked, they don't have the networked AI, they don't have 21 different presets. They have to have multiple other things that have to occur for them. They're also expensive. It's like, well, if our image quality's better, why would they ever use them? We'll see what the market says, but in my extrapolation of where we're at, our next probe is just going to be better. It'll be like, okay, I think we've reached that point now, and that's why image quality is not going to be the factor after our next probe. It'll be AI processing and delivering more value at that bedside. Today, the point-of-care ultrasound market in actual revenue is only $300 million-$350 million based upon a Signify report that just came out just a month ago. We're the fastest-growing handheld company in the world based on that report. Now we know the overall market for handhelds is we think upwards of $20 billion if everyone gets a probe, but the existing market today is a $300 million market. Now, the existing market for small compact carts and POCUS carts is about $1.6 billion-$2 billion. That's what the existing market is. For a small company like ourselves to take the burden of market development, it's a lot of cost, a lot of effort, a lot of education, et cetera. Now to enter a market where we're just going to have a better product. It's an existing market. The dollars are in the hospital's capital budgets. They want to do it. We're just going to walk in with a better product, and we're going to take market share. That's what happens with iQ Station. The first phase was making sure that we get our image quality to a certain phase. Then the second phase is we're going to have a better product offering than existing POCUS carts that are out there. Those POCUS carts are kind of de-featured carts. They're not the type of network carts, and they're also certainly not networked on a one-to-one basis, too. Our next product, I think, is going to generate a lot of revenue for us because we won't have the burden of developing a market. We'll have the benefit of coming in with a better product into an existing market. I think the other upside revenue opportunity with the next phase of our imaging is we believe that our next probe is going to have a better cardiac image than the largest imaging companies have for their handhelds. When people see it side by side, again, to have one probe that can do the whole body, that's networked, that has AI, that can merge into the health system's EMRs and all their data, and have a better image. Before, you would have to give up something when you had something that did everything. Now, this probe is just going to have a better image, you can do everything and have the best image. Why buy anything else? This was an answer that I didn't expect. Thank you, Joe. Thank you, John. Thank you for your time. Congrats again. Thank you. All right, everyone. Operator, that was the last question? Indeed. Well, sorry, we're about seven minutes over on the call. Just a lot. Thanks for all the questions for our analysts. Please excuse my enthusiasm, but my first few years here were a pretty hard road getting things situated. Butterfly has had a vision of democratizing imaging, of having every doctor, every nurse with their own probe, and that vision has increased, and our execution is right on. I'm very excited about what we'll deliver into the future and just very much appreciate everyone's support. Thank you. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.