Butterfly Network, Inc.

What they do

Butterfly sells the Butterfly system, consisting of handheld whole-body ultrasound probes, accessories and SaaS software subscriptions, to healthcare systems, physicians and providers through a direct sales force, distributors and eCommerce. Its probes use the company's Ultrasound-on-Chip semiconductor platform instead of piezoelectric crystals, paired with mobile-app software and enterprise Compass AI integration. It also licenses that platform for co-development in non-competitive markets through Butterfly Embedded, with active areas including brain computer interfaces, surgical robotics and liver assessment. The company reported approximately 220 employees as of January 31, 2026 and sells in over 30 countries, with Butterfly iQ+ used in over 70 low-resource settings.

Revenue drivers

• Core product revenue (probes, accessories, chips) — Point-of-care ultrasound devices and accessories sold to health systems, medical schools, distributors and eCommerce customers; recognized at a point in time, with quarterly volumes affected by timing of device sales.
• Software and other services — SaaS subscriptions, extended warranties, SDKs and Embedded partnership services; rose 22.9 percentage points year-over-year to 51.8% of total revenue in Q2 2026, driven by Embedded partnerships including Midjourney.
• Butterfly Embedded licensing — Out-licensing of the Ultrasound-on-Chip platform and related R&D services; the company cited 11 partners and said this revenue carries relatively higher margin than core offerings.
• U.S. versus international split — Q2 2026 U.S. revenue was $27.6 million, up 57%, while international revenue was $5.0 million, down 14% on lower probe sales to distribution partners, partly offset by entry into Brazil.

Recent performance

Q2 2026 revenue was $32.6 million, up 39% from $23.4 million a year earlier and a record for the company. Gross margin rose to 71.4% from 63.7%, which management attributed to higher-margin Embedded licensing revenue and lower software amortization. Net loss narrowed to $12.9 million from $13.8 million, and adjusted EBITDA loss improved 78% to $1.4 million, which management said was above its guidance. Units fulfilled rose 22.5%, or 1,176 units, year-over-year. Full-year 2025 revenue was $97.6 million with a net loss of $77.1 million.

Strategy

Butterfly describes itself as a multi-engine growth company built on four areas: Butterfly Embedded, enterprise POCUS software, medical education, and Home Community Care. It is investing in enterprise software around Compass AI, signing six new enterprise software agreements in the quarter, and in medical education, closing four additional partners including a long-term partnership with VCOM. It is pursuing FedRAMP certification, having received provisional authorization to sell across the U.S. Department of Veterans Affairs, and targeting certification in Q3 2026. It is expanding internationally, including regulatory authorization in Brazil, and is preparing its first commercial Home Community Care implementation in the second half of 2026. Management also said its semiconductor platform is expanding into new markets through Embedded partnerships.

Risks

• Persistent losses and cash use — The company has incurred significant losses since inception, with a $77.1 million net loss in 2025 and $12.9 million in Q2 2026, and expects to continue incurring losses for at least the next several years.
• Growth depends on customer acquisition — Butterfly states its growth depends on its ability to attract and retain customers, and revenue has historically been affected by the timing of device sales.
• Competition from larger incumbents — The company may not compete effectively with other ultrasound imaging device makers, many of which have greater financial and marketing resources.
• Pricing and reimbursement — The pricing of Butterfly's products and services and reimbursement for procedures using its devices are identified as risks that could adversely affect the business.

Outlook

Management raised full-year revenue guidance and improved its adjusted EBITDA guidance after Q2 2026 results exceeded the high end of its range. It expects FedRAMP certification in the third quarter of 2026 and first commercial Home Community Care revenue in the fourth quarter of 2026. Three existing Butterfly Garden partner tools are expected to become commercially available by year-end.