BFLY — Butterfly Network, Inc.

Butterfly Network, Inc. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $26.5 million, a 25% year-over-year increase.
• Gross Margin: 69%, up from 63% in the prior year.
• Adjusted EBITDA Loss: $6.1 million, improved from a loss of $9.1 million in Q1 2025.
• Cash Balance: $138 million, with a cash burn of $12.5 million for the quarter, down from $14.7 million year-over-year.

2. Strategic Updates and Business Highlights

• Product Development: Butterfly received FDA clearance for a blind sweep AI tool for determining fetal gestational age, marking a significant milestone in AI-enabled ultrasound technology.
• Partnerships: The company expanded its Butterfly Garden platform, now with 30 partners, and noted significant progress with existing partners like Deepecho and iCardio.
• POCUS Growth: The company reported a 5% increase in probe sales, with a notable shift towards higher-margin iQ3 devices, resulting in an 11% increase in average selling price (ASP).
• Home and Community Care: The initiative is progressing, with expectations for the first commercial agreement to be signed in H1 2026 and training for nurses to begin in Q3.
• Embedded Business: Revenue from Butterfly Embedded reached $5.7 million, a 147% increase year-over-year, primarily driven by the Midjourney partnership.

3. Forward Guidance and Outlook

• Q2 2026 Guidance: Expected revenue between $27 million and $31 million (24% year-over-year growth at midpoint) and an adjusted EBITDA loss of $6 million to $8 million.
• Full Year 2026 Guidance: Revenue projected between $117 million and $121 million (20-24% increase over 2025), with an adjusted EBITDA loss between $21 million and $25 million.
• The company is focused on expanding its POCUS business, enhancing the Compass AI platform, and growing the Home and Community Care initiative.

4. Bad News, Challenges, or Points of Concern

• Regulatory Environment: The company is navigating complex regulatory landscapes, particularly concerning the RoHS Lead Exemption for handheld ultrasound devices in the EU, which could impact future product development.
• Macroeconomic Factors: Butterfly is monitoring geopolitical tensions and tariffs that could affect business operations, although current impacts have been minor.
• Competitive Pressures: The emergence of numerous AI tools in the ultrasound space could lead to increased competition and regulatory scrutiny.

5. Notable Q&A Insights

• Medical School Partnerships: Strong momentum is expected in Q2 2026, with efforts to ensure that every incoming medical student has access to their own probe, potentially doubling annual sales.
• Compass AI Contracts: The company is seeing a sharp increase in enterprise deal activity, indicating a positive outlook for revenue contributions from this segment.
• Embedded Partnerships: There are ongoing discussions that could lead to significant near-term financial impacts similar to the Midjourney deal, with multiple potential partnerships in the pipeline.
• Home and Community Care Vision: The initial deployment aims to demonstrate economic benefits and improve patient care, with plans for expansion across the U.S. if successful.

Overall, Butterfly Network reported a strong start to 2026, with significant revenue growth, strategic advancements in product offerings, and a positive outlook for future growth, despite some regulatory and competitive challenges.