BFLY

Butterfly Network, Inc. BFLY used its second-quarter 2026 earnings call to emphasize a growth mix spanning Embedded partnerships, enterprise point-of-care ultrasound, or POCUS, and Home and Community Care. Revenues of $32.6 million topped the Zacks Consensus Estimate of $28.4 million, while the reported loss of 1 cent per share was narrower than the expected loss of 3 cents. Butterfly Network, Inc. price-consensus-eps-surprise-chart | Butterfly Network, Inc. Quote Management also raised 2026 guidance, detailed a more scalable Embedded model and outlined 2027 product launches. Executive vice president and CFO John Doherty said third-quarter revenues are expected between $26 million and $30 million, with an adjusted EBITDA loss of $6 million to $9 million. For 2026, Butterfly raised revenue guidance to $119-$123 million and adjusted EBITDA loss forecast to $19-$23 million. Doherty said second-quarter gross margin reached 71%, while the adjusted EBITDA loss improved to $1.4 million. He said guidance incorporates expected effects from tariffs, Middle East conflict and AI-driven supply-chain shortages. Chairman and CEO Joseph DeVivo said Butterfly added two Embedded partnerships in the second quarter, bringing the total to 11. Embedded revenues reached $10.8 million, up 439% year over year, primarily on the Midjourney partnership. During Q&A, a TD Cowen analyst asked about revenue cadence. Doherty said Embedded had been expected to generate roughly $7-$8 million per quarter, with fluctuations of $1-$2 million, before contributions from new partners. DeVivo added that the model is becoming standardized around common chips, software licenses and paid development work. A William Blair analyst pressed on commercialization timing, and DeVivo identified Mendaera and Sonic Incytes as nearer-term opportunities while describing neurotechnology programs as longer-cycle. DeVivo said Butterfly signed six additional enterprise Compass AI software deals in the second quarter. He also said the Compass AI pipeline has increased fivefold since last year. Doherty reported core business revenues of $21.9 million, up 2% year over year. Probe unit sales rose 23%, while a VCOM agreement carries potential total contract value exceeding $10 million over four years. International revenues fell 14% to $5 million as several larger orders shifted into the third quarter. DeVivo highlighted Brazil regulatory authorization and said full FedRAMP certification is anticipated in the third quarter after provisional authorization to sell across the VA. DeVivo said the first commercial Home and Community Care state is scheduled to begin Oct. 1, with nurses being trained during the third quarter. Doherty said the program is included in 2026 guidance and should contribute revenues in the fourth quarter. A Lake Street Capital Markets analyst asked about deployment scale. DeVivo said Butterfly expects to train roughly 15 to 30 nurses in the first state and can use education partners if expansion accelerates. In response to William Blair, DeVivo described a revenue model combining a fee tied to managed population size with per-scan charges. He said Butterfly can share in savings if readmissions decline, while bearing additional cost if agreed outcomes are not achieved. DeVivo said Butterfly remains on track to launch its next-generation P5.1-based probe in the first quarter of 2027. The device is designed to add harmonic imaging, with management emphasizing improved cardiac imaging. He also expects iQ Station to enter the POCUS cart market later in 2027. In response to a Freedom Brokers analyst, DeVivo cited an existing compact and POCUS cart market of about $1.6-$2 billion. The Apollo chip program is progressing toward deliveries to Midjourney by late 2027 or early 2028. Butterfly also expects three Garden partner tools to become commercially available by year-end with direct access to its cloud workflows. Doherty emphasized operating efficiency and resource allocation toward higher-return opportunities while funding product, semiconductor and commercial expansion. DeVivo framed POCUS, Home and Embedded as reinforcing growth engines centered on Ultrasound-on-Chip. Management’s priorities include scaling Embedded partnerships, executing the Home launch and keeping the 2027 product roadmap on schedule. BFLY carries a Zacks Rank #2 (Buy). Its Value Score is F, Growth Score is C, Momentum Score is F and VGM Score is F. Zacks Style Score guidance favors pairing top Zacks Ranks with A or B Style Scores, making the current combination mixed. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Rank can change as analysts revise earnings estimates following the just-reported results. The current rank and Style Scores represent point-in-time signals rather than a conclusive forecast. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Butterfly Network, Inc. (BFLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET Chief Financial Officer - John Doherty Chairman and Chief Executive Officer - Joseph DeVivo Operator: 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. John Doherty: 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. Joseph DeVivo: 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 5x. 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. John Doherty: 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. Joseph DeVivo: 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. Operator: 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. Josh Jennings: 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? Joseph DeVivo: 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. John Doherty: 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. Josh Jennings: 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? Joseph DeVivo: 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. John Doherty: One thing, all the development work we're also getting compensated for, it's not as if we're doing that for free. Joseph DeVivo: 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'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. Josh Jennings: 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. John Doherty: 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. Joseph DeVivo: 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. Josh Jennings: Appreciate it, gentlemen. Thank you. Operator: The next question comes from Chase Knickerbocker from Craig-Hallum. Chase, your line is open. Please go ahead. Chase Knickerbocker: 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? John Doherty: Let 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. Joseph DeVivo: Did that answer the question, Chase? Chase Knickerbocker: Going forward- Joseph DeVivo: I can. Chase Knickerbocker: A little bit more detail on that would be great. Joseph DeVivo: Absolutely. 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. Chase Knickerbocker: 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. John Doherty: 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. Joseph DeVivo: 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. Chase Knickerbocker: Got it. Very helpful. Thank you for taking the questions. Joseph DeVivo: No problem. Thanks, Chase. Operator: The next question comes from Ben Haynor at Lake Street Capital Markets. Ben, please go ahead. Your line is open. Ben Haynor: 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? Joseph DeVivo: 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. Ben Haynor: 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. Joseph DeVivo: 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. Ben Haynor: 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. Joseph DeVivo: 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. Ben Haynor: That's it for me. Thanks for all the color, and congrats on all the progress. Joseph DeVivo: Thanks, Ben. Operator: The next question comes from Steve Lichtman from William Blair. Steve, please go ahead. Your line is open. Steve Lichtman: Thank you. Morning. Joseph DeVivo: Hey, Steve. Steve Lichtman: 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? Joseph DeVivo: 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. Steve Lichtman: 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? Joseph DeVivo: 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? Steve Lichtman: Just in terms of the milestones. Joseph DeVivo: 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. Steve Lichtman: Really helpful. Thanks, Joe, congrats on the continued progress. Operator: The next question comes from Raylin Konakuty from Freedom Broker. Raylin, your line is open. Please go ahead. Raylin Konakuty: 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. Joseph DeVivo: 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? Raylin Konakuty: This was an answer that I didn't expect. Thank you, Joe. Thank you, John. Thank you for your time. Congrats again. John Doherty: Thank you. Joseph DeVivo: All right, everyone. Operator, that was the last question? Operator: Indeed. Joseph DeVivo: 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. Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines. Before you buy stock in Butterfly Network, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Butterfly Network wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Butterfly (BFLY) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Butterfly Network, Inc.? Here are five stocks we like better. Butterfly Network reported record second-quarter results: Revenue rose 39% year over year to $32.6 million, gross margin expanded to 71%, and the adjusted EBITDA loss narrowed to $1.4 million. Growth was led by the Embedded business, whose revenue surged 439% to $10.8 million, while the company added two partners and continued advancing its Apollo chip platform. Core probe sales, medical-school agreements, Compass AI software and Brazil authorization also expanded its opportunity. Butterfly raised its 2026 outlook to $119 million-$123 million in revenue, despite projecting a $19 million-$23 million adjusted EBITDA loss. The company plans to launch its first home and community care program in October and expects that business to contribute multiple millions of dollars in 2027. Can Butterfly Network Spread its Wings in 2023? Butterfly Network (NYSE:BFLY) reported record second-quarter revenue and raised its full-year outlook, citing growth in its Embedded business, enterprise point-of-care ultrasound sales and progress toward commercializing its home and community care offering. Revenue for the quarter ended June 30 totaled $32.6 million, up 39% from a year earlier, Chief Financial Officer John Doherty said. The company said the result exceeded the high end of its guidance range and was driven primarily by Butterfly Embedded, its program that licenses and supplies its Ultrasound-on-Chip technology to partners developing new imaging applications. → Microsoft Just Flipped the AI Spending Narrative Overnight Gross profit reached a record $23.3 million, up 56% year over year, while gross margin expanded to 71% from 64%. Butterfly attributed the margin improvement largely to a greater mix of higher-margin Embedded revenue. Adjusted EBITDA loss narrowed to $1.4 million from $6.2 million in the prior-year quarter. Embedded revenue rose 439% year over year to $10.8 million in the second quarter, primarily reflecting the company’s partnership with Midjourney, Doherty said. Butterfly’s core business, which includes probe sales, related software, Compass AI and other services, generated $21.9 million, up 2% from the comparable period last year. → 2 Unique Space ETFs That Could Upend the Industry Chief Executive Officer Joseph DeVivo said Butterfly added two Embedded partners during the quarter, bringing the total to 11. One partner is a brain-computer-interface company developing a new application, while another is pursuing a wearable device focused on a women’s health use case. DeVivo said the Embedded model is designed to scale because partners use Butterfly’s existing semiconductor platform rather than requiring the company to develop a separate chip for every customer. Revenue from the segment currently includes non-recurring engineering payments, annual license fees, statement-of-work development revenue and chip sales. → MarketBeat Week in Review – 07/27- 07/31 Doherty said the company has previously expected Embedded revenue to run at roughly $7 million to $8 million per quarter, with potential fluctuations. He said new partners and the future commercialization of existing partner programs could add to that level over time. The company said it has completed the primary design of its Apollo chip platform and has moved into the development phase. DeVivo said Butterfly remains on schedule to deliver Apollo chips to Midjourney by the end of 2027 or the beginning of 2028. U.S. revenue was $27.6 million, up 57% year over year, as Embedded revenue and core demand contributed to the result. Probe unit sales rose 23%. International revenue declined 14% to $5 million, which management attributed to a difficult comparison with the prior year’s iQ3 launch period and several larger orders shifting into the third quarter. Butterfly said it recently received regulatory authorization in Brazil, which DeVivo described as the largest medical-device market in Latin America and a significant long-term opportunity for the company. Sales of the iQ3 and iQ+ probes increased 17% and 33%, respectively, from a year earlier. However, average selling price declined 12%, reflecting a larger mix of iQ+ sales and preferred pricing included in a new agreement with Edward Via College of Osteopathic Medicine, or VCOM. The VCOM agreement is a four-year arrangement with potential total contract value exceeding $10 million. Under the partnership, VCOM plans to provide incoming students with iQ3 devices, while Butterfly subsidized initial iQ+ distributions to upperclassmen. Doherty said the arrangement is included entirely within the core business rather than Embedded revenue. Butterfly also signed six enterprise software agreements for Compass AI during the quarter. DeVivo said many of those agreements were paired with probe sales, and the Compass AI pipeline has increased fivefold since last year. Butterfly said it has a presence at more than 80% of U.S. medical schools. The company placed nearly 1,000 probes across six medical schools in the first quarter and more than doubled that volume through four additional institutional partnerships in the second quarter. Butterfly received provisional authorization to sell to the full Department of Veterans Affairs and expects full FedRAMP certification in the third quarter. Butterfly plans to begin managing its first commercial state for its home and community care business on Oct. 1. The company expects to train participating nurses during the third quarter and begin recognizing revenue from the program in the fourth quarter. Doherty said home and community care is included in the company’s guidance, though its 2026 contribution will be limited because the launch begins late in the year. He said the business is expected to generate multiple millions of dollars in 2027. DeVivo said the initial program will focus on congestive heart failure patients in skilled nursing facilities. Butterfly expects its model to include a fee based on the size of the patient population under management and a variable fee tied to the number of scans performed. The company is targeting reductions in admissions and readmissions among those patients. In Butterfly Garden, the company released its proprietary beam-steering capabilities, including iQ Slice and Fan, to Garden and Embedded partners. Butterfly added a new Garden partner focused on AI-enabled precision needle guidance and expects three existing partner tools to become commercially available by year-end. Butterfly also said it remains on track to launch a next-generation probe based on its P5.1 chip in the first quarter of 2027. DeVivo said the device is expected to include harmonic imaging and will be followed later in 2027 by the planned iQ Station entry into the ultrasound cart market. For the third quarter, Butterfly forecast revenue of $26 million to $30 million, representing 30% year-over-year growth at the midpoint, and an adjusted EBITDA loss of $6 million to $9 million. For full-year 2026, the company raised its revenue outlook to $119 million to $123 million, representing growth of approximately 22% to 26% over 2025. Butterfly now expects an adjusted EBITDA loss of $19 million to $23 million for the year. Butterfly ended the quarter with $125 million in cash and cash equivalents, excluding restricted cash. Cash use during the quarter was $13.3 million, compared with $7 million in the prior-year period. Butterfly Network, Inc is a medical technology company focused on democratizing access to diagnostic imaging through its proprietary ultrasound-on-chip platform. The company's flagship device, the Butterfly iQ, leverages semiconductor technology to deliver whole-body ultrasound imaging in a handheld form factor. This portable system connects to a compatible smart device, enabling point-of-care scanning across a variety of clinical settings. Beyond its hardware offering, Butterfly Network provides a cloud-based software suite that supports image storage, analysis and remote collaboration. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Butterfly Network Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Butterfly Network (BFLY) drew investor attention after reporting record second quarter 2026 revenue of US$32.61 million and updating its outlook for the rest of the year. The company reported a loss of US$12.91 million for the quarter and US$25.59 million for the first half of 2026. Management also issued revenue guidance for the third quarter and raised full year 2026 expectations. See our latest analysis for Butterfly Network. Butterfly Network shares have seen sharp swings around the earnings release, with the stock falling 13% on the day to US$7.11 after a year to date share price return of 89.6% and a one year total shareholder return of over 4x. This points to strong longer term momentum even as short term sentiment cools. If this kind of move has your attention, it could be a moment to look at other health focused AI opportunities through our stock screener and see how they stack up against Butterfly Network via 41 healthcare AI stocks For Butterfly Network, that sharp pullback after strong revenue and guidance raises a simple issue. Are investors reassessing the business itself, or just resetting expectations after a powerful run into the print? And how does the current price stack up against fundamentals? The most followed valuation narrative for Butterfly Network places fair value at about $7.06 a share, which is slightly below the last close at $7.11. Read the complete narrative. Want to understand why Butterfly Network is priced so close to that fair value mark? The narrative focuses on expectations for revenue expansion, changes in margins, and a future earnings multiple that is considered demanding under those assumptions. Result: Fair Value of $7.06 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Butterfly Network still faces some important execution risks, including potential delays in large enterprise deals and the ongoing drag from high R&D spending on profitability. Find out about the key risks to this Butterfly Network narrative. If this mixed picture of risks and rewards around Butterfly Network leaves you on the fence, take a closer look at the details and move quickly to form your own view using the 1 key reward and 3 important warning signs. If Butterfly Network has sharpened your interest in new opportunities, do not stop here. Use the Simply Wall St Screener to spot other stocks that fit your approach. Target potential mispricings by scanning companies that combine quality and value through the 55 high quality undervalued stocks. Prioritise resilience by focusing on businesses highlighted in the 81 resilient stocks with low risk scores. Hunt for earlier stage opportunities that still meet solid financial criteria with the 21 elite penny stocks with strong financials. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BFLY. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 30, 2026 at 8:00 a.m. ET Chief Financial Officer - John Doherty Chairman and Chief Executive Officer - Joseph DeVivo Operator: 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. John Doherty: 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. Joseph DeVivo: 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 5x. 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. John Doherty: 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. Joseph DeVivo: 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. Operator: 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. Josh Jennings: 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? Joseph DeVivo: 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. John Doherty: 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. Josh Jennings: 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? Joseph DeVivo: 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. John Doherty: One thing, all the development work we're also getting compensated for, it's not as if we're doing that for free. Joseph DeVivo: 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'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. Josh Jennings: 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. John Doherty: 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. Joseph DeVivo: 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. Josh Jennings: Appreciate it, gentlemen. Thank you. Operator: The next question comes from Chase Knickerbocker from Craig-Hallum. Chase, your line is open. Please go ahead. Chase Knickerbocker: 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? John Doherty: Let 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. Joseph DeVivo: Did that answer the question, Chase? Chase Knickerbocker: Going forward- Joseph DeVivo: I can. Chase Knickerbocker: A little bit more detail on that would be great. Joseph DeVivo: Absolutely. 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. Chase Knickerbocker: 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. John Doherty: 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. Joseph DeVivo: 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. Chase Knickerbocker: Got it. Very helpful. Thank you for taking the questions. Joseph DeVivo: No problem. Thanks, Chase. Operator: The next question comes from Ben Haynor at Lake Street Capital Markets. Ben, please go ahead. Your line is open. Ben Haynor: 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? Joseph DeVivo: 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. Ben Haynor: 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. Joseph DeVivo: 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. Ben Haynor: 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. Joseph DeVivo: 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. Ben Haynor: That's it for me. Thanks for all the color, and congrats on all the progress. Joseph DeVivo: Thanks, Ben. Operator: The next question comes from Steve Lichtman from William Blair. Steve, please go ahead. Your line is open. Steve Lichtman: Thank you. Morning. Joseph DeVivo: Hey, Steve. Steve Lichtman: 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? Joseph DeVivo: 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. Steve Lichtman: 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? Joseph DeVivo: 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? Steve Lichtman: Just in terms of the milestones. Joseph DeVivo: 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. Steve Lichtman: Really helpful. Thanks, Joe, congrats on the continued progress. Operator: The next question comes from Raylin Konakuty from Freedom Broker. Raylin, your line is open. Please go ahead. Raylin Konakuty: 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. Joseph DeVivo: 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? Raylin Konakuty: This was an answer that I didn't expect. Thank you, Joe. Thank you, John. Thank you for your time. Congrats again. John Doherty: Thank you. Joseph DeVivo: All right, everyone. Operator, that was the last question? Operator: Indeed. Joseph DeVivo: 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. Operator: This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines. Before you buy stock in Butterfly Network, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Butterfly Network wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance beat was driven by the 'flywheel' effect of three emerging growth engines: Point-of-Care Ultrasound (POCUS), Home and Community Care, and Embedded partnerships. The Embedded business saw a 439% revenue increase, primarily attributed to the Midjourney partnership and the growing market recognition of semiconductor-based imaging's potential. Core POCUS growth was bolstered by a shift toward enterprise-level software deals, with the Compass AI pipeline increasing five times since last year. Management attributes record gross margins of 71% to a favorable revenue mix, specifically the high-margin contributions from the Butterfly Embedded segment. Strategic positioning in medical education reached a milestone with 80% of U.S. medical schools now using Butterfly, shifting from small device placements to full one-to-one ultrasound curricula. International revenue declined 14% due to a difficult year-over-year comparison against the iQ3 launch and several large deals shifting into the third quarter. Full-year 2026 revenue guidance was raised to $119 million-$123 million, reflecting confidence in the commercialization of Home and Community Care and Embedded milestones. The next-generation probe, built on the P5.1 chip, is on track for a Q1 2027 launch, aiming to deliver harmonic imaging that exceeds the performance of traditional PZT handheld competitors. Management expects to enter the multi-billion dollar ultrasound cart market in late 2027 with the launch of iQ Station, leveraging existing hospital capital budgets. The Home and Community Care segment is scheduled to begin its first commercial implementation on October 1st, with revenue expected to materialize in Q4 2026. Apollo chip deliveries to Midjourney are scheduled for late 2027 or early 2028, coinciding with the transition of the fourth-generation chip from research to development. The VCOM partnership included preferred pricing for legacy iQ+ inventory to secure a long-term, $10 million commitment to the iQ3 platform, resulting in a 12% decrease in ASP for the quarter. Butterfly received provisional authorization for the full VA system and expects full FedRAMP certification in Q3, opening the U.S. government as a major purchasing channel. Macroeconomic headwinds, including Middle East conflicts and AI-driven supply chain shortages, have had only minor impacts to date but remain under close monitoring. The company is firemalling its Embedded organization from core development teams to ensure partnership scaling does not distract from the core POCUS business. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects Embedded revenue to maintain a cadence of approximately $7 million to $8 million per quarter, with fluctuations based on milestone achievements. While current revenue includes NRE payments and license fees, the 'big pops' in revenue are expected when partners transition to full commercialization and chip-sharing models. Management sees no practical limit to the number of partnerships because they utilize a standardized semiconductor platform rather than custom chips for each client. The business model is evolving from a 'job shop' into a scalable software platform where partners pay for development work, hardware, and eventually, high-volume chip purchases. The revenue model includes a fixed fee based on the size of the managed patient population plus a variable fee for every scan performed. Success will be measured by the reduction in hospital readmission rates for congestive heart failure patients, with potential for Butterfly to share in the cost savings generated for at-risk providers. Management claims the P5.1 chip will deliver better cardiac images than the handheld devices of the largest imaging companies, potentially making traditional PZT technology obsolete. The strategy is to enter the $1.6 billion to $2 billion POCUS cart market with a superior, networked product that avoids the high cost of 'market development' by tapping into existing demand.

Delivered Record Revenue and Adjusted EBITDA Loss Above Guidance Raised full year Revenue and Improved Adjusted EBITDA Guidance Delivered quarterly Revenue of $32.6 million in Q2, representing 39% YoY growth Delivered 71% Gross Margin, up 770 bps BURLINGTON, Mass. & NEW YORK, July 30, 2026--(BUSINESS WIRE)--Butterfly Network, Inc. (NYSE: BFLY) ("Butterfly" or the "Company"), a pioneer and leader in semiconductor-based ultrasound devices, programmable cloud software and AI, today announced financial results for the second quarter ended June 30, 2026, and provided a business update. Joseph DeVivo, Butterfly's President, Chief Executive Officer and Chairman commented, "Butterfly delivered another outstanding quarter, exceeding the high end of our guidance while achieving record revenue, gross margin and adjusted EBITDA. Just as important, the world got to see what Ultrasound-on-Chip™ is capable of as two Embedded partners unveiled entirely new applications being built on our platform. It's an exciting milestone for Butterfly and a validation of the opportunity we've believed in for years." DeVivo continued, "As those announcements captured global attention, they also highlighted something bigger: Butterfly has evolved into a multi-engine growth company. Our semiconductor platform is expanding into new markets through Butterfly Embedded; our POCUS business is building a larger enterprise opportunity through software, medical education and government; and Home & Community Care is transitioning from pilot to commercialization. Together, these growth engines reinforce one another and continue to expand our long-term opportunity." Recent Operational and Strategic Highlights: Butterfly Embedded™: Added two new partners to the Embedded portfolio, totaling 11 partners, with Midjourney and Aleph Neuro unveiling the groundbreaking applications they’re building with Butterfly's Ultrasound-on-Chip™ platform. Compass AI™ and Enterprise Momentum: Signed six new enterprise software agreements and expanded the Compass AI software pipeline meaningfully year over year. FedRAMP Progress: Received provisional authorization to sell across the U.S. Department of Veterans Affairs and remains on track to achieve FedRAMP certification in the third quarter of 2026. Medical Education Expansion: Closed four additional medical education partners in the quarter, including entering a long-term strategic partnership with VCOM to support and gain insights following physicians from medical school to residency and clinical practice. Butterfly Garden™: Added a new partner focused on precision needle-guidance AI and expect three existing partner tools to become commercially available by year-end. Home & Community Care: Prepared for first commercial implementation in the second half of 2026, with revenue expected in the fourth quarter. International Expansion: Received regulatory authorization in Brazil, opening one of the world's largest and fastest-growing ultrasound markets. Three Months Ended June 30, 2026 Financial Results Revenue: Total revenue was $32.6 million, representing growth of 39% from $23.4 million in the second quarter of 2025. U.S. revenue was $27.6 million, up 57% from prior year, primarily driven by revenue from our Butterfly Embedded™ partnerships, including our co-development partnership with Midjourney, as well as increased probe sales volume to our health system, medical school, and eCommerce customers. International revenue decreased 14% year-over-year to $5.0 million, largely resulting from decreased probe sales to our international distribution partners during the second quarter, although this decrease was partially offset by our recent commercial expansion into the Brazilian medical device market. Gross margin: Gross profit was $23.3 million versus gross profit of $14.9 million in the prior year period. Gross margin increased to 71.4% compared to 63.7% in the prior year period. This increase was primarily due to the relatively higher margin return on our Butterfly Embedded™ licensing revenue, as compared to our core business offerings, as well as a reduction in software amortization costs for our historic software development investments. Operating expenses: Operating expenses were $37.0 million, up 19% from $31.0 million in the prior year period. Total operating expenses excluding stock-based compensation and other expenses were $26.3 million, compared to $23.1 million in the second quarter of 2025, largely reflecting increased headcount in the current year from investments we've made in our internal capabilities throughout the past 12 months to support revenue growth as well as our product and software development projects. Net loss: Net loss was $12.9 million, compared to $13.8 million in the prior year period. Adjusted EBITDA: Adjusted EBITDA loss was $1.4 million, an improvement of 78% compared to $6.2 million in the prior year period. EPS: EPS was $(0.05), compared to $(0.06) in the prior year period. Adjusted EPS: Adjusted EPS was $(0.01), compared to $(0.03) in the prior year period. Cash and cash equivalents: Cash and cash equivalents were $124.7 million as of June 30, 2026. Guidance Raised revenue guidance and adjusted EBITDA guidance for the Fiscal Year 2026: Revenue of $119 million to $123 million, or approximately 22% to 26% growth Adjusted EBITDA loss of $19 million to $23 million Provided revenue guidance and adjusted EBITDA guidance for the 3rd Quarter of 2026: Revenue of $26 million to $30 million, or approximately 30% growth year-over-year at the midpoint Adjusted EBITDA loss of $6 million to $9 million Reconciliation of GAAP to Adjusted Reconciliations of gross profit and gross margin to adjusted gross profit and adjusted gross margin and of net loss and EPS to adjusted net loss, adjusted EBITDA, and adjusted EPS for the three and six months ended June 30, 2026, and 2025 are provided in the financial schedules that are part of this press release. An explanation of these non-GAAP financial measures is also included below under the heading "Non-GAAP Financial Measures." Conference Call A conference call and webcast to discuss second quarter 2026 financial performance and operational progress is scheduled for 8:00 am ET on July 30, 2026. The conference call will be broadcast live in listen-only mode via a webcast on Butterfly’s Investor Relations website at Events & Presentations. Individuals interested in listening to the conference call on your telephone may do so by dialing approximately ten minutes prior to start time: United States (Local): +1 646 844 6383United States (Toll-Free): +1 833 470 1428Global Dial-In Numbers: https://www.netroadshow.com/events/global-numbers?confId=48643 Access Code: 424023 After the live webcast, the call will be archived on Butterfly’s Investor Relations events page. In addition, a telephone replay of the call will be available until August 6, 2026, by dialing: United States (Local): +1 929 458 6194United States (Toll-Free): +1 866 813 9403Access Code: 941825 About Butterfly Network Butterfly Network, Inc. (NYSE: BFLY) is driving a digital revolution in ultrasound imaging and sensing with its proprietary Ultrasound-on-Chip™ semiconductor technology and software solutions. Butterfly first proved its technology in the point-of-care ultrasound market – commercializing the world's first single-probe, whole-body portable ultrasound device, which is now on its best-selling, third-generation: Butterfly iQ3™. The Company combines its advanced hardware with cloud software and AI, an enterprise workflow solution (Compass AI™) and other offerings to drive adoption of affordable, accessible ultrasound. Butterfly also enables third-party development of imaging AI apps through Butterfly Garden™, its software development kit and AI marketplace. In addition to its medical imaging products, Butterfly Embedded™ is the Company's Ultrasound-on-Chip™ licensing and co-development business designed to enable a new wave of ultrasound-enabled technologies across non-competitive healthcare markets and beyond. Through Butterfly Embedded™, partners can build and scale novel ultrasound applications powered by Butterfly's proprietary semiconductor chip and software platform. Butterfly's innovations have been recognized by Prix Galien USA, Fierce 50, TIME's Best Inventions and Fast Company's World Changing Ideas, among other achievements. To learn more, visit: www.butterflynetwork.com Non-GAAP Financial Measures In addition to providing financial measures based on generally accepted accounting principles in the United States of America ("GAAP"), we provide additional financial measures that are not prepared in accordance with GAAP ("non-GAAP"). The non-GAAP financial measures included in this press release are adjusted gross profit, adjusted gross margin, adjusted net loss, adjusted EBITDA, and adjusted EPS. We present non-GAAP financial measures in order to assist readers of our financial statements in understanding the core operating results that our management uses to evaluate the business and for financial planning purposes. Our non-GAAP financial measures provide an additional tool for investors to use in comparing our financial performance over multiple periods. The non-GAAP financial measures included in this press release are key performance measures that our management uses to assess our operating performance. These non-GAAP measures facilitate internal comparisons of our operating performance on a more consistent basis. We use these performance measures for business planning purposes and forecasting. We believe that these non-GAAP measures enhance an investor’s understanding of our financial performance as they are useful in assessing our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. The non-GAAP financial measures included in this press release may not be comparable to similarly titled measures of other companies because they may not calculate these measures in the same manner. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. When evaluating the Company’s performance, you should consider adjusted gross profit, adjusted gross margin, adjusted net loss, adjusted EBITDA, and adjusted EPS alongside other financial performance measures prepared in accordance with GAAP, including gross profit, gross margin, net loss, and EPS. The non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. In this press release, we have provided reconciliations of gross profit and gross margin to adjusted gross profit and adjusted gross margin and of net loss and EPS to adjusted net loss, adjusted EBITDA, and adjusted EPS, the most directly comparable GAAP financial measures. Reconciliations of our non-GAAP financial measures to corresponding GAAP measures are not available on a forward-looking basis because we are unable to predict with reasonable certainty the non-cash component of employee compensation expense, changes in our working capital needs, variances in our supply chain, the impact of earnings or charges resulting from matters we consider not to be reflective, on a recurring basis, of our ongoing operations, and other such items without unreasonable effort. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP. Management strongly encourages investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Forward Looking Statements This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Our actual results may differ from our expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believe," "predict," "potential," "continue," and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expectations with respect to financial results and guidance, including revenue and adjusted EBITDA expectations for the third quarter and full year 2026, revenue growth, future performance of our ultrasound business and Embedded opportunities (inclusive of co-development, revenue share/commercialization revenue, chip purchases, and/or chip licensing opportunities through the Embedded program); the timing, scope, and revenue potential of our Butterfly Home and Community Care business, including expectations regarding the commercial launch of our first state program and the timing of initial revenue; expectations regarding the achievement of FedRAMP certification and the expansion of sales to government agencies, including the U.S. Department of Veterans Affairs; the expansion of our Compass AI enterprise software pipeline and related revenue opportunities; expectations regarding international market expansion, including opportunities in Brazil; development and commercialization of products and services, and the size and potential growth of current or future markets for our products and services, including the launches of our next-generation probe, P5 chip, Apollo chip, and fourth-generation technology; the potential for our semiconductor platform to enable new markets through Butterfly Embedded partnerships; expectations regarding the growth of our medical education partnerships and their impact on long-term adoption;. Forward-looking statements are based on our current beliefs and assumptions and on information currently available to us. These forward-looking statements involve significant known and unknown risks and uncertainties and other factors that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside our control and are difficult to predict. Factors that may cause such differences include, but are not limited to: our ability to grow and manage growth effectively; the success, cost, and timing of our product and service development activities; the potential attributes and benefits of our products and services; the degree to which our products and services are accepted by healthcare practitioners and patients for their approved uses; our ability to obtain and maintain regulatory approval for our products, as applicable, and any related restrictions and limitations on the use of any authorized product; our ability to identify, in-license, or acquire additional technology; our ability to maintain our existing license, manufacturing, supply, and distribution agreements; the success, cost, and timing of our efforts to out-license our intellectual property to third parties; our ability to compete with other companies currently marketing or engaged in the development of ultrasound imaging devices, many of which have greater financial and marketing resources than us; changes in applicable laws or regulations; the impact of global macroeconomic conditions, including tariffs, geopolitical conflicts, and AI-driven supply chain shortages on our business and operations; the size and growth potential of the markets for our products and services, and our ability to serve those markets, either alone or in partnership with others; the pricing of our products and services, and reimbursement for medical procedures conducted using our products and services; our estimates regarding expenses, revenue, capital requirements, and needs for additional financing; our financial performance; our ability to attract and retain customers; our ability to manage our growth effectively; our ability to protect or enforce our intellectual property rights; and other risks and uncertainties indicated from time to time in our most recent Annual Report on Form 10-K or in subsequent filings that we make with the Securities and Exchange Commission. We caution that the foregoing list of factors is not exclusive. We caution you not to place undue reliance upon any forward-looking statements, which speak only as of the date of this press release. We do not undertake or accept any obligation or undertake to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statement is based. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730253801/en/ Contacts Investors John DohertyChief Financial Officer, [email protected] Media Liz SnyderDirector, PR & Communications, [email protected]

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record revenue of $32.6 million, up 39% year-over-year, exceeding guidance. Highest gross margin in company history at 71%, driven by higher-margin embedded revenue. Adjusted EBITDA loss improved 78% year-over-year to $1.4 million, beating guidance. Embedded revenue surged 439% to $10.8 million, with 11 partners signed and growing interest. Strong progress in POCUS core with 23% unit sales growth, Compass AI pipeline up 5x, and new medical school partnerships. International revenue declined 14% year-over-year to $5 million due to tough comps and delayed deals. Core POCUS revenue grew only 2% year-over-year, impacted by lower ASPs from VCOM subsidy. Cash used in operations increased to $13.3 million from $7 million in the prior year quarter. Home and community care revenue is minimal in 2026, with commercial launch only in Q4. Macroeconomic risks from tariffs, AI-driven supply chain shortages, and Middle East conflict remain. Here are the key Q&A highlights from Butterfly Network Inc's Q2 2026 earnings call. Warning! GuruFocus has detected 3 Warning Signs with BFLY. Is BFLY fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the components of the revenue recognition in the embedded business for the second quarter? A: **John Doherty, CFO** - The embedded revenue includes multiple parts: initial upfront payments, annual license fees, and development work. We recognize revenue as we achieve specific milestones against the project. In Q2, we made good progress on milestones for the Midjourney partnership, which resulted in the higher embedded revenue. The overall $74 million contract with Midjourney is not the total; there is potential for additional revenue from future work, chip sales, and revenue share upon commercialization. Q: How should we think about the cadence of embedded revenue over the next 12-24 months, and should we expect meaningful contributions from partners beyond Midjourney? A: **John Doherty, CFO** - We expect embedded revenue to be around $7 million to $8 million per quarter, with some fluctuation. As we add more partners, we expect this to increase. **Joseph DeVivo, CEO** - We added two new partners in Q2, and each has significant upside. Our revenue includes all partners, not just Midjourney. The big revenue pops will come when partners go commercial, which we anticipate for some of our current partners in the future. Q: How many additional embedded partnerships can the organization realistically support? A: **Joseph DeVivo, CEO** - I don't see a limit. The beauty is that we are not developing new chips for each partner. It's the same chip, and we are building a software platform that allows them to do the work themselves. This is a scalable, core part of our future. **John Doherty, CFO** - We are also getting compensated for all development work, so it's not free. Q: Can you explain the VCOM partnership and how it works from a revenue perspective? A: **John Doherty, CFO** - The VCOM deal is purely a core business deal, not embedded. It involves the sale of IQ+ and IQ3 probes and related software over a four-year period. **Joseph DeVivo, CEO** - VCOM made a long-term commitment to provide every incoming student with a probe. We subsidized the IQ+ probes for upperclassmen to help them onboard the entire school. This investment is reflected in our lower ASPs for the quarter, but it's the right move to deepen our penetration in medical education. Q: On the Home and Community Care commercial launch, how large is the group you need to train, and how many patients will this initial state touch? A: **Joseph DeVivo, CEO** - We will be training between 15 and 30 nurses initially. We are not disclosing the number of patients under management yet, as we want to get more mature and consistent before doing so. When revenue becomes meaningful, we will share the revenue model and scope. Q: Can you provide color on the commercialization efforts for the Butterfly Garden partners launching later this year? A: **Joseph DeVivo, CEO** - These are smaller, growth-oriented companies. We have been waiting for their FDA approvals and for them to integrate more deeply into our platform. We expect three partners to come online in the second half of the year. Each new app builds consumer awareness and creates its own flywheel, which is key to crossing the chasm for point-of-care ultrasound adoption. Q: Regarding the next-generation probe and the cart market entry, can you quantify the addressable market and expected price point? A: **Joseph DeVivo, CEO** - The current point-of-care ultrasound handheld market is about $300-$350 million. The existing market for small compact carts is about $1.6-$2 billion. With our next probe, we believe we will have better image quality than any other handheld, including for cardiology. This allows us to enter the existing cart market with a superior product without the burden of market development. We expect our next probe to generate significant revenue by taking market share in this established space. Q: How are you thinking about the revenue model for the Home and Community Care business? A: **Joseph DeVivo, CEO** - The model is simple. We will charge a fee based on the size of the population we manage, plus a charge for every scan performed. There will be a fixed component based on population size and a variable component based on scan volume. We are also taking on some risk, as we will be rewarded with a percentage of the cost savings we generate for the at-risk providers by reducing hospital readmissions. Q: What milestones are you looking for with the first home care customer to expand to additional customers? A: **Joseph DeVivo, CEO** - We are targeting a reduction in hospital admissions and readmissions for congestive heart failure patients. The national readmission rate for this population in skilled nursing facilities is 25-35%. If we can demonstrate a meaningful reduction in that rate, the economic impact for at-risk providers is significant. Once we prove this works at scale, we expect them to expand rapidly. Q: As you look at the different categories of embedded partners, are some closer to commercialization than others? A: **Joseph DeVivo, CEO** - Yes. Some partners, like Mandera (vascular robotics) and Sonic Insights (liver diagnosis), are using our current technology and are closer to commercial launch. Others, like the four neurotechnology BCI companies, are doing primary research and have a longer timeline. The Midjourney announcement has also opened conversations with many well-funded, larger companies that could change the calculus quickly. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Butterfly Network, Inc. BFLY is scheduled to report second-quarter 2026 results on July 30, before the opening bell. In the last reported quarter, the company’s loss per share of 3 cents topped the Zacks Consensus Estimate by 25%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions, missed once, delivering an earnings surprise of 0.9%, on average. Let’s check out the factors that have shaped BFLY’s performance prior to this announcement. Ahead of Butterfly Network’s second-quarter 2026 results, investors should closely monitor the performance of its core Point-of-Care Ultrasound (POCUS) business, which remains the foundation of the company’s growth strategy. In the first quarter, core revenues increased 10% year over year, supported by higher probe volumes, a richer mix of iQ3 device sales and solid demand across U.S. healthcare, international, veterinary and e-commerce channels. Management also highlighted continued traction in medical school deployments, with nearly 1,000 probes sold across six institutions and expectations for an even stronger second quarter as academic purchasing activity typically accelerates. Investors are likely to look for sustained probe demand, continued iQ3 adoption and improving average selling prices, which could further support gross margin expansion and reinforce Butterfly’s leadership in handheld ultrasound. Another key area of focus will be the company’s rapidly expanding software and artificial intelligence ecosystem. Butterfly Network ended the first quarter with growing momentum for Compass AI after securing its first seven-figure enterprise software contract and reporting a sharply higher enterprise sales pipeline. Per the first-quarter earnings call, management also highlighted encouraging early adoption of its FDA-cleared gestational age (GA) AI application, while Butterfly Garden expanded to 30 development partners with several AI-powered applications progressing toward commercialization. Investors are likely to focus on management commentary around additional Compass AI wins, software contract value growth, enterprise customer adoption and the pace of AI commercialization, as these offerings represent an increasingly important recurring revenue opportunity beyond hardware sales. Butterfly Embedded is expected to remain another major earnings catalyst. The business delivered exceptional 147% year-over-year revenue growth in the first quarter, primarily driven by the Midjourney partnership. Management also emphasized a healthy pipeline of additional embedded collaborations across robotics, wearables, pharmaceutical applications and other emerging markets. Executives also indicated that discussions are underway for partnerships that could generate financial contributions comparable to the Midjourney agreement. Investors will therefore look for updates on new partner additions, commercialization milestones, licensing activity and embedded revenue visibility, as this business has the potential to become a meaningful long-term growth engine with attractive margins. Another closely watched area is Butterfly Home and Community Care. On its first-quarter earnings call, management reiterated expectations to sign its first commercial agreement during the first half of 2026 and begin statewide nurse training and deployment during the third quarter. The company believes this initiative could significantly reduce hospital admissions and expand point-of-care imaging into home-based care settings, creating an entirely new revenue stream beginning in the second half of the year. Investors may seek updates on potential commercial contract execution, implementation timelines and the initial financial contribution expected from this business, as successful execution could validate BFLY’s broader strategy of extending ultrasound beyond traditional healthcare facilities. Moreover, investors will closely assess BFLY’s ability to sustain its improving financial profile while investing for future growth. The company ended the first quarter with 25% revenue growth, 69% gross margin and its lowest first-quarter net loss since becoming public. The company reaffirmed its full-year 2026 guidance despite macroeconomic uncertainties and tariff-related pressures, reflecting confidence in the prospect of the business. Management expects continued investments in AI, Embedded, Home and next-generation semiconductor technologies, including its fourth-generation chip platform, while maintaining operating discipline. Updates on gross margin, adjusted EBITDA, cash usage and progress toward full-year guidance will therefore be critical in evaluating whether BFLY can continue balancing rapid innovation with improving profitability. Butterfly Network, Inc. price | Butterfly Network, Inc. Quote For second-quarter 2026, the Zacks Consensus Estimate for revenues is pegged at $28.4 million, implying an improvement of 21.5% from the prior-year quarter’s reported figure. The consensus estimate for loss per share is pegged at 3 cents, indicating growth of 50% from the prior-year period’s reported number. Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below. Earnings ESP: BFLY has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. In the year-to-date period, BFLY shares have rallied 73.2%, significantly outperforming the broader Zacks Medical Information Systems Market, which has declined 14.6% over the same period. BFLY has also comfortably outpaced the S&P 500, which has gained 7.6%, underscoring strong investor confidence in the company's AI-driven growth strategy and expanding ultrasound platform. BFLY has also delivered markedly stronger returns than its MedTech peers. While LivaNova LIVN has advanced 27.1% year to date, GE HealthCare GEHC has lost 26.1%. The stock has also significantly outperformed the broader Zacks Medical sector, which has generated a modest 0.3% return during the same period. Image Source: Zacks Investment Research From a valuation standpoint, Butterfly Network is trading at a forward 12-month price-to-sales (P/S) multiple of 12.61X, reflecting a premium valuation relative to its MedTech peers. The elevated multiple suggests that investors are assigning a higher valuation to the company's long-term growth prospects, particularly its expanding AI software ecosystem, Embedded business and improving profitability profile. BFLY currently trades well above LivaNova, which carries a forward 12-month P/S multiple of 2.74X and GE HealthCare, which is valued at 1.24X sales. Image Source: Zacks Investment Research Butterfly Network’s long-term investment thesis is increasingly supported by the expansion of its ultrasound-on-chip ecosystem beyond its core handheld imaging business. Management continues to build three complementary growth engines — POCUS, Home and Community Care, and Butterfly Embedded — that are expected to complement one another over time. While POCUS continues to benefit from higher iQ3 adoption, growing enterprise software penetration and expanding AI capabilities, the Home business is poised to create an entirely new care delivery model. At the same time, Butterfly Embedded is opening new revenue opportunities through licensing, chip sales and partnerships across robotics, wearables and other emerging healthcare applications, significantly expanding the company's addressable market. Artificial intelligence and Butterfly’s semiconductor platform remain the company's biggest long-term differentiators. Through Compass AI, Butterfly Garden and its growing portfolio of FDA-cleared AI applications, the company is steadily increasing the value of its software ecosystem while driving greater probe utilization and enterprise adoption. Meanwhile, investments in next-generation chip technology and embedded partnerships position Butterfly Network to extend ultrasound into entirely new clinical and non-clinical use cases with attractive recurring licensing opportunities. Together, these initiatives strengthen Butterfly Network’s long-term revenue visibility while supporting management’s goal of driving sustained growth and improving operating leverage over the coming years. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Butterfly Network, Inc. (BFLY) : Free Stock Analysis Report LivaNova PLC (LIVN) : Free Stock Analysis Report GE HealthCare Technologies Inc. (GEHC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BURLINGTON, Mass. & NEW YORK, July 16, 2026--(BUSINESS WIRE)--Butterfly Network, Inc. (NYSE: BFLY) ("Butterfly"), a pioneer and leader in semiconductor-based ultrasound devices, programmable cloud software and AI, announced that it will report second quarter 2026 financial results on Thursday, July 30, 2026, at 8:00 am ET. Joseph DeVivo, President, Chief Executive Officer and Chairman of the Board, and John Doherty, Executive Vice President and Chief Financial Officer, will host a conference call and webcast before the market opens on July 30 to discuss the financial performance and operational progress. The conference call will be broadcast live in listen-only mode via a webcast on Butterfly’s Investor Relations website at Events & Presentations. Individuals interested in listening to the conference call via telephone may do so by dialing approximately ten minutes prior to start time: United States (Local): +1 646 844 6383United States (Toll-Free): +1 833 470 1428Global Dial-In Numbers: https://www.netroadshow.com/events/global-numbers?confId=48643 Access Code: 424023 After the live webcast, the call will be archived on Butterfly’s Investor Relations events page. In addition, a telephone replay of the call will be available until August 6, 2026, by dialing: United States (Local): +1 929 458 6194United States (Toll-Free): +1 866 813 9403Access Code: 941825 About Butterfly Network Butterfly Network, Inc. (NYSE: BFLY) is driving a digital revolution in ultrasound imaging and sensing with its proprietary Ultrasound-on-Chip™ semiconductor technology and software solutions. Butterfly first proved its technology in the point-of-care ultrasound market – commercializing the world's first single-probe, whole-body portable ultrasound device, which is now on its best-selling, third-generation: Butterfly iQ3™. The Company combines its advanced hardware with cloud software and AI, an enterprise workflow solution (Compass AI™) and other offerings to drive adoption of affordable, accessible ultrasound. Butterfly also enables third-party development of imaging AI apps through Butterfly Garden™, its software development kit and AI marketplace. In addition to its medical imaging products, Butterfly Embedded™ is the Company's Ultrasound-on-Chip™ licensing and co-development business designed to enable a new wave of ultrasound-enabled technologies across non-competitive healthcare markets and beyond. Through Butterfly Embedded™, partners can build and scale novel ultrasound applications powered by Butterfly's proprietary semiconductor chip and software platform. Butterfly's innovations have been recognized by Prix Galien USA, Fierce 50, TIME's Best Inventions and Fast Company's World Changing Ideas, among other achievements. To learn more, visit: www.butterflynetwork.com View source version on businesswire.com: https://www.businesswire.com/news/home/20260716388115/en/ Contacts Investors: John DohertyChief Financial Officer, [email protected]

Achieved 25% revenue growth driven by double-digit expansion in both core POCUS and the rapidly scaling Butterfly Embedded business. Secured first-ever FDA clearance for a blind sweep AI tool, enabling gestational age determination in 2 minutes without manual image interpretation. Expanded the Butterfly Garden ecosystem to 30 partners, with four already receiving FDA clearances for specialized clinical applications. Realized 69% gross margins, a 9% year-over-year increase, attributed to higher-margin Embedded revenue and a shift toward the premium iQ3 device. Advanced the RoHS Lead Exemption challenge in the EU, with regulators recommending a shortened 2-year exemption based on the viability of Butterfly's lead-free technology. Accelerated medical school adoption with nearly 1,000 probes sold to six institutions year-to-date, targeting a one-to-one student-to-probe ratio. Reaffirmed full-year 2026 revenue guidance of $117 million to $121 million, representing approximately 20% to 24% growth over 2025. Expects the first commercial agreement for Butterfly Home and Community Care in the first half of 2026, with statewide training beginning in Q3. Anticipates the Apollo fourth-generation chip will be a major catalyst, offering 20x the data processing power of the chip launching next year in 2027. Projects a meaningful inflection in probe utilization and system adoption over the next three years as the AI-powered ultrasound library matures. Plans to expand the POCUS business into new high-growth markets, including Brazil, while seeking FedRAMP marketplace entry for federal opportunities. Butterfly Embedded revenue surged 147% year-over-year to $5.7 million, primarily driven by the Midjourney partnership. Achieved the lowest first-quarter net loss since going public while maintaining a cash balance of $138 million to fund future innovation. Management noted minor impacts from global macroeconomic factors, including the war in the Middle East and tariffs, but confirmed these are managed within guidance. The company is establishing a dedicated Embedded business and intends to build a team in San Francisco to better engage with the broader technology ecosystem. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management confirmed they are pursuing multiple opportunities that could replicate the material financial impact of the Midjourney transaction. Partnerships involve a mix of licensing fees for software (similar to NVIDIA's CUDA model), chip sales, and engineering fees for custom refinements. Exclusivity is a key lever in negotiations, as partners often pay to be the sole provider for specific clinical or industrial use cases. The shift from pilot to commercial phase aims to prove the model is operational, profitable, and improves patient outcomes in real-world settings. Initial focus is on managing congestive heart failure to reduce hospital readmissions, with plans to expand into bladder scans and DVT testing. Management expects some revenue contribution in the second half of 2026, with significant scaling across more states projected for 2027. A new probe featuring the first ultrasound-on-chip with harmonic imaging via CMA technology is scheduled for release in late 2026 or early 2027. The 'IQ Station' is currently in development with a target launch window of early to mid-2027. Management expects the first wearable ultrasound products to reach the market through Embedded partners rather than as Butterfly-branded stand-alone devices. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.