Butterfly Network, Inc. Q3 FY2025 earnings call

• Q3 2025 results were at the higher end of revenue guidance, with revenue up 5% y-o-y. - Core business strategy focuses on going deeper into POCUS category with higher quality imaging and software for hospital systems. - AI initiatives: POCUS CARE trial published in JAMA, HeartFocus app launch, Gates Foundation collaboration on gestational age calculator. - Strengthened information security with ISO 27001 and other certifications. - Chip developments: P5.1 chip entering fab production, Apollo AI chip development for better image quality and AI acceleration.

Revenue for the third quarter of 2025 was $21.5 million, reflecting 5% growth over the prior year period. Product revenue was $14.6 million, an increase of 8% versus Q3 2024, driven by higher average selling prices in international markets and increased volume in e-com and vet. Software and other services revenue was $6.9 million, flat to the prior year. Gross margin, including a noncash write-off of excess inventory of $17.4 million, was negative 17.5% compared with 59.5% in the prior year. Adjusted gross margin, excluding inventory write-downs, increased to 63.9% from 60% in the prior year period.

• Reaffirmed full-year revenue guidance in range of $91 million to $95 million, implying $25 million to $29 million in revenue for Q4. - Tightened full-year adjusted EBITDA loss guidance to range of $32 million to $35 million or $9 million to $12 million for Q4.

• Government shutdown impact: Prolonged closure could delay deal timing for deals relying on government funding. - Macroeconomic factors: Customers delaying purchase decisions due to macroeconomic factors affecting U.S. hospital and enterprise channels.

Q: Can you quantify size of deals pushed due to macro and activity in October?

A: Deals can be 100 to 200 probes, with large medical school deals; opportunities stacking up.

Q: Talk about subs and software lower renewal rates and Compass AI?

A: Churn in individual subscriptions, but Compass AI rollout in Q4.

Q: Sales funnel and pipeline outlook for 2026?

A: Deals aged, but stacking up, lifting expected in 2026.

Q: P5.1 chip launch and info security impact?

A: P5.1 in fab production, info security as competitive advantage with cloud connectivity.

Q: Apollo AI upgrades and IQ Station/RoHS?

A: Apollo AI has 20x processing power for edge AI, IQ Station in development, RoHS in third-party review.