Butterfly Network, Inc. Q4 FY2025 earnings call

Joe mentioned fourth quarter revenues growth, first positive operating cash flow, progress on strategic growth plan with three core tenets: accelerate core focus business with enterprise-ready cloud-connected imaging solution, execute strategic initiatives to reach new care settings, enable new applications and deliver R&D roadmap. John discussed financial highlights like record revenue, exceeding guidance, improved adjusted EBITDA margin, positive cash flow. Mentioned progress in core POCUS, Compass AI launch, secure cloud infrastructure achievements, progress in Butterfly Garden partners, home business progress, Butterfly Embedded business including Midjourney deal, and R&D roadmap with P5.1 chip in production and Apollo chip in development.

Fourth quarter revenues were $31.5 million, growing 41% year over year. Core POCUS revenue grew 15% year over year. Product revenue was $18.1 million, up 23% vs Q4 2024. Software and other services revenue was $13.4 million, up 76% year over year. Full year 2025 total revenue increased 19% to $97.6 million, driven by core focus business growth and emerging Butterfly Embedded business. Gross profit in Q4 2025 was $21.2 million, a 55% increase, with gross profit margin at 67%. Adjusted EBITDA loss for Q4 2025 was $3.2 million, an improvement from $9.1 million in 2024. Full year 2025 adjusted EBITDA loss was $26.5 million, an improvement from $38.9 million in 2024.

First quarter 2026 revenue expected in range of $24 million to $28 million. Adjusted EBITDA loss expected in range of $8 million to $10 million. Full year 2026 revenues expected between $117 million and $121 million, an increase of approximately 20% to 24%. Adjusted EBITDA loss expected between $21 million and $25 million. Guidance includes investment in key areas and impact from tariffs.

Forward-looking statements are based on current info, assumptions, expectations subject to change. Known and unknown risks, uncertainties, and other factors may cause actual results to differ materially. Risks described in SEC filings.

Q: About timing and revenue contributions from MidJourney partnership.

A: Joe said likely near term, John mentioned MidJourney contract has different components, expect contribution throughout 2026 - 2027, and opportunity for chip sales and revenue share when commercial.

Q: Steps before home franchise commercial effort.

A: Likely before mid-2026, nominal revenue in 2026, start contributing in 2027.

Q: Macro environment impact in 2026.

A: Still some downward pressure from tariffs, but seeing improvement, timing of deals moved out last year but opening up.

Q: Medical schools in 2026.

A: Medical schools will be positive contributor, students want Butterfly, trained on it, will grow with them through careers.

Q: Transition to Butterfly-embedded.

A: Solved foundational problem in ultrasound, market calling for partnership, roadmap amplifies current efforts.

Q: Compass AI in POCUS.

A: First to invest in enterprise SaaS-based software, helps hospitals increase revenue, makes workflow easier with AI.

Q: PE 5.1 chip FDA timing and form factors.

A: Hoping early 2027 to have 5.1 chip in next probe, IQ Station later 2027, wearable use case depends on home care success.

Q: POCUS innovation forum.

A: Brings various specialties together, listens to their needs, Compass AI came from feedback, important for improvement.