Butterfly Network, Inc. ((BFLY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Butterfly Network’s recent earnings call painted a mixed picture, highlighting both achievements and challenges. The company reported notable revenue growth and progress in its AI strategy, yet faced hurdles due to macroeconomic factors and inventory write-offs. Despite delays in enterprise deals, Butterfly Network remains optimistic about future prospects, driven by new product developments and market expansion.
Revenue Growth and High-End Guidance
Butterfly Network reported third-quarter 2025 results at the higher end of its revenue guidance, achieving a 5% growth over the previous year. This growth was primarily driven by higher average selling prices and increased volume in the U.S. market, showcasing the company’s ability to capitalize on domestic demand.
AI Strategy and Milestones
The company’s AI strategy took significant strides in the third quarter, with the POCUS CARE trial demonstrating real-world impact. The trial improved clinical management in 35% of cases, reduced hospital length of stay by 30%, and generated over $750,000 in cost savings, underscoring the potential of AI in healthcare.
Launch of New Products and Certifications
Butterfly Network strengthened its market position with the launch of HeartFocus and the attainment of ISO 27001 certifications. These developments enhanced the company’s enterprise readiness and expanded its global reach, reinforcing its status as a trusted partner in the medical technology sector.
Development of Next-Gen Chip Technology
The completion of the P5.1 chip development, featuring MEMS capabilities, marked a significant technological advancement. The ongoing development of the Apollo AI chip is expected to further enhance ultrasound processing and AI capabilities, positioning Butterfly Network at the forefront of innovation.
Government Shutdown and Macro Challenges
The federal government shutdown posed potential risks for regulatory processing delays and deal timing. Additionally, macroeconomic factors led to customer purchase delays, presenting challenges for the company’s growth trajectory.
Inventory Write-Off Impacting Gross Margin
A noncash write-off of excess inventory related to previous generation chips resulted in a negative gross margin of 17.5%, a stark contrast to the 59.5% margin in the prior year. This write-off significantly impacted the company’s financial performance.
Delayed Enterprise and Hospital Deals
Several large deals were delayed due to macroeconomic factors, affecting U.S. hospital and enterprise channels. These delays contributed to a softer quarter, highlighting the challenges posed by external economic conditions.
Forward-Looking Guidance
Butterfly Network’s leadership provided forward-looking guidance, maintaining its full-year revenue guidance of $91 million to $95 million and adjusted EBITDA loss guidance of $32 million to $35 million. The company emphasized strategic initiatives, including the anticipated launch of its next-gen enterprise software, Compass AI, and the development of the P5.1 chip. Despite macroeconomic headwinds and delayed purchase decisions, Butterfly Network remains optimistic about its growth prospects in 2026.
In summary, Butterfly Network’s earnings call highlighted a balanced mix of achievements and challenges. While the company reported revenue growth and advancements in AI and technology, it faced obstacles due to macroeconomic factors and inventory issues. Despite these challenges, Butterfly Network remains optimistic about its future, driven by strategic initiatives and market expansion.