BFLY — Butterfly Network, Inc.

Butterfly Network Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: Achieved a record $32.6 million, up 39% year-over-year, exceeding guidance.
• Gross Profit: Reached $23.3 million, a 56% increase, with a gross margin of 71%, up from 64% the previous year.
• Adjusted EBITDA: Loss narrowed to $1.4 million from a loss of $6.2 million in Q2 2025, reflecting improved revenue and cost management.
• Probe Sales: Increased by 23% year-over-year, with unit sales of iQ3 and iQ+ up 17% and 33%, respectively.
• Cash Position: Ended the quarter with $125 million in cash, with cash usage of $13.3 million.

2. Strategic Updates and Business Highlights

• Embedded Partnerships: Signed two additional partnerships, bringing the total to 11, with significant revenue growth (439% year-over-year) driven by the Midjourney partnership.
• POCUS Business: Secured six enterprise software deals for Compass AI, with a fivefold increase in the software pipeline.
• Government Sales: Received provisional authorization to sell to the VA, with full FedRAMP certification expected soon.
• Medical Education: Expanded presence in U.S. medical schools, with a notable partnership with VCOM to provide ultrasound training devices.
• Home and Community Care: Set to launch commercial operations in October 2026, with expectations for revenue generation in Q4 2026.

3. Forward Guidance and Outlook

• Q3 2026 Guidance: Expected revenue between $26 million and $30 million, representing a 30% year-over-year increase at the midpoint; adjusted EBITDA loss projected between $6 million and $9 million.
• Full Year 2026 Guidance: Revenue forecast raised to between $119 million and $123 million (22%-26% increase over 2025); adjusted EBITDA loss expected between $19 million and $23 million.

4. Bad News, Challenges, or Points of Concern

• International Revenue Decline: International revenue decreased by 14% year-over-year to $5 million, attributed to tough comparisons and delayed orders.
• Cash Usage Increase: Cash usage increased from $7 million in Q2 2025 to $13.3 million, raising concerns about cash burn as the company invests in growth.
• Global Economic Factors: Monitoring ongoing geopolitical tensions and supply chain issues, although impacts have been minor thus far.

5. Notable Q&A Insights

• Embedded Revenue Visibility: Management expects Embedded revenue to stabilize around $7 million-$8 million per quarter, with potential for growth as new partners commercialize.
• Partnership Scalability: Management sees no limit to the number of partnerships, emphasizing a standardized approach that allows for scalability without significant additional costs.
• Home Care Revenue Model: Revenue will be based on a fixed fee per managed patient population, plus variable fees for scans performed, with a focus on reducing readmission rates for chronic patients.
• Next-Generation Probe and Market Entry: Anticipated to launch in early 2027, the new probe is expected to outperform existing handheld devices, targeting a $1.6 billion-$2 billion market in POCUS carts.

Overall, Butterfly Network reported a strong quarter with record revenues and strategic advancements, while also addressing challenges in international markets and cash usage. The outlook remains positive with raised guidance and significant growth opportunities ahead.