Butterfly Network, Inc.
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 1, 2025
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001628280-25-021669
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001628280-25-037249
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 70 current paragraphs.
41 unchanged; 15 reworded; 13 added; 11 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Software and other services mix decreased by 2.9 percentage points, to 28.9%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. While this decrease is partly due to a slight decrease in implementation revenue in the current year partially offset by higher subscription revenue, the mix decrease is primarily a reflection of the increases in both our product revenue and total revenue shifting the mix more towards hardware.
Current report
Product revenue increased by $2.0 million, or 13.5%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily driven by the impact of the higher selling price of our iQ3 probe, which launched in the US during the first quarter of 2024 and internationally during the third quarter of 2024, and the delivery of semiconductor chips to one of our Octiv partners. These increases were partially offset by lower probe sales volume in our US sales channels which were bolstered in the prior year by a large number of trade-ins and upgrades following the launch of our recently-anniversaried iQ3 probe.
Current report
Software and other services revenue decreased by $0.1 million, or 1.1%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily driven by decreases in revenue from implementations and other services, but they were partially offset by an increase in our software subscription revenue.
Current report
Research and development expenses decreased by $1.1 million, or 11.6%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily driven by a $1.0 million reduction in personnel costs resulting from our business transformation initiative in 2024 to optimize our non-specialized technical functions.
Current report
General and administrative expenses decreased by $0.9 million, or 9.4%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily driven by a reduction of $0.5 million in personnel costs, largely due to lower stock-based compensation expense in the current year, as well as reductions of $0.1 million each in our insurance costs and our professional service fees for legal and other administrative services.
Current report
Comparison of the six months ended June 30, 2025 and 2024
Current report
Revenue
Current report
Software and other services revenue increased by $0.6 million, or 4.7%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily driven by increases in software subscription revenue, revenue from our Octiv and Butterfly Garden partnerships, and revenue from SDK sales. These increases were partially offset by a decrease in revenue from implementations.
Current report
Cost of product revenue increased by $0.8 million, or 7.0%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to deliveries of semiconductor chips to one of our Octiv partners. Cost of software and other services revenue decreased by $0.8 million, or 16.6%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by a decrease in amortization expense for software development investments made by the Company in 2021 as well as reductions in personnel costs resulting from our business transformation initiative in 2024 to optimize our non-specialized technical functions. Cost of revenue as a percentage of revenue decreased from 41.6% to 36.6% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to the reasons discussed above as well as higher average selling prices on our iQ3 probe and efficiency improvements in our manufacturing process.
Current report
Research and development expenses decreased by $1.9 million, or 9.4%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by a $1.7 million reduction in personnel costs resulting from our business transformation initiative in 2024 to optimize our non-specialized technical functions.
Current report
Other
Current report
Other increased by $0.7 million, or 37.0%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was driven by $0.2 million of higher legal costs due to litigation and $0.5 million of higher employment-related costs. These costs are not representative of our ongoing operations.
Current report
Comparison of the six months ended June 30, 2025 and 2024
Removed paragraphs (11)
Previous report
Software and other services mix decreased by 2.8 percentage points, to 33.3% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. While our software and other services revenue increased in total, our hardware revenue increased at a faster rate due in part to the sale of semiconductor chips to one of our partners.
Previous report
Cost of revenue
Previous report
Research and development
Previous report
Sales and marketing
Previous report
General and administrative
Previous report
Software and other services revenue increased by $0.7 million, or 10.9%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by higher enterprise software revenue and increased licensing and services revenue from our partnerships, partially offset by lower renewals of individual subscriptions.
Previous report
Cost of revenue
Previous report
Research and development
Previous report
Research and development expenses decreased by $0.8 million, or 7.4%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by reductions of $0.7 million in personnel costs resulting from our business transformation initiative in 2024 to optimize our non-specialized technical functions.
Previous report
Sales and marketing
Previous report
General and administrative
Reworded paragraphs (15)
Previous wording
Butterfly developed ultrasound devices that can perform whole-body imaging in a single handheld probe because it is powered by our proprietary semiconductor technology instead of piezoelectric crystals. Our Ultrasound-on-Chip™ makes ultrasound more accessible outside of large healthcare institutions, while our software is intended to make the product easy to use, fully integrated with the clinical workflow, and accessible on a user’s smartphone, tablet, and almost any hospital computer system connected to the Internet. We aim to enable the delivery of imaging information anywhere at point-of-care to drive earlier detection throughout the body and remote management of health conditions. We market and sell the Butterfly system, which includes probes, related accessories, and software subscriptions, to healthcare systems, physicians, and healthcare providers through a direct sales force, distributors, and our eCommerce channel.
Current wording
Butterfly developed ultrasound devices that can perform whole-body imaging in a single handheld probe because they are powered by our proprietary semiconductor technology instead of piezoelectric crystals. Our Ultrasound-on-Chip™ makes ultrasound more accessible outside of large healthcare institutions, while our software is intended to make the product easy to use, fully integrated with the clinical workflow, and accessible on a user’s smartphone, tablet, and almost any hospital computer system connected to the Internet. We aim to enable the delivery of imaging information anywhere at point-of-care to drive earlier detection throughout the body and remote management of health conditions. We market and sell the Butterfly system, which includes probes, related accessories, and software subscriptions, to healthcare systems, physicians, and healthcare providers through a direct sales force, distributors, and our eCommerce channel.
Previous wording
Since 2022, we have taken significant actions to reduce our cost of operations and extend our cash runway and have reduced our annual cash requirements by approximately $180 million, to less than $50 million annually. As we look forward, we expect to continue to invest in our business in order to grow revenue. On January 31, 2025, we raised additional capital through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock, generating proceeds of $81.1 million, net of underwriting costs and related expenses.
Current wording
Since 2022, we have taken significant actions to reduce our cost of operations and extend our cash runway and have reduced our annual cash requirements by approximately $180 million, to less than $50 million annually. As we look forward, we expect to continue to invest in our business in order to grow revenue. On January 31, 2025, we raised additional capital through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock, generating proceeds of $81.0 million, net of underwriting costs and related expenses.
Previous wording
Units fulfilled increased by 466 units, or 10.9%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was driven by higher sales volume in our US sales channels.
Current wording
Units fulfilled decreased by 279 units, or 5.1%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was a result of lower probe sales volume in our US sales channels since the anniversary of our iQ3's 2024 launch, but this was partially offset by higher probe sales volume internationally and in our Vet sales channel.
Previous wording
Over time, as adoption of our devices increases through further market penetration and as practitioners in the Butterfly network continue to use our devices, we expect our annual revenue mix to shift more toward software and other services. The quarterly revenue mix may be impacted by the timing of device sales. Recently, due in part to the continued success of our next-generation iQ3 probe and the sale of semiconductor chips to one of our partners, our software and other services mix as a percentage of total revenue decreased.
Current wording
Over time, as adoption of our devices increases through further market penetration and as practitioners in the Butterfly network continue to use our devices, we expect our annual revenue mix to shift more toward software and other services. The quarterly revenue mix may be impacted by the timing of device sales. Recently, due in part to the continued success of our next-generation iQ3 probe and the delivery of semiconductor chips to one of our partners, our software and other services mix as a percentage of total revenue decreased.
Previous wording
Cost of product revenue increased by $0.7 million, or 14.3%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by an increase in devices sold. Cost of software and other services revenue decreased by $0.3 million, or 11.5%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by a $0.2 million decrease in capitalized software amortization on investments in software development made by the Company in 2021. Cost of revenue as a percentage of revenue decreased from 41.8% to 37.0%, primarily due to the decrease in capitalized software amortization as well as decreases in payroll expenses and cloud hosting costs.
Current wording
Cost of product revenue remained relatively flat for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, increasing $0.1 million, or 1.4%, primarily due to the delivery of semiconductor chips to one of our Octiv partners, but partially offset by lower probe sales volume. Cost of software and other services revenue decreased by $0.5 million, or 21.5%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily driven by a corresponding decrease in amortization expense for software development investments made by the Company in 2021. Cost of revenue as a percentage of revenue decreased from 41.4% to 36.3% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to the reasons discussed above as well as efficiency improvements in our manufacturing process.
Previous wording
Sales and marketing expenses increased by $1.2 million, or 12.0%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by $0.9 million of higher personnel costs and $0.3 million of higher event expenses, resulting from investments in our sales force and marketing functions in order to support continued revenue growth.
Current wording
Sales and marketing expenses increased by $1.8 million, or 18.8%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was primarily driven by $1.3 million of higher personnel costs and $0.2 million of higher professional services costs resulting from investments in our sales force as well as our marketing and client experience functions in order to support continued revenue growth.
Previous wording
Other decreased by $0.7 million, or 48.1%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by $0.7 million of lower legal costs due to litigation. These costs are not representative of our ongoing operations.
Current wording
Other increased by $1.4 million, or 227.9%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase was driven by $0.9 million of higher legal costs due to litigation and $0.5 million of higher employment-related costs. These costs are not representative of our ongoing operations.
Previous wording
Product revenue increased by $2.9 million, or 25.4%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily driven by higher sales volume in our US sales channels, the impact of the iQ3 probe’s higher selling price after its launch in the US during the first quarter of 2024 and internationally during the third quarter of 2024, and the delivery of semiconductor chips to one of our newly onboarded partners.
Current wording
Product revenue increased by $4.8 million, or 18.7%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily driven by the impact of the higher selling price and higher international volume of our iQ3 probe, which launched in the US during the first quarter of 2024 and internationally during the third quarter of 2024. In addition, our year-to-date product revenue was positively impacted by the deliveries of semiconductor chips to one of our Octiv partners.
Previous wording
General and administrative expenses decreased by $0.8 million, or 8.1%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by reductions of $0.3 million in insurance costs, $0.2 million in personnel costs, and $0.1 million in professional service fees for legal and other administrative services.
Current wording
General and administrative expenses decreased by $1.8 million, or 8.7%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by a reduction of $0.7 million in personnel costs. Additionally, we realized reductions of $0.4 million in our insurance costs and $0.2 million in our professional service fees for legal and other administrative services.
Previous wording
On January 31, 2025, we raised $81.1 million, net of underwriting costs and related expenses, through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock. Excluding this public offering, during the three months ended March 31, 2025, the Company utilized $14.7 million of cash and cash equivalents for ongoing operations and the payment of our annual employee and management bonuses. As of March 31, 2025, our cash and cash equivalents balance was $155.2 million. Our future spending will depend on various factors, including our rate of revenue growth and the timing and extent of spending on strategic business initiatives. We expect that our existing cash and cash flows from operations will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.
Current wording
On January 31, 2025, we raised $81.0 million, net of underwriting costs and related expenses, through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock. During the three months ended June 30, 2025, the Company utilized $7.1 million of cash and cash equivalents for ongoing operations. As of June 30, 2025, our cash and cash equivalents balance was $148.1 million. Our future spending will depend on various factors, including our rate of revenue growth and the timing and extent of spending on strategic business initiatives. We expect that our existing cash and cash flows from operations will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.
Previous wording
Our material cash requirements include contractual obligations with third parties for office leases, technology licensing agreements, and inventory supply agreements. Our fixed office lease payment obligations were $27.1 million as of March 31, 2025, with $3.7 million payable within the next 12 months. Our fixed technology license payment obligations were $14.0 million as of March 31, 2025, with $3.5 million payable within the next 12 months. Our fixed purchase obligations for inventory supply agreements, net of vendor advances, were $2.9 million as of March 31, 2025, all of which is payable within the next 12 months.
Current wording
Our material cash requirements include contractual obligations with third parties for office leases, technology licensing agreements, inventory supply agreements, and outsourced services. Our fixed office lease payment obligations were $26.2 million as of June 30, 2025, with $3.7 million payable within the next 12 months. Our fixed technology license payment obligations were $14.0 million as of June 30, 2025, with $3.5 million payable within the next 12 months. Our fixed purchase obligations for inventory supply agreements, net of vendor advances, were $1.8 million as of June 30, 2025, all of which is payable within the next 12 months. Our fixed outsourced services payment obligations were $4.2 million as of June 30, 2025, with $1.4 million payable within the next 12 months.
Previous wording
The following table summarizes our sources and uses of cash for the three months ended March 31, 2025 and 2024:
Current wording
The following table summarizes our sources and uses of cash for the six months ended June 30, 2025 and 2024:
Previous wording
Net cash used in operating activities decreased by $9.0 million, or 43.5%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was comprised of improvements of $7.3 million in net loss adjusted for certain non-cash items and $1.7 million in net working capital cash usage. The improvement in net working capital cash usage was primarily driven by improvements of $3.9 million in cash provided by changes in our inventory and the related vendor advances and accrued purchase commitments, $1.6 million in cash provided by changes in accounts receivable, and $0.9 million in cash used for changes in deferred revenue. These improvements were partially offset by a $4.5 million increase in cash used for changes in accounts payable and accrued expenses, which includes a $2.8 million increase in cash used to pay out accrued annual bonuses to our employees and management.
Current wording
Net cash used in operating activities decreased by $11.8 million, or 38.6%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was comprised of improvements of $8.6 million in net loss adjusted for certain non-cash items and $3.3 million in net working capital cash usage. The improvement in net working capital cash usage was primarily driven by a $5.5 million improvement in cash provided by changes in our inventory and the related vendor advances and accrued purchase commitments and a $0.3 million improvement in cash used for changes in deferred revenue. These improvements were partially offset by a $1.0 million increase in cash used for changes in prepaid expenses and other assets, a $0.7 million increase in cash used for changes in accounts receivable, and a $0.7 million increase in cash used for changes in accounts payable and accrued expenses.
Previous wording
Net cash used in investing activities decreased by $0.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to a decrease in purchases of property, equipment, and intangible assets, including capitalized software.
Current wording
Net cash used in investing activities decreased by $0.6 million, or 32.0%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due to a decrease in purchases of property, equipment, and intangible assets, including capitalized software.
Previous wording
Net cash provided by financing activities increased by $78.5 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This increase was primarily comprised of $81.1 million provided by the net proceeds from the public share offering in January 2025, partially offset by $2.8 million in cash used for payments of taxes for restricted stock units. We did not have any financing activities during the three months ended March 31, 2024.
Current wording
Net cash provided by financing activities increased by $79.5 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily comprised of $81.0 million provided by the net proceeds from the public share offering in January 2025 as well as $1.2 million provided by stock plan transactions, partially offset by $2.8 million in cash used for payments of taxes for restricted stock units. We did not have any financing activities during the six months ended June 30, 2024.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Sales and marketing expenses increased by $3.1 million, or 15.3%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily driven by $2.5 million of higher personnel costs resulting from investments in our sales force and marketing functions in order to support continued revenue growth.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Comparison of the three months ended March 31, 2025 and 2024