Butterfly Network, Inc.

Previous 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.

Current wording

Units fulfilled increased by 221 units, or 4.7%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was driven by higher probe sales volume in our US sales channels.

Previous wording

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 wording

Software and other services mix decreased by 1.9 percentage points, to 32.3%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease is primarily a reflection of the increases in both our product revenue and total revenue shifting the mix more towards hardware.

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 delivery 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 has been decreasing in comparison to comparative periods in prior years.

Previous wording

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.

Current wording

Sales and marketing expenses increased by $1.0 million, or 10.6%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The most significant drivers of this increase were $0.4 million of higher personnel costs and $0.1 million of higher professional services costs, both resulting from investments in our sales force and client experience function in order to support continued revenue growth.

Previous 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.

Current wording

Other increased by $1.1 million, or 64.7%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This increase was driven by $1.9 million of higher legal costs due to litigation, partially offset by $0.8 million of lower employment-related costs. These costs are not representative of our ongoing operations.

Previous wording

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 wording

Software and other services revenue increased by $0.5 million, or 2.6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily driven by increases in licensing and services revenue from our partnerships and licensing revenue from our US sales channels, partially offset by a decrease in software and other services revenue from our international sales channels.

Previous 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.

Current wording

Sales and marketing expenses increased by $4.1 million, or 13.8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily driven by $3.0 million of higher personnel and other employment-related costs and $0.2 million of higher professional services costs, both resulting from investments in our sales force and client experience function in order to support continued revenue growth.

Previous wording

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 wording

General and administrative expenses decreased by $1.9 million, or 6.2%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This decrease was primarily driven by reductions of $0.7 million in insurance costs, $0.5 million in personnel costs partly due to lower stock-based compensation expense, and $0.3 million in external accounting and audit fees.

Previous wording

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 wording

Other increased by $1.8 million, or 49.8%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was driven by $2.1 million of higher legal costs due to litigation, partially offset by $0.3 million of lower employment-related costs. These costs are not representative of our ongoing operations.

Previous 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.

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 September 30, 2025, the Company utilized $3.9 million of cash and cash equivalents for ongoing operations. As of September 30, 2025, our cash and cash equivalents balance was $144.2 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.

Previous 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.

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 $25.2 million as of September 30, 2025, with $3.7 million payable within the next 12 months. Our fixed technology license payment obligations were $14.0 million as of September 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 $3.6 million as of September 30, 2025, all of which is payable within the next 12 months. Our fixed outsourced services payment obligations were $4.5 million as of September 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 six months ended June 30, 2025 and 2024:

Current wording

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2025 and 2024:

Previous 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.

Current wording

Net cash used in operating activities decreased by $16.9 million, or 43.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was comprised of improvements of $7.0 million in net loss adjusted for certain non-cash items and $9.9 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, a $4.2 million improvement in cash used for changes in accounts receivable, and a $1.7 million improvement in cash provided by changes in accounts payable and accrued expenses. These improvements were partially offset by a $1.8 million increase in cash used for changes in prepaid expenses and other assets.

Previous 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.

Current wording

Net cash used in investing activities remained relatively flat for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, increasing by 0.7%. There were no significant changes in purchases of property, equipment, and intangible assets, including capitalized software or sales of property and equipment.

Previous 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.

Current wording

Net cash provided by financing activities increased by $79.5 million for the nine months ended September 30, 2025 compared to the nine months ended September 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 nine months ended September 30, 2024.

Previous wording

For our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no material changes to the critical accounting policies and estimates disclosed in our 2024 Annual Report on Form 10-K.

Current wording

For our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, there have been no other material changes to the critical accounting policies and estimates disclosed in our 2024 Annual Report on Form 10-K.