Butterfly Network, Inc. (BFLY) — Fundamental Analysis

Snapshot & Big Picture

Butterfly Network makes handheld, semiconductor-based ultrasound devices — a category it largely pioneered — that plug into smartphones and tablets. The core pitch is democratizing medical imaging by collapsing a traditionally expensive, room-sized machine into a pocket-sized probe. Revenue has grown steadily from $27.6M in fiscal 2019 to $97.6M in fiscal 2025, yet the company has never posted a profit. The story is one of genuine clinical innovation paired with the grinding financial reality of a hardware-plus-software business that is still scaling toward a sustainable cost structure. Debt-to-equity was not reported in any of the SEC filings reviewed, suggesting the company has been funded primarily through equity rather than traditional debt.

Latest Quarter Snapshot (Q1 2026 — Most Current Data Available)

The quarter ending March 31, 2026 is the most recent data point and shows the clearest picture of where Butterfly stands today.

The standout figure here is the gross margin of nearly 69% — the highest in the company's filing history. This signals meaningful progress in product mix, software attach rates, or manufacturing cost reduction (likely some combination of all three). The operating loss remains significant at -52%, but that is a notable improvement over the full-year 2025 operating margin of -88.5% and a dramatic improvement versus the -221% posted in fiscal 2023. The quarterly EBITDA loss of -$11.8M, if sustained for four quarters, would imply an annualized cash burn materially below recent annual figures, which is an encouraging directional signal.

Profitability — Multi-Year Trend

Butterfly has never been profitable, but the trajectory of its losses tells an improving story, particularly from 2023 onward.

A few things stand out. First, gross margins turned positive for good in 2021 and have generally trended higher, despite some volatility (2023 was a rough year, dipping back to 25.6%). Second, EBITDA losses have shrunk dramatically from a peak of -$190.6M in 2021 to -$65.5M in 2024 — though 2025 saw a slight uptick to -$79.7M, which is worth monitoring. Third, the operating and net margin curves, while still deeply negative, have compressed meaningfully since 2022. The direction is right; the pace is the question.

Financial Health

The current ratio — measuring short-term assets against short-term liabilities — has been consistently strong since the company went public via SPAC in 2021, sitting at 3.83x at fiscal year-end 2025 and ticking up slightly to 4.02x in Q1 2026. That means for every dollar of near-term obligations, Butterfly holds roughly four dollars in liquid or near-liquid assets. This is reassuring for a company still burning cash: it has a meaningful runway cushion. The declining trend from the 10.27x peak in 2021 simply reflects cash being spent down over time, not deteriorating creditworthiness. Debt-to-equity was not reported in any of the reviewed filings across all periods.

Growth

The 5-year CAGR of 16.1% reflects the faster early growth phase off a smaller base, while the 3-year CAGR of 10.0% shows that the pace of revenue expansion has moderated as Butterfly scales. That moderation is not unusual for a maturing growth company, but with operating losses still large, investors will be watching closely to see whether revenue growth can accelerate back toward the higher end while expense growth stays constrained — the classic path to operating leverage.

Plain English Summary

Butterfly Network has spent the better part of a decade building something genuinely novel — a chip-based ultrasound probe that costs a fraction of traditional equipment — and the financial history reflects exactly what that kind of innovation costs. The early years were brutal: negative gross margins, enormous cash burn, and operating losses multiples of revenue. But the company has made real progress. Gross margins have climbed into positive and increasingly meaningful territory, the annual EBITDA loss has been cut by more than half from its peak, and the most recent quarter (Q1 2026) shows a gross margin close to 69% — the best ever recorded. Revenue has grown at roughly 16% annually over five years and 10% over the last three. The balance sheet, funded through equity, carries no reported debt and a healthy current ratio above 4x, giving the company time to keep executing without an imminent liquidity crisis. The core risk is straightforward: Butterfly is still losing money at the operating level, and converting clinical adoption into durable, scalable revenue growth fast enough to outrun expenses is the challenge that defines the investment thesis. If the Q1 2026 margin improvement is a trend rather than a one-quarter anomaly, the path to breakeven becomes much more visible. If not, cash burn remains the dominant concern for long-term holders.

Source Filings

• Form 10-Q — Filed April 30, 2026 (Period Ending March 31, 2026)
• Form 10-K — Filed February 27, 2026 (Fiscal Year Ending December 31, 2025)