Butterfly Network recently released its latest Form 10-Q, reporting a business that develops and sells handheld ultrasound devices, related software, and service offerings in the U.S. and international markets. Its product line includes the Butterfly iQ+ and iQ3 probes, the Butterfly Move cart-based system, the iQ+ Bladder scanner, Compass AI, ScanLab, and veterinary versions of its handheld system. The company sells through a direct sales force, distributors, and e-commerce, and it is headquartered in Burlington, Massachusetts.
In Item 2, management said the business is built around portable, semiconductor-based ultrasound technology paired with cloud-connected software and education tools. The company said its devices use proprietary Ultrasound-on-Chip technology rather than piezoelectric crystals, and that its software is designed to fit into clinical workflows and be accessible on smartphones, tablets, and hospital computer systems connected to the internet. Butterfly also said it licenses its semiconductor platform through its Embedded program for co-development in non-competitive markets.
For the three months ended June 30, 2026, total revenue rose 39.5% to $32.6 million from $23.4 million a year earlier. Product revenue fell 5.4% to $15.7 million, while software and other services revenue jumped 149.8% to $16.9 million. Management said the product decline reflected the non-recurrence of prior-year semiconductor chip sales to Embedded partners, partly offset by higher probe sales in the core business.
Units fulfilled increased by 1,176, or 22.5%, in the quarter, with the company attributing the gain mainly to higher probe sales in the U.S. through direct sales to health systems and medical schools, as well as e-commerce. Software and other services mix rose 22.9 percentage points to 51.8%, driven by higher Embedded-related revenue, including the co-development partnership with Midjourney, Inc.
Gross profit increased to $23.3 million from $14.9 million, and gross margin widened to 71.4% from 63.7%. Total cost of revenue rose to $9.3 million from $8.5 million, but as a share of revenue it fell to 28.6% from 36.3%.
Operating expenses increased to $37.0 million from $31.0 million. Research and development rose 26.8% to $10.5 million, driven by a $1.2 million increase in personnel costs, a $0.7 million increase in product engineering costs, and a $0.3 million increase in software costs tied to third-party AI tools. General and administrative expenses climbed 24.4% to $11.4 million, mainly because of a $1.5 million increase in personnel and other employment-related costs, including stock-based compensation, plus a $0.4 million provision for credit losses tied to a prior sale to one international distributor.
Sales and marketing was essentially flat at $11.5 million, down 0.8% from $11.6 million. Other expense increased to $3.6 million from $2.0 million, reflecting $4.0 million of estimated liabilities for litigation loss contingencies and $2.0 million of higher legal costs, partly offset by a $4.0 million expected insurance recovery and a $0.4 million reduction in employment-related costs.
Butterfly reported an operating loss of $13.7 million, narrower than the $16.1 million loss a year earlier. Loss before taxes improved to $12.9 million from $13.8 million, and net loss was $12.9 million, compared with $13.8 million in the prior-year quarter.
For the first six months of 2026, revenue increased to $59.1 million from $44.6 million, while net loss narrowed to $25.6 million from $27.8 million. The market has reacted to these announcements by moving the company's shares 6.69% to a price of $7.575. If you want to know more, read the company's complete 10-Q report here.
