Third Quarter 2026
Filed Oct 29, 2026Butterfly Network Reports Third Quarter 2026 Financial Results Beats High End of Quarterly Revenue and Adjusted EBITDA Guidance
Third-quarter revenue grew 52%, GAAP gross margin reached 73.0%, adjusted EBITDA loss narrowed to $1.2 million, and management raised Fiscal Year 2026 revenue and adjusted EBITDA guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, three months ended September 30, 2026GAAP | $32.6M | – | 52% |
| Product revenue, three months ended September 30, 2026GAAP | $15.63M | – | – |
| Software and other services revenue, three months ended September 30, 2026GAAP | $16.97M | – | – |
| Total cost of revenue, three months ended September 30, 2026GAAP | $8.80M | – | – |
| Gross profit (loss), three months ended September 30, 2026GAAP | $23.8M | – | – |
| Gross margin, three months ended September 30, 2026GAAP | 73.0% | – | – |
| Adjusted gross profit, three months ended September 30, 2026non-GAAP | $23.8M | – | – |
| Adjusted gross margin, three months ended September 30, 2026non-GAAP | 73.0% | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | $10.17M | – | – |
| Sales and marketing expense, three months ended September 30, 2026GAAP | $11.60M | – | – |
| General and administrative expense, three months ended September 30, 2026GAAP | $11.56M | – | – |
| Other operating expense, three months ended September 30, 2026GAAP | $4.04M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $37.4M | – | 19% |
| Total operating expenses excluding stock-based compensation and other expenses, three months ended September 30, 2026other | $26.6M | – | – |
| Loss from operations, three months ended September 30, 2026GAAP | −$13.58M | – | – |
| Interest income, three months ended September 30, 2026GAAP | $1.07M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | −$284K | – | – |
| Change in fair value of warrant liabilities, three months ended September 30, 2026GAAP | — | – | – |
| Other income (expense), net, three months ended September 30, 2026GAAP | −$13K | – | – |
| Loss before provision for income taxes, three months ended September 30, 2026GAAP | −$12.81M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | — | – | – |
| Net loss, three months ended September 30, 2026GAAP | $12.8M | – | – |
| EPS, three months ended September 30, 2026GAAP | $(0.05) | – | – |
| Adjusted net loss, three months ended September 30, 2026non-GAAP | −$2.02M | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | −$1.2M | – | improvement of 85% |
| Adjusted EPS, three months ended September 30, 2026non-GAAP | $(0.01) | – | – |
| Total revenue, nine months ended September 30, 2026GAAP | $91.74M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $65.38M | – | – |
| Gross margin, nine months ended September 30, 2026GAAP | 71.3% | – | – |
| Adjusted gross profit, nine months ended September 30, 2026non-GAAP | $65.38M | – | – |
| Adjusted gross margin, nine months ended September 30, 2026non-GAAP | 71.3% | – | – |
| Total operating expenses, nine months ended September 30, 2026GAAP | $106.5M | – | – |
| Loss from operations, nine months ended September 30, 2026GAAP | −$41.11M | – | – |
| Net loss, nine months ended September 30, 2026GAAP | −$38.39M | – | – |
| EPS, nine months ended September 30, 2026GAAP | $(0.15) | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | −$8.70M | – | – |
| Adjusted EPS, nine months ended September 30, 2026non-GAAP | $(0.04) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| U.S. revenuePrimarily driven by revenue from Butterfly Embedded™ partnerships, including the co-development partnership with Midjourney, as well as increased probe sales volume to health system, distributor, and eCommerce customers. | $27.5M | – | 71% |
| International revenueLargely resulting from decreased probe sales to global health partners. | $5.1M | – | decreased 5% year-over-year |
| Product revenueNo separate product-revenue driver was provided. | $15.63M | – | – |
| Software and other services revenueButterfly Embedded™ licensing revenue contributed to the relatively higher-margin revenue mix. | $16.97M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal Year 2026 and 4th Quarter of 2026 outlook
- RevenueFiscal Year 2026: $123 million to $126 million, or approximately 26% to 29% growth; 4th Quarter of 2026: $31 million to $34 million, or approximately 3% growth year-over-year at the midpoint
- NoteFiscal Year 2026 adjusted EBITDA loss of $12 million to $15 million
- Note4th Quarter of 2026 adjusted EBITDA loss of $3 million to $6 million
What drove it
- Butterfly Embedded™ partnerships, including the co-development partnership with Midjourney, contributed to U.S. revenue growth.
- The relatively higher-margin return on Butterfly Embedded™ licensing revenue and increased probe sales volume drove gross-margin expansion.
- The Company closed five 7-figure and ten 6-figure TCV enterprise deals in the quarter.
- Butterfly achieved FedRAMP authorization, supporting federal and VA pipeline opportunities.
- Mendaera launched the first commercial product built on Butterfly technology on October 1, 2026.
- Home & Community Care entered implementation for its first state, with scanning set to begin in November and initial revenue expected in the fourth quarter.
Concerns
- International revenue decreased 5% year-over-year to $5.1 million, largely due to decreased probe sales to global health partners.
- Operating expenses increased 19% to $37.4 million, reflecting increased headcount supporting revenue growth and product and software development projects.
- The Company reported a net loss of $12.8 million and adjusted EBITDA loss of $1.2 million in the third quarter.
- Net cash used in operating activities was $(32,429) (in thousands) for the nine months ended September 30, 2026.
What to watch
- Execution against fourth-quarter revenue guidance of $31 million to $34 million and adjusted EBITDA loss guidance of $3 million to $6 million.
- Initial Home & Community Care revenue expected in the fourth quarter and scanning scheduled to begin in November.
- Conversion of federal and VA opportunities following FedRAMP authorization.
- Expansion of Butterfly Embedded™ commercialization following Mendaera’s October 1, 2026 product launch.
- Development of the Apollo chip and preparations to launch a next-generation product powered by the P5.1 chip in early 2027.
- Whether international probe sales to global health partners recover.
Balance sheet and cash flow
- Cash and cash equivalents were $122.3 million as of September 30, 2026.
- Cash and cash equivalents: $122,301 (in thousands) at September 30, 2026; $150,489 (in thousands) at December 31, 2025.
- Total assets: $287,975 (in thousands) at September 30, 2026; $296,533 (in thousands) at December 31, 2025.
- Total liabilities: $103,530 (in thousands) at September 30, 2026; $100,554 (in thousands) at December 31, 2025.
- Total stockholders’ equity: $184,445 (in thousands) at September 30, 2026; $195,979 (in thousands) at December 31, 2025.
- Net cash used in operating activities, nine months ended September 30, 2026: $(32,429) (in thousands); prior year: $(21,731) (in thousands).
- Purchases of property, equipment, and intangible assets, including capitalized software, nine months ended September 30, 2026: $(3,069) (in thousands); prior year: $(2,265) (in thousands).
- Net cash used in investing activities, nine months ended September 30, 2026: $(3,069) (in thousands); prior year: $(2,265) (in thousands).
- Net cash provided by financing activities, nine months ended September 30, 2026: $7,310 (in thousands); prior year: $79,454 (in thousands).
- Net decrease in cash, cash equivalents, and restricted cash, nine months ended September 30, 2026: $(28,188) (in thousands); prior-year net increase: $55,458 (in thousands).
- Cash, cash equivalents, and restricted cash, end of period: $126,316 (in thousands); prior year: $148,248 (in thousands).
Analysis
Butterfly reported third-quarter revenue of $32.6 million, up 52% from $21.5 million in the third quarter of 2025. U.S. revenue rose 71% to $27.5 million, driven in part by Butterfly Embedded™ partnerships, including Midjourney, and by increased probe sales volume across health systems, distributors, and eCommerce. International revenue decreased 5% year-over-year to $5.1 million because of lower probe sales to global health partners. Software and other services revenue was $16,971 (in thousands), compared with $6,933 (in thousands) in the prior-year quarter.
Profitability improved sharply. GAAP gross profit was $23.8 million versus a gross loss of $3.8 million, and GAAP gross margin was 73.0% versus (17.5)%. Adjusted gross margin increased to 73.0% from 63.9%. The prior-year period included a $17.4 million write-down of excess and obsolete inventory, while current-quarter margins also benefited from the higher-margin return on Butterfly Embedded™ licensing revenue and increased probe sales volume. The Company described 73% as the highest gross margin in its history.
Operating expenses increased 19% to $37.4 million, with total operating expenses excluding stock-based compensation and other expenses at $26.6 million versus $23.7 million. Management attributed the increase largely to headcount investments supporting revenue growth and product and software development. Despite the expense increase, the net loss narrowed to $12.8 million from $34.0 million, EPS improved to $(0.05) from $(0.13), and adjusted EBITDA loss improved 85% to $1.2 million from $8.1 million.
The balance sheet reported $122.3 million of cash and cash equivalents as of September 30, 2026. For the nine months ended September 30, 2026, net cash used in operating activities was $(32,429) (in thousands), while purchases of property, equipment, and intangible assets were $(3,069) (in thousands). Management raised Fiscal Year 2026 revenue guidance to $123 million to $126 million and adjusted EBITDA loss guidance to $12 million to $15 million. Fourth-quarter guidance calls for revenue of $31 million to $34 million and adjusted EBITDA loss of $3 million to $6 million.
Management, verbatim
Our third quarter results came in ahead of guidance on both revenue and adjusted EBITDA, and we posted the highest gross margin in Butterfly’s history.
Joseph DeVivo, President, Chief Executive Officer and Chairman
We saw strength across our business. The enterprise pipeline is turning into signed deals, and achieving FedRAMP authorization puts larger federal opportunities on the table.
Joseph DeVivo, President, Chief Executive Officer and Chairman
Every step forward expands the markets we can serve, and more than a decade of investment in this semiconductor platform is beginning to deliver on the vast potential we have expected.
Joseph DeVivo, President, Chief Executive Officer and Chairman
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so no comparison of actual results with prior guidance is available.
- Quarterly operating cash flow was not reported.
- Free cash flow was not reported.
- Debt was not reported.
- Share repurchases and dividends were not reported.
- Prior-quarter comparisons for reported metrics were not provided.
- Guidance for gross margin, operating expenses, and tax rate was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.