Butterfly Network reported fourth‑quarter 2025 results that exceeded analyst expectations, with revenue of $31.5 million, a 41% year‑over‑year increase, and an adjusted earnings per share of $‑0.02 that beat the consensus estimate of $‑0.04. The revenue lift was driven by robust demand for its iQ+ and iQ3 ultrasound probes, a 76% year‑over‑year jump in software and other services revenue, and a $6.8 million contribution from the Midjourney partnership, which added a new high‑margin revenue stream to the business.
Adjusted gross margin expanded to 67.5% from 61.4% a year earlier, reflecting a shift toward higher‑margin embedded semiconductor licensing and software services. The mix shift, combined with pricing power in the embedded segment and a reduction in software amortization costs, underpinned the margin improvement and helped the company achieve its first positive operating cash flow of $6.3 million in Q4 2025.
Management highlighted the milestone of positive operating cash flow, noting that the improved margin and revenue mix were key drivers. CEO Joseph DeVivo said, "We delivered record quarterly revenue of $31.5 million, growing 41% year over year, and achieved the first quarter of positive operating cash flow in our company's history." CFO John Doherty added, "We had a strong fourth quarter 2025 with revenue of $31.5 million, the highest quarterly result in the company's history, and we are guiding for continued growth in fiscal 2026."
For fiscal 2026, Butterfly Network raised its revenue guidance to $117 million to $121 million, above consensus estimates of roughly $107 million. The company reiterated confidence in the continued adoption of its semiconductor‑based ultrasound platform while acknowledging the impact of tariffs initiated in 2025, which are factored into the guidance. The upward revision signals management’s belief that demand for embedded and software solutions will sustain growth beyond the current quarter.
The results underscore Butterfly Network’s transition from a medical‑device company to a semiconductor‑based imaging platform, with the Midjourney partnership and embedded licensing driving higher‑margin revenue. The earnings beat, margin expansion, and positive cash flow reinforce the company’s execution capability and support its forward‑looking guidance.
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