Butterfly Network, Inc. (BFLY): History, Ownership, Mission, How It Works & Makes Money

Butterfly Network, Inc. is fundamentally changing medical imaging with its handheld, Ultrasound-on-Chip™ technology, but can a company with a 2025 revenue target of $91 million to $95 million truly disrupt the multi-billion-dollar Point-of-Care Ultrasound (POCUS) market?

You're looking at a firm that hit a record 2025 Q2 revenue of $23.4 million and has pushed its gross margins to an all-time high of 64%, proving that their platform-centric strategy-hardware as a gateway to recurring software-is definitely working.

The story here isn't just about a portable probe; it's about how their unique ownership structure and focus on AI services like Compass AI position them to unlock a massive opportunity, so understanding its history and revenue model is crucial for any investor or strategist today.

Butterfly Network, Inc. (BFLY) History

Given Company's Founding Timeline

Butterfly Network was born from a vision to democratize medical imaging, making sophisticated ultrasound technology as accessible and ubiquitous as a smartphone. The company's origin story is rooted in a personal mission by its founder, a serial entrepreneur who saw the need for a portable, affordable diagnostic tool.

Year established

The company was officially incorporated on January 25, 2011.

Original location

Butterfly Network was established in Guilford, Connecticut, USA, which served as the initial hub for its groundbreaking research and development.

Founding team members

The founding team was led by Dr. Jonathan Rothberg, a scientist and serial entrepreneur, who was joined by Nevada Sanchez and Tyler Ralston.

Initial capital/funding

Initial funding came from Dr. Rothberg himself, followed by significant venture capital. By 2018, the company had raised over $400 million in pre-public funding. This early capital was crucial for developing the core Ultrasound-on-Chip™ technology.

Given Company's Evolution Milestones

The company's trajectory is defined by its hardware innovation and a pivot toward software and artificial intelligence (AI) to drive adoption, culminating in a reaffirmed 2025 revenue target of up to $95 million.

Given Company's Transformative Moments

The most transformative decisions centered on moving the ultrasound from a cart-based machine to a semiconductor-based device, and then layering software and AI on top. This is the defintely the core of the business model.

• The Ultrasound-on-Chip™ Breakthrough: The foundational shift was integrating the entire ultrasound system onto a single silicon chip. This miniaturization dramatically reduced the cost and size, making the device portable and connecting it to a smartphone.
• The SPAC IPO: Going public in 2021 via a Special Purpose Acquisition Company (SPAC) was a strategic move that injected a massive amount of capital-approximately $584 million-to accelerate market penetration and platform development.
• The AI and Chip Roadmap: The company is now focused on its next-generation hardware, including the P5.1 chip, which is in fab production for a 2026 launch, and the new Apollo AI chip. This signals a clear commitment to maintaining a technological edge through Moore's Law.
• Global Health Expansion: The 1,000 Probe Partnership in Sub-Saharan Africa, funded by the Gates Foundation, is a key strategic initiative; it resulted in over 1.8 million obstetrical scans conducted as of July 2025. This proves the device's utility in resource-limited settings, opening vast international markets.

If you want to understand the current financial drivers and key institutional players, you should check out Exploring Butterfly Network, Inc. (BFLY) Investor Profile: Who's Buying and Why?

Butterfly Network, Inc. (BFLY) Ownership Structure

Butterfly Network, Inc. is controlled by a mix of institutional investment funds and corporate insiders, with the largest single block of shares held by public and retail investors. This structure means strategic decisions are a balance between the company's founders and management, major long-term funds, and the broader market sentiment.

Given Company's Current Status

Butterfly Network, Inc. (BFLY) is a publicly traded company, listed on the New York Stock Exchange (NYSE). As of November 2025, the company's market capitalization is approximately $525.41 million, reflecting its position as a high-growth, yet still unprofitable, digital health innovator. The company is actively governed by a fiduciary Board of Directors, which oversees management and is accountable to shareholders.

For the fiscal year 2025, analysts anticipate an Earnings Per Share (EPS) of approximately -$0.35, underscoring the company's focus on scaling its technology and market penetration over immediate profitability. This is a common trade-off in the medical technology space; you're investing in future market capture. For a deeper dive into the numbers, you can check out Breaking Down Butterfly Network, Inc. (BFLY) Financial Health: Key Insights for Investors.

Given Company's Ownership Breakdown

Understanding who owns the stock is crucial because it tells you who has the voting power to shape the company's direction. The ownership is split mainly among three groups, with institutional investors holding the largest concentrated stake.

Given Company's Leadership

The company is steered by an experienced management team, blending deep medical technology expertise with business scaling acumen. The average tenure for the executive team is around 2.3 years, suggesting a relatively recent but focused leadership structure driving the current strategy.

The key figures at the helm as of November 2025 include:

• Joseph DeVivo: President, Chief Executive Officer (CEO), and Chairman of the Board. He was appointed in April 2023 and is the primary driver of operational and strategic execution.
• Megan Carlson: Senior Vice President and Interim Chief Financial Officer (CFO). She manages the financial strategy and reporting, a critical role given the company's growth phase.
• Steven Cashman: Executive Vice President and Chief Business Officer. He focuses on commercial strategy and market expansion.
• Victor Ku: Senior Vice President and Chief Technology Officer (CTO). He leads the global technology and product development roadmap.
• Jonathan Rothberg: Founder and Director. As the original visionary, he maintains a key board role, guiding the long-term innovation strategy.

The leadership is heavily focused on commercializing the Ultrasound-on-Chip™ technology and expanding the subscription-based software model globally. Their compensation, for example, CEO Joe DeVivo's total compensation of $5.49 million, is weighted toward performance incentives, which is typical for a growth company.

Butterfly Network, Inc. (BFLY) Mission and Values

Butterfly Network, Inc.'s core purpose transcends profit, focusing instead on a deep-seated commitment to making advanced medical diagnostics a universal right, not a luxury. This drive to democratize healthcare is the cultural DNA that guides their innovation and business strategy.

Butterfly Network's Core Purpose

You're looking for what truly drives a company beyond its quarterly earnings, and for Butterfly Network, Inc., it's a clear, massive goal. Their purpose is simple: put powerful diagnostic tools into the hands of every healthcare professional globally, especially in underserved regions where 4.7 billion people still lack access to medical imaging.

Here's the quick math: if you can replace a $100,000+ cart-based ultrasound machine with a handheld device costing only $2,699, you fundamentally change the economics of care. That's the real-world impact of their 'Ultrasound-on-Chip' technology.

Official mission statement

The mission statement is direct and action-oriented, reflecting a commitment to global health equity. It's a powerful statement that maps their technology directly to a social good.

• Democratize healthcare by making medical imaging accessible to everyone around the world.

This mission is defintely reflected in their 2025 strategy, which includes expanding their educational app, ScanLab, into medical school curricula and launching AI tools like a gestational age calculator in countries like Malawi and Uganda.

Vision statement

While an official, one-line vision statement isn't always published, the company's consistent messaging points toward a future where their technology is the standard for point-of-care ultrasound (POCUS). They see a world where their integrated hardware, AI, and software transform clinical workflows and patient outcomes.

• Pave the way to mass adoption of ultrasound for earlier detection and remote management of health conditions globally.
• Drive a digital revolution in medical imaging with proprietary Ultrasound-on-Chip technology and intuitive software solutions.

This vision is backed by their financial expectations; they are forecasting full-year 2025 revenue guidance between $91 million and $95 million, showing they are scaling a business built on this accessible technology. For a deeper dive into how they plan to fund this vision, you should check out Breaking Down Butterfly Network, Inc. (BFLY) Financial Health: Key Insights for Investors.

Butterfly Network slogan/tagline

The company's most pervasive and succinct message cuts right to the heart of their value proposition, emphasizing accessibility and ubiquity.

• Medical imaging for everyone.

This isn't just marketing fluff; it's a measurable goal. For instance, a recent POCUS CARE trial demonstrated that using their AI lung tool improved clinical management in 35% of cases and generated over $750,000 in direct cost savings for one hospital system by reducing the length of stay by 30%. That's the slogan in action: better, cheaper, faster care.

Butterfly Network, Inc. (BFLY) How It Works

Butterfly Network is transforming medical imaging by replacing traditional, cart-based ultrasound machines with a proprietary, single-chip semiconductor technology, making whole-body ultrasound portable and affordable. This handheld device pairs with a smartphone or tablet, moving diagnostic imaging out of specialized rooms and into the hands of clinicians at the point-of-care (POCUS).

Butterfly Network's Product/Service Portfolio

Butterfly Network's Operational Framework

The company's value creation hinges on a razor-and-blade model: sell the hardware (the probe) and secure high-margin, recurring revenue from the software subscription. The core of the operation is the proprietary Breaking Down Butterfly Network, Inc. (BFLY) Financial Health: Key Insights for Investors Ultrasound-on-Chip™ technology, which replaces complex, expensive piezoelectric crystals with a single micro-machined silicon chip. That's a massive cost advantage.

This allows for a streamlined supply chain compared to traditional ultrasound manufacturers. The operational process is focused on scaling chip production, expanding the software's capabilities with AI, and driving enterprise adoption. For the 2025 fiscal year, management has reaffirmed revenue guidance between $91 million and $95 million, with Q3 2025 revenue hitting $21.5 million, showing the model is gaining traction despite macroeconomic headwinds.

• Hardware Manufacturing: Focus on the iQ3 probe, which drove Q3 2025 product revenue to $14.6 million.
• Software Development: Continuous investment in AI, with the next-gen Compass AI software on track for a late 2025 launch to enhance clinical workflow and documentation.
• Sales Strategy: Shifting from individual provider sales to large enterprise deals, although closing these deals has faced delays due to hospital IT resource allocation.

Butterfly Network's Strategic Advantages

The company's main edge is its ability to defintely lower the barrier to entry for medical imaging, both on price and complexity. The single-probe, whole-body imaging capability is a game-changer for point-of-care diagnostics, eliminating the need for multiple specialized transducers. This is true market disruption.

• Proprietary Technology: The Ultrasound-on-Chip™ significantly reduces hardware cost and size, enabling a pocket-sized device.
• AI-Driven Clinical Impact: AI tools are proving their worth; an AI lung tool demonstrated a 30% reduction in hospital length of stay and improved clinical management in 35% of cases in a POCUS CARE trial.
• High-Margin Revenue Mix: The Q3 2025 adjusted gross margin of 63.9% reflects the increasing contribution of high-margin software subscriptions and improved hardware pricing.
• Future-Proofing Innovation: Development of the sixth-generation Apollo AI chip and the P5.1 chip ensures the hardware can handle increasingly complex on-device AI applications, maintaining a technological lead.

Butterfly Network, Inc. (BFLY) How It Makes Money

Butterfly Network, Inc. generates revenue through a hybrid model, primarily selling its proprietary handheld ultrasound devices (probes) and securing recurring subscription fees for its essential software, cloud services, and AI-enabled features.

The company's strategy is to drive adoption of its low-cost hardware to create a funnel for its higher-margin, sticky software platform, which is the key to long-term sustainable growth.

Butterfly Network's Revenue Breakdown

Based on the third quarter (Q3) of 2025 financial results, Butterfly Network's revenue streams show a clear reliance on hardware sales, but the software component remains critical for margin expansion.

Here's the quick math: Product Revenue was $14.6 million in Q3 2025, with Software and Other Services Revenue at $6.9 million, totaling $21.5 million. Product growth is outpacing software right now, mostly due to the international rollout of the Butterfly iQ3 probe, but that software base is what makes the model defensible.

Business Economics

The core economic engine of Butterfly Network is the razor-and-blade model, but modernized for digital health. They sell the hardware (the razor) at a competitive price, sometimes even at a lower margin for large enterprise deals, to lock in the customer for the recurring software subscription (the blade).

• Pricing Power: The new iQ3 probe has a higher average selling price (ASP), which helped drive the 8% growth in product revenue in Q3 2025 and improved overall gross margins.
• Subscription Stickiness: The Software and Other Services revenue stream, which was flat at $6.9 million in Q3 2025, includes essential features like cloud storage, telemedicine capabilities, and access to the Butterfly Garden (a developer ecosystem). This recurring revenue is the most defintely predictable part of the business.
• Margin Improvement: The company's adjusted gross margin hit 63.9% in Q3 2025, up from 60.0% in the prior year period. This improvement is a direct result of the higher ASP on the iQ3 and better cost management, plus a higher margin on the software component.

The long-term goal is to increase the software mix, as that's where the high-margin, predictable revenue lives. It's a classic platform play: sell the device, then sell the ecosystem. You can read more about their strategy in the Mission Statement, Vision, & Core Values of Butterfly Network, Inc. (BFLY).

Butterfly Network's Financial Performance

As of November 2025, the company is still in a growth-investment phase, meaning profitability is not yet a reality, but key operational metrics are showing positive trends toward efficiency.

• 2025 Revenue Target: Management reaffirmed its full-year 2025 revenue guidance to a range of $91 million to $95 million, representing approximately 13% year-over-year growth. We'll use the midpoint, $93 million, for our modeling.
• Loss Narrowing: The full-year 2025 Adjusted EBITDA loss guidance was narrowed to between $32 million and $35 million, an improvement that reflects disciplined cost control. This is a critical sign of operational leverage.
• Cash Position: The company maintains a strong cash position, with cash and cash equivalents totaling $144.2 million as of September 30, 2025. This provides a solid runway to execute their strategy without immediate financing pressure.
• Cash Burn Control: Quarterly cash burn was reduced to a record low of $3.9 million in Q3 2025, a huge win for financial stability.

What this estimate hides is the GAAP Net Loss, which was $34.0 million in Q3 2025 due to a significant non-cash inventory write-off, so you need to keep an eye on the adjusted figures for a true picture of core operations.

Butterfly Network, Inc. (BFLY) Market Position & Future Outlook

Butterfly Network is positioned as a disruptive innovator in the handheld point-of-care ultrasound (POCUS) market, leveraging its proprietary Ultrasound-on-Chip technology to drive affordability and accessibility. The company's future outlook hinges on its pivot to an enterprise-focused, software-driven model, aiming to convert its technological edge into sustainable profitability beyond its projected $91 million to $95 million in revenue for the 2025 fiscal year.

Competitive Landscape

The handheld ultrasound market is moderately concentrated, but Butterfly Network competes not just on hardware, but on its software ecosystem and single-probe, whole-body imaging capability. Based on its 2025 revenue guidance against the estimated $397.3 million handheld market size, Butterfly Network holds a significant, but not dominant, share.

Opportunities & Challenges

The company's strategy is currently focused on expanding its enterprise footprint and monetizing its software and AI capabilities, but it faces the persistent challenge of converting a high-growth technology into positive cash flow. Here's the quick math: Q3 2025 saw a net loss of $34.0 million, driven partly by a $17.4 million inventory write-down, so financial discipline is defintely paramount.

Industry Position

Butterfly Network is a market leader in the handheld ultrasound sub-segment, not the broader $5.7 billion portable ultrasound market, which includes larger cart-based systems. The core strength is its Ultrasound-on-Chip technology, which replaces traditional piezoelectric crystals, enabling an affordable, single-probe, whole-body solution.

The company is effectively transitioning from a pure hardware seller to a digital health platform, which is the right move. That shift is evident in the strategic focus on its subscription model and the launch of its next-gen enterprise software, Compass AI, which is on track to launch before year-end 2025. This platform approach is critical because it creates a high-margin, recurring revenue stream, moving beyond the one-time sale of the iQ3 device.

• Focus on AI integration: The company is aggressively integrating AI, such as the AI-powered lung tool demonstrated to reduce hospital length of stay by 30% and generate over $750,000 in direct cost savings in a clinical trial.
• Strong liquidity: As of September 30, 2025, the company maintained $144.2 million in cash and cash equivalents, which provides a necessary buffer to fund its path to profitability.
• Education and adoption: Expanding its medical education footprint, like integrating its ScanLab AI-powered app across all four years of curriculum at Kansas City University, helps build lifelong product loyalty among future clinicians.

To understand the financial implications of this strategy, you should read our deep dive: Breaking Down Butterfly Network, Inc. (BFLY) Financial Health: Key Insights for Investors.