Earnings

Butterfly Posts Record 73% Gross Margin

The Tip Desk · November 1, 2026 · 3 min read

Third-quarter revenue reached $32.6 million, up 52% from a year earlier, as the company issued full-year 2026 revenue guidance of $123 million to $126 million.

Butterfly Network, Inc. (BFLY), a semiconductor-based ultrasound company, reported third-quarter revenue of $32.6 million, up 52% from $21.5 million a year earlier, after 39% year-over-year growth in the second quarter and 25% in the first.

The company said results came in ahead of guidance on both revenue and adjusted EBITDA. Gross margin reached a company record of 73.0%, with gross profit of $23.8 million versus a $3.8 million gross loss in the year-ago quarter.

U.S. revenue was $27.5 million, up 71% from the prior year, versus 57% year-over-year growth in the second quarter and 25% in the first. The company said the U.S. increase was driven in part by Butterfly Embedded partnerships, including co-development with Midjourney, and by higher probe sales to health-system, distributor and e-commerce customers. International revenue fell 5% to $5.1 million, largely from lower probe sales to global health partners.

Software and other services revenue was $17.0 million, compared with $6.9 million a year earlier. Product revenue was $15.6 million.

The company said the $27.6 million increase in GAAP gross profit was due in part to a $17.4 million write-down of excess and obsolete inventory recognized in the prior-year period, which is excluded from adjusted gross profit. The remainder of the GAAP increase, and a $10.1 million rise in adjusted gross profit, was primarily due to higher-margin Embedded licensing revenue versus core offerings and increased probe volume. Adjusted gross margin was 73.0%, up from 63.9% a year earlier.

Operating expenses were $37.4 million, up 19% from $31.4 million a year earlier. The company said expenses excluding stock-based compensation and other items were $26.6 million, largely reflecting higher headcount from investments in internal capabilities to support revenue growth and product and software development.

Net loss narrowed to $12.8 million from $34.0 million a year earlier, or $(0.05) a share versus $(0.13). Adjusted EBITDA loss improved 85% to $1.2 million from $8.1 million. Adjusted EPS was $(0.01). Cash and cash equivalents were $122.3 million as of September 30, 2026.

President, Chief Executive Officer and Chairman Joseph DeVivo said the enterprise pipeline is turning into signed deals and that FedRAMP authorization puts larger federal opportunities on the table. The company closed five seven-figure and ten six-figure total-contract-value enterprise deals in the quarter and officially achieved FedRAMP authorization as expected.

Butterfly Embedded added three brain-computer-interface partners, including Merge Labs and Bridge Neurotech. Mendaera became the first partner to launch a commercial product built on Butterfly technology on October 1, 2026. Home and Community Care entered implementation of its first state, with scanning set to begin in November and initial revenue expected in the fourth quarter.

Management issued full-year 2026 revenue guidance of $123 million to $126 million, or about 26% to 29% growth, and adjusted EBITDA loss guidance of $12 million to $15 million. Fourth-quarter 2026 revenue guidance is $31 million to $34 million, about 3% year-over-year growth at the midpoint, with an adjusted EBITDA loss of $3 million to $6 million.

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