WillItSurvive
Medical technology and health companies · United States

Butterfly Network

butterflynetwork.com ↗

Makes handheld, phone-connected ultrasound probes with built-in AI diagnostic software.

Losing its protection
Assessed 22 July 2026 · Evidence as of 22 July 2026
The structural protection is eroding.
On the recordSince 22 July 2026 · Checkable from July 30, 2026 · Every call on the record Checkpoint: Q2 2026 earnings report, test of 25% YoY growth and margin trend
The call

Butterfly holds real chip and AI patents but still loses money while GE and Philips match its image quality and Midjourney's spa-scan revenue remains unproven.

Butterfly Network makes portable ultrasound machines and artificial intelligence software to read ultrasound images. The company designed its own special computer chip for ultrasound, which is genuinely hard to copy, and it has FDA approval for its AI diagnostic tool. However, GE and Philips already sell handheld ultrasound machines that work just as well or better, so Butterfly is not the only choice in the market. The biggest problem is that Butterfly is losing about $76 million per year while bringing in only $103 million in sales, and the company has cut its workforce multiple times over the past five years. Almost all of Butterfly's future growth depends on one untested business deal (a partnership with another company for consumer wellness products) rather than a steady stream of new customers. If that deal falls apart or if GE and Philips drop their prices, Butterfly's cash could run out before the company becomes profitable.

Why
01
AI pressure: GE HealthCare and Philips AI-enhanced ultrasound software (Vscan Air AI, Lumify AI). Rivals are folding their own AI image-reading tools into cheaper handheld scanners, narrowing Butterfly's software edge. Could AI do the core job? Only partly.
02
Bigger players: GE HealthCare (Vscan Air) and Philips Healthcare (Lumify). Both rate equal or better than Butterfly on independent image-quality benchmarks and sell into the same hospital budgets. Could a giant copy it? Yes, easily.
03
What protects it. Patented Ultrasound-on-Chip semiconductor design plus FDA-cleared AI tools that took over a decade to build and clear.
What would change this call
Butterfly's Q2 2026 earnings (July 30, 2026) show revenue growth below 25% YoY. Would show core POCUS demand losing ground to GE and Philips faster than licensing revenue can offset.
Embedded/licensing revenue stays near 5% of total with no new licensees beyond Midjourney by year-end 2026. Would show the growth story depends on one unproven consumer deal rather than a diversified moat.
Cash-on-hand or burn rate disclosed showing runway under 2 years. Would show financial pressure forcing further restructuring or dilution before profitability is reached.
Key numbers
  • TTM net loss $75.8M on $102.9M revenue (2026-07-21)
  • Embedded licensing revenue $5.7M, up 147% YoY (2026-03-31)
  • Headcount cut from 463 to ~220 since 2021 (2026-06-30)
Named risks
  • Growth increasingly concentrated in one speculative Midjourney licensing deal with unproven consumer demand. Severity: high
  • Sustained net losses and adjusted EBITDA losses despite revenue growth through 2026. Severity: medium
  • Independent benchmarks show GE and Philips handhelds rated equal or better on core image quality. Severity: medium
  • Insider stock sales by CEO and founder during a large 2026 share price run-up. Severity: low
Rivals, as read in July 2026
RivalDirectionEvidence
GE Healthcare (Vscan Air)losing to2024 independent expert study rated Vscan Air higher on image quality than Butterfly (Oct 2024)
Philips (Lumify)losing to2024 study rated Lumify higher on image quality and ease of use than Butterfly (Oct 2024)
MidjourneycontestingLicensed 40 Butterfly chip modules per scanner unit in deal worth up to $74M, disclosed Nov 17 2025
Mindray, Clarius, EchoNous, ExocontestingAll named alongside Butterfly in 2024 head-to-head handheld ultrasound comparison studies
Questions people ask
Is Butterfly Network profitable in 2026?
No. Trailing twelve month net loss was about $75.8M on roughly $102.9M revenue as of July 21, 2026. Q1 2026 adjusted EBITDA loss was $6.1M, and full year 2026 guidance still projects a $21M to $25M adjusted EBITDA loss despite 25% YoY revenue growth.
Who is Butterfly Network's biggest competitor?
GE Healthcare (Vscan Air) and Philips (Lumify) are its closest rivals in handheld ultrasound. A 2024 independent cross-sectional study of point-of-care ultrasound experts rated Vscan Air and Lumify higher than Butterfly on image quality and ease of use.
Could AI replace Butterfly Network's products?
Unlikely soon. Butterfly's core moat is its FDA-cleared Ultrasound-on-Chip hardware and regulatory clearances, like the March 30, 2026 gestational age AI tool, which a pure AI model cannot substitute without its own clearance. Its own AI features are a growth driver, not a replacement threat.
What is the Midjourney deal with Butterfly Network?
Disclosed via Form 8-K on November 17, 2025, Midjourney licensed Butterfly's Ultrasound-on-Chip modules (40 per unit) for a full-body tomographic scanner planned for a San Francisco wellness venue in 2027, in a deal worth up to $74M over five years.
Has Butterfly Network had layoffs?
Yes. Butterfly cut about 10% of its workforce, roughly 60 employees, in August 2022 as part of a broader restructuring that shrank headcount from a 2021 peak, following its February 12, 2021 SPAC listing that had raised about $549M in cash.
Is Butterfly Network stock overvalued after its 2026 run?
BFLY shares were up roughly 260% over the trailing twelve months as of July 21, 2026, trading well below the all time high of $29.13, even as the company still guided to a $21M to $25M adjusted EBITDA loss for full year 2026.
Timeline
  • 2026-07-30Q2 2026 earnings scheduled, next test of 25% YoY growth trajectory
  • 2026-06-18Midjourney medical hardware venture using Butterfly chips publicly detailed
  • 2026-04-30Q1 2026 results: $26.5M revenue up 25% YoY, 69% gross margin
  • 2026-03-30FDA clears first automated blind sweep gestational age AI tool
  • 2025-11-17Midjourney licensing deal disclosed in Form 8-K, worth up to $74M over 5 years
  • 2023-04-03FDA clears AI enabled Auto B-Line Counter for lung assessment
  • 2022-08-16Butterfly lays off about 10% of workforce, roughly 60 employees
  • 2021-02-12SPAC merger with Longview Acquisition Corp closes, ~$1.5B EV, $549M cash raised
Revision history
22 July 2026
First assessed. Losing its protection. The text above is fixed as of this date and is not edited afterwards.
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