Butterfly Network Reports Strong Revenue Growth, Improved Operating Cash Flow, and Major AI Partnership in 2025 Annual Report
Summary
Butterfly Network's 2025 annual report shows strong revenue growth and improved operating cash flow, supported by a new multi-million dollar AI partnership, despite an increased net loss due to a significant inventory write-down.
Key Events
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Strong Revenue Growth in 2025
Total revenue increased by 19.0% to $97.6 million for the year ended December 31, 2025, up from $82.1 million in 2024. Product revenue grew 17.1% and software/other services revenue increased by 22.7%.
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Significant Improvement in Operating Cash Flow
Net cash used in operating activities decreased by 69.5% to $12.7 million in 2025, a substantial improvement from $41.7 million used in 2024, driven by better working capital management.
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Major Co-Development and Licensing Agreement with Midjourney, Inc.
In November 2025, Butterfly entered a 5-year agreement with Midjourney, Inc., including a $15 million one-time fee, a $10 million annual license fee, and potential additional payments up to $9 million for milestones and revenue sharing for its Ultrasound-on-Chip technology.
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Increased Net Loss Due to Inventory Write-Down
The company reported a net loss of $77.1 million in 2025, up from $72.5 million in 2024. This was primarily impacted by a non-recurring $17.4 million charge for excess and obsolete inventory.
Analysis
Butterfly Network's 2025 annual report reveals significant revenue growth and a notable improvement in operating cash flow, signaling progress towards financial stability. Total revenue increased by 19.0% year-over-year to $97.6 million, driven by both product sales and software/services. A key highlight is the Co-Development and Licensing Agreement with Midjourney, Inc., which includes a $15 million upfront fee, a $10 million annual license fee, and potential milestone and revenue sharing payments, validating Butterfly's Ultrasound-on-Chip technology and opening new revenue streams. While the company reported an increased net loss of $77.1 million, this was significantly impacted by a $17.4 million charge for excess and obsolete inventory. Crucially, net cash used in operating activities decreased substantially from $41.7 million in 2024 to $12.7 million in 2025, indicating improved operational efficiency and a longer cash runway, further bolstered by an $81.0 million public offering in January 2025. The expiration of public warrants in February 2026 also removes a potential dilutive overhang. Investors should monitor the execution of the Midjourney partnership and the company's ability to manage inventory and legal costs moving forward.
At the time of this filing, BFLY was trading at $4.56 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $1.2B. The 52-week trading range was $1.32 to $5.03. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.