10q10k10q10k.net

What changed in Butterfly Network, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Butterfly Network, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+220 added−210 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in Butterfly Network, Inc.'s 2025 10-K

220 paragraphs added · 210 removed · 170 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

79 edited+30 added−16 removed160 unchanged
Biggest changeAny of these transactions could be material to our financial condition and operating results and expose us to many risks, including: • disruption in our relationships with customers, distributors, manufacturers, or suppliers as a result of such a transaction; • unanticipated liabilities related to acquired companies; • difficulties integrating acquired personnel, technologies, and operations into our existing business; • diversion of management’s time and focus away from operating our business to acquisition integration challenges; • increases in our expenses and reductions in our cash available for operations and other uses; and • possible write-offs or impairment charges relating to acquired businesses.
Biggest changeAny of these transactions could be material to our financial condition and operating results and expose us to many risks, including: • delays or an inability to engage with third parties on such transactions on favorable terms or at all; • disruption in our relationships with customers, distributors, manufacturers, or suppliers as a result of such a transaction; • unanticipated liabilities related to such transactions, including with respect to disputes that may arise under agreements governing our strategic transactions; • difficulties collaborating with third-party personnel, or integrating acquired personnel, working with third-party or acquired technologies, and integrating our products and technologies with and into a third party, or integrating operations into our existing business; • diversion of management’s time and focus away from operating our business to acquisition integration challenges; • increases in our expenses and reductions in our cash available for operations and other uses; and • possible write-offs or impairment charges relating to acquired businesses.
If we fail to protect our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.
If we fail to protect our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.
These laws are complex and far-reaching in nature, and, as a result, we cannot assure investors that we would not be required in the future to alter one or more of our practices to be in compliance with these laws or any changes in these laws or the interpretation thereof. 27 Table of Contents Any violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could result in a material adverse effect on our business, prospects, financial condition, or results of operations.
These laws are complex and far-reaching in nature, and, as a result, we cannot assure investors that we would not be required in the future to alter one or more of our practices to be in compliance with these laws or any changes in these laws or the interpretation thereof. 28 Table of Contents Any violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and could result in a material adverse effect on our business, prospects, financial condition, or results of operations.
We cannot predict the number, timing, or size of future joint ventures, acquisitions, or other strategic transactions, or the effect that any such transactions might have on our operating results.
We cannot predict the number, timing, or size of future joint ventures, acquisitions, or other strategic transactions, if any, or the effect that any such transactions might have on our operating results.
To continue to develop our sales and marketing organization to successfully achieve market awareness and sell our products, we must: • continue to recruit and retain adequate numbers of effective and experienced sales and marketing personnel; • effectively train our sales and marketing personnel in the benefits and risks of our products; • establish and maintain successful sales, marketing, training, and education programs that educate health care professionals so they can appropriately inform their patients about our products; • manage geographically dispersed sales and marketing operations; and • effectively train our sales and marketing personnel on the applicable fraud and abuse laws that govern interactions with healthcare practitioners as well as current and prospective patients and maintain active oversight and auditing measures to ensure continued compliance.
To continue to develop our sales and marketing organization to successfully achieve market awareness and sell our products, we must: • continue to recruit and retain adequate numbers of effective and experienced sales and marketing personnel; • effectively train our sales and marketing personnel in the benefits and risks of our products; • establish and maintain successful sales, marketing, training, and education programs that educate health care professionals so they can appropriately inform their patients about our products; 26 Table of Contents • manage geographically dispersed sales and marketing operations; and • effectively train our sales and marketing personnel on the applicable fraud and abuse laws that govern interactions with healthcare practitioners as well as current and prospective patients and maintain active oversight and auditing measures to ensure continued compliance.
The FDA and similar governmental bodies in other countries have the authority to require the recall of our products if we or our third-party manufacturers fail to comply with relevant regulations pertaining to, among other things, manufacturing practices, labeling, advertising, or promotional activities, or if new information is obtained concerning the safety or efficacy of these products.
The FDA and similar governmental bodies in other countries have the authority to require the recall of our medical device products if we or our third-party manufacturers fail to comply with relevant regulations pertaining to, among other things, manufacturing practices, labeling, advertising, or promotional activities, or if new information is obtained concerning the safety or efficacy of these products.
Rothberg holds all of the issued and outstanding shares of our Class B common stock and holds approximately 75% of the voting power of our capital stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents, and any merger, consolidation, or sale of all or substantially all of our assets or other major corporate transactions.
Rothberg holds all of the issued and outstanding shares of our Class B common stock and holds approximately 71% of the voting power of our capital stock and is able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents, and any merger, consolidation, or sale of all or substantially all of our assets or other major corporate transactions.
Implementation of further legislative or administrative reforms to these reimbursement systems, or adverse decisions relating to coverage of or reimbursement for our products by administrators of these systems, could have an impact on the acceptance of and demand for our products and the prices that our customers are willing to pay for them We are subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters.
Implementation of 30 Table of Contents further legislative or administrative reforms to these reimbursement systems, or adverse decisions relating to coverage of or reimbursement for our products by administrators of these systems, could have an impact on the acceptance of and demand for our products and the prices that our customers are willing to pay for them We are subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters.
In addition, the growth of market acceptance of our products by healthcare practitioners outside of the United States will largely depend on our ability to continue to demonstrate the relative safety, effectiveness, reliability, cost-effectiveness, and ease of use of such products.
In addition, the growth of market acceptance of our medical device products by healthcare practitioners outside of the United States will largely depend on our ability to continue to demonstrate the relative safety, effectiveness, reliability, cost-effectiveness, and ease of use of such products.
In some instances in our advertising and promotion, we may make claims regarding our product as compared to competing products, which may subject us to heightened regulatory scrutiny, enforcement risk, and litigation risks. The FDA requires that promotional labeling be truthful and not misleading, including with respect to any comparative claims made about competing products or technologies.
In some instances in our advertising and promotion, we may make claims regarding our medical devices as compared to competing products, which may subject us to heightened regulatory scrutiny, enforcement risk, and litigation risks. The FDA requires that promotional labeling be truthful and not misleading, including with respect to any comparative claims made about competing products or technologies.
Even if we pursue and obtain issued patents in particular jurisdictions, our patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties 33 Table of Contents from competing. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
Even if we pursue and obtain issued patents in particular jurisdictions, our patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties from competing. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
We, our contract manufacturers, and our component suppliers are required to comply with the FDA’s Quality System Regulation (“QSR”), which is a complex regulatory framework that covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage, shipping, and servicing of 28 Table of Contents our devices.
We, our contract manufacturers, and our component suppliers are required to comply with the FDA’s Quality System Regulation (“QSR”), which is a complex regulatory framework that covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage, shipping, and servicing of our devices.
In addition to FDA implications, the use of comparative claims also presents risk of a lawsuit by the competitor under federal and state false advertising and unfair competition statutes (e.g., the Lanham Act) or unfair and deceptive trade practices law, and possibly also state libel law, or other similar foreign 29 Table of Contents laws.
In addition to FDA implications, the use of comparative claims also presents risk of a lawsuit by the competitor under federal and state false advertising and unfair competition statutes (e.g., the Lanham Act) or unfair and deceptive trade practices law, and possibly also state libel law, or other similar foreign laws.
If a third party claims that we or any of our licensors, customers, or collaboration partners infringe upon a third party’s intellectual property rights, we may have to: • seek licenses that may not be available on commercially reasonable terms, if at all; • abandon any infringing product or redesign our products or processes to avoid infringement; • pay substantial damages including, in an exceptional case, treble damages and attorneys’ fees, which we may have to pay if a court decides that the product or proprietary technology at issue infringes upon or violates the third-party’s rights; • pay substantial royalties or fees or grant cross-licenses to our technology; or • defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.
If a third party claims that we or any of our licensors, customers, or collaboration partners infringe upon a third party’s intellectual property rights, we may have to: • seek licenses that may not be available on commercially reasonable terms, if at all; • abandon any infringing product or redesign our products or processes to avoid infringement; • pay substantial damages including, in an exceptional case, treble damages and attorneys’ fees, which we may have to pay if a court decides that the product or proprietary technology at issue infringes upon or violates the third-party’s rights; • pay substantial royalties or fees or grant cross-licenses to our technology; or • defend litigation or administrative proceedings that may be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources. 36 Table of Contents Competitors may infringe our patents or the patents that we license.
The objectives of these cyber-attacks vary widely and may include, among other things, unauthorized access to personal, customer, or third-party information, disruptions in operations and the provision of services to customers, or theft of IP or 31 Table of Contents other sensitive assets or information belonging to us, our business partners, or customers.
The objectives of these cyber-attacks vary widely and may include, among other things, unauthorized access to personal, customer, or third-party information, disruptions in operations and the provision of services to customers, or theft of IP or other sensitive assets or information belonging to us, our business partners, or customers.
We must continue to develop and grow our sales and marketing organization and enter into partnerships or other arrangements to market and sell our products and/or collaborate with third parties, including distributors and others, to market and sell our products to maintain the commercial success of our devices and to achieve commercial success for any 25 Table of Contents of our future products.
We must continue to develop and grow our sales and marketing organization and enter into partnerships or other arrangements to market and sell our products and/or collaborate with third parties, including distributors and others, to market and sell our products to maintain the commercial success of our devices and to achieve commercial success for any of our future products.
The GDPR also confers a private right of 30 Table of Contents action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. If we fail to comply with the GDPR, the U.K. GDPR, and the U.K.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. If we fail to comply with the GDPR, the U.K. GDPR, and the U.K.
While we believe that our level of inventory is currently sufficient for us to continue the manufacturing of our products without a disruption to our business in the event that we must replace one of our suppliers, there can be no assurance that we can maintain this level of inventory in the future.
While we believe that our level of inventory is currently 25 Table of Contents sufficient for us to continue the manufacturing of our products without a disruption to our business in the event that we must replace one of our suppliers, there can be no assurance that we can maintain this level of inventory in the future.
While we intend to vigorously defend against these actions, there is no assurance that we will be successful in the defense or that insurance will be available or adequate to fund any settlement or judgment or the litigation and indemnification costs of the actions.
While we intend to vigorously defend against these actions, there is no assurance that we will be successful in the defense or that insurance will be available or adequate to fund any settlement or judgment or the litigation and indemnification 40 Table of Contents costs of the actions.
Such interruptions may occur for several reasons, including as a result of regulatory enforcement actions, tight credit markets or other financial distress, production constraints or difficulties, unscheduled downtimes, war, severe weather and natural disasters, fires and explosions, accidents, mechanical failures, pandemics, civil unrest, strikes, unpermitted releases of toxic or hazardous substances, other EH&S risks, sabotage, cybersecurity attacks, riots, or terrorist attacks.
Such interruptions may occur for several reasons, including as a result of regulatory enforcement actions; tight credit markets or other financial distress; production constraints or difficulties; unscheduled downtimes; war; severe weather and natural disasters; fires and explosions; accidents; mechanical failures; pandemics; civil unrest; strikes; unpermitted releases of toxic or hazardous substances; other environment, health, and safety risks; sabotage; cybersecurity attacks; riots; or terrorist attacks.
Foreign acquisitions involve unique risks in addition to those mentioned above, including those related to the integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries. In addition, the anticipated benefit of any acquisition or other strategic transaction may not materialize.
Foreign transactions involve unique risks in addition to those mentioned above, including those related to our collaborations and integration of operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries. In addition, the anticipated benefit of any acquisition or other strategic transaction may not materialize.
Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share. As of December 31, 2024, Dr.
Shares of our Class B common stock have 20 votes per share, while shares of our Class A common stock have one vote per share. As of December 31, 2025, Dr.
We may be subject to enforcement action if we engage in improper or off-label marketing or promotion of our products, including fines, penalties, and injunctions. Our promotional materials and training methods must comply with the FDA and other applicable laws and regulations, including the prohibition of the promotion of unapproved, or off-label, uses.
We may be subject to enforcement action if we engage in improper or off-label marketing or promotion of our medical devices, including fines, penalties, and injunctions. Our promotional materials and training methods for our medical devices must comply with the FDA and other applicable laws and regulations, including the prohibition of the promotion of unapproved, or off-label, uses.
The ongoing implementation of the Affordable Care Act in the United States, as well as state-level healthcare reform proposals, could reduce medical procedure volumes and impact the demand for medical device products or the prices at which we can sell products.
The ongoing administration and modification of the Affordable Care Act (the “ACA”) in the United States, as well as state-level healthcare reform proposals, could reduce medical procedure volumes and impact the demand for medical device products or the prices at which we can sell products.
The data privacy and IT security insurance coverage we currently maintain may be inadequate. In addition, the market for such insurance continues to evolve and, in the future, our data privacy and IT security insurance coverage may be prohibitively expensive or not available on acceptable terms or in sufficient amounts, or at all.
In addition, the market for such insurance continues to evolve and, in the future, our data privacy and IT security insurance coverage may be prohibitively expensive or not available on acceptable terms or in sufficient amounts, or at all.
We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock and we could be subject to sanctions or investigations by the NYSE, the SEC, or other regulatory authorities, which would require additional financial and management resources.
We could lose investor confidence in the accuracy and completeness of our financial reports, which could have an adverse effect on the price of our common stock and we could be subject to sanctions or investigations by the New York Stock Exchange (“NYSE”), the SEC, or other regulatory authorities, which would require additional financial and management resources.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
In addition, the laws of some foreign countries do not protect intellectual property 34 Table of Contents rights to the same extent as federal and state laws in the United States.
This volatility may affect the price at which you could sell the shares of our common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common 39 Table of Contents stock.
This volatility may affect the price at which you could sell the shares of our common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and growth prospects. Item 1B. UNRESOLVED STAFF COMMENTS None.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and growth prospects. 41 Table of Contents Item 1B.
They are, therefore, likely to be able to sustain the costs of complex patent litigation longer 35 Table of Contents than we could.
They are, therefore, likely to be able to sustain the costs of complex patent litigation longer than we could.
We are currently subject to a securities class action lawsuit and stockholder derivative actions, the unfavorable outcomes of which may have a material adverse effect on our financial condition, results of operations, and cash flows.
We are currently subject to a securities class action lawsuit and stockholder derivative actions, and we have indemnification obligations to certain defendants party to a putative class action, the unfavorable outcomes of which may have a material adverse effect on our financial condition, results of operations, and cash flows.
Our ability to compete successfully may be adversely affected by factors such as: • the introduction of new products or product enhancements by competitors; • the development of new technology or the application of known or unknown technology; • a failure to satisfy local market conditions and regulations, such as mandatory IP transfers, protectionist measures, and other government policies supporting increased local competition; • the emergence of new market entrants; • a failure to maintain or expand relationships with existing customers or attract new customers; • cost of production or delivery, whether due to geographic location, currency fluctuations, taxes, duties, or otherwise, which may enable our competitors to offer greater discounts or lower prices; • the perception of our brand and image in the market; • a failure to successfully enter new geographic or adjacent product markets; • changing regulatory standards, legal requirements, or enforcement rigor; or • consolidation among customers, suppliers, channel partners, or competitors. 26 Table of Contents Our inability to obtain and maintain regulatory authorizations for, and supply commercial quantities of, our offerings as quickly and effectively as our competitors are able to could limit market acceptance.
Our ability to compete successfully may be adversely affected by factors such as: • the introduction of new products or product enhancements by competitors; • the development of new technology or the application of known or unknown technology; • a failure to satisfy local market conditions and regulations, such as mandatory IP transfers, protectionist measures, and other government policies supporting increased local competition; • the emergence of new market entrants; • a failure to maintain or expand relationships with existing customers or attract new customers; • cost of production or delivery, whether due to geographic location, currency fluctuations, taxes, duties, or otherwise, which may enable our competitors to offer greater discounts or lower prices; • the perception of our brand and image in the market; • a failure to successfully enter new geographic or adjacent product markets; • changing regulatory standards, legal requirements, or enforcement rigor; or • consolidation among customers, suppliers, channel partners, or competitors.
We may not be able to successfully manage our sales force or increase our product sales at acceptable rates. If we are unable to establish and maintain adequate sales and marketing capabilities, or enter into and maintain arrangements with third parties to sell and market our products, our business may be harmed.
We may not be able to successfully manage our sales force or increase our product sales at acceptable rates. If we are unable to continue establishing and maintaining adequate sales and marketing capabilities, or unable to continue entering into and maintaining arrangements with third parties to sell and market our products, our business may be harmed.
Any errors or defects in third-party software or other third-party software failures could result in errors, defects, or cause our products to fail, which could harm our business and be costly to correct.
We use software licensed from third parties in our products. Any errors or defects in third-party software or other third-party software failures could result in errors, defects, or cause our products to fail, which could harm our business and be costly to correct.
If we were to lose such suppliers, or if such suppliers were unable to fulfill our orders or to meet our manufacturing specifications, there can be no assurance that we will be able to identify or enter into agreements with alternative suppliers on a timely basis or on acceptable terms, if at all.
If we were to lose such suppliers, or if such suppliers were unable to fulfill our orders, meet our manufacturing specifications, or provide such materials and components in sufficient quantities, on a timely basis, or at acceptable costs, there can be no assurance that we will be able to identify or enter into agreements with alternative suppliers on a timely basis or on acceptable terms, if at all.
The FDA (and comparable foreign regulatory authorities) has comprehensive and prescriptive guidelines for medical device component manufacturers, requiring these manufacturers to establish and maintain processes and procedures to adequately control environmental conditions that could adversely affect product quality and impact patient safety. Clean room standards are an example of these requirements.
The FDA (and comparable foreign regulatory authorities) has comprehensive and prescriptive guidelines for medical device component manufacturers, requiring these manufacturers to establish and maintain processes and procedures to adequately control environmental conditions that could adversely affect product quality and impact patient safety.
As of February 13, 2025, we owned approximately 620 issued patents and pending patent applications in the United States and foreign jurisdictions, including the European Union and the United Kingdom. These issued patents and pending patent applications (if they were to be issued as patents) have expected expiration dates ranging between approximately 2030 and 2045.
As of February 25, 2026, we owned approximately 665 issued patents and pending patent applications in the United States and foreign jurisdictions, including the European Union and the United Kingdom. These issued patents and pending patent applications (if they were to be issued as patents) have expected expiration dates ranging between 2030 and 2046.
In the event it becomes necessary to utilize a different contract manufacturer for our component products, we would experience additional costs, delays, and difficulties in obtaining such components as a result of identifying and entering into an agreement with a new contract manufacturer as well as preparing such new manufacturer to meet the logistical requirements associated with manufacturing our devices, and our business would suffer.
Business — Manufacturing — Key Agreements — Manufacture and Supply Agreement with Benchmark Electronics, Inc ”. 24 Table of Contents In the event it becomes necessary to utilize a different contract manufacturer for our component products, we would experience additional costs, delays, and difficulties in obtaining such components as a result of identifying and entering into an agreement with a new contract manufacturer as well as preparing such new manufacturer to meet the logistical requirements associated with manufacturing our devices, and our business would suffer.
If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue offering our products on terms that are not economically feasible, to re-engineer our products, to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, operating results, and financial condition.
If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue offering our products on terms that are not economically feasible, to re-engineer our products, to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, operating results, and financial condition. 37 Table of Contents We use third-party software that may cause errors or failures of our products that could lead to lost customers or harm to our reputation.
Acquisitions, joint ventures, or other strategic transactions could disrupt our business, cause dilution to our stockholders, and otherwise harm our business. We may acquire other businesses, products, or technologies as well as pursue strategic alliances, joint ventures, technology licenses, investments in complementary businesses, or other strategic initiatives.
Acquisitions, joint ventures, or other strategic transactions, including in connection with our Butterfly Embedded™ program, could disrupt our business, cause dilution to our stockholders, and otherwise harm our business. We may acquire other businesses, products, or technologies as well as pursue strategic alliances, co-development opportunities, joint ventures, technology licenses, investments in complementary businesses, or other strategic initiatives.
If we, our contract manufacturers or our component suppliers are unable to manufacture our products in sufficient quantities, on a timely basis, at acceptable costs, and in compliance with regulatory and quality requirements, the manufacturing and distribution of our devices could be interrupted, and our product sales and operating results could suffer.
If we, our contract manufacturers or our component suppliers are unable to manufacture our products in compliance with regulatory and quality requirements, the manufacturing and distribution of our devices could be interrupted, and our product sales and operating results could suffer.
Competitors may infringe our patents or the patents that we license. In the event of infringement or unauthorized use, we may file one or more infringement lawsuits, which can also be expensive and time-consuming.
In the event of infringement or unauthorized use, we may file one or more infringement lawsuits, which can also be expensive and time-consuming.
If we are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory inspection or approval, which could result in further delay.
If we are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory inspection or approval, which could result in further delay, or could charge higher prices for the underlying materials or components.
We may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our current or future products, and we cannot provide any assurances that we would be able to obtain such licenses.
We may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our current or future products, and we cannot provide any assurances that we would be able to obtain such licenses. Licensing intellectual property involves complex legal, business, and scientific issues.
There has been an extension to the Framework to cover U.K. transfers to the United States. The Framework could be challenged like its predecessor frameworks. This complexity and the additional contractual burden increases our overall risk exposure. There may be further divergence in the future, including with regard to administrative burdens.
There has been an extension to the Framework to cover U.K. transfers to the United States. The Framework could be challenged like its predecessor frameworks. This complexity and the additional contractual burden increases our overall risk exposure.
Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors.
Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors. 39 Table of Contents Litigation Risks We face the risk of product liability claims and may be subject to damages, fines, penalties, and injunctions, among other things.
If we fail to continue to comply with current good manufacturing requirements, as well as ISO or other regulatory standards, we may be required to cease all or part of our operations until we comply with these regulations. Maintaining compliance with multiple regulators adds complexity and cost to our manufacturing and compliance processes.
If we or our manufacturers fail to continue to comply with current good manufacturing requirements, as well as ISO or other regulatory standards, we may be required to cease all or part of our operations until we comply with these regulations.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patent and other rights to third parties under collaborative development relationships; 34 Table of Contents • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our products, and what activities satisfy those diligence obligations; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patent and other rights to third parties under collaborative development relationships; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our products, and what activities satisfy those diligence obligations; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners. 35 Table of Contents If disputes over licensed intellectual property prevent or impair our ability to maintain the licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product, or the dispute may have an adverse effect on our results of operations.
If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation, and potential notification of the breach to customers, regulators, and counterparties, as well as any related litigation expenses, fines, penalties, or damages, could be material. In addition, our remediation efforts may not be successful.
While we have undertaken efforts to mitigate cybersecurity risks, these efforts may not prevent all incidents. 32 Table of Contents If we were to experience a significant cybersecurity breach of our information systems or data, the costs associated with the investigation, remediation, and potential notification of the breach to customers, regulators, and counterparties, as well as any related litigation expenses, fines, penalties, or damages, could be material.
This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and may affect the market price of shares of our Class A common stock. 37 Table of Contents Delaware law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult.
This concentrated control may have the effect of delaying, preventing or deterring a change in control of the Company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and may affect the market price of shares of our Class A common stock.
We have and may continue to experience pricing pressures from contract suppliers or manufacturers on which we rely. Due to supply constraints, we have seen our costs increase in 2024, but we were largely able to offset these costs through manufacturing efficiencies and pricing actions.
We have and may continue to experience pricing pressures from contract suppliers or manufacturers on which we rely. Prior to 2025, due to supply constraints, we saw increases to the costs of our raw materials, but we were largely able to offset these costs through manufacturing efficiencies and pricing actions.
Our products often are connected to, and reside within, our customers’ information technology (“IT”) infrastructures. In some jurisdictions, we are expected to design our products to include appropriate cybersecurity protections, and regulatory authorities may review such protections when granting marketing authorizations.
In some jurisdictions, we are expected to design our products to include appropriate cybersecurity protections, and regulatory authorities may review such protections when granting marketing authorizations.
Furthermore, our markets are continually evolving and thus revenues and income are difficult to forecast. Any of these competitive factors could adversely affect our pricing, margins, and market share and have a material adverse effect on our business results, cash flows, financial condition, or prospects. Unfavorable global economic conditions could adversely affect our business, financial condition, or results of operations.
Any of these competitive factors could adversely affect our pricing, margins, and market share and have a material adverse effect on our business results, cash flows, financial condition, or prospects. 27 Table of Contents Unfavorable global economic conditions could adversely affect our business, financial condition, or results of operations.
Many of these providers attempt to impose limitations on their liability for such errors, defects, or failures, and if enforceable, we may have additional liability to our customers or third-party providers that could harm our reputation and increase our operating costs. 36 Table of Contents We will need to maintain our relationships with third-party software providers and to obtain software from such providers that does not contain any errors or defects.
Many of these providers attempt to impose limitations on their liability for such errors, defects, or failures, and if enforceable, we may have additional liability to our customers or third-party providers that could harm our reputation and increase our operating costs.
However, we expect there will continue to be supply constraints; our suppliers are continuing to raise prices and may continue to raise prices in the future, which we may not be able to offset through manufacturing efficiencies or pricing actions.
We may face supply constraints if our suppliers raise prices in the future, which we may not be able to offset through manufacturing efficiencies or pricing actions.
Our inability to successfully manufacture our products would have a material adverse effect on our operating results. 24 Table of Contents We rely on limited or sole suppliers for some of the materials and components used in our products, and we may not be able to find replacements or immediately transition to alternative suppliers, which could have a material adverse effect on our business, financial condition, results of operations, and reputation.
We rely on limited or sole suppliers for some of the materials and components used in our products that may not be able to supply such materials and components in sufficient quantities, on a timely basis, or at acceptable costs, and we may not be able to find replacements or immediately transition to alternative suppliers, which could have a material adverse effect on our business, financial condition, results of operations, and reputation.
Moreover, our licensees may breach their obligations, or we may be exposed to liability due to our failure or alleged failure to satisfy our obligations. Any such occurrence could have an adverse effect on our business. Licensing intellectual property involves complex legal, business, and scientific issues.
Moreover, our licensees may breach their obligations, or we may be exposed to liability due to our failure or alleged failure to satisfy our obligations under such license agreements. Any such occurrence could have an adverse effect on our business.
Although we have insurance at levels that we believe to be appropriate, this insurance is subject to deductibles and coverage limitations. Our current product liability insurance may not continue to be available to us on acceptable terms, if at all, and, if available, the coverage may not be adequate to protect us against any future product liability claims.
Our current product liability insurance may not continue to be available to us on acceptable terms, if at all, and, if available, the coverage may not be adequate to protect us against any future product liability claims.
We are dependent on our global production and operating network to develop, manufacture, assemble, supply, and service our offerings. A work stoppage, labor shortage, or other production limitation, including import or export restrictions and transportation issues, among others, could occur at our manufacturing facilities or at supplier or customer facilities, and negatively impact our reputation and market position.
A work stoppage, labor shortage, or other production limitation, including import or export restrictions and transportation issues, among others, could occur at our manufacturing facilities or at supplier or customer facilities, and negatively impact our reputation and market position.
The market price for our common stock historically has been highly volatile and could continue to be subject to wide fluctuations in response to various factors.
General Risk Factors The price of our common stock historically has been volatile, which may affect the price at which you could sell any shares of our common stock. The market price for our common stock historically has been highly volatile and could continue to be subject to wide fluctuations in response to various factors.
We may be subject to product liability claims if our products cause, or merely appear to have caused, an injury. Claims may be made by patients, healthcare providers, or others selling our products.
We may be subject to product liability claims if our products cause, or merely appear to have caused, an injury. Claims may be made by patients, healthcare providers, or others selling our products. The risk of product liability claims may also increase if our products are subject to a product recall, whether voluntary or mandatory, or government seizure.
In addition, we may be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting.
In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting. In addition, we may be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting.
If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business, and investors’ views of us. We are required to comply with Section 404 of the Sarbanes-Oxley Act.
Risks Related to Our Securities and to Being a Public Company If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, our ability to operate our business, and investors’ views of us.
Through programs like our Powered by Butterfly™, we expect to continue strategically granting licenses to our intellectual property subject to customary contractual provisions. Like in-licenses, out-licenses are complex, and disputes may arise between us and our licensees.
Through programs like Butterfly Embedded™, we expect to continue strategically granting licenses to our intellectual property subject to customary contractual provisions. However, we may be unable to negotiate such licenses on favorable terms or at all. Additionally, our out-licenses are complex, and disputes may arise between us and our licensees.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including changes in inflation, interest rates, and overall economic conditions and uncertainties.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including changes in inflation, interest rates, and overall economic conditions and uncertainties. We expect our costs of goods sold and other operating expenses to change in the future in line with periodic inflationary changes.
In addition, third-party sourced software components, malicious code, or a critical vulnerability emerging within such software could expose our customers to increased cyber risk. While we have undertaken efforts to mitigate cybersecurity risks, these efforts may not prevent all incidents.
In addition, third-party sourced software components, malicious code, or a critical vulnerability emerging within such software could expose our customers to increased cyber risk.
We could incur substantial expense and harm to our reputation, and our ability to introduce new or enhanced products in a timely manner could be adversely affected. Any interruption in the operations of our manufacturing facilities, or our suppliers’ or customers’ facilities, may impair our ability to deliver products or provide services.
We could incur substantial expense and harm to our reputation, and our ability to introduce new or enhanced products in a timely manner could be adversely affected.
These actions may divert management resources, we may incur substantial costs, and any unfavorable outcome may have a material adverse effect on our financial condition, results of operations, and cash flows. General Risk Factors The price of our common stock historically has been volatile, which may affect the price at which you could sell any shares of our common stock.
These actions may divert management resources, we may incur substantial costs, and any unfavorable outcome may have a material adverse effect on our financial condition, results of operations, and cash flows.
Our current or future products may be subject to product recalls even after receiving FDA clearance or approval. A recall of our products, either voluntarily or at the direction of the FDA, or the discovery of serious safety issues with our products, could have a significant adverse impact on us.
A recall of such products, either voluntarily or at the direction of the FDA, or the discovery of serious safety issues with such products, could have a significant adverse impact on us.
We may experience manufacturing problems or delays that could limit the growth of our revenue or increase our losses. We may encounter unforeseen situations that would result in delays or shortfalls in our production as well as delays or shortfalls caused by our outsourced manufacturing suppliers and by other third-party suppliers who manufacture components for our products.
We may encounter unforeseen situations that would result in delays or shortfalls in our production as well as delays or shortfalls caused by our outsourced manufacturing suppliers and by other third-party suppliers who manufacture components for our products. We are dependent on our global production and operating network to develop, manufacture, assemble, supply, and service our offerings.
The dual class structure of our common stock has the effect of concentrating voting power with our founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.
Because we are a “controlled company” within the meaning of the NYSE rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies. 38 Table of Contents The dual class structure of our common stock has the effect of concentrating voting power with our founder, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control.
If third-party payer payment approval cannot be obtained by patients for procedures that use our products, sales of our products may decline significantly and our customers may reduce or eliminate purchases of our products. The cost-containment measures that healthcare providers are instituting, both in the U.S. and outside of the U.S., could harm our ability to operate profitably.
If third-party payer payment approval cannot be 33 Table of Contents obtained by patients for procedures that use our products, sales of our products may decline significantly and our customers may reduce or eliminate purchases of our products.
For example, GPOs and IDNs have also concentrated purchasing decisions for some customers, which has led to downward pricing pressure for medical device companies. 32 Table of Contents Risks Related to Butterfly’s Intellectual Property If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors would be adversely impacted, and our business may be harmed.
Risks Related to Butterfly’s Intellectual Property If we are unable to protect our intellectual property, our ability to maintain any technological or competitive advantage over our competitors and potential competitors would be adversely impacted, and our business may be harmed.
Our ability to use net operating losses and certain other tax assets to offset future income may be subject to certain limitations. As of December 31, 2024, we had federal net operating loss (“NOL”) carryforwards of approximately $634.8 million, of which approximately $73.7 million will begin to expire in 2031 if not utilized.
As of December 31, 2025, we had federal net operating loss (“NOL”) carryforwards of approximately $700.4 million, of which approximately $73.7 million will begin to expire in 2031 if not utilized. Unused NOLs may be carried forward to offset future taxable income if we achieve profitability in the future, unless such NOLs expire under applicable tax laws.
Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to our systems, networks, products, solutions, services, and data, as well as our reputation, which could adversely affect our business. We manufacture and sell products that rely upon software and computer systems to operate properly and process and store confidential information.
There may be further divergence in the future, including with regard to administrative burdens. 31 Table of Contents Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crimes pose a risk to our systems, networks, products, solutions, services, and data, as well as our reputation, which could adversely affect our business.
Section 404 of the Sarbanes-Oxley Act requires public companies to maintain effective internal control over financial reporting. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting.
We are required to comply with Section 404 of the Sarbanes-Oxley Act. Section 404 of the Sarbanes-Oxley Act requires public companies to maintain effective internal control over financial reporting.
The impact of this healthcare reform legislation, and practices including price regulation, competitive pricing, comparative effectiveness of therapies, technology assessments, and managed care arrangements are uncertain.
The impact of this healthcare reform legislation, and practices including price regulation, competitive pricing, comparative effectiveness of therapies, technology assessments, and managed care arrangements are uncertain. In addition, future federal or state legislative, regulatory, or judicial developments affecting ACA-related programs could change coverage, utilization, and payment dynamics in ways that adversely affect our business.
In addition to agreements pursuant to which we in-license intellectual property, we have in the past, and we will in the future, grant licenses under our intellectual property. For example, we licensed parts of our Ultrasound on a Chip™ and other components of our intellectual property portfolio to Forest Neurotech in 2023, subject to contractual restrictions.
We have in the past, and we will in the future, grant licenses under our intellectual property.
Our organizational documents are governed by Delaware law.
Delaware law and provisions in our certificate of incorporation and bylaws could make a takeover proposal more difficult. Our organizational documents are governed by Delaware law.
Removed
Item 1. Business — Manufacturing — Key Agreements — Manufacture and Supply Agreement with Benchmark Electronics, Inc ”.

… 45 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

28 edited+5 added−4 removed36 unchanged
Biggest changeFurthermore, the new U.S. presidential administration has publicly expressed support for greater restrictions on free trade and the increase of tariffs on goods imported into the United States. If we dedicate significant resources to our international operations and are unable to manage these risks effectively, our business, operating results, and financial condition may be adversely affected.
Biggest changeIf we dedicate significant resources to our international operations and are unable to manage these risks effectively, our business, operating results, and financial condition may be adversely affected. Furthermore, the United States government has increased, and has indicated a willingness to continue to increase, the use of tariffs by the United States to accomplish certain policy goals.
Any number of factors could negatively affect customer retention, growth, and engagement, including: • customers increasingly engaging with competing products; • failure to introduce new and improved products and services; • inability to continue to develop products for mobile devices that customers find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; • changes in customer sentiment about the quality or usefulness of our products and services or concerns related to privacy and data sharing, safety, security, or other factors; • inability to manage and prioritize information to ensure customers are presented with content that is engaging, useful, and relevant to them; • adverse changes in our products that are mandated by legislation or regulatory agencies, both in the United States and internationally; or • technical or other problems preventing us from delivering products or services in a rapid and reliable manner or otherwise affecting the user experience.
Any number of factors could negatively affect our sales to customers and customer retention, growth, and engagement, including: • customers increasingly engaging with competing products; • failure to introduce new and improved products and services; • inability to continue to develop products for mobile devices that customers find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; • changes in customer sentiment about the quality or usefulness of our products and services or concerns related to privacy and data sharing, safety, security, or other factors; • inability to manage and prioritize information to ensure customers are presented with content that is engaging, useful, and relevant to them; • adverse changes in our products that are mandated by legislation or regulatory agencies, both in the United States and internationally; or • technical or other problems preventing us from delivering products or services in a rapid and reliable manner or otherwise affecting the user experience.
We anticipate that we will continue to incur significant losses for at least the next several years as we continue to commercialize our existing products and services and seek to develop and commercialize new products and services. Since inception, we have devoted substantially all of our financial resources to develop our products and related services.
We anticipate that we will continue to incur losses for at least the next several years as we continue to commercialize our existing products and services and seek to develop and commercialize new products and services. Since inception, we have devoted substantially all of our financial resources to develop our products and related services.
Our ability to generate future revenue from product and service sales depends heavily on our success in many areas, including, but not limited to: • launching and commercializing current and future products and services, either directly or in conjunction with one or more collaborators or distributors; • obtaining and maintaining marketing authorization with respect to each of our products and maintaining regulatory compliance throughout relevant jurisdictions; • maintaining clinical and economical value for end-users and customers in changing environments; • addressing any competing technological and market developments; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • establishing and maintaining distribution relationships with third-parties that can provide adequate (in amount and quality) infrastructure to support market demand for our products; and • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.
Our ability to generate future revenue from product and service sales depends heavily on our success in many areas, including, but not limited to: • launching and commercializing current and future products and services, either directly or in conjunction with one or more collaborators or distributors; • obtaining and maintaining marketing authorization with respect to each of our products and maintaining regulatory compliance throughout relevant jurisdictions; • maintaining clinical and economical value for end-users and customers in changing environments; 20 Table of Contents • addressing any competing technological and market developments; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • establishing and maintaining distribution relationships with third-parties that can provide adequate (in amount and quality) infrastructure to support market demand for our products; and • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how.
Medical device development is costly and involves continual technological change, which may render our current or future products obsolete. The market for point-of-care medical devices is characterized by rapid technological change, medical advances, and evolving industry standards.
Medical device development is costly and involves continual technological change, which may render our current or future medical devices obsolete. The market for point-of-care medical devices is characterized by rapid technological change, medical advances, and evolving industry standards.
Our business is dependent upon the success of our sales and customer acquisition and retention strategies, and our marketing efforts are focused on developing a strong reputation with healthcare providers and increasing awareness of our products and services.
We are dependent upon the success of our sales and customer acquisition and retention strategies. Our business is dependent upon the success of our sales and customer acquisition and retention strategies, and our marketing efforts are focused on developing a strong reputation with healthcare providers and increasing awareness of our products and services.
We have limited experience operating internationally, and engaging in international business involves a number of difficulties and risks, including: • required compliance with foreign regulatory requirements and laws, including regulations and laws relating to patient data and medical devices; • trade relations among the United States and those foreign countries in which our current or future customers, distributors, manufacturers, and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements, whether imposed by the United States or such foreign countries, in particular the strained trade relations between United States and China since 2018; • difficulties protecting, procuring, or enforcing intellectual property rights internationally; • required compliance with anti-bribery laws, such as the FCPA and the UK Bribery Act of 2010, data privacy requirements, labor laws, and anti-competition regulations; • laws regulating the confidentiality of sensitive personal information and the circumstances under which such information may be released and/or collected; 22 Table of Contents • longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability and war or other military conflict, including the ongoing conflict occurring in Ukraine, which could have a material adverse impact on our sales in Europe and elsewhere; and • potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers.
We have limited experience operating internationally, and engaging in international business involves a number of difficulties and risks, including: • required compliance with foreign regulatory requirements and laws, including regulations and laws relating to patient data and medical devices; • trade relations among the United States and those foreign countries in which our current or future customers, distributors, manufacturers, and suppliers have operations, including protectionist measures such as tariffs and import or export licensing requirements, whether imposed by the United States or such foreign countries, in particular the strained trade relations between United States and China since 2018; • difficulties protecting, procuring, or enforcing intellectual property rights internationally; • required compliance with anti-bribery laws, such as the FCPA and the UK Bribery Act of 2010, data privacy requirements, labor laws, and anti-competition regulations; • laws regulating the confidentiality of sensitive personal information and the circumstances under which such information may be released and/or collected; • longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability and war or other military conflict, including the ongoing conflicts occurring in Ukraine and the Middle East, which could have a material adverse impact on our sales in Europe and elsewhere; and • potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements, and other trade barriers.
If we fail to expand the use of our products and services in a timely manner, we may not be able to expand our market share or to grow our revenue. Our financial performance will be substantially dictated by our success in adding, retaining, and engaging active users of our products.
If we fail to expand the use of our products and services in a timely manner, we may not be able to expand our market share or to grow our revenue. Our financial performance is substantially dictated by our success in adding, retaining, and engaging active users of our products.
These legal proceedings may involve claims brought by current or former employees, government agencies, or others, through private actions, class actions, administrative proceedings, or other litigation. These legal proceedings may involve allegations of illegal, unfair, or inconsistent employment practices, including wage and hour, discrimination, harassment, wrongful termination, retaliation, violations of law, or other concerns.
These legal proceedings may involve claims brought by current or former employees, government agencies, or others, through private actions, class actions, 23 Table of Contents administrative proceedings, or other litigation. These legal proceedings may involve allegations of illegal, unfair, or inconsistent employment practices, including wage and hour, discrimination, harassment, wrongful termination, retaliation, violations of law, or other concerns.
If TSMC is unable to supply components or devices, our business would be harmed. 23 Table of Contents We entered into an FSA with TSMC, under which TSMC agreed to manufacture, and we committed to purchase, a minimum volume of the wafers used for the semiconductor chips in our probes.
If TSMC is unable to supply components or devices, our business would be harmed. We entered into an FSA with TSMC, under which TSMC agreed to manufacture, and we committed to purchase, a minimum volume of the wafers used for the semiconductor chips in our probes.
To date, utilization of our software has varied across different medical specialties, but 21 Table of Contents usage does not directly correlate to renewal of subscriptions, as different medical specialties interact with the device in different ways depending on their clinical focus and routine.
To date, utilization of our software has varied across different medical specialties, but usage does not directly correlate to renewal of subscriptions, as different medical specialties interact with the device in different ways depending on their clinical focus and routine.
We expect our development path will be directed at accessing and optimizing our technology for use in various care settings, potentially including home scanning and or wearable patient technology, subject to appropriate regulatory authorization. We face risks associated with launching such new products.
We expect our development path will primarily be directed at accessing and optimizing our technology for use in various care settings, potentially including home scanning and wearable patient technology, subject to our receipt of appropriate regulatory authorization. We face risks associated with launching such new products.
We are faced with the risk that the marketplace will not be receptive to our products and services over competing products, including traditional cart-based ultrasound devices used in hospitals, imaging centers, and physicians’ offices, 20 Table of Contents and that we will be unable to compete effectively.
We are faced with the risk that the marketplace will not be receptive to our products and services over competing products, including traditional cart-based ultrasound devices used in hospitals, imaging centers, and physicians’ offices, and that we will be unable to compete effectively.
During the years ended December 31, 2024, 2023, and 2022, approximately 23%, 21%, and 30%, respectively, of our total revenue was generated from customers located outside of the United States. We believe that a substantial percentage of our future revenue will come from international sources as we expand our sales and marketing opportunities internationally.
During the years ended December 31, 2025, 2024, and 2023, approximately 21%, 23%, and 21%, respectively, of our total revenue was generated from customers located outside of the United States. We believe that a substantial percentage of our future revenue will continue to come from international sources as we expand our sales and marketing opportunities internationally.
As our business model is predicated on both hardware and software sales, there is risk that any decline in software renewal rates will adversely impact our business.
As our business model is predicated on sales of both hardware and software and other services, there is risk that any decline in software renewal rates will adversely impact our business.
Factors that could affect our ability to successfully commercialize our current products and services and to commercialize any potential future products and services include: • challenges of developing (or acquiring externally-developed) technology solutions that are adequate and competitive in meeting the requirements of next-generation design challenges; and • dependence upon physicians’ and other healthcare practitioners’ acceptance of our products.
Factors that could affect our ability to successfully commercialize our current products and services and to commercialize any potential future products and services include: • challenges of developing (or acquiring externally-developed) technology solutions that are adequate and competitive in meeting the requirements of next-generation design challenges; • challenges of expanding our business to include licenses of our Ultrasound-on-Chip™ technology; and • dependence upon physicians’ and other healthcare practitioners’ acceptance of our products.
We have chosen to engage a single supplier, TSMC, a semiconductor manufacturer, to manufacture and supply all of the wafers used to create the semiconductor chips in our probes. See “ Item 1. Business — Manufacturing — Key Agreements — Foundry Service Agreement with Taiwan Semiconductor Manufacturing Company Limited ”.
We have chosen to engage a single supplier, TSMC, a semiconductor manufacturer, to manufacture and supply all of the wafers used to create the semiconductor chips incorporating our Ultrasound-on-Chip™ technology used in our medical devices. See “ Item 1. Business — Manufacturing — Key Agreements — Foundry Service Agreement with Taiwan Semiconductor Manufacturing Company Limited ”.
We have developed, and we are engaged in the development of, ultrasound imaging solutions using our ultrasound-on-a-semiconductor-chip technology. We are commercializing Butterfly iQ+ and Butterfly iQ3 point-of-care ultrasound imaging devices. Our success will depend on the acceptance of our products and services in the U.S. and international healthcare markets.
We have developed, and we are engaged in the development of, ultrasound imaging solutions using our Ultrasound-on-Chip™ technology. We are commercializing Butterfly iQ+ and Butterfly iQ3 point-of-care ultrasound imaging devices. Our business also includes licensing our Ultrasound-on-Chip™ technology to third parties. Our success will depend on the acceptance of our products and services in the U.S. and international healthcare markets.
If TSMC fails to fulfill its obligations under its existing contractual arrangements with us or does not perform satisfactorily, or if this relationship is terminated for other reasons, our ability to source our devices would be negatively and adversely affected. In addition, our obligation to purchase a minimum volume from TSMC may adversely affect our cash flows.
If TSMC fails to fulfill its obligations under its existing contractual arrangements with us or does not perform satisfactorily, or if this relationship is terminated for other reasons, our ability to source our devices would be negatively and adversely affected.
We may be unable to achieve any or all of these goals. Risks Related to Our Business and Operations Our success depends upon market acceptance of our products and services, our ability to develop and commercialize existing and new products and services and generate revenues, and our ability to identify new markets for our technology.
Risks Related to Our Business and Operations Our success depends upon market acceptance of our products and services, our ability to develop and commercialize existing and new products and services and generate revenues, and our ability to identify new markets for our technology.
We may encounter significant competition across our existing and future planned products and services and in each market in which we sell or plan to sell our products and services from various companies, many of which have greater financial and marketing resources than we do. Our primary competitors include the top five manufacturers of legacy cart-based incumbent ultrasound devices.
We may encounter significant competition across our existing and future planned products and services and in each market in which we sell or plan to sell our products and services from various companies, many of which have greater financial and marketing resources than we do.
We expect to generate an increasing portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition.
The expenses or losses associated with unsuccessful product development or launch activities or lack of market acceptance of our new products could adversely affect our business or financial condition. 22 Table of Contents We expect to generate an increasing portion of our revenue internationally in the future and may become subject to various additional risks relating to our international activities, which could adversely affect our business, operating results and financial condition.
If we are required to buy back from TSMC any unused raw wafers pursuant to the FSA, our cash flows may be adversely impacted. Geopolitical tensions between Taiwan and China have risen steadily in recent months.
In 2025, we agreed to buy back certain unused raw wafers from TSMC that we did not expect to use in future manufacturing. If we are required to buy back from TSMC any additional unused raw wafers pursuant to the FSA, our cash flows may be adversely impacted. Geopolitical tensions continue to exist between Taiwan and China.
Since commercialization of the Butterfly iQ, we have also engaged in the continued development and sales of our enterprise software. We have financed our operations primarily through the issuance of equity securities and convertible debt. We have incurred net losses of $72.5 million, $133.7 million, and $168.7 million in the years ended December 31, 2024, 2023, and 2022, respectively.
We have financed our operations primarily through the issuance of equity securities and convertible debt. We have incurred net losses of $77.1 million, $72.5 million, and $133.7 million in the years ended December 31, 2025, 2024, and 2023, respectively. Our accumulated deficit as of December 31, 2025 was $879.2 million.
Our accumulated deficit as of December 31, 2024 was $802.1 million. We do not know whether or when we will become profitable. Our ability to generate revenue and achieve profitability depends upon our ability to accelerate the commercialization of our products and service offerings in line with the demand from current and future customers and our aggressive business strategy.
Our ability to generate revenue and achieve profitability depends upon our ability to accelerate the commercialization of our products and service offerings in line with the demand from current and future customers and our aggressive business strategy. We may be unable to achieve any or all of these goals.
In addition, many of our competitors are well-established manufacturers with significant resources and may engage in aggressive marketing tactics. Competitors may also possess the ability to commercialize additional lines of products, bundle products, or offer higher discounts and incentives to customers in order to gain a competitive advantage.
Competitors may also possess the ability to commercialize additional lines of products, bundle products, or offer higher discounts and incentives to customers in order to gain a competitive advantage. If the prices of competing products are lowered as a result, we may not be able to compete effectively.
If that happens, the market price of our common stock could decline, and stockholders may lose all or part of their investment.
If that happens, the market price of our common stock could decline, and stockholders may lose all or part of their investment. Unless the context otherwise requires, references in this section to “we,” “us,” “our,” and the “Company” refer to Butterfly Network, Inc. and its subsidiaries.
Unless the context otherwise requires, references in this section to “we,” “us,” “our,” and the “Company” refer to Butterfly Network, Inc. and its subsidiaries. 19 Table of Contents Risks Related to Our Financial Condition and Capital Requirements We have a limited operating history on which to assess the prospects for our business, we have generated limited revenue from sales of our products, and we have incurred losses since inception.
Risks Related to Our Financial Condition and Capital Requirements We have a limited history of generating revenue from sales of our products, and we have incurred significant losses since inception.
Removed
We have financed our operations primarily through the issuance of equity and convertible debt securities. We have generated limited revenue from the sale of our products and services to date and have incurred significant losses.
Added
We launched our first product, Butterfly iQ, in 2018, our second product, Butterfly iQ+, in 2020, and our third product, Butterfly iQ3, in 2024. Since commercialization of the Butterfly iQ, we have also engaged in the continued development and sales of our enterprise software. Our business also includes licensing our Ultrasound-on-Chip™ technology to third parties.
Removed
We have incurred significant losses since inception. As such, you cannot rely upon our historical operating performance to make an investment decision about us. Since our inception, we have engaged in R&D activities and launched our first product, Butterfly iQ, in 2018, our second product, Butterfly iQ+, in 2020, and our third product, Butterfly iQ3, in 2024.
Added
Additionally, in 2025, approximately 11% of our revenue was generated by sales to a single customer. We do not know whether or when we will become profitable.
Removed
If the prices of competing products are lowered as a result, we may not be able to compete effectively. We will be dependent upon the success of our sales and customer acquisition and retention strategies.
Added
Our primary competitors for our point-of-care medical devices include the top five manufacturers of legacy cart-based incumbent ultrasound devices. 21 Table of Contents In addition, many of our competitors are well-established manufacturers with significant resources and may engage in aggressive marketing tactics.
Removed
The expenses or losses associated with unsuccessful product development or launch activities or lack of market acceptance of our new products could adversely affect our business or financial condition.
Added
Such tariffs and any countermeasures could increase the cost of raw materials and components necessary for our operations, disrupt our global supply chain, and create additional operational challenges. We may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers.
Added
While tariffs and other trade measures imposed have not had a significant impact on our business or results of operations, we cannot predict further developments, and such existing or future tariffs could have a material adverse effect on our results of operations, financial position, and cash flows.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+0 added−2 removed11 unchanged
Biggest changeWhen appropriate, cyber or information security incidents would be escalated by the CISO to our executive leadership team and/or our disclosure committee. On a regular basis, the CISO also updates the executive management team on developments within the cybersecurity sphere.
Biggest changeThe Information Security Committee meets periodically and as circumstances warrant to discuss and monitor prevention, detection, and remediation of risks from cybersecurity threats. When appropriate, cyber or information security incidents would be escalated by the CISO to our executive leadership team and/or our disclosure committee.
Other members of the committee include representation from information technology, quality, product, operations, sales, and compliance as well as advisory support from internal audit. Our CISO, working with his team and the Information Security Committee, has primary responsibility for assessing and managing our cybersecurity threat management program.
Other members of the committee include representation from information technology, quality, product, operations, sales, and compliance as well as advisory support from internal audit. Our CISO, working with his team (the “Information Security Team”) and the Information Security Committee, has primary responsibility for assessing and managing our cybersecurity threat management program.
Risk Management Strategy and Governance Under the ultimate direction of our Chief Executive Officer, our Information Security Committee has primary responsibility for overseeing our management of cybersecurity risks. It is chaired by our Chief Information Security Officer ("CISO") who reports directly to our Chief Technology Officer.
Risk Management Strategy and Governance Under the ultimate direction of our Chief Executive Officer, our Information Security Committee has primary responsibility for overseeing our management of cybersecurity risks. It is chaired by our Chief Information Security Officer (“CISO”) who reports directly to our Chief Technology Officer.
The team also regularly monitors our internal network and our customer-facing network to identify security risks. In addition, the team has completed several assessments and threat modeling tabletop exercises, based on “what-if” scenarios.
The team also regularly monitors our internal network and our 42 Table of Contents customer-facing network to identify security risks. In addition, the team has completed several assessments and threat modeling tabletop exercises, based on “what-if” scenarios.
Item 1C. CYBERSECURITY Butterfly Network, Inc. uses, stores, and processes data for and about our customers, employees, partners, and suppliers. We have implemented a cybersecurity risk management program that is designed to identify, assess, and mitigate risks from cybersecurity threats to this data and our systems.
Item 1C. CYBERSECURITY We use, store, and process data for and about our customers, employees, partners, and suppliers. We have implemented a cybersecurity risk management program that is designed to identify, assess, and mitigate risks from cybersecurity threats to this data and our systems.
The current CISO has more than 20 years of experience in building and leading security, risk management, and compliance organizations across several industries, including med-tech, healthcare, and financial services, and many of these companies include highly-regulated Fortune 500 companies.
The current CISO has more than 20 years of experience in building and leading security, risk management, and compliance organizations across several industries, including med-tech, healthcare, and financial services, and many of these companies include highly-regulated Fortune 500 companies. The current CISO is an expert in NIST 800-53 (Rev-5), ISO27001, and other national and international security risk management disciplines.
The Risk Assessment consists of: • Listing the vulnerabilities company assets are exposed to; • Identifying the threats that may exploit such vulnerabilities; • Calculating inherent risk rating based on impact and exploitability; and • Calculating residual risk by assessing mitigating controls . 41 Table of Contents
Annually, the Information Security Team conducts a risk assessment that is informed by industry standards. The Risk Assessment consists of: • Listing the vulnerabilities company assets are exposed to; • Identifying the threats that may exploit such vulnerabilities; • Calculating inherent risk rating based on impact and exploitability; and • Calculating residual risk by assessing mitigating controls.
The Board of Directors has delegated oversight of the Company’s cybersecurity program to the Audit Committee of the Board of Directors.
On a regular basis, the CISO also updates the executive management team on developments within the cybersecurity sphere. The Board of Directors has delegated oversight of the Company’s cybersecurity program to the Audit Committee of the Board of Directors.
Removed
The current CISO is an expert in NIST 800-53 (Rev-5), ISO27001, and other national and international security risk management disciplines. 40 Table of Contents The Information Security Committee meets periodically and as circumstances warrant to discuss and monitor prevention, detection, and remediation of risks from cybersecurity threats.
Removed
Annually, the security team conducts a risk assessment that is informed by industry standards.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeFor more information about our legal proceedings and this item, see Note 17, “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements in Part II, Item 8 “ Financial Statements and Supplementary Data ” of this Annual Report on Form 10-K, which is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeFor more information about our legal proceedings and this item, refer to the “Contingencies” section in Note 17, “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements in Part II, Item 8 “ Financial Statements and Supplementary Data ” of this Annual Report on Form 10-K, which is incorporated herein by reference. Item 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−2 removed0 unchanged
Biggest changeStockholders As of February 13, 2025, the Company had 216,496,214 shares of Class A common stock issued and outstanding held of record by 54 holders, 26,426,937 shares of Class B common stock issued and outstanding held of record by six holders.
Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock is traded on the NYSE under the symbol “BFLY”. 43 Table of Contents Stockholders As of February 19, 2026, the Company had 228,205,930 shares of Class A common stock issued and outstanding held of record by 46 holders and 26,426,937 shares of Class B common stock issued and outstanding held of record by ten holders.
These numbers of holders of record also do not include holders whose shares or warrants may be held in trust by other entities. Dividends We have never declared or paid cash dividends on our capital stock. We intend to retain all of our future earnings to finance the growth and development of our business.
These numbers of holders of record also do not include holders whose shares may be held in trust by other entities. Dividends We have never declared or paid cash dividends on our capital stock. We intend to retain all of our future earnings to finance the growth and development of our business.
We believe the actual numbers of holders of our Class A common stock and public warrants are larger than the numbers of holders of record as many of our Class A common stock and public warrants are held by brokers and other institutions on behalf of an indeterminate number of beneficial owners.
We believe the actual numbers of holders of our Class A common stock are larger than the numbers of holders of record as many of our shares of Class A common stock are held by brokers and other institutions on behalf of an indeterminate number of beneficial owners.
We do not intend to pay cash dividends to our stockholders in the foreseeable future. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings Not applicable.
We do not intend to pay cash dividends to our stockholders in the foreseeable future. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings None. Issuer Purchases of Equity Securities None.
Issuer Purchases of Equity Securities Not applicable. 42 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2025 Annual Meeting of Stockholders (the “Proxy Statement”) and is incorporated herein by reference to Item 12 of Part II of this Annual Report on Form 10-K.
Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans will be included in our definitive proxy statement to be filed with the SEC with respect to our 2026 Annual Meeting of Stockholders (the “Proxy Statement”) and is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K.
Removed
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock and warrants to purchase Class A common stock are traded on the NYSE under the symbols “BFLY” and “BFLY WS” respectively.
Removed
As of February 13, 2025, the Company had 13,799,357 public warrants held of record by one holder and 6,853,333 private placement warrants issued in connection with Longview’s initial public offering held of record by six holders, with each warrant exercisable for one share of Class A common stock at a price of $11.50 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

48 edited+15 added−16 removed53 unchanged
Biggest changeYear ended December 31, 2024 2023 2022 (in thousands) Dollars % of revenue Dollars % of revenue Dollars % of revenue Revenue: Product $ 54,200 66.1 % $ 40,036 60.8 % $ 50,263 68.5 % Software and other services 27,856 33.9 25,864 39.2 23,127 31.5 Total revenue 82,056 100.0 65,900 100.0 73,390 100.0 Cost of revenue: Product 24,380 29.7 40,655 61.7 26,804 36.5 Software and other services 8,845 10.8 8,389 12.7 7,126 9.7 Total cost of revenue 33,225 40.5 49,044 74.4 33,930 46.2 Gross profit 48,831 59.5 16,856 25.6 39,460 53.8 Operating expenses: Research and development 37,800 46.1 55,616 84.4 88,044 120.0 Sales and marketing 41,567 50.7 39,073 59.3 59,494 81.1 General and administrative 39,810 48.5 49,613 75.3 77,596 105.7 Other 4,065 5.0 18,164 27.6 7,346 10.0 Total operating expenses 123,242 150.3 162,466 246.6 232,480 316.8 Loss from operations (74,411) (90.8) (145,610) (221.0) (193,020) (263.0) Interest income 5,020 6.1 7,450 11.3 3,384 4.6 Interest expense (1,261) (1.5) — — (2) — Change in fair value of warrant liabilities (1,859) (2.3) 4,544 6.9 20,859 28.4 Other income (expense), net (13) — (2) — 98 0.1 Loss before provision for income taxes (72,524) (88.5) (133,618) (202.8) (168,681) (229.9) Provision (benefit) for income taxes (32) — 82 0.1 42 0.1 Net loss and comprehensive loss $ (72,492) (88.5) $ (133,700) (202.9) $ (168,723) (230.0) Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year ended December 31, (in thousands) 2024 2023 Change % Change Product $ 54,200 $ 40,036 $ 14,164 35.4 % Software and other services 27,856 25,864 1,992 7.7 $ 82,056 $ 65,900 $ 16,156 24.5 % 46 Table of Contents Product revenue increased by $14.2 million, or 35.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Biggest changeThe accounting policies are described in Note 2 “Summary of Significant Accounting Policies” in our consolidated financial statements included in this Annual Report on Form 10-K. 47 Table of Contents Year ended December 31, 2025 2024 2023 (in thousands) Dollars % of total revenue Dollars % of total revenue Dollars % of total revenue Revenue: Product $ 63,443 65.0 % $ 54,200 66.1 % $ 40,036 60.8 % Software and other services 34,167 35.0 27,856 33.9 25,864 39.2 Total revenue 97,610 100.0 82,056 100.0 65,900 100.0 Cost of revenue: Product 44,065 45.1 24,380 29.7 40,655 61.7 Software and other services 7,811 8.0 8,845 10.8 8,389 12.7 Total cost of revenue 51,876 53.1 33,225 40.5 49,044 74.4 Gross profit 45,734 46.9 48,831 59.5 16,856 25.6 Operating expenses: Research and development 36,262 37.1 37,800 46.1 55,616 84.4 Sales and marketing 45,876 47.0 41,567 50.7 39,073 59.3 General and administrative 39,235 40.2 39,810 48.5 49,613 75.3 Other 10,776 11.0 4,065 5.0 18,164 27.6 Total operating expenses 132,149 135.4 123,242 150.2 162,466 246.5 Loss from operations (86,415) (88.5) (74,411) (90.7) (145,610) (221.0) Interest income 5,911 6.1 5,020 6.1 7,450 11.3 Interest expense (1,490) (1.5) (1,261) (1.5) — — Change in fair value of warrant liabilities 2,272 2.3 (1,859) (2.3) 4,544 6.9 Other income (expense), net 2,768 2.8 (13) 0.0 (2) 0.0 Loss before provision for income taxes (76,954) (78.8) (72,524) (88.4) (133,618) (202.8) Provision (benefit) for income taxes 110 0.1 (32) 0.0 82 0.1 Net loss and comprehensive loss $ (77,064) (79.0) % $ (72,492) (88.3) % $ (133,700) (202.9) % Comparison of the Years Ended December 31, 2025 and 2024 Revenue Year ended December 31, (in thousands) 2025 2024 Change % Change Product $ 63,443 $ 54,200 $ 9,243 17.1 % Software and other services 34,167 27,856 6,311 22.7 $ 97,610 $ 82,056 $ 15,554 19.0 % Product revenue increased by $9.2 million, or 17.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
We estimate variable consideration based on the individual contract characteristics or may apply a portfolio approach depending on the circumstances. 52 Table of Contents Stock-based compensation Our stock-based compensation program includes stock option grants and restricted stock unit ("RSU") grants to our employees, directors, and consultants as well as an employee stock purchase plan ("ESPP").
We estimate variable consideration based on the individual contract characteristics or may apply a portfolio approach depending on the circumstances. 54 Table of Contents Stock-based compensation Our stock-based compensation program includes stock option grants and restricted stock unit ("RSU") grants to our employees, directors, and consultants as well as an employee stock purchase plan ("ESPP").
These other expenses primarily consist of employee severance and benefits costs related to our reductions in force and business transformation initiative, litigation costs, and legal settlements. Results of Operations We operate as a single reportable segment to reflect the way our chief operating decision maker reviews and assesses the performance of the business.
These other expenses primarily consist of employee severance and benefits costs related to reductions in force, business transformation initiatives, litigation costs, and legal settlements. Results of Operations We operate as a single reportable segment to reflect the way our chief operating decision maker reviews and assesses the performance of the business.
We capitalize manufacturing overhead expenditures as part of inventory costs. Capitalized costs primarily include management’s best estimate and allocation of the direct labor, materials costs, and other overhead costs incurred related to 53 Table of Contents inventory acquired or produced but not sold during the respective period.
We capitalize manufacturing overhead expenditures as part of inventory costs. Capitalized costs primarily include management’s best estimate and allocation of the direct labor, materials costs, and other overhead costs incurred related to 55 Table of Contents inventory acquired or produced but not sold during the respective period.
Cost of revenue Year ended December 31, (in thousands) 2024 2023 Change % Change Product $ 24,380 $ 40,655 $ (16,275) (40.0) % Software and other services 8,845 8,389 456 5.4 $ 33,225 $ 49,044 $ (15,819) (32.3) % Percentage of revenue 40.5 % 74.4 % Cost of product revenue decreased by $16.3 million, or 40.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cost of revenue Year ended December 31, (in thousands) 2024 2023 Change % Change Product $ 24,380 $ 40,655 $ (16,275) (40.0) % Software and other services 8,845 8,389 456 5.4 $ 33,225 $ 49,044 $ (15,819) (32.3) % Percentage of revenue 40.5 % 74.4 % 50 Table of Contents Cost of product revenue decreased by $16.3 million, or 40.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cash flows provided by investing activities Net cash provided by investing activities decreased by $73.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to the sale of our marketable securities in 2023.
Net cash provided by (used in) investing activities Net cash provided by (used in) investing activities decreased by $73.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to the sale of our marketable securities in 2023.
We plan to continue to invest additional resources to expand and further develop our SaaS and other service offerings which will be reflected in cost of revenue as amortization expense. Research and development Research and development expenses primarily consist of personnel costs and benefits, professional services, facilities-related expenses and depreciation, fabrication services, and software costs.
We plan to continue to invest additional resources 46 Table of Contents to expand and further develop our SaaS and other service offerings which will be reflected in cost of revenue as amortization expense. Research and development Research and development expenses primarily consist of personnel costs and benefits, professional services, facilities-related expenses and depreciation, fabrication services, and software costs.
Sales and marketing Year ended December 31, (in thousands) 2024 2023 Change % Change Sales and marketing $ 41,567 $ 39,073 $ 2,494 6.4 % Percentage of revenue 50.7 % 59.3 % 47 Table of Contents Sales and marketing expenses increased by $2.5 million, or 6.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Sales and marketing Year ended December 31, (in thousands) 2024 2023 Change % Change Sales and marketing $ 41,567 $ 39,073 $ 2,494 6.4 % Percentage of revenue 50.7 % 59.3 % Sales and marketing expenses increased by $2.5 million, or 6.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The decrease was primarily due to $2.0 million of payments made in connection with financing activities in 2024 that did not occur in 2023, partially offset by $0.5 million of proceeds from our employee stock purchase plan that began in 2024.
The decrease was primarily due to $2.0 million of payments made in 53 Table of Contents connection with financing activities in 2024 that did not occur in 2023, partially offset by $0.5 million of proceeds from our employee stock purchase plan that began in 2024.
General and administrative General and administrative expenses primarily consist of personnel costs and benefits, insurance, patent fees, software costs, facilities-related expenses, and outside services. Outside services consist of professional services, legal fees and other professional fees. 45 Table of Contents Other Operating expenses classified as other are expenses which we do not consider representative of our ongoing operations.
General and administrative General and administrative expenses primarily consist of personnel costs and benefits, insurance, patent fees, software costs, facilities-related expenses, and outside services. Outside services consist of professional services, legal fees and other professional fees. Other Operating expenses classified as other are expenses which we do not consider representative of our ongoing operations.
This increase was primarily driven by higher enterprise software revenue and increased licensing revenue from our Butterfly Garden and Powered by Butterfly partnerships, partially offset by lower renewals of individual subscriptions. Enterprise as a percentage of software revenue increased by approximately 5 percentage points year-over-year.
This increase was primarily driven by higher enterprise software revenue and increased licensing revenue from our Butterfly Embedded™ partnerships, partially offset by lower renewals of individual subscriptions. Enterprise as a percentage of software revenue increased by approximately 5 percentage points year-over-year.
Cost of subscription revenue increased by $0.5 million, or 5.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was primarily driven by higher software amortization expenses but was partially offset by lower cloud hosting costs.
Cost of software and other services revenue increased by $0.5 million, or 5.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was primarily driven by higher software amortization expenses but was partially offset by lower cloud hosting costs.
Comparison of the period for the years ended December 31, 2023 and 2022 Cash flows used in operating activities Net cash used in operating activities represents the cash receipts and disbursements related to our activities other than investing and financing activities.
Comparison of the period for the years ended December 31, 2024 and 2023 Net cash used in operating activities Net cash used in operating activities represents the cash receipts and disbursements related to our activities other than investing and financing activities.
Cash flows provided by financing activities Net cash provided by financing activities decreased by $1.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Net cash provided by (used in) financing activities Net cash provided by (used in) financing activities decreased by $1.7 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Butterfly developed ultrasound devices that can perform whole-body imaging in a single handheld probe because it is powered by our proprietary semiconductor technology instead of piezoelectric crystals.
Butterfly developed ultrasound devices that can perform whole-body imaging in a single handheld probe because they are powered by our proprietary semiconductor technology instead of piezoelectric crystals.
Cost of revenue Cost of product revenue consists of product costs including manufacturing costs, personnel costs and benefits, inbound freight, packaging, warranty replacement costs, payment processing fees, and inventory obsolescence and write-offs.
Cost of revenue Cost of product revenue consists of product costs including manufacturing costs, personnel costs and benefits, inbound freight, packaging, warranty replacement costs, royalty fees for licensed intellectual property, payment processing fees, and inventory obsolescence and write-offs.
The process of preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expense during the period.
GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenue and expense during the period.
Generally, we have identified the following performance obligations can be promised in our contracts with customers: • Hardware devices and accessories; • Software subscriptions, including renewal subscriptions, which represent an obligation to provide the customer with ongoing access to our cloud-hosted software applications on a continuous basis throughout the subscription period; • Implementation and integration services; • Extended warranties; and • SDKs, either perpetual or term-based.
Generally, we have identified the following performance obligations can be promised in our contracts with customers: • Hardware devices and accessories; • Software subscriptions, including renewal subscriptions, which represent an obligation to provide the customer with ongoing access to our cloud-hosted software applications on a continuous basis throughout the subscription period; • Out-licensing arrangements of our intellectual property for novel technologies in non-competitive markets and related research and development services; • Implementation and integration services; • Extended warranties; and • SDKs, either perpetual or term-based.
We expect cash provided by historical financing activities will continue to be our primary source of funds to support operating needs and capital expenditures for the foreseeable future. Net cash used in operating activities decreased by $70.3 million, or 41.6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
We expect cash provided by historical financing activities will continue to be our primary source of funds to support operating needs and capital expenditures for the foreseeable future. Net cash used in operating activities decreased by $29.0 million, or 69.5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Cash Flows The following table summarizes our sources and uses of cash for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (in thousands) 2024 2023 2022 Net cash used in operating activities $ (41,707) $ (98,820) $ (169,115) Net cash provided by (used in) investing activities (2,658) 70,414 (93,779) Net cash provided by (used in) financing activities (1,495) 228 2,881 Net decrease in cash, cash equivalents, and restricted cash $ (45,860) $ (28,178) $ (260,013) 50 Table of Contents Comparison of the period for the years ended December 31, 2024 and 2023 Cash flows used in operating activities Net cash used in operating activities represents the cash receipts and disbursements related to our activities other than investing and financing activities.
Cash Flows The following table summarizes our sources and uses of cash for the years ended December 31, 2025, 2024 and 2023: Year ended December 31, (in thousands) 2025 2024 2023 Net cash used in operating activities $ (12,700) $ (41,707) $ (98,820) Net cash provided by (used in) investing activities (3,348) (2,658) 70,414 Net cash provided by (used in) financing activities 77,762 (1,495) 228 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 61,714 $ (45,860) $ (28,178) 52 Table of Contents Comparison of the period for the years ended December 31, 2025 and 2024 Net cash used in operating activities Net cash used in operating activities represents the cash receipts and disbursements related to our activities other than investing and financing activities.
To date, we have invested in building out our commercial footprint, with the ultimate goal of growing adoption at large-scale healthcare systems and driving awareness of the usability of ultrasound.
The quarterly revenue mix may be impacted by the timing of device sales. To date, we have invested in building out our commercial footprint, with the ultimate goal of growing adoption at large-scale healthcare systems and driving awareness of the usability of ultrasound.
We view software and other services mix as a key indicator of the profitability of our business, and thus we believe that this measure is useful to investors. Software and other services mix decreased by 5.3 percentage points, to 33.9% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We view software and other services mix as a key indicator of the profitability of our business, and thus we believe that this measure is useful to investors. 45 Table of Contents Software and other services mix increased by 1.1 percentage points, to 35.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Liquidity and Capital Resources Since our inception, our primary sources of liquidity are cash flows from operations and proceeds from stock issuances and the Business Combination. Our primary uses of liquidity are operating expenses, working capital requirements, and capital expenditures. During the year ended December 31, 2024, the Company utilized $45.9 million of cash and cash equivalents.
Liquidity and Capital Resources Since our inception, our primary sources of liquidity are cash flows from operations and proceeds from stock issuances and the Business Combination. Our primary uses of liquidity are operating expenses, working capital requirements, and capital expenditures.
SaaS subscriptions, Support, and term-based SDKs are generally related to stand-ready obligations and are recognized ratably over time. Over time, as adoption of our devices increases through further market penetration and as practitioners in the Butterfly network continue to use our devices, we expect our annual revenue mix to shift more toward software and other services.
Over time, as adoption of our devices increases through further market penetration, as practitioners in the Butterfly network continue to use our devices, and as our Butterfly Embedded™ collaborations continue to grow and develop, we expect our annual revenue mix to shift more toward software and other services.
We have restricted cash of $4.0 million as of December 31, 2024 to secure a letter of credit for one of our leases, which is expected to be maintained as a security deposit for the duration of the lease. Our material cash requirements include contractual obligations with third parties for office leases, technology licensing agreements, and inventory supply agreements.
As of December 31, 2025, we have restricted cash of $4.0 million to secure a letter of credit for one of our leases, which is expected to be maintained as a security deposit for the duration of the lease.
Our software and related service offerings include SaaS subscriptions, product support and maintenance (“Support”), and software development kits ("SDKs") which may be perpetual or term-based. SaaS subscriptions include licenses for teams and individuals as well as enterprise-level subscriptions. For sales of products and perpetual SDKs, revenue is recognized at a point in time upon transfer of control to the customer.
Our software and related service offerings include SaaS subscriptions, product support and maintenance (“Support”), software development kits ("SDKs") which may be perpetual or term-based, and partnership support services. SaaS subscriptions include licenses for teams and individuals as well as enterprise-level subscriptions.
Other Year ended December 31, (in thousands) 2024 2023 Change % Change Other $ 4,065 $ 18,164 $ (14,099) (77.6) % Percentage of revenue 5.0 % 27.6 % Other decreased by $14.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Other Year ended December 31, (in thousands) 2025 2024 Change % Change Other $ 10,776 $ 4,065 $ 6,711 165.1 % Percentage of revenue 11.0 % 5.0 % Other increased by $6.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Our fixed purchase obligations for inventory supply agreements, net of vendor advances, were $3.8 million as of December 31, 2024, all of which is payable within the next 12 months. As of December 31, 2024, we had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements.
Our fixed outsourced services payment obligations were $4.1 million as of December 31, 2025, with $1.4 million payable within the next 12 months. As of December 31, 2025, we had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements.
This decrease was primarily driven by reductions of $6.2 million in personnel costs resulting from our reductions in force carried out in 2023, $2.7 million in professional service fees for legal and other administrative services, and $1.5 million in insurance costs.
This decrease was primarily driven by reductions of $6.2 million in personnel costs resulting from our reductions in force carried out in 2023, $2.7 million in professional service fees for legal and other administrative services, and $1.5 million in insurance costs. 51 Table of Contents Other Year ended December 31, (in thousands) 2024 2023 Change % Change Other $ 4,065 $ 18,164 $ (14,099) (77.6) % Percentage of revenue 5.0 % 27.6 % Other decreased by $14.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
As of December 31, 2024, our cash and cash equivalents balance was $88.8 million. On January 31, 2025, we raised an additional $86.9 million, before underwriting costs and expenses, through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock.
On January 31, 2025, we raised $81.0 million, net of underwriting costs and related expenses, through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock. Excluding this public offering, during the year ended December 31, 2025, the Company utilized $19.3 million of cash and cash equivalents.
Research and development Year ended December 31, (in thousands) 2023 2022 Change % Change Research and development $ 55,616 $ 88,044 $ (32,428) (36.8) % Percentage of revenue 84.4 % 120.0 % Research and development expenses decreased by $32.4 million, or 36.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Research and development Year ended December 31, (in thousands) 2025 2024 Change % Change Research and development $ 36,262 $ 37,800 $ (1,538) (4.1) % Percentage of revenue 37.1 % 46.1 % Research and development expenses decreased by $1.5 million, or 4.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Key Performance Measures We review the key performance measures discussed below to evaluate the business and measure performance, identify trends, formulate plans, and make strategic decisions. Our key performance measures may fluctuate over time as the adoption of our devices increases, which may shift the revenue mix more toward software and other services.
Our key performance measures may fluctuate over time as the adoption of our devices increases, which may shift the revenue mix more toward software and other services. Units fulfilled We define units fulfilled as the number of devices whereby control is transferred to a customer.
Our implementation and integration services are a performance obligation satisfied over time, and we use costs incurred as inputs into the measure of progress to recognize revenue for these services. We account for the warranty as an assurance-type warranty. When product revenue is recognized, an estimate of future warranty costs is recognized as cost of product revenue and accrued expenses.
Out-licensing arrangements and the related research and development services are performance obligations that are satisfied over time using an input method as progress is made towards key project milestones. Our implementation and integration services are a performance obligation satisfied over time, and we use costs incurred as inputs into the measure of progress to recognize revenue for these services.
Our future spending on capital resources may vary from those currently planned and will depend on various factors, including our rate of revenue growth and the timing and extent of spending on strategic business initiatives.
As of December 31, 2025, our cash and cash equivalents balance was $150.5 million. Our future spending will depend on various factors, including our rate of revenue growth and the timing and extent of spending on strategic business initiatives.
Factors that affect the estimate of future warranty costs include historical and current product failure rates, service delivery costs incurred in correcting product failures, and warranty policies and business practices. Our contracts with customers include variable consideration in the form of refunds and credits for product returns and price concessions.
We account for the warranty as an assurance-type warranty. When product revenue is recognized, an estimate of future warranty costs is recognized as cost of product revenue and accrued expenses. Factors that affect the estimate of future warranty costs include historical and current product failure rates, service delivery costs incurred in correcting product failures, and warranty policies and business practices.
Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year ended December 31, (in thousands) 2023 2022 Change % Change Product $ 40,036 $ 50,263 $ (10,227) (20.3) % Software and other services 25,864 23,127 2,737 11.8 $ 65,900 $ 73,390 $ (7,490) (10.2) % Product revenue decreased by $10.2 million, or 20.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year ended December 31, (in thousands) 2024 2023 Change % Change Product $ 54,200 $ 40,036 $ 14,164 35.4 % Software and other services 27,856 25,864 1,992 7.7 $ 82,056 $ 65,900 $ 16,156 24.5 % Product revenue increased by $14.2 million, or 35.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The decrease was primarily due to the non-recurrence of net proceeds from exercise of stock options and warrants of $2.7 million, partially offset by $0.1 million from other financing activities. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The process of preparing financial statements in conformity with U.S.
Sales and marketing Year ended December 31, (in thousands) 2023 2022 Change % Change Sales and marketing $ 39,073 $ 59,494 $ (20,421) (34.3) % Percentage of revenue 59.3 % 81.1 % Sales and marketing expenses decreased by $20.4 million, or 34.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Sales and marketing Year ended December 31, (in thousands) 2025 2024 Change % Change Sales and marketing $ 45,876 $ 41,567 $ 4,309 10.4 % Percentage of revenue 47.0 % 50.7 % Sales and marketing expenses increased by $4.3 million, or 10.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Our fixed office lease payment obligations were $28.0 million as of December 31, 2024, with $3.7 million payable within the next 12 months. Our fixed technology license payment obligations were $14.0 million as of December 31, 2024, with $3.5 million payable within the next 12 months.
Our material cash requirements include contractual obligations with third parties for office leases, technology licensing agreements, inventory supply agreements, and outsourced services. Our fixed office lease payment obligations were $24.3 million as of December 31, 2025, with $3.7 million payable within the next 12 months.
This increase was primarily driven by $6.7 million of higher employee severance and benefits costs resulting from our reductions in force in 2023 and $4.1 million of higher legal costs due to litigation and other legal matters. These costs are not representative of our ongoing operations.
This increase was driven by $7.1 million of higher legal costs due to litigation, including the $3.0 million accrued loss contingency recognized in 2025, partially offset by $0.4 million of lower employment-related costs. These costs are not representative of our ongoing operations.
The decrease in net working capital cash usage was driven by a $17.7 million reduction in cash used for changes in our inventory and the related vendor advances and accrued purchase commitments, partially offset by a $4.5 million increase in cash used by accrued expenses and other liabilities, $2.9 million increase in cash used by operating lease assets and liabilities, and a $0.8 million increase in cash used by prepaid expenses and other assets.
The improvement in net working capital cash usage was primarily driven by a $12.4 million improvement in cash provided by changes in deferred revenue, a $5.6 million improvement in cash provided by changes in our inventory and the related vendor advances, a $3.3 million improvement in cash provided by changes in accounts payable and accrued expenses, and a $1.8 million improvement in cash used for changes in accounts receivable.
We believe that this measure is useful to investors because it presents our core growth and performance of our business period over period. 43 Table of Contents Units fulfilled increased by 3,131, or 19.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We do not adjust this measure for returns as our volume of returns has historically been low. We view units fulfilled as a key indicator of the growth of our business. We believe that this measure is useful to investors because it presents our core growth and performance of our business period over period.
The decrease was driven by a $9.3 million decrease in net working capital cash usage and a $61.0 million decrease in net loss adjusted for certain noncash items, primarily driven by the loss on excess inventory, the change in fair value of warrant liabilities, and net income.
The decrease was comprised of improvements of $8.9 million in net loss adjusted for certain non-cash items and $20.1 million in net working capital cash usage.
Although our software and other services revenue increased in the current year, our software and other services mix decreased due to the even larger increase in product revenue realized in the current year. 44 Table of Contents Description of Certain Components of Financial Data Revenue Revenue consists of revenue from the sale of products, such as medical devices and accessories, and the sale of software and related services, classified as software and other services revenue on our consolidated statements of operations and comprehensive loss.
This increase was primarily driven by increases in software subscription revenue from our Butterfly Embedded™ partnerships. Description of Certain Components of Financial Data Revenue Revenue consists of revenue from the sale of products, such as medical devices, accessories, and semiconductor chips, and the sale of software and other services.
General and administrative Year ended December 31, (in thousands) 2023 2022 Change % Change General and administrative $ 49,613 $ 77,596 $ (27,983) (36.1) % Percentage of revenue 75.3 % 105.7 % General and administrative expenses decreased by $28.0 million, or 36.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Additionally, as our units fulfilled increased, we had $0.3 million of higher shipping and logistics costs. 49 Table of Contents General and administrative Year ended December 31, (in thousands) 2025 2024 Change % Change General and administrative $ 39,235 $ 39,810 $ (575) (1.4) % Percentage of revenue 40.2 % 48.5 % General and administrative expenses decreased by $0.6 million, or 1.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Cash flows used in investing activities Net cash used in investing activities decreased by $164.2 million, or 175.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was primarily due to the purchase of marketable securities in 2022, and the subsequent sale of those securities in 2023.
These improvements were partially offset by a $2.9 million increase in cash used for changes in prepaid expenses and other assets. Net cash used in investing activities Net cash used in investing activities increased by $0.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to increased purchases of fixed assets.
Cost of subscription revenue increased by $1.3 million, or 17.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This increase was primarily driven by higher amortization expenses related to newly deployed internally developed software that supports our SaaS offerings.
Cost of software and other services revenue decreased by $1.0 million, or 11.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a $2.1 million decrease in amortization expense for software development investments that we made in prior years, partially offset by a $1.0 million increase in costs related to specialized development activities for our Butterfly Embedded™ partners.
This decrease was primarily driven by reductions of $22.0 million in 49 Table of Contents personnel costs resulting from our reductions in force over the past year and $4.9 million in professional service fees for legal and other administrative services.
This increase was primarily driven by $3.3 million of higher personnel and other employment-related costs and $0.2 million of higher professional services costs, both resulting from investments in our sales force and client experience function in order to support continued revenue growth.
Removed
Since 2022, we have taken significant actions to reduce our cost of operations and extend our cash runway and have reduced our annual cash requirements by approximately $180 million, to less than $50 million annually. As we look forward, we expect to continue to invest in our business in order to grow revenue.
Added
We also license our 44 Table of Contents proprietary Ultrasound-on-Chip™ semiconductor platform for co-development of novel technologies in non-competitive markets through a program called Butterfly Embedded™. Key Performance Measures We review the key performance measures discussed below to evaluate the business and measure performance, identify trends, formulate plans, and make strategic decisions.
Removed
On January 31, 2025, we raised additional capital through the issuance and sale in a public offering of 27.6 million shares of our Class A common stock, generating proceeds of $86.9 million, before underwriting costs and expenses.
Added
Units fulfilled increased by 1,792, or 9.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was driven by higher probe sales volume in our US and veterinary sales channels.
Removed
The quarterly measures may be impacted by the timing of device sales. Units fulfilled We define units fulfilled as the number of devices whereby control is transferred to a customer. We do not adjust this measure for returns as our volume of returns has historically been low.
Added
For sales of products and perpetual SDKs, revenue is recognized at a point in time upon transfer of control to the customer. SaaS subscriptions, Support, and term-based SDKs are generally related to stand-ready obligations and are recognized ratably over time.
Removed
We view units fulfilled as a key indicator of the growth of our business.
Added
This increase was primarily driven by both our increased sales volume and the impact of the higher selling price of our iQ3 probe, which launched in the US during the first quarter of 2024 and internationally during the third quarter of 2024, and our iQ3 Vet probe, which launched in the US and some international markets during the fourth quarter of 2025.
Removed
The increase was led by higher volume across all U.S. sales channels as we began selling our next-generation iQ3 probe alongside our existing iQ+ probe. We also saw increased probe sales in our international distributor channel after onboarding several new distribution territories in the current year.
Added
Our product revenue also benefited from deliveries of semiconductor chips to one of our Butterfly Embedded™ partners in the current year. Software and other services revenue increased by $6.3 million, or 22.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Removed
The quarterly revenue mix may be impacted by the timing of device sales. In 2024, due to the continued success of our next-generation iQ3 probe, our software and other services mix as a percentage of total revenue decreased.
Added
This increase was primarily driven by increases in licensing revenue from our Butterfly Embedded™ partnerships. 48 Table of Contents Cost of revenue Year ended December 31, (in thousands) 2025 2024 Change % Change Product $ 44,065 $ 24,380 $ 19,685 80.7 % Software and other services 7,811 8,845 (1,034) (11.7) $ 51,876 $ 33,225 $ 18,651 56.1 % Percentage of revenue 53.1 % 40.5 % Cost of product revenue increased by $19.7 million, or 80.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily driven by a non-recurring $17.4 million charge during the year ended December 31, 2025 for excess and obsolete inventory due to technological advancements in the underlying components of our devices and changes in our product portfolio.
Removed
The accounting policies are described in Note 2 “Summary of Significant Accounting Policies” in our consolidated financial statements included in this Annual Report on Form 10-K.
Added
Additionally, the increased volume of probe sales during the year ended December 31, 2025 compared to the year ended December 31, 2024 resulted in a $1.8 million increase in cost of product revenue.
Removed
This decrease was primarily driven by a decline in probe sales in our distribution, global health, and eCommerce channels. Additionally, there were a number of large sales in these channels in 2022 that did not reoccur in 2023. Partially offsetting these declines were increases in overall prices.
Added
Cost of revenue as a percentage of revenue increased from 40.5% to 53.1% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to the $17.4 million excess and obsolete inventory charge, which is 17.8% as a percentage of total revenue for the year ended December 31, 2025.
Removed
Software and other services revenue increased by $2.7 million, or 11.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This increase was primarily driven by a higher volume of SaaS subscriptions sold in conjunction with new device sales, current year subscription renewals, and expanded service offerings.
Added
This decrease was primarily driven by a reduction of $2.4 million in personnel and other employment-related costs, due in part to our increased utilization of personnel in lower-cost geographies, as well as a reduction of $0.4 million in product engineering costs as we approach the completion of development for our next-generation technology.
Removed
We saw an increase in enterprise software sales of $2.4 million while individual subscriptions were flat.
Added
These reductions were partially offset by an increase of $1.4 million in professional services costs for software development and regulatory compliance.
Removed
Enterprise as percentage of software sales increased 6%. 48 Table of Contents Cost of revenue Year ended December 31, (in thousands) 2023 2022 Change % Change Product $ 40,655 $ 26,804 $ 13,851 51.7 % Software and other services 8,389 7,126 1,263 17.7 $ 49,044 $ 33,930 $ 15,114 44.5 % Percentage of revenue 74.4 % 46.2 % Cost of product revenue increased by $13.9 million, or 51.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
This decrease was primarily driven by reductions of $0.6 million in insurance costs and $0.3 million in credit loss expense.
Removed
This increase was primarily driven by a $21 million loss on excess inventory related to inventory on-hand that was deemed excess due to a shift in our strategy and market conditions. This was partially offset by lower probe volume and operating efficiencies in manufacturing Butterfly iQ+.
Added
We expect that our existing cash and cash flows from operations will be sufficient to meet our liquidity, capital expenditure, and anticipated working capital requirements and fund our operations for at least the next 12 months.
Removed
This decrease was primarily driven by reductions of $23.5 million in personnel costs resulting from our reductions in force over the past year, a decrease of $2.6 million in engineering and testing costs, and a decrease of $4.6 million in consulting fees as we developed our internal capabilities to perform previously outsourced functions.
Added
Our fixed technology license payment obligations were $10.5 million as of December 31, 2025, with $1.5 million payable within the next 12 months. Our fixed purchase obligations for inventory supply agreements, net of vendor advances, were $4.2 million as of December 31, 2025, all of which is payable within the next 12 months.
Removed
This decrease was primarily driven by reductions of $13.6 million in personnel costs resulting from our reductions in force over the past year. Reductions of $3.3 million in marketing expenses and $2.3 million in travel expenses also contributed to the decrease. We have started to reinvest in direct sales to drive top-line growth.
Added
Net cash provided by (used in) financing activities Net cash provided by (used in) financing activities increased by $79.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. This increase was primarily comprised of $81.0 million provided by the net proceeds from the public share offering in January 2025.
Removed
Other Year ended December 31, (in thousands) 2023 2022 Change % Change Other $ 18,164 $ 7,346 $ 10,818 147.3 % Percentage of revenue 27.6 % 10.0 % Other increased by $10.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
Our contracts with customers include variable consideration in the form of refunds and credits for product returns and price concessions.
Removed
Additionally, there was a $12.5 million decrease in purchases of fixed assets. 51 Table of Contents Cash flows provided by financing activities Net cash provided by financing activities decreased by $2.7 million, or 92.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed4 unchanged
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We did not have any floating rate debt as of December 31, 2024. Our cash and cash equivalents are comprised primarily of bank deposits and money market accounts. The primary objective of our investments is the preservation of capital to fulfill liquidity needs.
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We did not have any floating rate debt as of December 31, 2025. Our cash and cash equivalents are comprised primarily of bank deposits and money market accounts. The primary objective of our investments is the preservation of capital to fulfill liquidity needs.

Other BFLY 10-K year-over-year comparisons