Butterfly Network's Preliminary Q4 Revenue Growth Matches 2025 Guidance, Reinforcing Neutral Stance Amid Profitability Concerns

What happened

Butterfly Network announced preliminary, unaudited Q4 2025 revenue growth of at least 17% year over year, signaling continued top-line momentum as it enters 2026. This aligns with the DeepValue report's 2025 sales outlook in the mid-to-high $90 millions, based on 2024 revenue of $82.1 million and a HOLD rating due to balanced risk/reward. However, the report highlights persistent net losses, with Q2 2025 net loss of $13.8 million and cash of $152 million, underscoring unproven profitability and cash flow independence. Key risks from intense competition with incumbents like GE and Philips, along with the need to convert enterprise pilots into scaled software contracts, remain unaddressed by this revenue update. Investors should view this growth cautiously as unaudited, awaiting full results to assess software attach rates and operational leverage critical for a thesis upgrade.

Implication

For investors, the at least 17% Q4 growth confirms Butterfly's ability to meet revenue targets, which is positive for execution credibility. However, the DeepValue report emphasizes that upside depends on higher-margin software-led growth and operating leverage, areas not directly validated by this preliminary data. The company's path to breakeven requires improving gross margins and controlling opex, with Q2 2025 gross profit of $14.9M trailing opex of $31.0M, indicating ongoing challenges. Competitive pressures and potential pricing issues could erode margins, so sustained growth must be coupled with better unit economics to justify a multiple expansion. Therefore, while top-line momentum is encouraging, the HOLD rating remains appropriate until clearer evidence of profitability and software traction emerges from audited financials.

Thesis delta

The preliminary revenue growth is in line with the DeepValue report's expectations and does not shift the HOLD thesis, as it reinforces positive momentum but fails to address core profitability and competitive risks. However, it slightly strengthens the case for execution improvement, though a material upgrade would require evidence of durable software attach and margin expansion in upcoming audited results.