Investment Report: Butterfly Network, Inc. (NYSE: BFLY)
Date: July 18, 2025
Sector: Medical Devices / Digital Health
Market Cap: ~$500M
Stock Price: $1.87 USD
🔬 Company Overview
Butterfly Network, Inc. develops, manufactures, and commercializes handheld ultrasound imaging devices powered by its patented Ultrasound-on-Chip™ technology. Its flagship product, Butterfly iQ+, connects to a smartphone or tablet to deliver high-quality, portable, real-time imaging. This makes diagnostic ultrasound affordable and accessible at the point-of-care, from rural clinics to advanced hospitals.
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Founded: 2011 (by Dr. Jonathan Rothberg)
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Headquarters: Burlington, MA
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Mission: To democratize medical imaging globally through portable, AI-enhanced ultrasound
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Patents: 450+ (ultrasound chip design, AI diagnostics, portable imaging workflows)
⚙️ Technology Edge
Butterfly Network’s innovation lies in the integration of semiconductor-based ultrasound imaging into a single silicon chip—a departure from traditional piezoelectric probe design. This enables:
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Lower cost vs. cart-based ultrasound machines
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Wider access in rural/emerging markets
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AI-powered diagnostic assistance (Auto B-line, Cardiac AI, Auto Bladder Volume, etc.)
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Seamless cloud-based image storage and collaboration via Butterfly Cloud
Notable Advancements (2024–2025):
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Pulse Wave Doppler launched for cardiac diagnostics
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Needle Viz™ for improved ultrasound-guided injections
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Partnership with Forest Neurotech (OpenAI-backed) to integrate Butterfly into brain health research
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Expanded use of AI-guided protocols and automated image analysis
BFLY holds 450 patents in this technology
🤝 Strategic Partnerships & Clients
Clients:
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Hospital systems (Cleveland Clinic, Mount Sinai Health)
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U.S. Department of Veterans Affairs (VA health system adoption)
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Global health orgs (Doctors Without Borders, Bill & Melinda Gates Foundation)
Recent Partnerships:
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Telemedicine Integration: Butterfly is embedding its technology with telehealth platforms for remote consultations
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AI research collaborations with academic institutions (e.g., Harvard Medical, UCSF)
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Governmental & NGO use in maternal health in Africa, trauma triage, military field hospitals
📈 Growth Prospects
Butterfly Network is positioned to benefit from:
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Global ultrasound market expansion (~$10B+ TAM, growing ~5–7% CAGR)
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Shift to portable diagnostics in primary care, EMS, and low-resource settings
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AI-driven clinical workflows, supporting better triage, faster diagnoses
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New product pipeline for multi-modal imaging, including remote monitoring
Near-Term Catalysts (H2 2025):
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Continued double-digit revenue growth (>20% YoY)
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Expansion of SaaS/cloud recurring revenue
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FDA clearances for new AI modules (in review)
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More commercial wins in Latin America, Southeast Asia
💰 Financial Snapshot (Q1 2025)
| Metric | Value |
|---|---|
| Revenue | $20.1M (+20% YoY) |
| Gross Margin | ~63% |
| Cash & Equivalents | $155M |
| Debt | $0 |
| Net Loss | -$22M (but narrowing losses YoY) |
| Runway | ~4.5 years of cash at current burn rate |
Butterfly aims to achieve cash flow breakeven by 2027, supported by increasing margins and SaaS revenue growth.
🧠 Leadership & Founding Vision
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Founder: Dr. Jonathan Rothberg (serial biotech inventor – Ion Torrent, 454 Life Sciences)
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CEO: Joseph DeVivo (former InTouch Health, Teleflex)
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Board: Includes former Google Health and Medtronic executives
Their leadership emphasizes scale, access, and AI-first imaging.
💼 Acquisition Potential
Due to its low valuation and disruptive tech, Butterfly is a prime takeover target. Potential acquirers:
| Company | Strategic Fit |
|---|---|
| Philips | Adds mobile devices to imaging suite |
| GE Healthcare | Expands POCUS (Point of Care Ultrasound) leadership |
| Siemens Healthineers | Complements AI ambitions |
| Medtronic | Ties to its surgical/navigation platforms |
| Canon Medical | Gains U.S. ultrasound presence |
No firm offers reported yet, but analysts expect interest in H2 2025.
🧠 Analyst Consensus & Valuation
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Analyst Target: $3.50–$4.00 (vs. $1.87 current)
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Upside Potential: ~90%+
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Valuation: Forward Price/Sales ~4x is low for medtech with 60%+ margins
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Risk factors: Regulatory, adoption pace, competitive response (e.g., Clarius, Philips Lumify)
🟩 Investment Thesis: Buy or Hold?
✅ Buy Case
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Unique tech, defensible IP, and strong brand
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High gross margins, recurring SaaS growth, zero debt
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Proven leadership and credible clients
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Long-term trend toward decentralized imaging
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Potential M&A premium
⚠️ Risks
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Still unprofitable; cash burn ongoing
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Competition from larger firms entering handheld imaging
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Regulatory hurdles for AI software modules
➕ Hold Case
If already holding BFLY, the risk-reward remains attractive for long-term upside or buyout scenario. Upcoming Q2 results (Aug 2025) may serve as a catalyst.
📌 Final Verdict:
Butterfly Network represents a rare small-cap medtech with:
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Disruptive, scalable tech
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Growing real-world clinical adoption
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Multiple future monetization paths (B2B, AI SaaS, cloud, global health)
It’s early in a transformative curve and priced below fair value. Investors looking for asymmetric upside in digital health should consider a position, especially before any M&A headlines.
- ED Note: We recently added BFLY to our Bio Tech portfolio
