Key Takeaways BFLY plans a Beam Steering API launch, opening core imaging access to third-party developers.Software-based beam steering on a chip supports Biplane, iQ Slice and iQ Fan, simplifying image capture.After the news, BFLY shares rose 4.9%, extending a 115.9% six-month rally.Butterfly Network (BFLY) recently announced its plans to launch its Beam Steering API to support advanced third-party AI applications and technology development. The API, expected to be released in the first half of 2026, will ...

Author's note: I present and update my best small-cap Busted IPO stock ideas only to subscribers of my exclusive marketplace, The Busted IPO Forum . Try a free 2-week trial today by clicking HERE .Shares of ultrasound device concern Butterfly Network, Inc. ( BFLY ) have doubled since announcing the launch of Compass AI, aimed at improving workflows on November 17, 2025. The company's novel approach to its handheld, single-probe, full-body ultrasound leverages semiconductors as opposed toThe Busted IPO Forum ...

Core Insights - Butterfly Network Inc. has launched Compass AI, an AI-powered operating system aimed at enhancing point-of-care ultrasound (POCUS) programs for health systems, focusing on compliance, scalability, and revenue generation [1][3] Group 1: Product Launch and Features - Compass AI replaces traditional, order-based POCUS workflows, which often result in documentation delays and unbilled exams, capturing only about 15% of compliant studies [2] - The new AI-enhanced, encounter-based workflow can achieve documentation compliance rates of up to 94% without increasing the workload for clinicians [3] Group 2: Financial Implications - The transformation brought by Compass AI can potentially lead to up to 5 times more revenue from the same clinical volume by capturing previously missed value [3] Group 3: Company Overview - Butterfly Network Inc. develops, manufactures, and commercializes ultrasound imaging solutions both in the US and internationally [4]

Core Insights - Butterfly Network, Inc. (BFLY) has launched Compass AI, a next-generation enterprise software platform aimed at enhancing point-of-care ultrasound (POCUS) programs across health systems, which is expected to significantly improve documentation compliance and revenue generation from existing exam volumes [1][8]. Short-term Outlook - Compass AI is positioned to capitalize on increased enterprise demand as health systems seek rapid, revenue-boosting solutions, addressing long-standing workflow and compliance issues that could lead to accelerated adoption and enhanced software monetization [2][4]. Stock Performance - Following the announcement of Compass AI, BFLY's shares experienced a decline of nearly 7% at the previous day's close. However, year-to-date, the shares have increased by 34.7%, outperforming the industry, which saw a decline of 10.8%, while the S&P 500 rose by 12.2% during the same period [3]. Long-term Strategy - In the long run, Compass AI is expected to solidify BFLY's role as a core infrastructure partner for health systems, transitioning the company towards a more sustainable, software-driven revenue model. This deeper integration into POCUS workflows is anticipated to enhance customer retention, facilitate multi-department deployments, and promote steady growth in recurring revenue [4][12]. Product Features - Compass AI addresses significant workflow and documentation challenges in POCUS programs, with traditional workflows capturing only about 15% of compliant studies, leaving 85% unbilled. The new platform aims to achieve documentation compliance rates of up to 94% without increasing clinician workload, potentially allowing health systems to generate up to five times more revenue from the same clinical load [9][10]. - The platform includes a Documentation Agent that utilizes ambient voice dictation to automate exam note completion, reducing charting time by up to 25%. Additionally, the QA Agent enhances quality review through AI-based image evaluation and feedback [10]. - Compass AI features a Program Dashboard that monitors usage, documentation compliance, credentialing, and unbilled studies, providing insights into operational performance and potential return on investment (ROI). It also integrates seamlessly with electronic health records (EHRs), PACS, and SSO systems, ensuring efficient routing of studies into medical records and preventing lost images [11][12].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $21.5 million, reflecting a 5% growth over the prior year, driven by higher average selling prices and increased volume, particularly in the U.S. [14][15] - Gross margin, including a non-cash inventory write-off of $17.4 million, was negative 17.5%, compared to 59.5% in the prior year. Adjusted gross margin increased to 63.9% from 60% in the prior year [17][18] - Adjusted EBITDA loss was $8.1 million, an improvement from a loss of $8.4 million in Q3 2024, leading to a normalized cash burn of $3.9 million [18][19] - Cash and cash equivalents at the end of the quarter were $148 million, with a trailing 12-month cash use of $31.5 million [19] Business Line Data and Key Metrics Changes - Product revenue was $14.6 million, an increase of 8% versus Q3 2024, driven by higher average selling prices in international markets and increased volume in e-commerce and veterinary channels [15][16] - Software and other services revenue was $6.9 million, flat compared to the prior year, with increased licensing and services revenue offset by lower renewals of individual subscriptions [16] Market Data and Key Metrics Changes - Total international revenue increased 4% over the prior year to $5.4 million, primarily driven by price increases following the international launch of iQ3 [15] - U.S. revenue was $16.1 million, slightly up from the previous year, attributed to e-commerce sales and improved performance in the veterinary distribution channel [15] Company Strategy and Development Direction - The company is focusing on enterprise sales by building a strategy that integrates Butterfly more holistically within health systems, despite facing headwinds in the second quarter [5][6] - The five-year plan introduced multiple growth pillars, including deeper engagement in core business areas and expansion into new markets [5][6] - The AI strategy is seen as a significant accelerator, with successful trials demonstrating the economic impact of Butterfly's AI tools on patient care and hospital efficiency [8][12] Management's Comments on Operating Environment and Future Outlook - Management noted that while Q3 is typically the quietest quarter, they are optimistic about returning to momentum in 2026, with increased pipeline opportunities [5][21] - The company reaffirmed its full-year revenue guidance of $91 to $95 million, indicating a need to close larger deals in the pipeline to reach the higher end of the range [22][23] - Management expressed confidence in the long-term positioning of Butterfly Network, emphasizing the affordability and flexibility of their technology compared to traditional ultrasound solutions [24] Other Important Information - The company has strengthened its information security posture with new certifications, enhancing its competitive advantage in the market [7][56] - The P5.1 chip development has been completed, expected to significantly enhance imaging capabilities and performance, with production set to begin [26][27] Q&A Session Summary Question: Can you quantify the size of some deals that have been pushed due to macro factors? - Management indicated that deals can range from 100 to 200 probes, with large medical school deals also in the pipeline [33][35] Question: What is the outlook for the sales pipeline heading into 2026? - Management noted that while the time to close has extended, there are more deals stacking up, and they expect a lift in 2026 as budgets reset [41][42] Question: How will the cost-effectiveness data from the Rutgers study impact future sales? - The study establishes significant economic benefits, which will strengthen the company's position in enterprise sales discussions [43][46] Question: What is the status of the HomeCare program? - Management remains optimistic about the channel but emphasized that until agreements are finalized, nothing is certain [47] Question: What is needed to de-risk the launch of the P5.1 chip? - Management expressed confidence in the low risk of execution for the new product launch, citing successful past launches as a precedent [50][52] Question: How does the new information security certification help win business? - The company believes its cloud connectivity and security posture provide a competitive advantage, especially as the industry shifts towards cloud solutions [56][57]

Core Insights - Butterfly Network, Inc. (BFLY) is scheduled to release its third-quarter 2025 results on October 31, before market opening [1] - The company reported a loss of 6 cents in the last quarter, exceeding the Zacks Consensus Estimate by 14.29%, and has topped earnings estimates in the last four quarters with an average surprise of 21.91% [1] Q3 Estimates - The Zacks Consensus Estimate for Butterfly Network's revenues in Q3 2025 is $21 million, reflecting a 2.1% increase from the previous year [2] - The expected loss for the third quarter is 7 cents per share, indicating a 12.5% year-over-year improvement [2] Estimate Revision Trend - Estimates for Butterfly Network's Q3 earnings have remained stable over the past 90 days [3] Factors Influencing Q3 Performance - The company is in the second year of a strategic plan aiming for over $500 million in revenues by 2030 and break-even cash flows by the end of 2027 [4] - Product revenues are expected to benefit from strong uptake of the Butterfly iQ3 probe, both domestically and internationally, along with higher average selling prices [4] - Increased enterprise software revenues and contributions from partnerships are anticipated to enhance Software and other services sales [5] Strategic Initiatives - The introduction of Compass AI, a cloud-based enterprise software platform, is expected to simplify documentation and improve record completion [5] - Ongoing strategic initiatives like Octiv, HomeCare, and Butterfly Gardens are likely to support revenue growth [6][8] - The AI marketplace, Butterfly Gardens, has added new partners and received FDA clearance for AI-powered clinical applications, which may positively impact revenues [7] Challenges - Uncertainty regarding changes in funding and government programs may slow down customer purchasing decisions, affecting U.S. hospital and enterprise channels [9]

Core Insights - Tempus AI and Butterfly Network reported their Q2 2025 results, highlighting contrasting growth trajectories driven by AI [1] - Tempus AI is experiencing rapid revenue growth and nearing profitability, while Butterfly Network is in a turnaround phase with modest revenue gains [1] Tempus AI - Tempus AI's Q2 2025 revenues increased nearly 90% year over year, surpassing estimates by 5.12%, driven by a 115% rise in Genomics and a 35.7% increase in high-margin Data and Services [5][6] - Adjusted EBITDA loss narrowed to $5.6 million, with management raising revenue guidance to $1.26 billion for 2025 [6] - The company is building a competitive moat through innovation, with over 40 million patient records connected and strategic partnerships enhancing its data and AI capabilities [7] - Despite strong growth, Tempus AI is still operating at a loss, with rising costs of revenues increasing by 32.2% year over year [9] Butterfly Network - Butterfly Network is gaining traction with large-scale deployments, including a significant enterprise deal with a top health system, indicating confidence in its iQ3 handheld ultrasound platform [10] - The launch of Compass AI signals a shift towards a software-driven model, aiming for higher-margin recurring revenue [10] - HomeCare pilots have shown promise in reducing heart failure readmissions, with potential annual revenue of $40-$60 million from one customer [11] - Despite progress, Butterfly Network faces challenges such as elongated sales cycles and reliance on partner uptake for new initiatives [12] Valuation Comparison - Tempus AI has a forward price-to-sales (P/S) ratio of 9.59, above its one-year median of 8.05, while Butterfly Network's P/S ratio is 3.73, below its median of 5.46 [13] - Analysts suggest a potential decline of 8.1% for Tempus AI's stock, while Butterfly Network's average price target implies a 128% upside [14][15] Investment Outlook - Tempus AI's impressive growth and innovation are tempered by its high valuation and ongoing losses, suggesting a cautious investment approach [17][20] - Butterfly Network, despite modest growth and execution risks, presents a compelling opportunity for investors due to its distressed valuation and significant upside potential [20]

Core Insights - Butterfly Network reported a record gross margin of 63.7% and a revenue growth of 9.0% year-over-year for Q2 2025, although revenue slightly missed analyst expectations at $23.4 million [1][2] - The company narrowed its losses with non-GAAP earnings per share of $(0.03), better than the expected $(0.05) [1] - Management revised its full-year revenue guidance down to $91 million to $95 million for FY2025, indicating a shift from earlier expectations of approximately 20% year-on-year growth [1][10] Financial Performance - Revenue for Q2 2025 was $23.4 million, up 8.8% from $21.5 million in Q2 2024 [2] - Gross margin improved by 5.1 percentage points from 58.6% in Q2 2024 to 63.7% in Q2 2025 [2][6] - Product revenue increased by 25% to $14.2 million, while software and services revenue remained flat at $6.8 million [5] Strategic Developments - Butterfly Network focuses on handheld ultrasound devices using Ultrasound-on-Chip technology, targeting a wide range of healthcare providers [3] - The company is expanding clinical partnerships and launching new AI-driven software, including the iQ3 device and upcoming P5 chip [4][7] - Recent pilot programs, such as Butterfly HomeCare, have shown promising results in reducing hospital readmissions [8] Future Outlook - The updated revenue guidance suggests approximately 13% growth for FY2025, down from previous estimates [10] - Despite the reduced revenue outlook, the company expects adjusted EBITDA losses to improve to between $32 million and $37 million for FY2025 [10] - Key areas to monitor include the uptake of new AI-driven software, international expansion, and progress in securing additional hospital contracts [11]

Financial Data and Key Metrics Changes - The company reported record revenue of $23.4 million for Q2 2025, representing a 9% increase year-over-year, driven by higher average selling prices and sales of semiconductor chips [16][20] - Gross margins reached an all-time high of 64%, up from 59% in the prior year, attributed to higher average selling prices and improved software and services margins [20] - Adjusted EBITDA loss improved to $6.2 million from $8.1 million in the same period last year, reflecting a 24% improvement [20][24] Business Line Data and Key Metrics Changes - Product revenue was $16.6 million, a 13% increase compared to Q2 2024, primarily due to higher average selling prices and chip sales [18] - Software and other services revenue remained flat at $6.8 million, impacted by lower renewals of individual subscriptions and implementation services revenue [19] - Total annual recurring revenue (ARR) grew slightly, led by an increase in enterprise software subscription ARR [19] Market Data and Key Metrics Changes - U.S. revenue was $17.2 million, essentially flat year-over-year, affected by lower probe volume despite chip sales [17] - International revenue increased by 19% to $6.2 million, driven by price and volume growth from the international launch of iQ3 [18] Company Strategy and Development Direction - The company is focusing on larger deals and expanding its enterprise and medical school pipeline, with a recent large enterprise deal closed in Q2 [7][8] - The launch of the next-generation software platform, Compass AI, is expected to enhance documentation processes and increase penetration within existing customers [27][28] - The company is optimistic about the long-term growth potential of handheld ultrasound technology and aims to leverage its core competencies to deliver new revenue streams [32][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds affecting purchase decisions and delayed large deals, but remains confident in the long-term value proposition of its products [5][24] - The company adjusted its full-year revenue guidance to a range of $91 million to $95 million, emphasizing fiscal discipline while investing in growth areas [24][25] - Management believes that the current uncertainties are temporary and expects a return to normalcy as healthcare providers adapt to changes [60][61] Other Important Information - The company announced the departure of its CFO, Heather Getz, with Megan Carlson appointed as interim CFO [13][14] - The Butterfly Garden initiative is entering its commercial phase, with new AI tools expected to enhance clinical use [9][11] Q&A Session Summary Question: Competitive landscape and its impact - Management clarified that the guidance revision was not due to competitive pressures but rather delays in larger deals, emphasizing that they are pioneering new market segments [36][38] Question: Software subscription revenue trends - The software revenue is experiencing a mixed performance, with individual subscriptions facing churn while enterprise software is growing, aided by the upcoming Compass AI [41][42] Question: Guidance assumptions and enterprise side impact - Management noted that delays in global health deals and enterprise sales have led to a conservative guidance revision, but they remain optimistic about future opportunities [55][56] Question: Home care program details - The home care program is expected to generate revenue through a program fee based on enrolled patients and revenue per scan, with significant potential for scaling [67][69] Question: Readmission reduction in heart failure - Management indicated a significant reduction in readmissions, with plans to demonstrate the scalability of pilot results to secure broader agreements [84][85] Question: IQ Station and P5 updates - The IQ Station is expected to compete with existing ultrasound carts, while the P5 technology is anticipated to significantly enhance image quality, positioning the company favorably in the market [90][92]

Financial Data and Key Metrics Changes - The company reported record revenue of $23.4 million for Q2 2025, representing a 9% increase compared to the previous year, driven by higher average selling prices and sales of semiconductor chips [16][20] - Gross margins reached an all-time high of 64%, up from 59% in the prior year, attributed to higher average selling prices and improved software and services margins [20] - Adjusted EBITDA loss improved to $6.2 million from $8.1 million in the same period last year, reflecting a 24% improvement [20][24] Business Line Data and Key Metrics Changes - Product revenue was $16.6 million, a 13% increase year-over-year, primarily due to higher average selling prices and chip sales [18] - Software and other services revenue remained flat at $6.8 million, impacted by lower renewals of individual subscriptions and implementation services revenue [19] - Total Annual Recurring Revenue (ARR) grew slightly, led by an increase in enterprise software subscription ARR [19] Market Data and Key Metrics Changes - U.S. revenue was $17.2 million, essentially flat year-over-year, affected by lower probe volume despite higher average selling prices [17] - International revenue increased by 19% to $6.2 million, driven by the international launch of iQ3 and geographic expansion [17] Company Strategy and Development Direction - The company is focusing on larger deals and expanding its enterprise and medical school pipeline, despite delays in closing some larger deals [6][22] - The launch of the next-generation software platform, Compass AI, is expected to enhance documentation processes and improve enterprise sales [27][28] - The company is optimistic about the long-term growth potential of handheld ultrasound technology and its ability to drive worldwide adoption [34] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic headwinds affecting purchase decisions, particularly in the U.S. hospital and enterprise channels [22][60] - The company has adjusted its full-year revenue guidance to a range of $91 million to $95 million, reflecting the need to close delayed larger deals [23][24] - Management remains confident in the company's value proposition and believes it will thrive in a cost-contained healthcare environment [5][34] Other Important Information - The company announced the departure of its CFO, Heather Gatz, who will transition to an advisory role until early 2026 [13][15] - The Butterfly Garden initiative is entering its commercial phase, with new AI tools expected to enhance clinical use [9][11] Q&A Session Summary Question: Competitive landscape and headwinds - Management clarified that the guidance revision was not due to competition but rather delays in larger deals, emphasizing that they are pioneering new market segments [36][38] Question: Software subscription revenue trends - Management indicated that individual subscription renewals face challenges, while enterprise software is growing, aided by the upcoming Compass AI [42][44] Question: Guidance assumptions and enterprise side impact - Management noted that delays in global health deals and enterprise sales have led to a conservative guidance adjustment, but they remain optimistic about future opportunities [54][56] Question: Home care pilot program details - Management shared that the home care program has shown significant reductions in readmissions, and they are working to finalize commercial agreements [65][67] Question: IQ Station and P5 updates - Management confirmed that IQ Station will compete with existing ultrasound carts, and the P5 technology is expected to significantly enhance image quality [91][93]