0001628280-25-037249
SEC filingRevenue grew 8.8% YoY driven by iQ3 probe and semiconductor chips; gross margin expanded to 63.7%.
For the three months ended June 30, 2025, total revenue increased 8.8% YoY to $23.4 million, driven by a 13.5% rise in product revenue to $16.6 million, partially offset by a 1.1% decline in software and other services revenue to $6.8 million. Product revenue benefited from the higher selling price of the iQ3 probe and deliveries of semiconductor chips to an Octiv partner, while software revenue decreased due to lower implementation revenue. Gross profit rose to $14.9 million (63.7% margin) from $12.6 million (58.6% margin), reflecting manufacturing efficiency improvements and higher average selling prices. Operating expenses decreased slightly to $31.0 million from $29.8 million, as reductions in R&D and G&A (down 11.6% and 9.4%, respectively) were more than offset by increased sales and marketing spending (up 18.8%) and higher other expenses (up $1.4 million from litigation and severance). Net loss improved to $13.8 million from $15.7 million.
The company operates as a single reportable segment, but MD&A provides granularity on revenue mix. Product revenue accounted for 71.1% of total revenue in Q2 2025, up from 68.2% a year ago, while software and other services mix declined to 28.9% from 31.8%. The mix shift toward hardware reflects strong iQ3 adoption and semiconductor chip sales, though unit volumes in the US decreased 5.1% due to lapping the iQ3 launch. International and veterinary channels grew, partially offsetting the US decline. Cost of revenue as a percentage of revenue improved from 41.4% to 36.3%, driven by lower amortization of software development costs and manufacturing efficiencies.
Management expects to continue investing in commercial capabilities and product development while maintaining cost discipline. The company raised $81 million in January 2025, bolstering its cash position to $148.1 million as of June 30, 2025, which is expected to fund operations for at least 12 months. No explicit numerical guidance was provided, but management anticipates ongoing revenue growth and further margin expansion as the revenue mix shifts toward software over the long term. The iQ3 probe remains a key growth driver, particularly in international markets, and partnerships like Octiv contribute to product revenue. However, the MD&A notes that litigation and restructuring costs may persist as non-recurring items.
As of June 30, 2025, Butterfly Network holds $148.1 million in cash and cash equivalents, with no outstanding debt (excluding operating leases). Shareholders' equity stands at $232.8 million, up from $168.8 million at year-end 2024, primarily driven by a $81.0 million net share offering. Inventories total $68.9 million, slightly down from $70.8 million, indicating cautious inventory management. The company maintains a strong liquidity position with no bank debt.
The Notes disclose minimum inventory purchase commitments of $4.5 million under a non-cancellable supply agreement. Additionally, the company has a vendor advance asset of $2.7 million and an accrued purchase commitment liability of $0.1 million. Remaining performance obligations (RPO) total $40.5 million, of which 50% is expected to be recognized within the next twelve months. Operating lease liabilities total $21.7 million ($2.6M current, $19.1M non-current).
No share buybacks or dividends are disclosed. The company raised $81.0 million net in a January 2025 public offering of 27.6 million shares at $3.15 per share. There is no debt issuance or repayment. Capital expenditures are not explicitly detailed in the Notes but are referenced as included in the cash flow statement ($1.2M for H1 2025). The company continues to invest in R&D ($18.2M) and sales & marketing ($23.2M) in H1 2025.
The company operates in a single reportable segment. Geographic revenue for H1 2025: United States $34.6 million (77.5% of total), International $10.0 million (22.5%). Product revenue (hardware) accounted for $30.8 million, while software and other services contributed $13.8 million, representing 31% of total revenue. Segment net loss was $27.8 million for H1 2025.