BFLY

MKT CAP —P/E —DIV YIELD —FCF YIELD —REV TTM $112.1M +28.1%NET INCOME −$74.8MNET CASH —52W 1.97 – 9.93NEXT EARNINGS Oct 29SEC XBRL · TTM TO Invalid Date

How BFLY rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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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.
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.
We launched our first product, Butterfly iQ, in 2018, our second product, Butterfly iQ+, in 2020, and our third product, Butterfly iQ3, in 2024.
Our business also includes licensing our Ultrasound-on-Chip™ technology to third parties.
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.
Additionally, in 2025, approximately 11% of our revenue was generated by sales to a single customer.
We have developed, and we are engaged in the development of, ultrasound imaging solutions using our Ultrasound-on-Chip™ technology.
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.
Medical device development is costly and involves continual technological change, which may render our current or future medical devices obsolete.
Our primary competitors for our point-of-care medical devices include the top five manufacturers of legacy cart-based incumbent ultrasound devices.
We are dependent upon the success of our sales and customer acquisition and retention strategies.
Our financial performance is substantially dictated by our success in adding, retaining, and engaging active users of our products.
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.
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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
As part of our strategy to expand the licensing of our Ultrasound-on-Chip™ semiconductor platform through Butterfly Embedded™, we expect to continue to engage with third parties on licensing and co-development opportunities.
Any 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.
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.
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.
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.

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Gone since FY2024

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.
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.
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.
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.
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.
Our accumulated deficit as of December 31, 2024 was $802.1 million.
We have developed, and we are engaged in the development of, ultrasound imaging solutions using our ultrasound-on-a-semiconductor-chip technology.
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.
Medical device development is costly and involves continual technological change, which may render our current or future products obsolete.
Our primary competitors include the top five manufacturers of legacy cart-based incumbent ultrasound devices.
We will be dependent upon the success of our sales and customer acquisition and retention strategies.
Our financial performance will be substantially dictated by our success in adding, retaining, and engaging active users of our products.
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.
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.
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.
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.
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 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.
Furthermore, 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.
In addition, our obligation to purchase a minimum volume from TSMC may adversely affect our cash flows.
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.
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.
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.
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 experience manufacturing problems or delays that could limit the growth of our revenue or increase our losses.
Clean room standards are an example of these requirements.
Failure of component manufacturers or other third-party suppliers to comply with applicable standards could delay the production of our products.
If we are unable to keep up with demand for our products, our revenue could be impaired, market acceptance for our products could be adversely affected, and our customers might instead purchase our competitors’ products.
Our inability to successfully manufacture our products would have a material adverse effect on our operating results.
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.
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 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.
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.
For example, in November 2024, we announced our plan to form Octiv, LLC, a wholly-owned subsidiary dedicated to bringing our proprietary chip to new non-competitive markets.
However, we may not be successful in achieving this objective.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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