GET DAILY SIGNALSButterfly Network (BFLY) Delivers Strong Q3 with Record Margins and Raised 2026 Outlook
Key Takeaways
- Butterfly Network reported third quarter 2026 revenue of $32.6 million, up 52% year over year and about 9% above the top end of its own guidance.
- GAAP net loss narrowed to $12.8 million, or $0.05 per share, compared with a $34.0 million loss, or $0.13 per share, a year earlier.
- The company posted its highest gross margin in its history at 73.0%, while adjusted EBITDA loss improved to just $1.2 million.
- Butterfly raised its full-year 2026 revenue guidance to $123 million to $126 million, representing roughly 26% to 29% growth.
- Butterfly Embedded revenue surged more than 1,000% to $11.1 million, driven by the Midjourney partnership and new partners including Merge Labs and Bridge Neurotech.
- Shares rose about 5.8% on the day of the report as investors reacted to the beat and raised outlook.
Earnings Context and Why It Matters
Butterfly Network, a pioneer in semiconductor-based ultrasound devices, cloud software, and artificial intelligence, has been shifting from a hardware-focused point-of-care ultrasound provider toward a broader platform built around enterprise software and high-growth Embedded partnerships. The third quarter of 2026 served as an important checkpoint for that transition, with investors seeking confirmation that recent revenue growth and margin improvements could hold up. Earlier periods had shown solid U.S. gains and shrinking losses, yet the core POCUS business had expanded more gradually. This quarter stood out because it tested whether the Embedded pipeline and enterprise momentum could counter international softness and keep the company aligned with its path to profitability.
Reported Results
Butterfly Network reported third quarter 2026 revenue of $32.6 million, a 52% increase from $21.5 million a year earlier and ahead of the roughly $28.4 million consensus estimate. Net loss was $12.8 million, or $0.05 per share, versus a $34.0 million loss, or $0.13 per share, in the prior-year period. Adjusted loss per share came in at about $0.01, better than the roughly $0.04 loss analysts had projected. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Gross margin reached a record 73.0%, up 913 basis points year over year, helped by a higher mix of Embedded revenue. Adjusted EBITDA loss narrowed to $1.2 million, an 85% improvement from $8.1 million a year earlier. U.S. revenue climbed 71% to $27.5 million, while international revenue declined 5% to $5.1 million amid deal timing shifts. Core POCUS revenue rose 5% to $21.5 million, while Embedded revenue jumped over 1,000% to $11.1 million. Cash and equivalents stood at $122.3 million at quarter end.
Management raised full-year 2026 revenue guidance to $123 million to $126 million and issued fourth-quarter revenue guidance of $31 million to $34 million, with an adjusted EBITDA loss of $3 million to $6 million. The company also highlighted five seven-figure and ten six-figure TCV enterprise deals.
Market Reaction and Investor Sentiment
Investors responded favorably to the report, pushing shares up roughly 5.8% on the day to close near $7.81. The combination of a revenue beat, a record gross margin, a sharply narrower adjusted EBITDA loss, and a full-year guidance raise helped refresh sentiment after a period of choppier short-term trading. The market’s positive tone was tempered somewhat by the fourth-quarter guidance range, which implied a potential sequential revenue dip, and by the disclosure of a new $150 million shelf registration and ATM program, which some investors view as a potential dilution risk. Still, the dominant interpretation was that Butterfly’s Embedded strategy is scaling faster than expected while the enterprise pivot continues to firm up the core business.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors will be watching whether BFLY can sustain its Embedded momentum while stabilizing international results. Management signaled expectations for improved fourth-quarter and 2027 performance, but Embedded revenue remains lumpy because it is tied to partner program timing and development milestones. Concentration risk around a few large partners, including Midjourney, is another factor to monitor, particularly since management does not break out individual partner contributions.
On the core side, the company’s enterprise strategy is gaining traction through multi-year contracts and Compass AI adoption. The FedRAMP authorization achieved during the quarter opens access to the federal government, the largest healthcare purchaser, and management pointed to a growing pipeline. The Home & Community Care program has moved into execution, with initial revenue expected in the fourth quarter and more meaningful contribution anticipated by 2028.
Key variables to track in coming quarters include gross margin durability, cash burn, the pace of international recovery, and whether enterprise deals layer into a steadier revenue base. The new shelf registration and ATM program also bear watching, as any equity issuance could affect share count. As always, these items should be evaluated alongside broader demand for portable, AI-enabled ultrasound across hospital, clinic, and out-of-hospital settings.
Exploring AI Tools for Earnings Analysis
In my own workflow I frequently turn to Tickeron’s AI-powered tools to cross-check earnings data and spot comparable setups across the medtech sector. The AI Screener lets me filter quickly on fundamentals, growth rates, and technical signals, which helps put a quarter like this one in broader context without spending hours on manual screens. It has become a regular part of how I review names that are transitioning business models.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
BFLY sees MACD Histogram crosses below signal line
BFLY saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on October 07, 2026. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 45 instances where the indicator turned negative. In 41 of the 45 cases the stock moved lower in the days that followed. This puts the odds of a downward move at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for BFLY moved out of overbought territory on September 23, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 27 similar instances where the indicator moved out of overbought territory. In 21 of the 27 cases, the stock moved lower in the following days. This puts the odds of a move lower at 78%.
BFLY moved below its 50-day moving average on October 13, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for BFLY crossed bearishly below the 50-day moving average on October 14, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 14 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 88%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where BFLY declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 89%.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 54 of 63 cases where BFLY's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 86%.
The Momentum Indicator moved above the 0 level on October 28, 2026. You may want to consider a long position or call options on BFLY as a result. In 69 of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 82%.
Following a +17.27% 3-day Advance, the price is estimated to grow further. Considering data from situations where BFLY advanced for three days, in 186 of 226 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
The Aroon Indicator entered an Uptrend today. In 137 of 156 cases where BFLY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 88%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 15 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.980) is normal, around the industry mean (3.824). P/E Ratio (-26.931) is within average values for comparable stocks, (1.677). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (11.052). Dividend Yield (0.000) settles around the average of (0.010) among similar stocks. P/S Ratio (16.556) is also within normal values, averaging (40.124).
The Tickeron Price Growth Rating for this company is 36 (best 1 - 100 worst), indicating steady price growth. BFLY’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 53 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 97 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BFLY’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 95, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
Industry MedicalNursingServices
Advertisement