Is BFLY a Buy? What to Consider in 2026
Short answer
The bull case for Butterfly Network (BFLY) rests on Software and recurring-revenue mix shift: Software and other services revenue grew roughly 68% year over year in Q1 2026 to about $12M and now makes up a larger share of the total. Revenue (TTM) is ~$103M. If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: Butterfly remains unprofitable, with trailing losses of roughly $76M against about $103M of revenue as of Q1 2026, so it depends on its cash balance and, potentially, future capital raises that could dilute shareholders. Whether BFLY is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
Butterfly Network designs and sells handheld ultrasound systems built on its proprietary Ultrasound-on-Chip technology, which replaces the traditional piezoelectric crystals in an ultrasound machine with a semiconductor sensor. That lets a single probe (the flagship iQ3) image the whole body and connect to a phone or tablet, and the company layers on subscription software, cloud storage, and AI tools that push clinicians toward higher-margin recurring revenue. Customers include hospitals, clinics, medical schools, and increasingly international and lower-resource settings where a $2,000-to-$5,000-range device is far cheaper than a cart-based system. The investment picture is classic emerging medtech: real and reaccelerating growth (Q1 2026 revenue rose about 25% year over year, led by roughly 68% software growth) against persistent losses and cash burn, offset by a solid cash cushion of about $138M. The stock has been extremely volatile, having run up sharply, so it trades at a high multiple of sales while the company is still guiding to an adjusted-EBITDA loss for 2026. The bull case rests on software mix, AI, and international expansion driving the model toward profitability; the bear case is that competition, hardware-cycle lumpiness, and dilution keep margins and the share price under pressure.
What's the case for buying BFLY?
1. Software and recurring-revenue mix shift
Software and other services revenue grew roughly 68% year over year in Q1 2026 to about $12M and now makes up a larger share of the total. Because software carries much higher gross margins than probes, this mix shift is the main lever pushing company gross margin toward the high-60s percent range and narrowing the adjusted-EBITDA loss.
2. iQ3 probe and hardware refresh cycle
The higher-priced iQ3 probe, launched domestically and then internationally, has lifted average selling prices and international revenue. New hardware refreshes drive device replacement demand, though they also make quarterly revenue lumpy as sales are tied to launch timing and channel adoption.
3. AI and international expansion
Butterfly is embedding AI-guided acquisition and interpretation tools and pushing into international markets where handheld ultrasound can leapfrog expensive cart systems. Management frames AI plus global reach as the path to broadening the addressable market beyond specialist sonographers to generalist clinicians.
4. Cost discipline and path toward breakeven
The company has cut quarterly cash burn to record lows and narrowed its adjusted-EBITDA loss versus prior year while still investing in R&D and sales. Reaching sustainable profitability depends on holding operating expenses roughly flat while revenue compounds in the 20%-plus range.
What are the risks to BFLY?
Butterfly remains unprofitable, with trailing losses of roughly $76M against about $103M of revenue as of Q1 2026, so it depends on its cash balance and, potentially, future capital raises that could dilute shareholders. The point-of-care ultrasound market is competitive, with GE HealthCare, Philips, Clarius, Exo, and others fielding rival handheld devices, which can pressure pricing and adoption. Revenue is lumpy because it leans on hardware launch cycles and large institutional orders, and the stock trades at a high multiple of sales after a large run-up, leaving it vulnerable to sharp drawdowns if growth or margins disappoint. Regulatory, reimbursement, and clinical-adoption dynamics add further uncertainty to the timeline for profitability.
How is BFLY valued? (as of JUNE 2026)
Snapshot for BFLY as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (TTM): ~$103M
- Q1 2026 revenue growth: ~25% YoY
- FY2026 revenue guidance: ~$117M to $121M
- Gross margin (Q1 2026): ~69%
- Cash and equivalents: ~$138M
- Market cap: ~$1.5B to $2.3B (volatile)
As of mid-2026, Butterfly generated roughly $103M in trailing revenue while posting net losses, and it guided to full-year 2026 revenue of about $117M to $121M with an adjusted-EBITDA loss of roughly $21M to $25M. With a market cap in the $1.5B-to-$2.3B range after a large share-price run, the stock trades at a high multiple of sales, so the valuation embeds substantial future growth. The roughly $138M cash balance gives it a multi-year runway at current burn rates.
How do you decide if BFLY is a buy?
Rather than asking whether BFLY is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold BFLY indirectly through an index or sector ETF before adding more.
For the full picture, see the BFLY stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about BFLY against your real portfolio and see your actual exposure before deciding.
The bottom line on BFLY
The bottom line: Butterfly Network's story right now is Software and recurring-revenue mix shift, with revenue (ttm) at ~$103M. If you believe that narrative continues, the call is about sizing BFLY sensibly and checking overlap with what you own; if you doubt it (the risk: butterfly remains unprofitable, with trailing losses of roughly $76M against about $103M of revenue as of Q1 2026, so it depends on its cash balance and, potentially, future capital raises that could dilute shareholders.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
Build a basket around BFLY with Walnut
Use Butterfly Network as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
Is BFLY a good stock to buy right now?
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The case for Butterfly Network right now is Software and recurring-revenue mix shift, with revenue (ttm) at ~$103M. If you believe that thesis holds, BFLY is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is butterfly remains unprofitable, with trailing losses of roughly $76M against about $103M of revenue as of Q1 2026, so it depends on its cash balance and, potentially, future capital raises that could dilute shareholders. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does Butterfly Network do?
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Butterfly Network designs and sells handheld ultrasound systems built on its proprietary Ultrasound-on-Chip technology, which replaces the traditional piezoelectric crystals in an
What are the main risks of BFLY?
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Butterfly remains unprofitable, with trailing losses of roughly $76M against about $103M of revenue as of Q1 2026, so it depends on its cash balance and, potentially, future capital raises that could dilute shareholders. The point-of-care ultrasound market is competitive, with GE HealthCare, Philips, Clarius, Exo, and others fielding rival handheld devices, which can pressure pricing and adoption. Revenue is lumpy because it leans on hardware launch cycles and large institutional orders, and the stock trades at a high multiple of sales after a large run-up, leaving it vulnerable to sharp drawdowns if growth or margins disappoint. Regulatory, reimbursement, and clinical-adoption dynamics add further uncertainty to the timeline for profitability.
What does Butterfly Network do?
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It makes handheld ultrasound probes built on a proprietary Ultrasound-on-Chip semiconductor, letting a single device image the whole body when plugged into a phone or tablet. It also sells subscription software, cloud storage, and AI tools that add recurring revenue on top of the hardware.
Is Butterfly Network profitable?
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No. As of Q1 2026 the company was still posting net losses, with trailing losses of roughly $76M against about $103M of revenue. It has narrowed its adjusted-EBITDA loss and cut cash burn, but management still guides to an adjusted-EBITDA loss for full-year 2026.
How fast is Butterfly growing?
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Revenue grew about 25% year over year in Q1 2026 to roughly $26.5M, led by software and services up around 68%. Full-year 2026 guidance of about $117M to $121M implies roughly 20% to 24% annual growth.
What is the iQ3 probe?
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The iQ3 is Butterfly's flagship third-generation handheld ultrasound probe, offered at a higher price point than earlier models. Its domestic and international launches have raised average selling prices and helped lift international revenue.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell BFLY; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.