Butterfly Network at William Blair Conference: Innovating Medical Imaging

On Thursday, 05 June 2025, Butterfly Network (NYSE:BFLY) took center stage at the 45th Annual William Blair Growth Stock Conference. CEO Joe DeVivo shared the company’s strategic vision, highlighting advancements in ultrasound technology and AI integration. While Butterfly projects a 20% revenue growth, it also anticipates an EBITDA loss, reflecting its ambitious investment in innovation.

Key Takeaways

• Butterfly Network is focused on expanding its user base and leveraging AI to revolutionize ultrasound imaging.
• The company projects 20% revenue growth for the year, with improving gross margins.
• Butterfly has launched its third-generation device, IQ3, and is working on future generations.
• The integration of third-party AI applications is enhancing diagnostic capabilities.
• Butterfly devices are used in 70% of US medical schools, emphasizing its educational impact.

Financial Results

• Butterfly projects 20% revenue growth, aiming for $96 million to $100 million.
• Q1 2024 revenue growth was 20%, reaching $25 million.
• Gross margins are improving, and the company is reducing cash consumption.
• An EBITDA loss is anticipated as detailed in the presentation materials.

Operational Updates

• Over $300 million invested in semiconductor technology, cloud, and AI.
• Third-generation device, IQ3, launched in February; fourth-generation expected by late 2026 or early 2027.
• Fifth-generation device in development with 20 times the data rate.
• Expansion into the compact ultrasound cart market is underway.
• Five licensing deals for semiconductor technology are creating new revenue streams.

AI and Software Ecosystem

• Two FDA-cleared AI tools for bladder and lung scanning.
• Ecosystem opened to third-party developers; five partners have submitted applications to the FDA.
• Over 25 million anonymized images in the cloud, growing by 20,000-30,000 new images daily.
• Aorta protocol launched in ScanLab for medical education.

Market Penetration

• Over 150,000 Butterfly devices sold worldwide.
• Devices used in Ukraine, Israel, Gaza, and Africa.
• 70% of US medical schools are using Butterfly devices for teaching.
• Home care pilot program targets congestive heart failure patients.

Future Outlook

• Strengthen core business and drive user base growth.
• Maintain differentiation through technological innovation and AI tools.
• Explore new business streams through partnerships and licensing.
• Expand into the compact ultrasound cart market and home care services.
• Increase presence in medical schools and hospitals.

Q&A Highlights

• Environmental impact standards in Europe are being addressed, with an advisor identified and dossiers under review.

In conclusion, Butterfly Network’s presentation at the conference underscored its commitment to innovation in medical imaging. For more details, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Andrew Brackman, Equity Research Analyst, William Blair: Alright. Hi, everyone. Good morning. Thanks for joining us on the third and final day of the William Blair Grostock conference here in Chicago. If you don’t know me, I’m Andrew Brackman.

I’m the equity research analyst here at Blair that covers Butterfly. We’re very pleased to have the company’s CEO, Joe DeVivo, joining us today. I am required to tell you that for a full list of research disclosures, please visit blair.com. Just another couple pieces of housekeeping. The formal presentation will be in this room that’ll last about thirty minutes, and then we’ll go upstairs for the breakout after the presentation.

With that, I’ll turn it over to Joe. Thanks, Joe.

Joe DeVivo, CEO, Butterfly: Thank you, Andy. And thank you William Blair for having us here. Thank you for your support. We very much appreciate being part of the conference. So, being a growth conference, and there are some familiar faces out there.

So there are some who know the butterfly story. And but also, I’m sure there’s some some new faces and new those that are new to the story. So I’m gonna try to provide whatever new updates I can for existing for those who are are currently interested and those who are new to the story. Hopefully, I’ll I’ll build out the vision and what Butterfly does. So about nine months ago, my son had a medical issue, and his pediatrician said, you need to send him to the emergency room right away.

So that’s, you know, that’s not a good thing. Right? You don’t want to have to go to the emergency room. So we did. We sat there for a bit.

We got into the room. An emergency room doctor came in, inspected, and looked at my son, and said, think I know what it is, but I need to have confirmation. So that confirmation was he wanted an they wanted to order an ultrasound. So we sat there in the emergency room for three hours waiting for the time when my son can be put into a wheelchair, wheeled to a different floor in radiology, have that ultrasound taken by a very skilled ultrasonographer who did a wonderful job, but then had to wait for the wheelchair to pick him back up, bring him back to the room to tell that doctor something that they already knew. Ultrasound, there is 82,000 ultrasonographers in the world or in The United States.

If anyone has an issue and needs an ultrasound, they typically go into a hospital and then have it done in radiology. Two thirds of the world don’t have access to medical imaging at all. And ultrasound is the least cost, the least invasive, without any radiation artifact out in the world. And so the concept of Butterfly believes that every doctor and every nurse has the ability to do their own ultrasound. If Butterfly was in that hospital when we went in first of all, the doctor, when he wanted to confirm, could have confirmed under ultrasound that we could have been out of the ER in five minutes.

Actually, his pediatrician should have had the ultrasound in the first place and saved us the trip to the emergency room. Butterfly is a very innovative company that uses, and I’ll show you, semiconductor technology to make ultrasound even more cost effective, put it in the hands of more doctors, and to change access to care. So we are a publicly traded business. Our guidance for the year is 20% growth to between 96,000,000 and $100,000,000 with the EBITDA loss as you see here. We did 20% growth in the first quarter of twenty five million and had improving gross margins and on a quarter by quarter basis have been reducing our cash consumption.

We are we’ve been making major investments in semiconductor technology, cloud, AI and it’s all paying off. You know, we are focused on our core business momentum, but we also have some new businesses that we’re developing, and I’ll show that to you more in a bit, with new AI tools. And also, we have an ecosystem that new partners have been coming into. And we also in our semiconductor are developing a business to also out license some of our technology as we believe we’ve solved some things foundationally. And then lastly, just for updates for those who know Butterfly, the Ross standards in Europe that focus on the environmental impact, the process has now started.

An advisor had been identified and dossiers are being reviewed. And we can deal with that in the q and a session if you’d like. So how many of you have seen ER? You familiar with ER? Noah Wiley.

Right? Big show about ten, fifteen years ago. Well, he’s back. Noah Wiley has a new show called The Pit. It’s on the Max.

And I just wanna show you a little clip. Butterfly ultrasound Oh, that’s cool. If you can’t feel a pulse, check for Doppler flow with this. It’s a mini ultrasound if all the screen pops.

But a yellow can change to a red if they go south. You gotta stay on top of them even if they seem stable.

Andrew Brackman, Equity Research Analyst, William Blair: Okay, Olivia. I’m doctor King.

Joe DeVivo, CEO, Butterfly: Oh.

Andrew Brackman, Equity Research Analyst, William Blair: Looks like closed tipped rib fractures.

Joe DeVivo, CEO, Butterfly: Strong pedal pulses. Great flow with the butterfly. Sylvia?

Andrew Brackman, Equity Research Analyst, William Blair: Whitaker? Sylvia. Sylvia, can you hear me? Sylvia, can you hear me? I lost her radial pulse.

Joe DeVivo, CEO, Butterfly: From a broken leg? Well, what did

Andrew Brackman, Equity Research Analyst, William Blair: we miss?

Joe DeVivo, CEO, Butterfly: I don’t know. Heart attack, another injury from the car crash? That’s for pulses. It has an EFAST mode.

Andrew Brackman, Equity Research Analyst, William Blair: Diagnosis made. So

Joe DeVivo, CEO, Butterfly: there’s probably four other scenes in that show too, but it shows you how in an emergency session for to have something mobile, to have something smart, this was not a product placement on the PET. We didn’t pay for this. One of the advisors was fan of butterfly. They called us and asked us for a probe. We gave him a probe.

And now we were probably in, you know, 16 of the thirty minutes of that show was all butterfly. And then so I’d I’d encourage you to look at episode twelve and thirteen, But it shows real life why this is so important. Our semiconductor, normal ultrasound devices have lenses or crystals in them. And those crystals are pre tuned, pre cut to a certain array, then different frequencies allow that array to see different parts of anatomy. So if you’ve ever seen an ultrasound machine, have one probe to look at the abdomen, one probe to look at the chest, one for MSK, one for other.

Butterfly, as you see in the screen, in on the left, has a MEMS semiconductor. You see those little vibrating drums. We have 9,000 vibrating drums on our chip, and we can control each drum in the independently. So that allows us to dynamically create the sound and create the the type of array. So when you’re in that situation, you don’t have to go run for this machine, that machine.

You just simply choose the abdominal preset. It tunes itself to exactly what it should be, and then you go. You know, supercomputers used to be huge. Now, all of you have them in your pocket. Well, ultrasound used to be huge.

And Butterfly is now on this Moore’s Law semiconductor development journey to be able to miniaturize, cost reduce, increase power to literally deliver almost like a Star Trek type experience where you have a device that can scan the body and in the future AI will be able to determine things to allow people to scan and also to make decisions. Butterfly is the company that is digitizing ultrasound. Because of our semiconductor, it’s allowing us to be able to, in a low cost way, just like a digital camera. You know, everyone knows about Kodak and what occurred in the early nineties when they came out with the first digital camera. It was one megapixel, image wasn’t good enough, they shut the program down.

All the other great imaging companies said, no, wait a minute. This is actually a great idea, but you have to stay the course and invest in semiconductors. Well, Butterfly has done that, and we’ve been investing in semiconductors now and have just launched our third generation. And in the marketplace, our economics are strong. We are saving people money.

Hospitals are able to bill and able to acquire these images. And there’s just a very strong economic standard set that Butterfly is setting out there. And because we have one device that works in most all use cases for the full body, we won one of the largest awards in ’24 in healthcare for having the best new technology. And it has applicability in all these different use cases. So if you’re in a rural area or you’re in a troubled area, I mean, example, we have over a thousand of these devices in Ukraine right now.

Every medic has a butterfly. They don’t have to worry about, you know, just triaging or just stabilizing them and sending them to a forward unit. They’re able to diagnose them right away and take care of them. We have them in Israel and Gaza. We have them in all throughout Africa.

Not only that, but we have over 100,000, one hundred and 50 thousand devices that have been sold around the world to doctors who have them personally for their individual practices. In order to make this work, Butterfly over time has not just developed the probe in the semiconductor, we’ve developed a software ecosystem to make it work. So today, someone purchases it’s it’s very similar to iPhone and iCloud. So if someone purchases the device, they also then get a cloud account and they pay an annual subscription to be able to store their data and have advanced tools. And we are constantly improving that software and pushing out new updates.

So when you buy a butterfly, the device actually gets better and better just like your iPhone. You have more capabilities. You have the opportunity to deal with bug fixes, the opportunity to make different improvements. And all of those devices are networked into a cloud. We have over 25,000,000 images of of of anonymized images that come in our cloud, and that is growing by about 20 to 30,000 new images a day.

So that lets us do AI development, lets us do our own digital clinical trials to be able to develop the best software and the best use cases. And this operating system we then now sell to hospitals because it will link our software will link into their electronic health record. It’ll link to the hospital’s DICOM and also their revenue cycle management system. So as they are collecting ultrasound is notorious for not getting the records for reimbursement because it’s so easy to pick the device up, you know, do a scan and not walk through the documentation. But in the workflow of the Butterfly, we make it very easy.

When you when you turn on the Butterfly, you have to log in. It knows who you are. If it knows who you are, it knows who your patients are. You select your patient. When you choose your preset, say I want to do an abdominal scan.

When you choose your preset, then all then the CPT codes come up. And say, well which one of the five abdominal codes are you gonna do? You select which code it is and it actually walks you through the workflow to ensure you get all the images necessary to qualify for that code. So it’s all dynamic. It’s all within the system.

And we’ve built this now ready to become a real part of the future of health care. Now, one of the biggest challenges with ultrasound is its heart. When you anyone ever go get a CT or an MRI here? Right. Well, that that technician, when you go in for that scan, what do they tell you?

Lie on the bed, keep your head down, don’t move. Right? Then they go in another room and they initiate a standard protocol. And as you’re lying there, the machine automatically is collecting your images. With ultrasound, ultrasound is like a flashlight.

You have to contort it. You have to know where in the body to put it. You have to know where that anatomy is. And then when you see it, you have to then, of course, know what you’re looking at. And the images are not necessarily, you know, as intuitive.

And so how do you get every doctor and every nurse in the world to be able to do ultrasound? Are they gonna are they gonna go through the same type of classic training that an ultrasonographer goes through? Kinda hard. So, we have been able to teach people individual scans and start developing them. And we have tools online like Butterfly certified, we have a Butterfly University, and then we have some tools I’ll show you in a moment.

But the ultimate way to unlock this market is through AI tools. So today we have two FDA AI tools that can automatically scan the bladder and give a bladder volume. We can automatically scan the lung and tell you how wet it is for congestive heart failure patients. And now what Butterfly has done is opened its ecosystem up to third party developers. So if they now develop a echo, they they can develop an automated AI tool for echo cardiography.

And now it with a new software development kit that we’ve published, they can launch that AI tool into the App Store. The the our customers literally download the app onto their phone. They get the ID and password from the company that they’ll pay for, and then now they plug their Butterfly into that app, and all the data from Butterfly comes into that application. We have our partners now five of our partners have applications into the FDA. One of them two of them have received FDA clearance.

One is iCardio, the other is Deske or Heart Focus. And those apps will be launched in this calendar year And then customers will now have the opportunity. Everyone in the Butterfly ecosystem will have the opportunity just to download the app, buy the keys from the company. And then of course, within the ecosystem, Butterfly enjoys a percentage of that software revenue. So as that now as more and more apps come into the ecosystem, not only does our device get more capable and our users have the ability to do more and more things easily, but we but we now see a revenue stream from that.

And partners wanna come in to Butterfly because we have the largest installed base in the world for handheld devices, larger than GE, larger than Philips, larger than any other company because we’re affordable and we’re all in one and we’re we’ve created this this fungible technology. So we’re really excited about our new partners coming in. We have 23 different companies today that are developing apps to come into the Butterfly ecosystem. I think that’s just going to grow over the next several years. Now, we are in the in the point of care ultrasound market or the handheld market.

And as you see in the left, it is the fastest growing space in ultrasound, but it’s also the smallest. As our semiconductors get better and better and our image quality gets more and more powerful, we believe we have access to start moving right on this chart. There are some developments that we have that will help us get into the compact ultrasound cart market and then also into the low ultrasound market over the next several years. I’ll show you some of that evolution. So we’ve been basically blazing a new trail because within the last ten years, the handheld market has been developed.

So that’s a brand new market and a lot of the energy on the handheld side have been propagated by butterflies efforts. But as our semiconductor gets more and more powerful, then we open up access to a lot of the existing market. And we are a semiconductor company. We have a semiconductor with a MEMS wafer. It’s made by TSMC.

They are our partner. They’re very fascinated with the MEMS technology and and and have done an amazing job. And you can see here five different generations of semiconductors with the different performance characteristics. We launched Butterfly with the IQ about a year later, followed it up with the IQ plus with our p 4.1 chip. And then recently last February launched IQ three, our third generation device.

You see the data rate, it has double the processing power. And you’ll see in a moment what that does for the image. But we’re now also, you know, one of the biggest knocks against digital ultrasound has been mechanical pressure and can you get harmonics to really get the higher level image. We’ve solved that problem. And in our fourth generation, the image quality is off the charts.

And I’m going to show you in a moment. And then we have our fifth generation that’s also in development. So we believe that by the end of twenty six, beginning at ’27, we should have our fourth generation device out, and then a couple of years later, our fifth generation. And the fifth generation, look at that data rate. It’s actually 20 times the power of the the current device.

So a lot of excitement on the development. And this is kind of our visual journey. So I I don’t know I don’t know if anyone’s an ultrasonographer here. I’m a lay person. I’ve looked at these images a lot.

But you can see from left to right that evolution. You know, that 2015 is kind of the Kodak giving up on the digital camera market time. We didn’t give up. We kept on going. And we’ve invested over $300,000,000 in the development of this semiconductor.

And so it’s unique and special. The IQ is where we are today, and p five is our fourth generation. But on this chart, you know, we we are big admirers of Mindray. They do a wonderful job in the m eight cart. This is a list price $32,995 cart image on the right.

We have it in our lab. We use it as kind of a gold standard. Our fourth generation chip is pretty amazing. You can see the image clarity. You can even see the platelet cloud in the ventricle.

You see air you saw all the anatomy clearly. We have a wide field of view. And this isn’t a device I can’t price our fourth generation device, but we sell our current device for $3,899. So I don’t know what our fourth generation price will be, but it’s, you know, roughly one ninth, one tenth of what a card is, but it’s in the it’s in your pocket. It walks with you.

You know, doctors bring it into their practice. They bring it to a clinic they work on. They bring it on missionary trips. They bring it into the hospital. And we get yelled at by hospitals at times because and we we’ve had these problems.

It’s almost a little bit of the iPhone Blackberry scenario where, you know, you all probably had a Blackberry a while ago working for financial institutions. They said, this is what you’re gonna use for your this is locked down and secure and this has etcetera. But what did you do? You went out and, you know, all these apps were coming out. It was cool.

There’s always things you could do on it. And so you bought your own iPhone even though you had a Blackberry. And then when there were a lot of iPhones out there, then, you know, IT directors started to realize, well, I I can’t govern this, but we can lock down the iPhone. We can manage our data and and and move forward. There are hundreds of doctors in any particular medical institution that has their own that has their own butterfly today.

About a thousand to 1,500 a quarter just go online, use their credit card, and buy their own device outside the realm of the hospital. So what that does is it kind of creates this tipping point for us. We’ll sit down with administration and say, do you know that about a hundred of your doctors own butterflies? And we’ll get yelled at when they bring them in the hospital because it’s not integrated, of course, into their system, so they’re not getting that data. That’s why that software package I showed you earlier is so important.

We go, so sorry, but if you buy now our software, we can port all that data in and it’s sitting in the cloud. So if we didn’t lose it, we can now put it in and then integrate into your system. So that’s why Butterfly is so cool. That’s why Butterfly is so impactful. That’s why Butterfly is so disruptive.

That’s why a lot of the other big companies don’t like butterfly because we’re moving their cheese and we’re moving it pretty big. And so, you know, when we look at just the the core pocus market, you know, it’s projected to be a $600,000,000 market in a few years. And you say, well that’s not huge, but that’s the market we’re crafting out for ourselves. As our imaging gets better and better like you saw in p five, we believe the core $8,000,000,000 market is our own oyster now to go after. And that is something that we’re going to see in the next two to three years.

We have a cart concept that is true to our one to one mission. And I look forward to in the future showing you what that cart looks like. But here’s the cool part. I told you that a regular ultrasound device is like a flashlight. Right?

So you have a beam coming out and you have to kind of contort and steer it. Well, we have the ability to actually move the beam without moving the device. So I could put the device over the kidney, for example, press a button, and it’ll move the beam and just scan it. I don’t need a lot of skill in order to do that. I don’t have to be an ultrasonographer to capture an image.

Because everything is cloud based and everything is in our software, we can pull that image out. We can send it to a specialist, and then they can read it. So think now about the millions of patients in their in the home dealing with all different types of of congenital or or or, you know, congenital diseases. And and and look at, you know, congestive heart failure, look at diabetes, etcetera. Imagine you have a device, and we’re making a device now.

This is my AirPod. We’re making a device this size that ultimately will go on a patient. And that can do a scan of that patient, send that image into a cloud, direct it to a cardiac nurse, say, for example. And then they can determine whether they should intervene. That’s world changing.

The first evolution of butterfly has been we’ve been in this race to show that our image can be good enough. People thought we were just this wellness device and they would just do this because it’s cool. But now our image is so good, we can do clinical diagnosis and we are as good as everybody else. And now we’re gonna be better. So now the next phase of Butterfly is not trying to get to equivalency.

The next phase of Butterfly is showing we can change the world, change how we get these images, and change. And that’s where the massive opportunity over the next three to five years comes to fore. About 70% of medical schools in The United States actually are teaching kids on butterfly today. So there’s a whole generation that are learning ultrasound skills that in the next ten to twenty years, like and actually, this year, 2025, is the first class from several schools that are graduating with four years of having of being trained in ultrasound. And now many of these schools are going from having 10 of these in their lab to giving one to every every student when they come in.

People get their own stethoscope when they come in. That’s pretty standard. It’s almost like a college kid getting their laptop. Well, in the next several years, all these schools are gonna be giving a butterfly to all their all their students. We give them a discounted rate on on the device just like Apple did.

We establish our brand. We establish our relationship. We establish their know how into our ecosystem. And then when they graduate, you know, we we take them from an education to a clinical user. And that’s a big part of our second quarter is usually our medical school quarter because their fiscal year ends at the end of the second quarter.

And we now are seeing hospitals go from having a few in the lab to now go into these one to one models. And AI is the way that helps accelerate because we’ve now come up with an AI tool that can that can identify when you scan it what organ you’re looking at. And we can show the kids, hey, just like you see on the left, we’re we’ve just launched an aorta protocol into ScanLab, so that’s a new piece of news for us. But you see that when on the left, it’ll tell the student, put the probe right here under the sub xiphoid. And then as they’re looking, it’ll show them that’s the spine in orange, that’s the aorta in red, and that’s the inferior vena cava.

So by literally labeling it for them, you’re demystifying the image and you’re helping them learn. So all they want to do is scan, scan, scan. So we have this type of thing for cardiac, for pulmonary, for abdominal, and now specifically for aorta. And we’re ultimately going to have a protocol that’s going to scan down the aorta. Why is that important?

Because if there’s an aneurysm and there’s any type of diameter changes, we’re gonna be able to see it before the naked eye would see it. Pretty damn cool. And so there’s actually Kansas City University is the first medical school that has made the first year curriculum all based on ScanLab. They have to go through all of the different views. And and every time they do a scan, it comes up into the software and their instructors are able to view the scans, the quality of the scans, etcetera.

So again, medical education is very important. Now, I’ll end on two quick things. Home care. Well, in order to get into the home, we have to be able to empower nurses and and health care practitioners in the home to be able to do ultrasound. We’re working on a pilot right now where we’re eating our own dog food.

We’re committing to an at risk provider that we will train nurses to be able to do a scan. We will take that scan and direct it to a cardiologist and help them get real time diagnosis for congestive heart failure patients. And we’ll take risk on this. So we have a pilot, 200 patients. The pilot’s going to end now July 21.

And then after that, if it goes well, we may be able to sell our services to this at risk provider to help them manage tens of thousands of patients in The United States. If that works, it’s a brand new revenue stream for Butterfly. We also, as I mentioned to you, are developing a licensing business for our chip. Because we learned that our chip is not just a point of care ultrasound chip, it’s actually a chip that would help anyone who wants ultrasound. So we’ve created five deals now with five different companies who are licensing our chip and purchasing our chip and paying for our software to be able to tune it to the specific application they want to embed it into their device.

And we think there’s a very big market opportunity in wearables, implantables, interventional therapeutics, but also in non healthcare verticals. We think the oil and gas industry is interested in this, military for security, because there’s a lot of things that these MEMS sensors can do with delivering sound, looking at fingerprints, etcetera, etcetera. So we are going to return value to our shareholders by monetizing that $300,000,000 investment in any way that we can that we possibly can. So our core pillars for growth is to strengthen our core, to drive our user base, to create and maintain our differentiation, and then generate as much new business as possible. And that kind of guides us, and we’re very, very excited about where we are as a business.

So I want to thank you all for your time, and we’ll have Q and A in a different room. Andrew Ray? All right. Thank you everybody.

Andrew Brackman, Equity Research Analyst, William Blair: This presentation has now finished. Please check back shortly for the archive.

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