BFLY

Butterfly is executing better than it has in years, and that's the honest part of the story. FY2025 revenue hit a record $97.6M (+19.0% YoY), the strongest growth in the five-year history (FY2021 $62.6M → FY2025 $97.6M), and the MD&A backs the quality of it: units fulfilled rose 9.1% on US and veterinary probe demand, while software/services mix climbed to 35.0% (+1.1pp) on Butterfly Embedded SaaS partnerships. The balance sheet is genuinely clean — $150M cash (+69.5%), liabilities/equity of just 0.51x, and $196M of equity. Critically, operating cash burn shrank to -$12.7M (a 69.5% improvement), so on current burn the cash runway is multi-year. This is not a company at risk of failing.

The problem is the price, not the business. At $8.91 the market cap is $2.20B — 22.6x FY revenue. That is a software multiple applied to a company that is still ~65% hardware/product revenue (software mix only 35%), growing 19%, and structurally unprofitable: operating margin -88.5%, net margin -79.0%, net loss -$77.1M, ROE -39.3%. Gross margin of 46.9% is mediocre for something valued like SaaS, and gross profit actually fell 6.3% YoY even as revenue grew, meaning the revenue mix/pricing is not yet scaling profitably. The accumulated deficit sits at -$879M. To support 22.6x sales, BFLY has to deliver years of accelerating, high-margin software growth flawlessly — the current data shows steady-but-modest progress, not an inflection.