Butterfly Network (BFLY) Morgan Stanley 24th Annual Global Healthcare Conference summary

Strategic direction and technology evolution

• Focus on leveraging semiconductor-based imaging to democratize medical imaging globally, expanding beyond point-of-care ultrasound into broader clinical and non-clinical applications.

• Licensing technology and partnering with third parties increases total addressable market (TAM) and creates new revenue streams.

• Fourth-generation chip, launching in early 2027, will achieve harmonic imaging and surpass current handheld image quality standards.

• Over 600 patents and a partnership with TSMC provide significant competitive barriers and supply chain advantages.

• Modular, cloud-based architecture enables rapid software updates, data aggregation, and integration with health systems.

Business model, partnerships, and market expansion

• Butterfly Embedded enables external partners to build on the core platform, expanding use cases in healthcare and beyond.

• Partnerships with companies like Midjourney and Merge validate the technology and open access to much larger TAMs, with the platform model allowing others to innovate on top of existing IP.

• The company is ring-fencing core medical imaging markets while partnering for niche or highly specialized applications, optimizing capital allocation.

• Early-stage partnerships are driving innovation in brain-computer interfaces and material stress sensing, with applications extending outside healthcare.

• Most new business relationships have been inbound, prompting proactive expansion efforts and organizational adjustments.

Financial outlook and operational leverage

• Five-year, $74 million partnership with Midjourney provides recurring revenue and is expected to extend and grow.

• Core business is moving upmarket with new product launches, including a home business and next-generation probe and station in the coming year.

• Operating leverage is driven by the ability to reuse core investments and technology across multiple verticals and partnerships.

• Revenue per customer and pipeline acceleration are key performance indicators, with a focus on expanding both direct and partnership-driven sales.

• The company anticipates more partnerships and continued growth in both core and embedded business lines.