Butterfly Network (BFLY) TD Cowen 46th Annual Health Care Conference summary

Strategic vision and technology evolution

• Focus on democratizing imaging with a flexible, programmable semiconductor chip for handheld ultrasound, enabling diverse clinical use cases in a single device.

• Technology has been featured in high-profile settings, including TV shows, space missions, and mass casualty events, highlighting its portability and impact.

• The chip's programmability allows rapid adaptation for new applications without hardware changes, accelerating R&D and partnership opportunities.

• Partnerships, such as with Midjourney, leverage the chip's capabilities for AI-driven healthcare solutions, with more collaborations expected.

• The company is positioned at the intersection of AI and medical devices, anticipating a shift from cloud-based to device-based AI in healthcare.

Partnership and pipeline developments

• Midjourney partnership began in late 2024, evolving from technology purchase to exclusive licensing, with a major use case announcement pending.

• Additional partnerships are in development, often starting as R&D collaborations before commercial agreements.

• Early partners include Mendaera (vascular robotics) and Sonic Incytes (fatty liver technology), integrating the chip into their core architectures.

• The company maintains confidentiality during development cycles, with public announcements dependent on partner preferences.

• Embedded business is expected to drive significant revenue and margin growth, supplementing the core handheld segment.

Competitive landscape and intellectual property

• Holds over 600 patents and collaborates with TSMC for chip manufacturing, creating a strong competitive moat.

• Fourth-generation chip has been sent to fabrication, with a fifth generation in development featuring advanced AI capabilities.

• Competes with companies like EchoNous and Exo (Echo), but differentiates through CMUT-based technology and rapid innovation cycles.

• Echo received a significant investment from Samsung, but current market traction favors the company’s latest iQ3 product.

• Ongoing vigilance regarding IP protection and competitive threats, especially from well-funded entrants.