On November 17, 2025, Butterfly Network’s subsidiary entered into a significant five-year co-development and licensing agreement with Midjourney, granting the latter exclusive access to its semiconductor-based ultrasound technology. This deal involves a US$15 million upfront payment, annual license fees of US$10 million, and opportunities for additional milestone and revenue-sharing options. The partnership underscores the growing interest within the healthcare industry for Butterfly’s innovative ultrasound-on-chip technology.
The agreement coincides with Butterfly’s recent launch of Compass AI, an AI-driven enterprise software platform aimed at enhancing healthcare workflows, compliance, and revenue capture. This development is particularly relevant as it targets the operational needs of healthcare systems while advancing Butterfly’s push into the AI sector.
Investors are closely observing how this major licensing deal, especially the recurring revenue from Midjourney, could transform Butterfly’s investment narrative. While this partnership adds a layer of recurring revenue and validates the company’s ultrasound-on-chip technology, the immediacy of enterprise adoption through substantial healthcare system deals remains crucial. Analysts point out that slow sales cycles and potential delays in closing high-value agreements represent ongoing risks, which, despite the recent news, persist as challenges for the company.
The launch of Compass AI enhances workflow automation and documentation for healthcare systems, positioning Butterfly to meet growing enterprise demands. Analysts have identified this capability as vital for encouraging broader adoption and enhancing subscription revenues, which are seen as key growth drivers for the company.
Despite the positive momentum generated by the Midjourney agreement and the launch of Compass AI, uncertainties surrounding enterprise sales cycles linger. Investors are advised to remain cautious as these cycles may cause delays in revenue realization. Nevertheless, Butterfly Network’s outlook predicts a revenue target of $135.9 million and earnings of $17.0 million by 2028, stemming from a projected annual revenue growth rate of 15.8%. This projection indicates a substantial improvement from the current earnings level of -$62.8 million, raising the possibility of a $3.58 fair value for its stock—a 16% upside from current trading prices.
Recent analysis from the Simply Wall St Community revealed varied fair value estimates for Butterfly Network, ranging from US$0.87 to US$10.29 per share. This wide divergence reflects differing opinions on the impact of recurring license revenue from partnerships and the unpredictability of enterprise sales cycles. Such factors could significantly influence Butterfly’s financial landscape going forward.
Looking ahead, the company’s ability to accelerate major enterprise adoption through large-scale healthcare system deals is pivotal. This critical juncture will ultimately determine whether Butterfly Network can translate its innovative technologies into sustainable revenue streams. As the healthcare market increasingly embraces AI and chip-based solutions, Butterfly’s strategic moves in this arena will be scrutinized closely by analysts and investors alike.
While the excitement surrounding Butterfly Network’s recent developments is palpable, the path to profitability remains fraught with challenges. The company’s focus on transformative technology must align with effective sales strategies to navigate the complexities of the healthcare sector. As healthcare systems continue to evolve, Butterfly’s innovations may play a pivotal role in shaping the future of medical diagnostics and patient care.
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