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    Butterfly Network Stock What The Merge Labs Ultrasound Licensing Deal Means

    Simply Wall St·09/15/2026 21:25:48
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    • Butterfly Network, Inc. and Merge Labs announced a multi-year licensing agreement for Butterfly Embedded, giving Merge access to the Poseidon Family of Ultrasound-on-Chip technology for ultrasound-based brain-computer interface development, with upfront and milestone payments, hardware commitments, technology access fees and future royalties.
    • The agreement positions Butterfly Network as Merge’s exclusive CMOS-MEMS chip-based ultrasound supplier for neural interface systems, while still allowing Butterfly to license its technology to other companies in the brain-computer interface field. This highlights the commercial flexibility and potential breadth of its embedded ultrasound platform.
    • We will now assess how Butterfly Network’s new multi-year licensing and royalty framework with Merge Labs could influence the broader investment narrative.

    Scan beyond Butterfly Network and this BCI deal by reviewing handpicked healthcare AI peers screened as 40 healthcare AI stocks.

    Butterfly Network Investment Narrative Recap

    To own Butterfly Network, you need to believe handheld ultrasound can keep gaining traction in hospitals, medical schools and remote care, while the company steadily lifts software mix and manages its R&D burn. The Merge Labs licensing deal adds a fresh revenue stream but does not change that the key near term catalyst is still execution on enterprise, education and HomeCare deployments.

    The biggest immediate risk remains execution and funding friction. Long sales cycles, volatile international demand and heavy AI and semiconductor spend could keep Butterfly reporting losses for some time. The recent agreement looks helpful for validating the chip platform. It does not by itself resolve profitability, sales timing or share price volatility.

    The upcoming Morgan Stanley Global Healthcare Conference on 15 September 2026 is the most relevant near term event for this story. Butterfly Network’s CEO, CFO and finance leadership are scheduled to present. This gives you a chance to hear how management frames the Merge Labs licensing deal within the broader enterprise, AI and HomeCare roadmap.

    Focus on whether they provide clearer detail on the magnitude and timing of embedded technology revenue, the path for Compass AI and Garden apps adoption, and how R&D and cash usage are being managed while the business remains loss making. Any update on pipeline conversion, subscription retention or international program stability matters more for the current risk reward than headline excitement around brain computer interface work.

    Butterfly Network's current earnings are a loss of US$74.8 million, and consensus points to earnings of US$26.9 million by 2029. This implies an earnings improvement of roughly US$101.7 million, alongside forecast revenue of US$221.4 million in that same year, built on an assumed yearly revenue growth rate of 25.5%.

    Uncover why Butterfly Network's fair value indicates a 37% potential upside to its current price, which could narrow quickly.

    NYSE:BFLY 1-Year Stock Price Chart
    NYSE:BFLY 1-Year Stock Price Chart

    Exploring Other Perspectives

    One alternate view treats Butterfly Network’s cash burn as the key issue, not the BCI upside. The most cautious analysts, who were assuming only 15.8% yearly revenue growth to about US$159.7 million and earnings of US$19.3 million by 2029, see slower adoption and more dilution risk. Their story may shift after this licensing news. Compare both narratives for yourself.

    Explore 4 other Butterfly Network fair value estimates, including one that suggests as much as 77% downside from the current price!

    Reach Your Own Conclusion

    Don't just follow the ticker; dig into the data and build a conviction that's truly your own.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.