You do not need to cut it back ,
it will leaf out again and bloom
for you on new wood

Blueangel

I guess it depends on whether you want the most blooms since I believe it blooms on new growth. You don't have to cut it way back, but selective pruning results in a better shape and more blooms. Dead heading in mid summer helps also.
I've left a couple of butterflies untouched so they would complete a hedge and was disappointed that the blooms were pretty poor on spindly growth.
Was yours a seedling when you planted it or an established potted shrub of nursery size? If it was just a seedling, the cutting back process helps the roots establish and strengthen to hold it in the soil.
I'm not a fan of cutting butterflies down to say a foot above ground. I think it only encourages watersprouts

I would think you could just prune it back a little bit to stimulate fuller growth without sacraficing size much. Even a more drastic pruning won't necessarily result in a smaller bush. Every other year or so I hard prune my Abelia and they return the same size they were, just fuller. The same seems to be true of butterfly bushes, but I don't have any mature ones to say for sure. Somehow the one I planted for my mother sprang to full size in two years while mine are still half the size. She has better sun, I blame it on that. Anyways, I think pruning it by up to half will result in a prettier bush with more blooms that I doubt will be any smaller. At the same time, it won't hurt it to leave it alone for another year either. -Ais.

If it's about 4 ft tall in it's third year, don't be shy about whacking it back by a good third to half in spring. Honestly, you aren't hurting the plant at all, and, by a nice cutback, will increase your blooms. And more bloom means more butterflies, yay! Buddleias also benefit by a summer deadheading: again, a new flush of bloom, and the fall butterflies will love you for it!