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We can readily understand why investors are attracted to unprofitable companies. For example, Delcath Systems (NASDAQ:DCTH) shareholders have done very well over the last year, with the share price soaring by 231%. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
So notwithstanding the buoyant share price, we think it's well worth asking whether Delcath Systems' cash burn is too risky. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.
See our latest analysis for Delcath Systems
Does Delcath Systems Have A Long Cash Runway?
A cash runway is defined as the length of time it would take a company to run out of money if it kept spending at its current rate of cash burn. When Delcath Systems last reported its December 2024 balance sheet in March 2025, it had zero debt and cash worth US$53m. Looking at the last year, the company burnt through US$26m. So it had a cash runway of about 2.0 years from December 2024. That's decent, giving the company a couple years to develop its business. Depicted below, you can see how its cash holdings have changed over time.
How Well Is Delcath Systems Growing?
On balance, we think it's mildly positive that Delcath Systems trimmed its cash burn by 16% over the last twelve months. But this achievement is overshadowed by the brilliant operating revenue growth of 1,702%. We think it is growing rather well, upon reflection. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.
Can Delcath Systems Raise More Cash Easily?
While Delcath Systems seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Delcath Systems has a market capitalisation of US$429m and burnt through US$26m last year, which is 6.1% of the company's market value. That's a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.