Is SaltX Technology Holding (STO:SALT B) In A Good Position To Deliver On Growth Plans?

Just because a business does not make any money, does not mean that the stock will go down. Indeed, SaltX Technology Holding (STO:SALT B) stock is up 201% in the last year, providing strong gains for shareholders. 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 SaltX Technology Holding's cash burn is too risky. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.

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How Long Is SaltX Technology Holding's Cash Runway?

A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. SaltX Technology Holding has such a small amount of debt that we'll set it aside, and focus on the kr18m in cash it held at June 2025. In the last year, its cash burn was kr35m. Therefore, from June 2025 it had roughly 6 months of cash runway. To be frank, this kind of short runway puts us on edge, as it indicates the company must reduce its cash burn significantly, or else raise cash imminently. You can see how its cash balance has changed over time in the image below.

Check out our latest analysis for SaltX Technology Holding

How Well Is SaltX Technology Holding Growing?

Happily, SaltX Technology Holding is travelling in the right direction when it comes to its cash burn, which is down 70% over the last year. But it's hard to delight in that cash burn reduction given the 53% collapse in revenue. On balance, we'd say the company is improving over time. In reality, this article only makes a short study of the company's growth data. You can take a look at how SaltX Technology Holding has developed its business over time by checking this visualization of its revenue and earnings history.

How Easily Can SaltX Technology Holding Raise Cash?

Since SaltX Technology Holding revenue has been falling, the market will likely be considering how it can raise more cash if need be. Companies can raise capital through either debt or equity. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn.

SaltX Technology Holding has a market capitalisation of kr1.7b and burnt through kr35m last year, which is 2.1% of the company's market value. So it could almost certainly just borrow a little to fund another year's growth, or else easily raise the cash by issuing a few shares.

So, Should We Worry About SaltX Technology Holding's Cash Burn?

On this analysis of SaltX Technology Holding's cash burn, we think its cash burn relative to its market cap was reassuring, while its cash runway has us a bit worried. We don't think its cash burn is particularly problematic, but after considering the range of factors in this article, we do think shareholders should be monitoring how it changes over time. Separately, we looked at different risks affecting the company and spotted 4 warning signs for SaltX Technology Holding (of which 2 shouldn't be ignored!) you should know about.

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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.