Is Adaptive Biotechnologies (NASDAQ:ADPT) Using Too Much Debt?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, Adaptive Biotechnologies Corporation (NASDAQ:ADPT) does carry debt. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Adaptive Biotechnologies's Net Debt?

The chart below, which you can click on for greater detail, shows that Adaptive Biotechnologies had US$133.6m in debt in June 2025; about the same as the year before. But it also has US$197.9m in cash to offset that, meaning it has US$64.3m net cash.

A Look At Adaptive Biotechnologies' Liabilities

Zooming in on the latest balance sheet data, we can see that Adaptive Biotechnologies had liabilities of US$92.1m due within 12 months and liabilities of US$225.0m due beyond that. On the other hand, it had cash of US$197.9m and US$45.6m worth of receivables due within a year. So it has liabilities totalling US$73.6m more than its cash and near-term receivables, combined.

Since publicly traded Adaptive Biotechnologies shares are worth a total of US$2.12b, it seems unlikely that this level of liabilities would be a major threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. Despite its noteworthy liabilities, Adaptive Biotechnologies boasts net cash, so it's fair to say it does not have a heavy debt load! There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Adaptive Biotechnologies can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

See our latest analysis for Adaptive Biotechnologies

Over 12 months, Adaptive Biotechnologies reported revenue of US$205m, which is a gain of 22%, although it did not report any earnings before interest and tax. With any luck the company will be able to grow its way to profitability.

So How Risky Is Adaptive Biotechnologies?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Adaptive Biotechnologies lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through US$83m of cash and made a loss of US$121m. But at least it has US$64.3m on the balance sheet to spend on growth, near-term. Adaptive Biotechnologies's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. Pre-profit companies are often risky, but they can also offer great rewards. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. We've identified 1 warning sign with Adaptive Biotechnologies , and understanding them should be part of your investment process.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.