Health Check: How Prudently Does Dyadic International (NASDAQ:DYAI) Use 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.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Dyadic International, Inc. (NASDAQ:DYAI) makes use of debt. But the more important question is: how much risk is that debt creating?

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When Is Debt A Problem?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is Dyadic International's Net Debt?

You can click the graphic below for the historical numbers, but it shows that Dyadic International had US$4.99m of debt in March 2025, down from US$5.83m, one year before. But on the other hand it also has US$7.35m in cash, leading to a US$2.36m net cash position.

How Strong Is Dyadic International's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Dyadic International had liabilities of US$1.96m due within 12 months and liabilities of US$5.01m due beyond that. Offsetting these obligations, it had cash of US$7.35m as well as receivables valued at US$244.9k due within 12 months. So it actually has US$623.1k more liquid assets than total liabilities.

This surplus suggests that Dyadic International has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Succinctly put, Dyadic International boasts net cash, so it's fair to say it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But ultimately the future profitability of the business will decide if Dyadic International 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.

Check out our latest analysis for Dyadic International

In the last year Dyadic International wasn't profitable at an EBIT level, but managed to grow its revenue by 58%, to US$3.6m. With any luck the company will be able to grow its way to profitability.

So How Risky Is Dyadic International?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Dyadic International lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of US$4.8m and booked a US$5.8m accounting loss. However, it has net cash of US$2.36m, so it has a bit of time before it will need more capital. With very solid revenue growth in the last year, Dyadic International may be on a path to profitability. Pre-profit companies are often risky, but they can also offer great rewards. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should be aware of the 3 warning signs we've spotted with Dyadic International .

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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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.