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Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, NuScale Power (NYSE:SMR) shareholders have done very well over the last year, with the share price soaring by 364%. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
In light of its strong share price run, we think now is a good time to investigate how risky NuScale Power's cash burn is. 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. Let's start with an examination of the business' cash, relative to its cash burn.
Does NuScale Power 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 NuScale Power last reported its December 2024 balance sheet in March 2025, it had zero debt and cash worth US$442m. Looking at the last year, the company burnt through US$109m. Therefore, from December 2024 it had 4.1 years of cash runway. Notably, however, analysts think that NuScale Power will break even (at a free cash flow level) before then. In that case, it may never reach the end of its cash runway. You can see how its cash balance has changed over time in the image below.
See our latest analysis for NuScale Power
How Well Is NuScale Power Growing?
We reckon the fact that NuScale Power managed to shrink its cash burn by 41% over the last year is rather encouraging. Having said that, the revenue growth of 62% was considerably more inspiring. It seems to be growing nicely. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years.
How Hard Would It Be For NuScale Power To Raise More Cash For Growth?
While NuScale Power 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. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. 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).