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, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.

So should Odysight.ai (NASDAQ:ODYS) shareholders be worried about its cash burn? 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 Odysight.ai Have A Long Cash Runway?

A company's cash runway is calculated by dividing its cash hoard by its cash burn. When Odysight.ai last reported its March 2026 balance sheet in May 2026, it had zero debt and cash worth US$22m. In the last year, its cash burn was US$16m. So it had a cash runway of approximately 17 months from March 2026. While that cash runway isn't too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. The image below shows how its cash balance has been changing over the last few years.

How Well Is Odysight.ai Growing?

Odysight.ai actually ramped up its cash burn by a whopping 70% in the last year, which shows it is boosting investment in the business. That's bad enough, but the operating revenue drop of 82% points to a period of uncertainty and, quite potentially, heightened risk for holders." Considering these two factors together makes us nervous about the direction the company seems to be heading. Clearly, however, the crucial factor is whether the company will grow its business going forward. So you might want to take a peek at how much the company is expected to grow in the next few years.

How Easily Can Odysight.ai Raise Cash?

Odysight.ai revenue is declining and its cash burn is increasing, so many may be considering its need to raise more cash in the future. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. 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.

Odysight.ai has a market capitalisation of US$85m and burnt through US$16m last year, which is 18% of the company's market value. Given that situation, it's fair to say the company wouldn't have much trouble raising more cash for growth, but shareholders would be somewhat diluted.

How Risky Is Odysight.ai's Cash Burn Situation?

On this analysis of Odysight.ai's cash burn, we think its cash runway was reassuring, while its falling revenue has us a bit worried. Summing up, we think the Odysight.ai's cash burn is a risk, based on the factors we mentioned in this article.ai that readers should think about before committing capital to this stock.

Of course Odysight.ai may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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.