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Veritas In Silico (TSE:130A) Is In A Good Position To Deliver On Growth Plans

Simply Wall St · 1d ago

We can readily understand why investors are attracted to unprofitable companies. 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 while history lauds those rare successes, those that fail are often forgotten; who remembers Pets.com?

So should Veritas In Silico (TSE:130A) shareholders be worried about its cash burn? 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. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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How Long Is Veritas In Silico'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. When Veritas In Silico last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth JP¥1.9b. In the last year, its cash burn was JP¥230m. That means it had a cash runway of about 8.3 years as of September 2025. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. Depicted below, you can see how its cash holdings have changed over time.

debt-equity-history-analysis
TSE:130A Debt to Equity History December 29th 2025

View our latest analysis for Veritas In Silico

How Is Veritas In Silico's Cash Burn Changing Over Time?

In our view, Veritas In Silico doesn't yet produce significant amounts of operating revenue, since it reported just JP¥95m in the last twelve months. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. Over the last year its cash burn actually increased by a very significant 54%. While this spending increase is no doubt intended to drive growth, if the trend continues the company's cash runway will shrink very quickly. Veritas In Silico makes us a little nervous due to its lack of substantial operating revenue. We prefer most of the stocks on this list of stocks that analysts expect to grow.

Can Veritas In Silico Raise More Cash Easily?

While Veritas In Silico does have a solid cash runway, its cash burn trajectory may have some shareholders thinking ahead to when the company may need to raise more cash. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.

Since it has a market capitalisation of JP¥3.3b, Veritas In Silico's JP¥230m in cash burn equates to about 6.9% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.

How Risky Is Veritas In Silico's Cash Burn Situation?

As you can probably tell by now, we're not too worried about Veritas In Silico's cash burn. For example, we think its cash runway suggests that the company is on a good path. While its increasing cash burn wasn't great, the other factors mentioned in this article more than make up for weakness on that measure. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term. On another note, Veritas In Silico has 4 warning signs (and 3 which are concerning) we think you should know about.

Of course Veritas In Silico 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.