There's no doubt that money can be made by owning shares of unprofitable businesses. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
So should Harte Hanks( NASDAQ:HHS ) shareholders be worried about its cash burn? For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). Let's start with an examination of the business' cash, relative to its cash burn.
How Long Is Harte Hanks' Cash Runway?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. As at September 2025, Harte Hanks had cash of US$6.5m and no debt. Looking at the last year, the company burnt through US$388k. So it had a very long cash runway of many years from September 2025. While this is only one measure of its cash burn situation, it certainly gives us the impression that holders have nothing to worry about. Depicted below, you can see how its cash holdings have changed over time.
View our latest analysis for Harte Hanks
How Well Is Harte Hanks Growing?
Given our focus on Harte Hanks' cash burn, we're delighted to see that it reduced its cash burn by a nifty 95%. Unfortunately, however, operating revenue dropped 11% during the same time frame. It seems to be growing nicely. In reality, this article only makes a short study of the company's growth data. You can take a look at how Harte Hanks has developed its business over time by checking this visualization of its revenue and earnings history .
How Easily Can Harte Hanks Raise Cash?
While Harte Hanks 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. 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.
Harte Hanks has a market capitalisation of US$21m and burnt through US$388k last year, which is 1.8% of the company's market value. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
Is Harte Hanks' Cash Burn A Worry?
It may already be apparent to you that we're relatively comfortable with the way Harte Hanks is burning through its cash. For example, we think its cash burn reduction suggests that the company is on a good path. Although its falling revenue does give us reason for pause, the other metrics we discussed in this article form a positive picture overall. 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. Separately, we looked at different risks affecting the company and spotted 2 warning signs for Harte Hanks (of which 1 can't be ignored!) you should know about.
Of course Harte Hanks 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 .
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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.
