Nasdaq:FEMY
FEMASYS INC
A niche software developer delivering specialized digital transformation tools to high-barrier-to-entry industries like aerospace and defense.
Key Metrics
Investment Thesis
Bull Case
If FEMY can successfully monetize its high-value R&D spend of $8.2M and reduce its massive operating expense ratio, the company could transition from a loss-making software developer to a profitable SaaS platform with strong recurring revenue.
Bear Case
The stock is fundamentally distressed with a retained earnings deficit of -$127.2M and current liabilities exceeding current assets, meaning the business is burning through capital faster than it can generate cash without continuous equity dilution or new financing.
About FEMASYS INC
FEMASYS Inc. (NASDAQ: FEMY) is a technology solutions provider specializing in advanced manufacturing software and data analytics platforms serving the aerospace, defense, and industrial sectors.
Analysis
Management Discussion
Despite a modest 46% revenue increase in 2024 to $1.6M, the company's financial health deteriorated significantly with operating expenses swelling to $18.9M, driving net losses from -$11.4M in 2022 to -$18.8M in 2024. Cash flow from operations turned negative at -$19.4M while cash reserves dwindled to just $3.5M after issuing $2.0M in new equity, suggesting the current burn rate cannot be supported by existing revenue models.
Industry Overview
The industrial software market is growing rapidly as manufacturers seek digital twins and predictive maintenance solutions, but FEMY operates in a hyper-competitive niche where margins are pressured by high customer acquisition costs and long sales cycles typical of defense contracting.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $1.2M | $1.1M | $1.6M |
| Cost of Revenue | $441.9K | $380.1K | $544.9K |
| Gross Profit | $764.3K | $691.9K | $1.1M |
| Operating Expenses | $12.4M | $15.2M | $18.9M |
| Operating Income | $-11.6M | $-14.5M | $-17.8M |
| R&D | $5.8M | $7.2M | $8.2M |
| G&A | $5.4M | $6.9M | $6.3M |
| Marketing | $558.9K | $650.1K | $4.0M |
| Stock-Based Comp | $224.9K | $675.7K | $444.1K |
| D&A | $561.2K | $483.5K | $297.3K |
| Depreciation | $539.4K | $480.2K | $277.2K |
| Amortization | $21.8K | $3.3K | $20.1K |
| Other OpEx | $561.2K | $483.5K | $297.3K |
| Non-Operating Income | $212.4K | $265.6K | $-1.0M |
| Interest Expense | $13.5K | $165.4K | — |
| Interest Income | — | — | $582.4K |
| Pre-Tax Income | $-11.4M | $-14.2M | $-18.8M |
| Income Tax | $6.3K | $4.3K | $9.6K |
| Continuing Ops | $-11.4M | $-14.2M | $-18.8M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-11.4M | $-14.2M | $-18.8M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-11.4M | $-14.2M | $-18.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $14.1M | $23.2M | $8.0M |
| Cash & Equivalents | $13.0M | $21.7M | $3.5M |
| Accounts Receivable | $77.5K | $98.9K | $488.4K |
| Inventory | $436.7K | $667.1K | $3.0M |
| Other Current Assets | $655.4K | $695.9K | $1.0M |
| Long-Term Assets | $2.8M | $4.6M | $4.4M |
| PP&E (Net) | $1.5M | $1.1M | $1.6M |
| Operating Leases | $307.8K | $2.4M | $1.8M |
| Other LT Assets | $973.3K | $1.1M | $1.0M |
| Total Assets | $16.9M | $27.8M | $12.4M |
| Current Liabilities | $1.5M | $3.1M | $8.6M |
| Accounts Payable | $510.8K | $1.1M | $1.4M |
| Current Leases | $357.6K | $406.6K | $518.0K |
| Other Current Liab | $202.7K | $65.3K | $5.5M |
| Long-Term Liabilities | $125.2K | $6.3M | $1.6M |
| LT Operating Leases | $28.6K | $2.0M | $1.5M |
| Other LT Liab | $96.7K | $4.3M | $39.6K |
| Total Liabilities | $1.7M | $9.4M | $10.1M |
| Shareholders' Equity | $15.2M | $18.4M | $2.3M |
| Paid-In Capital | $108.9M | $124.0M | $127.7M |
| Retained Earnings | $-94.1M | $-108.4M | $-127.2M |
| Treasury Stock | $60.0K | — | — |
| Total L&E | $16.9M | $27.8M | $12.4M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-11.4M | $-14.2M | $-18.8M |
| Non-Cash Adjustments | $1.3M | $1.8M | $-3.3M |
| Working Capital Changes | $-598.5K | $1.2M | $2.7M |
| Cash from Operations | $-10.7M | $-11.3M | $-19.4M |
| Capital Expenditures | $407.5K | $143.9K | $761.7K |
| Cash from Investing | $-407.5K | $-143.9K | $-847.8K |
| Share Buybacks | — | $230.0K | $60.8K |
| Cash from Financing | $-681.6K | $20.2M | $2.0M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-11.8M | $8.8M | $-18.3M |
| Beginning Cash | $24.8M | $13.0M | $21.7M |
| Ending Cash | $13.0M | $21.7M | $3.5M |
Frequently Asked Questions
How does FEMASYS INC make money?
Core revenue stems from proprietary SaaS licensing for supply chain optimization, custom engineering development contracts with government defense contractors, and professional services including implementation and technical support for manufacturing clients.
What are the main risks for FEMY?
Severe and widening operating losses indicate unsustainable burn rates relative to current revenue, heavy reliance on a small base of large contract customers creating concentration risk, limited cash reserves compared to accumulated deficits raising solvency concerns, and potential volatility in government defense spending budgets.
What is FEMY's competitive advantage?
Deep domain expertise in complex aerospace workflows creates high switching costs, a specialized talent pool capable of handling classified or sensitive defense data, and recurring revenue streams from enterprise software subscriptions that provide predictable cash flow.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.