Does indie Semiconductor (NASDAQ:INDI) Have A Healthy Balance Sheet?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We note that indie Semiconductor, Inc. (NASDAQ:INDI) does have debt on its balance sheet. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does indie Semiconductor Carry?

The image below, which you can click on for greater detail, shows that at September 2025 indie Semiconductor had debt of US$353.5m, up from US$176.6m in one year. However, it does have US$160.9m in cash offsetting this, leading to net debt of about US$192.7m.

How Healthy Is indie Semiconductor's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that indie Semiconductor had liabilities of US$79.2m due within 12 months and liabilities of US$383.0m due beyond that. On the other hand, it had cash of US$160.9m and US$64.5m worth of receivables due within a year. So it has liabilities totalling US$236.7m more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since indie Semiconductor has a market capitalization of US$878.5m, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. There's no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine indie Semiconductor's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for indie Semiconductor

Over 12 months, indie Semiconductor made a loss at the EBIT level, and saw its revenue drop to US$217m, which is a fall of 5.0%. That's not what we would hope to see.

Caveat Emptor

Importantly, indie Semiconductor had an earnings before interest and tax (EBIT) loss over the last year. Its EBIT loss was a whopping US$145m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled US$65m in negative free cash flow over the last twelve months. So suffice it to say we consider the stock very risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example - indie Semiconductor has 2 warning signs we think you should be aware of.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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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.