Fusemachines Inc.

FUSE

$0.60

+1.57%

N/A+$0.01

Technology

Software - Application

NASDAQ

Active Trading

Fusemachines Inc. develops and implements artificial intelligence as a service and machine learning software platforms. Their product suite features Fuse Anna, an ...

Fundamental Analysis of FUSE

Key Strengths

Experienced leadership with a clear vision in AI and machine learning

Strong gross profit margin of 54.8% indicating potentially scalable products

Risk Factors

Severe liquidity issues with current ratio of 0.206 and negative working capital of -$14.4 million

Negative operating cash flow and free cash flow, indicating ongoing cash burn

Profitability

Net Margin-20.93%

Operating Margin-95.70%

Valuation

P/E Ratio32.26x

Current Ratio0.11

Efficiency

ROE20.95%

ROA-16.81%

Fundamental Analysis of FUSE

Fusemachines Inc. is a small-cap AI software company listed on NASDAQ, focusing on AI-as-a-service, machine learning platforms, and educational programs. The company operates in a high-growth industry but faces significant financial challenges. As of the latest TTM data, the company has a market cap of approximately $25.4 million, with a stock price of $0.8782. The company shows a gross profit margin of 54.8%, indicating a decent product margin, but its operating margin is deeply negative at -89.5%, and net margin is only 2.7% due to unusual items. The company's balance sheet is weak: current ratio is 0.206, suggesting severe liquidity issues, and it has negative equity (book value per share is -$0.519). The company is loss-making on an operating basis, as evidenced by an EBIT margin of -66.3% and negative operating cash flow per share (-$0.27). Revenue per share is $0.331, indicating a small revenue base. The price-to-sales ratio is 2.649, which is high for a company with negative operating cash flow and high cash burn. The beta of 0.896 suggests lower volatility than the market, but the stock has been extremely volatile (range $0.751-$25) since IPO in 2022. The company's strategic initiatives, such as focusing on agentic AI and vertical products in retail and real estate, may provide growth opportunities, but they are also risky. The company has a strong commitment to democratize AI through education, which might build goodwill but not immediate profitability. Overall, the fundamental analysis indicates a high-risk, speculative investment with limited financial stability.

Key Strengths of FUSE

Experienced leadership with a clear vision in AI and machine learning
Strong gross profit margin of 54.8% indicating potentially scalable products
Diverse revenue streams including AI products, services, and educational programs
Global presence with offices in multiple countries, enabling talent and market access
Commitment to democratizing AI, which may foster partnerships and long-term brand value
Focus on high-growth areas like agentic AI and vertical-specific solutions
Despite small market cap, has secured NASDAQ listing and compliance
Partnership with resellers and potential for sales expansion

Risk Factors of FUSE

Severe liquidity issues with current ratio of 0.206 and negative working capital of -$14.4 million
Negative operating cash flow and free cash flow, indicating ongoing cash burn
Accumulated deficits leading to negative shareholders' equity, raising solvency concerns
High price-to-sales ratio despite lack of profitability, implying overvaluation
Dependence on successful execution of growth strategies in a competitive AI industry
Cybersecurity, data privacy, and regulatory risks inherent in AI operations
Customer adoption and retention risks as highlighted in forward-looking statements
Market volatility and potential delisting risks if market value or equity standards are not maintained

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$17.37M

32.3x

P/E Ratio

1.5x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin54.61%

Net Profit Margin-20.93%

Debt/Equity Ratio-0.19

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of FUSE

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of FUSE

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	-158.81%	—	—	Flat
Operating Margin	—	-149.94%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of FUSE

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	0.106	—	—	Flat
Quick Ratio	—	0.106	—	—	Flat
Debt / Equity	—	-0.185	—	—	Flat

Valuation of FUSE

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	-2.67x	—	—	Flat
P/B	—	-4.79x	—	—	Flat

Supply Chain of FUSE

RELATIONS

Upstream

Amazon Web Services (AWS)NASDAQ:AMZN International Business Machines Corporation (IBM)NYSE:IBM NVIDIA CorporationNASDAQ:NVDA OpenAI / Microsoft AzureNASDAQ:MSFT TSMC (Taiwan Semiconductor Manufacturing Company)NYSE:TSM

Downstream

DotscienceEnterprise Client A (Healthcare - Drug Discovery)Enterprise Client B (Food & Beverage - Demand Prediction)Enterprise Client C (Media/Subscription - Recommendation Engine)ModulAIre (IBM Platinum Partner)Genese SolutionGlobal Teams AIViableEduTop 2 Unnamed Enterprise Clients

Proxies

C3.ai Inc.NYSE:AI BigBear.ai Holdings Inc.NYSE:BBAI SoundHound AI Inc.NASDAQ:SOUN Upstart Holdings Inc.NASDAQ:UPST

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Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer