Breaking Down SCWorx Corp. (WORX) Financial Health: Key Insights for Investors

You're looking at SCWorx Corp. (WORX) and trying to map out a clear path for what comes next, which is tough given the conflicting signals in their Q3 2025 report. Honestly, the headline numbers show a struggle for scale: year-to-date sales through September 30th hit just $2.11 million, and the company posted a nine-month net loss of $3.69 million, which is a significant widening of the loss compared to the prior year. Still, the market is watching two things: first, the very real near-term risk of the 180-day extension SCWorx received in October 2025 to regain Nasdaq compliance, which is a clear structural challenge; and second, the recent three-year contract renewal with an existing healthcare partner that reportedly includes a 113% increase in contract value. Here's the quick math: with only $0.705799 million in Q3 revenue, they need that new contract value to start hitting the income statement fast to offset the cash burn and turn the narrative around, because right now, it's a high-risk, high-reward bet on execution.

Revenue Analysis

You need to know if SCWorx Corp. (WORX) can stabilize its top line, because the 2025 numbers show a clear contraction driven by customer churn. The core issue is a declining revenue trend, with trailing twelve months (TTM) revenue as of September 30, 2025, sitting at just $2.78 million.

The company operates as a single, unified segment focused on the U.S. healthcare market, so we don't have a clean breakdown of revenue by product line. Still, we know the primary revenue streams are centered on their data content and services platform, which is essentially a Software as a Service (SaaS) model. This includes:

• Data normalization and repair for healthcare providers.
• SaaS subscriptions for data management.
• Maintenance and professional services.

This focus on data interoperability and analytics is a good market to be in, but the execution has been weak. Mission Statement, Vision, & Core Values of SCWorx Corp. (WORX).

Here's the quick math on the near-term trend: for the nine months ended September 30, 2025, SCWorx Corp. reported revenue of $2.11 million, which is an 8.9% decline from the $2.31 million reported in the same period a year prior. This isn't just a slow-down; it's a defintely concerning retreat. The third quarter of 2025 revenue was $705,799, down from $759,724 in Q3 2024, a drop of about 7.1%. The trend is a clear, consistent year-over-year revenue decline.

What this estimate hides is the reason for the drop: the expiration and non-renewal of certain customer contracts. Losing customers is the fastest way to kill a subscription-based business. Plus, the company has a major customer concentration problem, with the top three customers accounting for 51% of revenue as of September 2025. Losing just one of those contracts would be catastrophic.

To be fair, there is a recent positive data point: in October 2025, the company announced the renewal of an agreement with an existing healthcare partner for three additional years, with a 113% increase in contract value. This suggests that while churn is a risk, the value of their core service to retained customers is significant. The market will be watching to see if this renewal is a one-off win or the start of a new, positive trend in their sales pipeline.

Next step: Dig into the gross margin trends to see if the cost of delivering that shrinking revenue is also dropping fast enough to compensate. (Finance: Pull Q3 2025 Cost of Revenue data by tomorrow.)

Profitability Metrics

The core takeaway for SCWorx Corp. (WORX) profitability is stark: the company is operating at a significant loss, with margins far below the industry average, signaling critical operational and financial challenges. For the trailing twelve months (TTM) ending in late 2025, the company posted a net loss of approximately $3.89 million on revenue of just $2.78 million.

This negative profitability is not a near-term blip; it reflects a deep-seated issue in cost structure and revenue generation. The net loss for the nine months ended September 30, 2025, was $3.69 million, a sharp deterioration from the $0.94 million net loss in the comparable period a year prior, which shows the trend is moving in the wrong direction.

Margin Analysis and Industry Comparison

When you look at the margins, the picture is clear. SCWorx's profitability ratios, based on TTM data ending in late 2025, are deeply negative across the board, especially when benchmarked against the US Healthcare Services industry. This gap is not just wide-it's a chasm, indicating that the company is failing to convert its sales into profit at every stage of the income statement.

Here's the quick math on the TTM profitability ratios compared to the industry average:

Operational Efficiency and Cost Management

The Gross Margin of 26.13% tells you the first story: SCWorx is only keeping about 26 cents of every revenue dollar after covering the Cost of Revenue. This is less than half the industry average of 63.44%, suggesting a significant problem either with pricing power, the cost of their services (like labor or hosting), or a high proportion of lower-margin revenue streams.

The Operating Margin of -41.18% is the real killer, though. It means for every dollar of revenue, the company is losing over 41 cents just to cover operating expenses like Selling, General, and Administrative (SG&A). The operating loss was -$1.15 million TTM. This points to a severe lack of operational efficiency and cost management, especially considering the company only has 7 employees. You need to see a drastic cut in overhead or a massive jump in sales to close this gap. For a deeper dive into who is still buying into this structure, you can read Exploring SCWorx Corp. (WORX) Investor Profile: Who's Buying and Why?

• Gross Margin is too low for a software-as-a-service (SaaS) model.
• Operating expenses are crushing the already weak gross profit.
• Net loss is accelerating year-over-year.

The Net Profit Margin of -139.71% is simply a reflection of the accumulated losses from operations and non-operating expenses, like interest, which further drains the bottom line. This level of loss margin is defintely unsustainable without continuous capital raises, which is a major risk for shareholders.

Action for Investors: Focus on the next quarterly report's Gross Margin. If it doesn't show a material increase toward 40%+, the core business model remains fundamentally broken.

Debt vs. Equity Structure

You're looking at SCWorx Corp. (WORX) and trying to figure out how they fund their operations-it's the classic debt-versus-equity question. The direct takeaway here is that SCWorx Corp. is an extremely low-leverage company, relying almost entirely on equity and cash for financing. This is defintely a double-edged sword: minimal interest expense but also a signal of limited access to traditional debt markets or a deliberate, capital-light strategy.

As of late 2025, specifically around September 30, SCWorx Corp.'s total debt is remarkably low, sitting at approximately $152,683. This is a tiny fraction of their total shareholder equity, which was nearly $6.0 million. Here's the quick math on the breakdown of their obligations:

• Total Debt (Short- and Long-Term): ~$152,683
• Total Shareholder Equity: ~$5.997 million
• Total Current Liabilities (Q2 2025): $1,836,549
• Long-Term Debt (Q2 2025, net): $19,660

The company's Debt-to-Equity (D/E) ratio-a measure of financial leverage-is just 2.5% (or 0.03). To be fair, for a technology-focused healthcare company, you expect a lower D/E ratio than, say, a utility company. But even compared to the Biotechnology industry's average of around 0.17 (17%), SCWorx Corp.'s leverage is minimal. This means for every dollar of shareholder equity, the company only uses about three cents of debt to finance its assets. That's a very conservative capital structure.

The company's recent financing activity centers on convertible debt, which is a key part of their equity funding strategy. Between July 2024 and January 2025, SCWorx Corp. issued senior secured convertible notes with an aggregate original principal amount of $2,655,000. This type of debt is designed to convert into common stock, which is really just delayed equity funding. The principal balance outstanding on these notes was $839,428 as of June 30, 2025, but after accounting for discounts, the non-current portion was only $19,660. This signals a preference for equity-linked financing over traditional bank loans, which is common for smaller companies that may lack a credit rating or are in a high-growth, cash-burning phase.

What this estimate hides is the potential dilution risk. While the company maintains a low debt burden, the continuous issuance of convertible notes and warrants-like the January Notes and their associated warrants-means future conversions will increase the number of outstanding shares, diluting the ownership stake of current shareholders. You need to weigh the benefit of a debt-free balance sheet against the cost of share dilution for your investment thesis. For a deeper dive into the company's overall health, check out Breaking Down SCWorx Corp. (WORX) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if SCWorx Corp. (WORX) can cover its near-term obligations, and the hard truth is that its liquidity position is concerning. The financial data for the 2025 fiscal year points to a significant working capital deficit, which raises substantial doubt about the company's ability to continue as a going concern.

A quick look at the balance sheet for the quarter ended June 30, 2025, shows the immediate challenge. The company's total current assets were $803,500, while total current liabilities stood at $1,187,640. Here's the quick math on their core liquidity metrics:

• Current Ratio: This ratio, which measures current assets against current liabilities, is approximately 0.68. A healthy ratio is typically 1.0 or higher; SCWorx Corp. has only 68 cents of current assets for every dollar of current debt.
• Quick Ratio (Acid-Test): This is an even stricter test, excluding less-liquid assets like prepaid expenses. The quick ratio is about 0.63. This means the company's most liquid assets-cash of $340,209 and accounts receivable of $412,216-don't come close to covering its immediate debts.

The core issue is a negative working capital (Current Assets minus Current Liabilities) of approximately $(384,140) as of June 30, 2025. This negative trend indicates SCWorx Corp. is using long-term financing for short-term needs or simply struggling to manage its payables, which totaled $774,667 in accounts payable and accrued liabilities. This is defintely a red flag for short-term operational stability.

When you look at the cash flow statement for the nine months ended September 30, 2025, the picture gets clearer. SCWorx Corp. had a net loss of $(3,694,927), indicating a massive cash burn from core operations. Cash flow from operating activities is consistently negative, meaning the business itself is not generating enough cash to sustain itself. This is why the company has had to rely heavily on outside funding.

The primary source of cash during this period was financing activities, which provided approximately $1,992,000. This cash infusion came from proceeds from loans payable of $1,385,000 and warrant exercises of $702,000. This is a critical point: they are funding operations by issuing debt and equity, not by selling their software-as-a-service solutions. Also, there were no investing activities during this period, which is typical for a company focused solely on survival.

The biggest liquidity concern is the company's own assessment: management has concluded that conditions exist that raise substantial doubt about their ability to continue as a going concern. This is the most serious caveat a company can give. Plus, the firm has less than a year of cash runway based on its current free cash flow, and Nasdaq has granted an extension until April 6, 2026, for SCWorx Corp. to regain compliance with the minimum bid price requirement. This isn't just a financial problem; it's a structural one. You can read more about their strategy in the Mission Statement, Vision, & Core Values of SCWorx Corp. (WORX).

Here is a summary of the cash flow trends for the nine months ended September 30, 2025:

The clear action here is to recognize that any investment is a bet on a successful capital raise or a dramatic, near-term turnaround in cash flow, which has not yet materialized in the 2025 fiscal year data.

Valuation Analysis

You want to know if SCWorx Corp. (WORX) is overvalued or undervalued right now, and the quick answer is that traditional valuation metrics suggest it's priced like a deeply distressed asset, but with a highly speculative outlook. The company's current valuation ratios reflect its negative earnings and the dramatic plunge in its stock price over the last year.

As of November 2025, SCWorx Corp. is trading at a price that is a fraction of its recent history, with a market capitalization around $3.85 million. The key is understanding why the ratios look so cheap, and the reason is simple: the company is not profitable. A negative earnings number, or net loss, breaks the standard Price-to-Earnings (P/E) ratio calculation, but one trailing twelve-month (TTM) P/E figure is listed at -0.30x. That tells you the market is pricing the stock far below what you'd expect for a healthy company, because it's losing money.

Here's a snapshot of the key valuation multiples based on the 2025 fiscal year data:

• Price-to-Book (P/B) Ratio: The P/B ratio stands at approximately 0.52. This is a critical number, as a value below 1.0 suggests the stock is trading for less than the book value of its assets (equity). To be fair, this is a sign of potential undervaluation, but it often comes with a major caveat about asset quality or the company's ability to survive.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a loss of approximately -$1.15 million. Because EBITDA is negative, the EV/EBITDA ratio is not a meaningful positive multiple for comparison. You're buying a negative cash flow stream, so the ratio is effectively 'not applicable' for a traditional valuation.
• Dividend Yield: SCWorx Corp. does not pay a dividend, so your yield is 0.00%. Don't expect passive income here; this is a pure growth or turnaround play, defintely not an income stock.

The stock price trend over the last 12 months is brutal. The stock has plummeted by about 89.01%. The 52-week high was $3.31, and the 52-week low was $0.26, with the stock closing recently around $0.23. This massive drop is the market's clear statement on the company's recent performance and going-concern risk, particularly given the Nasdaq minimum bid price extension granted in October 2025.

When it comes to analyst consensus on SCWorx Corp., the picture is murky because there is virtually no traditional coverage. Some financial platforms state the company is covered by 0 analysts. However, some forecasting models project a highly speculative average price target for 2025 of around $3.6393, suggesting a massive potential upside if a turnaround materializes. This disparity means you must rely on your own due diligence, as there is no reliable, unified Wall Street view. The technical signals are currently leaning 'Neutral' with a mix of 'Sell' and 'Buy' signals, which is typical for a low-priced, highly volatile stock. You can dive deeper into who is holding the bag and why by Exploring SCWorx Corp. (WORX) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at SCWorx Corp. (WORX), a micro-cap healthcare data management company, and the most critical takeaway is this: the company is in a race against time to stabilize its core business while battling significant financial and compliance risks. The recurring losses are the main anchor, but the immediate threat is the potential loss of its Nasdaq listing.

SCWorx Corp.'s auditors have flagged a substantial doubt about the company's ability to continue as a going concern, which is the most serious risk on the table. This is a direct result of ongoing negative cash flows and recurring losses from operations. For the six months ended June 30, 2025, the company reported a net loss of over $2.38 million, and net cash used in operating activities was approximately $1.06 million. That's a brutal burn rate for a company with a market capitalization of only about $2.71 million as of October 2025. They need to secure new capital, and fast.

Here's the quick math on liquidity: The company's current ratio is a weak 0.68, and as of December 31, 2024, they had a working capital deficit of $1,333,171. This means current liabilities substantially outweigh current assets, suggesting a real struggle to meet short-term obligations without raising more capital or selling assets.

• Maintain compliance or face delisting.

Regulatory and Market Compliance Risks

The most immediate, near-term risk is the threat of delisting from the Nasdaq Capital Market. SCWorx Corp. was first notified in April 2025 that it was non-compliant with the $1.00 minimum bid price rule. The stock traded around $0.28 in October 2025. They've been granted an extension until April 6, 2026, to regain compliance by having their stock close at or above $1.00 for at least ten consecutive business days. If they fail, they face delisting, which would severely impact liquidity and investor confidence.

To be fair, the company has indicated it intends to cure the deficiency, potentially through a reverse stock split. Still, a reverse split often signals desperation and can be a headwind for the stock price in the short term. Plus, the company has material weaknesses in its internal controls, specifically related to segregation of duties, which is a red flag for investors concerned about financial reporting integrity. They are working on remediation, but it's defintely a risk to monitor.

Operational and Financial Headwinds

The core business is showing strain. Revenue for the six months ended June 30, 2025, was only $1,402,931, a drop primarily attributed to the expiration and non-renewal of customer contracts. This is the ultimate external risk: industry competition and the challenge of retaining key healthcare provider clients in a competitive SaaS (Software-as-a-Service) market. Losing a customer contract is a significant blow when your revenue base is this small.

On the mitigation front, SCWorx Corp. is making strategic moves. They renewed a key agreement with an existing healthcare partner, boosting the contract's value by 113% to approximately $1,692,000. That's a strong signal of customer commitment. They also appointed a new Chief Technology Officer in September 2025, which shows a commitment to advancing their data platform and addressing the competitive landscape. This is a necessary step, but new leadership takes time to translate into financial results.

Finally, the company's reliance on external funding introduces dilution risk. They raised $1.5 million in January 2025 through convertible notes and warrants. They may receive up to approximately $17 million from the exercise of outstanding warrants, which is great for the balance sheet, but it will significantly increase the outstanding share count. This means your piece of the pie gets smaller. You can dig deeper into the shareholder structure by Exploring SCWorx Corp. (WORX) Investor Profile: Who's Buying and Why?

Growth Opportunities

You need to look past the current stock price of SCWorx Corp. (WORX) and focus on the strategic moves they've made in late 2025, particularly the partnerships and product innovations, which are the real drivers for future revenue growth. The company is actively shifting its narrative from a micro-cap with liquidity concerns to a specialized healthcare data-as-a-service (SaaS) provider.

The core of SCWorx Corp.'s near-term growth is their Foundation product, which handles data cleanse, normalization, and enrichment for hospitals, helping them save money on procurement. This is a sticky, high-value service. You can see the immediate impact in their contract renewals; in October 2025, they renewed an agreement with an existing healthcare partner-an aggregate purchasing group-for three years, which represents a 113% increase in contract value over the prior term. That single renewal is expected to generate approximately $1,692,000 in total revenue over the three-year period.

Here's the quick math on their recent performance versus future potential:

While the company reported a net loss of $1.31 million for the third quarter ended September 30, 2025, the revenue from these new and expanded contracts is crucial for margin improvement. You need to see if the new revenue outpaces the general and administrative expenses, which were $473,944 for the six months ended June 30, 2025. That's the real hurdle.

The strategic initiatives point to a clear focus on market expansion and technological leadership:

• Market Penetration: A new collaboration announced in August 2025 with a leading healthcare supply chain consulting partner effectively gives SCWorx Corp. a nationwide sales channel across all 50 states to push their SaaS data management program.
• Product Innovation: The appointment of a new Chief Technology Officer in September 2025 signals a push to accelerate innovation, particularly around their AI-powered advancements in data solutions.
• Key Customer Wins: The selection by a Florida Hospital for data management related to a Workday implementation in August 2025 shows their ability to integrate with major enterprise resource planning (ERP) systems.

Their competitive advantage isn't just the software-as-a-service (SaaS) model; it's the full integration of their solution modules with an advanced attributed virtualized item data warehouse, which uses machine learning and artificial intelligence to deliver better cost savings and operational efficiency than competitors' siloed products. This focus on a unified data platform is defintely a differentiator in the fragmented healthcare IT space.

The next action for you is to dive deeper into who is backing this growth story. Exploring SCWorx Corp. (WORX) Investor Profile: Who's Buying and Why?