Operating expense and cash‑burn dynamics:
In the Q2 2025 release bioAffinity disclosed that its operating expenses rose sharply versus the second quarter of 2023, driven primarily by higher R&D outlays as the company scales the CyPath Lung platform and expands its commercial rollout. The expense line grew roughly 30‑35 % year‑over‑year, outpacing revenue growth but still below the rate of the prior year’s expense acceleration. More importantly, the company reported a reduction in cash burn of about 15‑20 % versus Q2 2023, reflecting tighter working‑capital management, lower SG&A spend relative to headcount, and the cash inflow from the recent CyPath Lung sales surge (revenues up 62 % YoY).
Trading implications:
The narrowing cash‑burn gap signals improving financial discipline, which can bolster confidence among investors who were concerned about liquidity risk. If the expense trajectory begins to flatten while revenue continues to accelerate, the stock may break out of its current consolidation range (around the 20‑day EMA) and retest the 50‑day moving average on higher volume. Traders could consider long positions on pullbacks to the 20‑day EMA with a stop just below the recent low, targeting a 10‑15 % upside if the company continues to beat expense expectations. Conversely, a miss on expense guidance or a reversal in cash‑burn trends could trigger a short‑term sell‑off, so keep an eye on any forward‑looking commentary in the upcoming earnings call.