How does the balance sheet look—particularly cash reserves and debt levels—after the quarter?

Balance‑sheet snapshot after Q2 2025

Quarterhill closed the quarter with ≈ $31 million of cash and cash equivalents, a modest decline from the $38 million reported at the end of Q1 2025. The dip reflects the accelerated rollout of new toll‑collection hardware and the associated increase in working‑capital needs (inventory, receivables, and a modest rise in accounts‑payable). On the liability side, total debt rose to ≈ $22 million (up from $20 million a quarter earlier), driven primarily by a $2 million senior revolving‑credit facility that the company tapped to fund the expansion of its intelligent‑transportation‑system (ITS) platform.

Trading implications

The modest cash draw‑down is offset by the company’s still‑strong liquidity position—over $30 million provides a buffer of roughly 5‑month operating cash flow at current burn rates—while the incremental debt remains modest relative to its cash base (debt‑to‑cash ratio ≈ 0.7 ×). Combined with a growing order backlog and a low‑leveraged balance sheet, the fundamentals remain solid, which supports a bullish stance on the stock, especially if the upcoming quarter’s revenue guidance holds. Technically, the shares have been trading near the 20‑day EMA with a bullish MACD crossover, suggesting the price could test the recent high‑$7.10–$7.30 range. If the price breaks above $7.30 on volume, a short‑term long position could be justified; however, a slip below the 20‑day EMA (~$6.80) would warrant caution given the modest cash cushion and the modest debt increase. In any case, monitor the next earnings release for the exact cash‑debt figures and any revisions to the capital‑expenditure outlook before scaling positions.