Free Cash Flow DeteriorationA collapse of free cash flow to zero in 2025 signals weaker cash conversion and raises questions about working-capital management or higher investment needs. Reduced cash generation undermines the firm's ability to fund dividends, hire specialists, or absorb project delays until cash conversion normalizes.
Margin PressureA pronounced drop in gross margin is a structural concern for an advisory firm reliant on billable resources: it can reflect weaker pricing power, adverse client mix toward lower-margin projects, or rising labor costs. Sustained margin erosion would compress operating profitability and reinvestment capacity.
Earnings VolatilityNegative EPS growth and only modest margins point to earnings volatility and limited operating leverage. For a consulting business, this constrains the firm's ability to generate excess returns, build cash buffers, and consistently fund growth initiatives without relying on external financing or upset to capital allocation plans.