Persistent Net LossesOngoing net losses erode equity and limit internal funding for investments. Even modest negative margins signal structural challenges in converting revenue to profit, undermining long-term sustainability unless operational fixes or pricing changes restore profitability.
Negative Free Cash FlowA shift to negative free cash flow indicates operating cash generation doesn't cover capex and other uses, consuming reserves over time. Sustained negative FCF forces reliance on external financing or asset sales, increasing dilution or leverage risk over the medium term.
Margin Compression And Operational InefficiencyFalling gross margin and persistently negative operating profits suggest pricing pressure, cost inflation, or inefficient cost structure. These structural issues limit the company's ability to convert revenue growth into sustainable earnings without operational restructuring.