Persistent Net LossesMaterial and ongoing net losses indicate the business is not yet generating sustainable profits. Persistent losses erode retained earnings, limit reinvestment capacity, and mean profitability must improve materially or the firm will remain dependent on external capital over the medium term.
Negative Operating Cash FlowConsistently negative operating cash flow shows the core business consumes cash rather than generates it. This structural cash burn requires repeated funding rounds or asset draws, increasing dilution or financing risk and constraining long‑term investment and scaling prospects.
Volatile / Negative Gross MarginsErratic and occasionally negative gross margins point to unstable unit economics or cost structure issues. Without margin stabilization, revenue growth may not translate into profits, limiting operating leverage and making sustainable business model economics uncertain over the medium term.