Worsening Profitability And Margin CompressionSharp deterioration in gross and net margins reflects weaker pricing, poorer project mix, or cost control issues. Persistent negative margins erode equity and limit reinvestment capacity, making profitable scaling and sustainable earnings recovery a multi-quarter challenge unless margins are restored.
Material Cash-flow DeteriorationThe swing to sizable operating and free cash outflows signals the business is not funding operations internally. Continued negative cash flow increases funding risk, forces reliance on external capital, and constrains investment in sales, technology, or retention needed to restore profitability.
Rising Leverage And Deeply Negative Returns On EquityA rapid increase in leverage combined with deeply negative ROE amplifies financial risk: losses are eroding capital while debt rises, limiting strategic options and increasing sensitivity to tougher market conditions or interest costs over coming quarters.