High LeverageElevated leverage raises interest and refinancing risk, reducing financial flexibility to invest in product development or marketing. In a rising-rate environment, higher debt servicing can compress cash available for growth and increase vulnerability to macro shocks over the medium term.
Negative Operating And Free Cash FlowOngoing negative operating and free cash flows indicate the business currently consumes cash to support growth. This necessitates external financing or drawdown of reserves, which can constrain long-term investment plans, increase funding costs, and pressure liquidity if trends persist.
Net Margin CompressionA meaningful decline in net margin suggests rising operating expenses or cost pressures that could erode profitability if structural. Even with strong gross and EBITDA margins, falling net margins reduce retained earnings and free cash conversion, limiting reinvestment and resilience over time.