High LeverageSignificant leverage raises long-term financial risk: higher interest obligations, lower flexibility to fund growth organically, and greater vulnerability to revenue shocks. Over a 2-6 month horizon, leverage constrains strategic options and increases refinancing and liquidity risks.
Negative Operating & Free Cash FlowPersistent negative operating and free cash flow means the business cannot self-fund expansion or cover obligations, forcing reliance on external financing. This structural cash deficit pressures liquidity, can dilute shareholders or raise borrowing costs, and limits sustainable reinvestment.
Low Net Profit MarginDespite revenue growth and improving operating margins, elevated expenses keep net margins low, reducing retained earnings and free cash. Structurally high expense base limits profitability sensitivity and leaves the company exposed if revenue growth slows or input costs rise.