Compressing Net Profit MarginA declining net margin despite stable gross margins suggests rising operating expenses or other cost pressures. If persistent, margin compression can erode the benefit of revenue growth, reducing free cash conversion and limiting long-term returns to shareholders absent structural cost fixes.
Cash Flow Still Needs SupportAlthough FCF turned positive, the FCF-to-net-income gap implies cash generation isn't yet fully backing reported earnings. Continued working-capital or capex demands could constrain investment or dividends, making cash conversion a structural risk until ratios stabilize.
Limited Organizational ScaleA small employee base suggests limited internal capacity to scale operations, manage complex international expansion, or absorb shocks. Reliance on external partners and tight staffing can constrain execution speed and increase operational risk as the company pursues larger market opportunities.