Negative Free Cash FlowPersistent negative operating and free cash flows indicate difficulty converting accounting profits into cash. Over time this pressures liquidity and forces reliance on external funding or higher liabilities to finance growth, limiting flexibility for buybacks, higher dividends, or opportunistic investments.
Reliance On LiabilitiesGreater reliance on liabilities to fund assets increases vulnerability to interest rate moves and liquidity stress. In a capital markets business, funding strain can impair lending/margin facilities and raise refinancing risk, making earnings more sensitive to macro shocks over the medium term.
Operational Expense Pressure On Net MarginSignificant operational expenses compress net margins despite healthy gross margins. If cost growth outpaces revenue or client fee mix shifts, margin recovery will require sustained expense control or higher-margin revenue mix, which can slow earnings scalability in coming quarters.