Negative ProfitabilityPersistent negative margins signal the business is not generating operating profits despite revenue growth. This undermines internal reinvestment and shareholder returns, requiring structural cost improvement or pricing power increases to achieve sustainable profitability over the medium term.
Weak Cash GenerationOngoing negative operating and free cash flow creates liquidity pressure and forces reliance on financing for operations and capex. This reduces strategic flexibility, raises refinancing risk, and can constrain R&D and commercialization investments critical for long-term growth.
Reliance On Debt FinancingModerate leverage increases interest and refinancing burdens, particularly risky given losses and negative cash flow. Continued reliance on debt without profitability improvement can limit financial flexibility, elevate default risk, or force dilutive equity raises to shore up the balance sheet.