Elevated And Rising LeverageMaterially higher leverage increases financial risk: interest burden and refinancing needs constrain flexibility, raise default risk in downturns, and make capital allocation choices more constrained. This pressure will persist until cash flow generation or equity cushions improve.
Weak Cash GenerationPersistent negative operating and free cash flow forces reliance on external financing to fund operations and debt service. This undermines liquidity, raises refinancing and cost-of-capital risks, and limits the company's ability to sustainably invest or absorb shocks over the medium term.
Margin Compression And Thin Net MarginDeclining gross margins and a slim net margin reduce the company's buffer against cost inflation and downturns. Even with revenue growth, compressed margins limit cash conversion and reinvestment capacity, making profitability more sensitive to cyclical or structural cost pressures.