Revenue WeaknessTwo consecutive years of declining revenue reduce scale and bargaining leverage with clients and candidates. Lower volumes pressure fixed operating costs and recruiting investment, making it harder to restore margins and reinvest in growth initiatives without structural demand improvement.
Severe Gross Margin CompressionA collapse in gross margin is a structural red flag: it implies either sustained price pressure, adverse contract mix, or materially higher pay/costs. This directly erodes profitability and cash generation, undermines return on capital, and may require strategic pricing or cost restructuring to restore earnings power.
Higher Debt With Low Cash CoverageDebt increased materially in 2025 while operating cash flow coverage versus debt is low. If margins remain compressed, servicing higher debt could restrain flexibility for recruitment investment and working capital, raising refinancing and liquidity risk over the medium term.