Persistent Operating LossesMaterial negative operating and net margins show the business is not yet profitable at scale. Persistent losses erode returns on equity and require either sustained margin improvement or continued external funding; absent a clear path to positive operating income, equity value is at risk over time.
Negative Operating Cash FlowConsistently negative operating cash flow indicates the company is consuming cash to run core operations. This increases reliance on existing liquidity or future capital raises, raising dilution or financing risk, and limits the firm's ability to invest in sales, R&D, or customer support without external funding.
Recent Revenue ContractionA sharp year-over-year revenue decline despite multi-year growth suggests demand volatility, contract timing, or customer concentration. Falling top-line hinders operating leverage, delays breakeven, and raises execution risk in converting strong unit economics into sustainable, profitable scale.