Negative ProfitabilityPersistent negative net margins despite revenue growth signal structural cost issues (SG&A, R&D or scale inefficiencies). Without durable operating-cost reduction, the company will struggle to convert sales into sustainable profits and returns, limiting long-term shareholder value creation.
High LeverageElevated leverage raises refinancing, interest and covenant risks, particularly if cash generation remains weak. High debt constrains capital allocation, increases fixed costs and reduces resilience to shocks, making it harder to invest in R&D or absorb margin pressure over coming quarters.
Weak Cash GenerationOngoing negative operating cash flow indicates the core business does not reliably convert revenue into cash. This structural shortfall forces reliance on external financing, limits reinvestment capacity and elevates solvency risk unless operating cash conversion materially improves.