Very High LeverageElevated and rising leverage materially increases refinancing and downside risk. Higher debt servicing requirements constrain financial flexibility, limit ability to invest or weather shocks, and can amplify earnings volatility if margins or revenue weaken over the next several quarters.
Negative Operating And Free Cash FlowDeeply negative OCF and FCF mean reported earnings are not converting to cash, forcing reliance on external funding. This undermines capacity to service debt, sustain dividends, or fund capex organically and raises medium-term liquidity and solvency concerns if cash conversion does not improve.
Profitability Normalization RiskMargins normalizing from prior peaks implies past profitability may have been cyclical or one-off. If margins continue to revert, earnings and cashflow could be materially lower than prior peaks, stressing debt servicing and investment plans and increasing long-term earnings volatility.