High Leverage And Weak EquityA leveraged balance sheet with low/occasionally negative equity reduces financial flexibility and increases refinancing risk. Over multiple months this constrains ability to fund growth, makes the firm sensitive to interest shocks, and limits strategic optionality during downturns.
Sharp Drop In Gross ProfitA meaningful deterioration in gross profit margin signals structural pressure on core economics — e.g., higher content, distribution, or platform costs. If not reversed, margin compression can erode operating leverage and reduce the sustainability of recent net margin improvements.
Historically Volatile ProfitabilityVolatile EBIT/EBITDA margins point to inconsistent cost absorption or revenue quality. This makes cash flow and earnings unreliable, complicating forecasting and capital allocation over the medium term and elevating execution and operational risk for investors and creditors.