Persistent Net LossesOngoing net losses erode retained earnings and shareholder equity, limiting reinvestment and reducing flexibility to fund growth or weather downturns. Continued losses depress return metrics and make financing more costly, hindering the company’s ability to execute long-term strategic initiatives.
Rising LeverageAn increasing debt-to-equity ratio raises financial risk and interest obligations, restricting balance sheet flexibility. Higher leverage complicates funding for capex or working capital, increases vulnerability to cash flow stress, and can constrain strategic investments over multiple quarters.
Negative Free Cash FlowNegative free cash flow means operations plus capex consume cash, forcing reliance on external financing or non-operating inflows. This undermines the company’s ability to pay down debt, invest in capacity improvements, or build reserves, posing persistent constraints on financial recovery.