Hardware Revenue ConcentrationA business mix weighted toward hardware exposes revenue to cyclical enterprise capex and competitive pricing pressure. Hardware dependence can produce lumpy sales and heavier working capital needs, limiting predictability versus a higher-share recurring software/subscription model.
Modest Net Margin LevelNet margin below 10% constrains the internal funds available for faster scale, M&A, or accelerated R&D versus purer software peers. In prolonged pricing pressure or investment cycles, limited margin cushion reduces ability to absorb shocks while funding strategic initiatives.
Slower Reported Revenue TrendA modest reported revenue growth metric points to potential limits on market share expansion or end-market demand. If growth remains constrained, it could slow margin improvement and the transition toward higher recurring revenue, making long-term scaling more challenging.