Declining Gross MarginsA falling gross margin indicates rising cost of goods or pricing pressure at the core business level. Persistent compression of gross margin threatens long-term profitability and requires either cost control, pricing power, or product mix shifts to restore durable margin levels.
Negative Free Cash FlowNegative free cash flow reflects limited ability to internally fund capex, working capital needs, dividends, or debt reduction. Sustained FCF deficits force reliance on external financing or asset sales, increasing financing risk and constraining strategic flexibility over the medium term.
Margin Sustainability ConcernsWhile net income improved, lingering weaknesses in EBIT/EBITDA margins suggest operational recovery may be fragile or influenced by non-recurring items. Without sustained improvement at the operating level, profitability gains may not be durable across cycles.