Part 3/8:
One alarming indicator for the company's financial health is the velocity of its rising costs. Despite marginal revenue increases, operational expenses are surging at an alarming rate. Research and Development (R&D) expenses shot up 40% last year, while general and administrative costs rose 30%. Sales and marketing expenses remained unchanged, leaving analysts puzzled about the escalating R&D costs. With gross margins hovering around 70%, the inability to translate revenue growth into profitability leads to concerns about sustainability.