You just closed Q3 for a mid-sized B2B software company and the CFO wants a quick read on what changed versus Q2. Revenue grew, but operating profit fell, and management needs to know whether the issue is pricing, cost structure, or operating discipline. Assume revenue is recognized ratably and there were no one-time restructuring charges in either quarter.
| Metric | Q2 | Q3 |
|---|---|---|
| Revenue | $12,000,000 | $13,200,000 |
| Cost of revenue | $3,600,000 | $4,356,000 |
| Sales & marketing | $3,000,000 | $3,564,000 |
| R&D | $1,800,000 | $1,980,000 |
| G&A | $1,200,000 | $1,320,000 |
| Accounts receivable | $4,000,000 | $5,280,000 |
What key financial insights would you derive from this data, and how would you explain the quarter-over-quarter change in profitability and cash conversion to management?