PBSV Narrows Losses by 87% YTD Despite Revenue Dip

TL;DR

**PBSV's shrinking losses are a positive sign, but declining revenue and cash warrant caution; watch for sustained top-line growth.**

AI Summary

Pharma-Bio Serv, Inc. (PBSV) reported a net loss of $204,250 for the three months ended July 31, 2025, a 33.9% improvement from the $309,194 net loss in the same period last year. For the nine months ended July 31, 2025, the net loss significantly decreased to $100,361 from $793,730 in the prior year, representing an 87.4% reduction. Revenues for the three-month period declined by 18.8% to $1,963,083 from $2,418,163, and for the nine-month period, revenues decreased by 4.5% to $6,851,460 from $7,175,967. Despite the revenue decline, gross profit for the nine months increased by 20.8% to $2,161,097, primarily due to a larger decrease in cost of services. The company's cash and cash equivalents decreased to $3,957,752 as of July 31, 2025, from $6,767,356 at October 31, 2024, largely due to a $1,719,918 cash dividend paid to shareholders and a $603,432 net investment in marketable securities. Total assets also decreased by 16.6% to $13,585,578 from $16,292,230 over the same period. The company continues to operate in Puerto Rico, the United States, Europe, and Brazil, providing technical compliance consulting services.

Why It Matters

Pharma-Bio Serv's ability to significantly reduce its net loss, even with declining revenues, suggests improved operational efficiency or cost management, which is a critical signal for investors. The substantial cash dividend of $0.075 per common share, totaling $1,719,918, indicates a commitment to returning capital to shareholders, potentially attracting income-focused investors. However, the 18.8% revenue decline in the quarter and a 4.5% decline year-to-date could raise concerns about market share or demand for its technical compliance consulting services, especially in a competitive landscape where other firms might be gaining ground. Employees might face pressure if revenue trends continue downwards, impacting future growth opportunities.

Risk Assessment

Risk Level: medium — The company reported a significant decrease in cash and cash equivalents from $6,767,356 to $3,957,752, a 41.5% drop, primarily due to a large cash dividend and marketable securities investments. While net loss improved, revenues declined by 18.8% in the quarter and 4.5% year-to-date, indicating potential challenges in core business operations. The allowance for credit losses remains at approximately $5.3 million, mostly related to an account being litigated since 2021, posing a contingent risk.

Analyst Insight

Investors should monitor PBSV's upcoming earnings reports closely for signs of revenue stabilization or growth, particularly in its technical compliance consulting segments. While the reduced net loss is positive, the significant cash outflow and revenue decline suggest a need for a clearer strategic path to sustainable top-line expansion. Consider holding if already invested, but new investments should be approached with caution until revenue trends reverse.

Financial Highlights

debt To Equity

0.13

revenue

$6,851,460

operating Margin

-7.4%

total Assets

$13,585,578

total Debt

$1,658,894

net Income

$(100,361)

eps

$(0.004)

gross Margin

31.5%

cash Position

$3,957,752

revenue Growth

-4.5%

Key Numbers

• $1,963,083 — Revenues (3 months ended July 31, 2025) (Decreased by 18.8% from $2,418,163 in the prior year period.)
• $6,851,460 — Revenues (9 months ended July 31, 2025) (Decreased by 4.5% from $7,175,967 in the prior year period.)
• $(204,250) — Net Loss (3 months ended July 31, 2025) (Improved by 33.9% from $(309,194) in the prior year period.)
• $(100,361) — Net Loss (9 months ended July 31, 2025) (Improved by 87.4% from $(793,730) in the prior year period.)
• $3,957,752 — Cash and Cash Equivalents (July 31, 2025) (Decreased by 41.5% from $6,767,356 at October 31, 2024.)
• $1,719,918 — Cash Dividends Paid (9 months ended July 31, 2025) (Significant cash outflow to shareholders.)
• $13,585,578 — Total Assets (July 31, 2025) (Decreased by 16.6% from $16,292,230 at October 31, 2024.)
• $2,161,097 — Gross Profit (9 months ended July 31, 2025) (Increased by 20.8% from $1,789,468 in the prior year period.)
• $5.3 million — Allowance for Credit Losses (July 31, 2025) (Related to an account being litigated since 2021.)
• 22,918,092 — Common Shares Outstanding (September 10, 2025) (Total shares outstanding as of a recent date.)

Key Players & Entities

• Pharma-Bio Serv, Inc. (company) — Parent company and registrant
• Pharma-Bio Serv PR, Inc. (company) — Wholly-owned subsidiary in Puerto Rico
• Pharma Serv, Inc. (company) — Wholly-owned subsidiary in Puerto Rico
• Scienza Labs, Inc. (company) — Currently inactive wholly-owned subsidiary
• Pharma-Bio Serv US, Inc. (company) — Wholly-owned subsidiary in Delaware
• Pharma-Bio Serv SL (company) — Wholly-owned subsidiary in Spain
• Pharma-Bio Serv Brasil Servicos de Consultoria Ltda. (company) — Currently insignificant wholly-owned subsidiary in Brazil
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• Bloomberg (company) — Financial news and data provider

FAQ

Risk Factors

• Cash Dividend Payout Impact [medium — financial]: The company paid a significant cash dividend of $1,719,918 during the nine months ended July 31, 2025. This outflow, combined with a net investment in marketable securities of $603,432, contributed to a substantial decrease in cash and cash equivalents from $6,767,356 to $3,957,752.
• Declining Revenue Trends [medium — financial]: Revenues have decreased by 18.8% for the three months ended July 31, 2025 ($1,963,083 vs $2,418,163) and by 4.5% for the nine-month period ($6,851,460 vs $7,175,967). This trend indicates potential challenges in maintaining or growing top-line performance.
• Allowance for Credit Losses [high — financial]: An allowance for credit losses of $5.3 million is noted, related to an account under litigation since 2021. This represents a significant contingent liability and potential future write-off.
• Dependence on Puerto Rico Operations [low — operational]: While operating in multiple regions, the company's historical reliance on Puerto Rico for its operations could pose risks if economic or political conditions in that region deteriorate.

Industry Context

Pharma-Bio Serv, Inc. operates in the technical compliance consulting services sector, serving the pharmaceutical and biotechnology industries. This sector is characterized by stringent regulatory requirements and a constant need for specialized expertise to navigate complex compliance landscapes. Key trends include the increasing complexity of global regulations, the growing demand for outsourced compliance services, and the need for companies to maintain high standards in drug development and manufacturing.

Regulatory Implications

The company's services are directly tied to regulatory compliance in the pharmaceutical and biotech sectors. Changes in regulations from bodies like the FDA or EMA can significantly impact demand for its services. Maintaining a strong compliance record is paramount, as any lapse could lead to severe penalties and reputational damage for both PBSV and its clients.

What Investors Should Do

1. Monitor revenue trends closely.
2. Analyze the impact of cash dividends on liquidity.
3. Evaluate the resolution of the litigated account.
4. Assess the efficiency of cost management.

Key Dates

• 2025-07-31: End of third quarter reporting period — Key financial results for the three and nine months ended this date are reported, showing reduced net losses but declining revenues.
• 2024-10-31: End of fiscal year 2024 — Balance sheet figures from this date serve as the comparative baseline for the current period's asset and liability changes.

Glossary

US TCJA Transition Tax

A tax imposed by the Tax Cuts and Jobs Act of 2017 on certain untaxed foreign earnings of U.S. corporations. (The company has a payable related to this tax, which has decreased from $660,903 to zero for the long-term portion, and increased for the current portion.)

Operating lease right-of-use asset

An asset representing the right to use a leased asset over the lease term, recognized under ASC 842. (This asset and its corresponding liability have decreased, indicating the company is reducing its leased space or has shorter-term leases.)

Accumulated other comprehensive income

A component of equity that includes unrealized gains and losses that are not reported on the income statement. (This account has increased, suggesting positive performance in items like foreign currency translation adjustments or unrealized gains on certain investments.)

Treasury stock

Stock that a company has repurchased from the open market. (The amount of treasury stock has increased, indicating the company has bought back more of its own shares.)

Year-Over-Year Comparison

Compared to the prior year, Pharma-Bio Serv, Inc. has shown significant improvement in net loss, reducing it by 33.9% for the quarter and 87.4% for the nine months, largely due to a more substantial decrease in the cost of services. However, this improvement comes alongside a decline in revenues, down 18.8% for the quarter and 4.5% for the nine months. Total assets have decreased by 16.6%, and cash and cash equivalents have fallen by 41.5%, primarily due to a large cash dividend payment and investment in marketable securities.

Key Financial Figures

• $0.075 — 23,197 - 23,197 CASH DIVIDEND ($0.075 PER COMMON SHARE AT RECORD DATE) - -

Filing Documents

• pbsv_10q.htm (10-Q) — 909KB
• pbsv_ex311.htm (EX-31.1) — 13KB
• pbsv_ex312.htm (EX-31.2) — 13KB
• pbsv_ex321.htm (EX-32.1) — 5KB
• 0001654954-25-010775.txt ( ) — 3202KB
• pbsv-20250731.xsd (EX-101.SCH) — 21KB
• pbsv-20250731_lab.xml (EX-101.LAB) — 150KB
• pbsv-20250731_cal.xml (EX-101.CAL) — 32KB
• pbsv-20250731_pre.xml (EX-101.PRE) — 116KB
• pbsv-20250731_def.xml (EX-101.DEF) — 41KB
• pbsv_10q_htm.xml (XML) — 482KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

– Financial Statements

Item 1 – Financial Statements Condensed Consolidated Balance Sheets as of July 31, 2025 and October 31, 2024 (unaudited) 1 Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended July 31, 2025 and 2024 (unaudited) 2 Condensed Consolidated Statements of Comprehensive Loss for the three-month and nine-month periods ended July 31, 2025 and 2024 (unaudited) 3 Condensed Consolidated Statements of Changes in Stockholders' Equity for the three-month and nine-month periods ended July 31, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Cash Flows for the three-month and nine-month periods ended July 31, 2025 and 2024 (unaudited) 6 Notes to Condensed Consolidated Financial Statements (unaudited) 7

- Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 14

– Controls and Procedures

Item 4 – Controls and Procedures 17

OTHER INFORMATION

PART II OTHER INFORMATION

– Legal Proceedings

Item 1 – Legal Proceedings 18

– Risk Factors

Item 1A – Risk Factors 18

– Unregistered Sales of Equity Securities and Use of Proceeds

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds 18

– Exhibits

Item 6 – Exhibits 19

SIGNATURES

SIGNATURES 20 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

Item 1. FINANCIAL STATEMENTS PHARMA-BIO SERV, INC. Condensed Consolidated Balance Sheets (Unaudited) ASSETS July 31, 2025* October 31, 2024** Current assets Cash and cash equivalents $ 3,957,752 $ 6,767,356 Marketable securities 6,767,282 5,978,104 Accounts receivable 2,015,529 2,510,909 Prepaids and other assets 415,093 442,384 Total current assets 13,155,656 15,698,753 Property and equipment, net 131,526 169,281 Operating lease right-of-use 72,747 198,597 Other assets 225,649 225,599 Total assets $ 13,585,578 $ 16,292,230 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current operating lease liabilities $ 71,362 $ 165,201 Accounts payable and accrued expenses 874,379 1,127,649 Current portion of US TCJA Transition Tax and income taxes payable 713,153 594,316 Total current liabilities 1,658,894 1,887,166 US TCJA Transition Tax payable - 660,903 Long-term operating lease liabilities - 28,834 Total liabilities 1,658,894 2,576,903 Stockholders' equity Preferred Stock, $ 0.0001 par value; authorized 10,000,000 shares; none outstanding - - Common Stock, $ 0.0001 par value; authorized 50,000,000 shares; 23,519,672 and 23,519,672 shares issued, and 22,920,442 and 22,958,143 shares outstanding at July 31, 2025 and October 31, 2024, respectively 2,352 2,352 Additional paid-in capital 1,675,148 1,644,468 Retained earnings 10,533,691 12,353,970 Accumulated other comprehensive income 285,577 262,380 12,496,768 14,263,170 Treasury stock, at cost; 599,230 and 561,529 common shares held at July 31, 2025 and October 31, 2024, respectively ( 570,084 ) ( 547,843 ) Total stockholders' equity 11,926,684 13,715,327 Total liabilities and stockholders' equity $ 13,585,578 $ 16,292,230 * Unaudited. ** Condensed from audited financial statements. See notes to the condensed consolidated financial statements. -1- Table of Contents

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