Business Overview
Pharma-Bio Serv, Inc. is a technical compliance consulting services company operating across Puerto Rico, the United States, Europe, and Brazil through three reportable business segments. The company generates revenue primarily through time and material contracts (99% of revenues) and short-term fixed-fee contracts. During the six months ended April 30, 2026, the company reported revenues of $4,997,909 compared to $4,888,377 in the prior year period, with net income of $265,846 versus $103,889, reflecting improved operational performance.
Key Risk Factors
Key risk factors include: (1) Foreign exchange exposure from international operations, particularly in Puerto Rico, Spain, and Brazil, which generated cumulative translation adjustments of $(23,085) in the current period; (2) Dependence on Puerto Rico tax incentives, as the previous fifteen-year industrial tax exemption grant expired on October 31, 2024, and extension approval from PRIDCO is pending; (3) Contingent litigation liability related to a customer account with a $5.3 million allowance for credit losses that has been fully reserved since 2021; (4) Reliance on technical compliance services in regulated industries subject to changing regulations; (5) Impact of new GILTI tax provisions under the One Big Beautiful Bill Act effective for fiscal year 2027, which increases the effective tax rate on net CFC tested income from 10.5% to approximately 12.6%.
