10-Q: Earth Science Tech Reports Strong Q3 Growth, Profit Surge

Earth Science Tech, Inc. announced significant revenue and net income growth for the nine months ended December 31, 2025, alongside strategic acquisitions and a strengthened balance sheet.

Summary

• Revenue for the nine months ended December 31, 2025, increased by 7% to $26,197,596, up from $24,440,600 in the prior year.
• Gross profit for the nine-month period rose by 8% to $19,213,769, with gross margin improving to 73% from 72%.
• Net income for the nine months ended December 31, 2025, surged by 11% to $2,312,978, compared to $2,081,033 in the previous year.
• For the three months ended December 31, 2025, revenue increased by 14% to $8,386,779, and net income dramatically increased by 341% to $910,367.
• Total assets grew to $8,089,437 as of December 31, 2025, from $7,066,721 as of March 31, 2025, a 14.5% increase.
• Total liabilities decreased by 28.9% to $2,286,431 as of December 31, 2025, from $3,215,610 as of March 31, 2025.
• Stockholders' equity increased by 50.7% to $5,803,006 as of December 31, 2025, from $3,851,111 as of March 31, 2025.
• The company completed acquisitions of Las Villas Health LLC, DOConsultations LLC, and an 80% interest in Magnefuse LLC on April 1, 2025.
• An ongoing $5 million share repurchase program is in place, with 3,703,296 shares repurchased for $647,086.72 during the nine months ended December 31, 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing positively due to strong revenue and net income growth, improved gross margins, and a healthier balance sheet. However, the significant decline in operating cash flow and overall cash balance, coupled with high related-party compensation, introduces a degree of caution.

Positives

• Revenue increased by 7% for the nine months and 14% for the three months ended December 31, 2025, demonstrating strong top-line growth.
• Gross profit improved by 8% for the nine months and 26% for the three months, with gross margins rising to 73% and 76% respectively.
• Net income saw substantial growth, increasing by 11% for the nine months and a remarkable 341% for the three months ended December 31, 2025.
• Total assets increased by 14.5% and total stockholders' equity grew by 50.7%, indicating a strengthening balance sheet.
• Total liabilities decreased by 28.9%, improving the company's financial leverage and stability.
• The company actively repurchased 3,703,296 common shares for $647,086.72 during the nine-month period, reducing outstanding shares and potentially boosting EPS.
• Strategic acquisitions of Las Villas Health LLC, DOConsultations LLC, and Magnefuse LLC expand the company's operational footprint in healthcare and direct-to-consumer retail.

Negatives

• Cash and cash equivalents decreased significantly by 71.8% to $415,699 as of December 31, 2025, from $1,473,228 as of March 31, 2025.
• Net cash provided by operating activities decreased by 55.7% to $1,055,078 for the nine months ended December 31, 2025, compared to $2,378,347 in the prior year, primarily due to inventory build and increased accounts receivable.
• Advertising and marketing expenses increased substantially by 307% for the nine months and 105% for the three months, indicating higher customer acquisition costs or brand building efforts.
• Salaries expense increased by 4% for the nine months, contributing to higher overall operating expenses.
• Inventory increased by 116% to $1,088,019, which, while potentially supporting future sales, ties up capital and contributed to reduced operating cash flow.

Future Outlook

Management believes existing cash, expected operating cash flows, and investment monetization are sufficient to fund operations and share repurchase activity for at least the next twelve months. The company is actively pursuing licensure for its pharmacies in remaining U.S. states and expanding its product lines for MagneChef.

Management Comments

• Management contemplated the increase in marketing expenses as part of the strategic plan to increase sales in newly acquired business units.
• Management believes existing cash, expected operating cash flows, and investment monetization are sufficient to fund operations and repurchase activity for at least the next twelve months.

Industry Context

StockSavvy.ai notes that Earth Science Tech's strategy of operating as a strategic holding company focused on acquisitions and operational optimization in compounding pharmaceuticals, telemedicine, and real estate development positions it in diverse, growing sectors. The expansion of pharmacy licensure and telemedicine platforms aligns with broader trends in healthcare accessibility and personalized medicine. The increase in advertising and marketing spend suggests an aggressive push to capture market share in these competitive industries, particularly for newly acquired entities.

Legal Proceedings

• As of December 31, 2025, there were no pending or threatened legal actions expected to have a material adverse effect on the company's financial position, results of operations, or cash flows.

Related Party Transactions

• CEO Giorgio R. Saumat's compensation is paid to Point96 Consulting, LLC, totaling $500,000 for the three months and $2,759,735 for the nine months ended December 31, 2025.
• COO Mario G. Tabraue's compensation is paid to Tabraue Consulting, LLC, totaling $350,000 for the three months and $2,173,415 for the nine months ended December 31, 2025.
• Executive compensation includes quarterly performance bonuses contingent on the company's assets increasing quarter over quarter by at least 5%.

Stakeholder Impact

• Shareholders may benefit from the ongoing share repurchase program, which reduces outstanding shares and could support stock price.
• Shareholders may see increased value due to strong revenue and net income growth, and a strengthening balance sheet.
• Employees in newly acquired subsidiaries (Las Villas Health, DOConsultations, Magnefuse) are integrated into the larger holding company structure.
• Customers of RxCompound and Mister Meds may benefit from expanded licensure and telemedicine services, increasing accessibility to compounded medications.

Next Steps

• RxCompound and Mister Meds are actively pursuing licensure in remaining U.S. states.
• Peaks aims to offer telemedicine services nationwide through its healthcare provider network and ongoing licensure expansion.
• MagneChef is in the process of expanding its product line for new offerings that incorporate its intellectual property.
• The company will receive two more $60,000 installments from Crafted Elements, LLC in February and March 2026 for the sale of the BBQraft trademark.

Key Dates

Recommendation

The company demonstrates strong growth in revenue and net income, coupled with a healthier balance sheet (increased assets, decreased liabilities, increased equity). The ongoing share repurchase program is also a positive for shareholders. However, the significant decline in operating cash flow and overall cash balance, alongside substantial related-party compensation, warrants a cautious approach. While the growth trajectory is promising, the cash flow dynamics present a potential concern that seasoned investors would monitor closely before making a 'buy' decision. A 'hold' recommendation allows for observation of future cash flow improvements and sustained profitability.

Keywords

Pharmaceuticals, Telemedicine, Real Estate Development, Compounding Pharmacy, Healthcare, Acquisitions, Share Repurchase, Financial Performance, Q3 Earnings, ETST