BAB, Inc. Reports Results for 3rd Quarter FY 2025
MWN-AI** Summary
BAB, Inc. (OTCQB: BABB) released its financial results for the third quarter of fiscal year 2025, revealing revenues of $769,000 and a net income of $168,000, or $0.02 per share. This marks a decline from the previous year's revenues of $872,000, although net income remains consistent with last year's results. The decrease in revenue is attributed primarily to a reduction in marketing fund expenses, which fell by $106,000. According to U.S. GAAP, the company recognizes marketing fund revenue concurrently with the related expenses, meaning that this decline in expenses did not affect net income.
For the first nine months of FY 2025, BAB reported revenues of $2.334 million and a net income of $438,000, compared to $2.591 million and $405,000 during the same period in 2024. Similar to the quarterly results, the annual decrease in revenue is driven by lower marketing fund expenses, which were down $229,000. Other revenue sources, including royalty fees and franchise fees, also saw reductions, although licensing fees exhibited a positive trend with a 33.9% increase in the quarter.
Operating expenses for the quarter decreased by 17.6% to $550,000, driven by lower marketing expenditures as well as reduced professional fees and employee benefits. For the nine-month period, total operating expenses fell to $1.767 million, a 14.9% decrease from the previous year.
Overall, despite the revenue decline, BAB, Inc. experienced improved net income alongside streamlined operating expenses. The company franchises and licenses popular brands, including Big Apple Bagels® and Brewster’s® Coffee, and trades on the OTCQB under the symbol BABB. For further details, investors are encouraged to visit the company's website at www.babcorp.com.
MWN-AI** Analysis
BAB, Inc. (OTCQB: BABB) reported its third-quarter results for FY 2025, revealing nuanced financial dynamics that merit investor attention. The company achieved revenues of $769,000 and net income of $168,000, consistent on a per-share basis with the previous year but reflecting an 11.9% revenue decline overall. This downturn was primarily associated with a decrease in marketing fund expenses, which stripped back both revenue and expenses that cancel each other out under U.S. GAAP, resulting in a neutral impact on net income.
For the first nine months, revenues totaled $2,334,000—a 9.9% decrease year-over-year. Constrained growth in royalty and franchise fee revenue highlighted the challenges of the current market, with both categories experiencing declines. However, it's important to note that licensing fees showed strong resilience, increasing by 33.9% in the third quarter, suggesting a diversification avenue worth monitoring.
Operating expenses decreased across the board, which may signal efficiency improvement measures taken by the company. The reduction in the marketing fund expenses, along with cuts in professional fees, employee benefits, and occupancy costs, resulted in a notable 17.6% decline in total operating expenses for the quarter. Such operational prudence could enhance margins moving forward.
Given the mixed financial indicators, potential investors may approach BAB with cautious optimism. The company appears stable with a consistent net income, maintained earnings per share, and cost-control measures. However, the declining revenue trends in vital categories like royalty and franchise fees could pose long-term concerns.
In conclusion, BAB, Inc. seems to be managing its current financial landscape effectively, but investors should closely monitor the impact of revenue declines and market conditions on future growth potential. A balanced assessment is prudent, weighing operational efficiencies against revenue performance risks as the company navigates its path forward.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
DEERFIELD, Ill., Oct. 03, 2025 (GLOBE NEWSWIRE) -- BAB, Inc. (OTCQB: BABB) , announced its financial results for the third quarter ended August 31, 2025.
For the quarter ended August 31, 2025 BAB had revenues of $769,000 and net income of $168,000, or $0.02 per share earnings, versus revenues of $872,000 and net income of $160,000, or $0.02 per share, for the same quarter last year. Our total revenue for the three months ended August 31, 2025 decreased compared to the prior period due to a decrease in marketing fund expenses of $106,000, which drive the recognition of marketing fund revenue. Under U.S. GAAP, we recognize marketing fund revenue at the time the related marketing fund expenses are incurred. As marketing fund revenue and expense directly offset each other in any given period, the decline has no impact on net income.
For the nine months ended August 31, 2025, revenues were $2,334,000 and net income was $438,000, or $0.06 per share, versus revenues of $2,591,000 and net income of $405,000, or $0.06 per share for the same period in 2024. Our total revenue for the nine months ended August 31, 2025 decreased compared to the prior period primarily due to a decrease in marketing fund expenses of $229,000, which drive the recognition of marketing fund revenue. Under U.S. GAAP, we recognize marketing fund revenue at the time the related marketing fund expenses are incurred. As marketing fund revenue and expense directly offset each other in any given period, the decline has no impact on net income. Royalty revenue, decreased $11,000, franchise fee revenue decreased $14,000, and License fee and other income decreased $3,000 for the nine months ended August 31, 2025 compared to same period 2024.
Total operating expenses for the quarter ended August 31, 2025, were $550,000, versus $667,000, in 2024. The change in operating expenses for the quarter was primarily due to a decrease in marketing fund expenses of $106,000. In addition, there was a decrease in 2025 in professional fees of $6,000, employee benefits of $17,000, offset by an increase in payroll of $4,000, travel of $3,000 and other expenses of $5,000 in 2025 compared to the same period 2024.
Total operating expenses for the nine months ended August 31, 2025 were $1,767,000 versus $2,077,000 for August 31, 2024. The change in operating expenses for the nine months was primarily due to a decrease in marketing fund expenses of $229,000, a decrease in employee benefit expense of $52,000, a decrease in professional fees of $22,000, a decrease in occupancy of $8,000 and a decrease of $9,000 in general expenses. This was offset by an increase of $8,000 in payroll and $2,000 in advertising and promotion compared to same nine months of 2024.
BAB, Inc. franchises and licenses Big Apple Bagels®, My Favorite Muffin®, SweetDuet® frozen yogurt and Brewster’s® Coffee. The Company’s stock is traded on the OTCQB under the symbol BABB and its website can be visited at www.babcorp.com .
Certain statements in this press release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “forecast,” “estimate,” “project,” “intend,” “expect,” “should,” “would,” “believe” and similar expressions and all statements which are not historical facts are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the company’s actual results, performance (financial or operating), or achievements to differ from the future results, performance (financial or operating), or achievements expressed or implied by such forward-looking statements. The above factors are more fully discussed in the company’s SEC filings.
(TABLE FOLLOWS)
| Contact: | BAB, Inc. |
| Michael K. Murtaugh (847) 948-7520 | |
| Fax: (847) 405-8140 | |
| www.babcorp.com | |
| BAB, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||||||
| 08/31/25 | 08/31/24 | % Change | 08/31/25 | 08/31/24 | % Change | ||||||||||||
| REVENUES | |||||||||||||||||
| Royalty fees from franchised stores | $511,736 | $519,299 | -1.5 | % | $1,480,809 | $1,492,463 | -0.8 | % | |||||||||
| Franchise and area development fee revenue | 3,082 | 9,298 | -66.9 | % | 15,248 | 28,759 | -47.0 | % | |||||||||
| Licensing fees and other income | 66,785 | 49,869 | 33.9 | % | 207,138 | 209,969 | -1.3 | % | |||||||||
| Marketing Fund Revenue | 186,930 | 293,469 | -36.3 | % | 631,025 | 859,516 | -26.6 | % | |||||||||
| Total Revenue | 768,533 | 871,935 | -11.9 | % | 2,334,220 | 2,590,707 | -9.9 | % | |||||||||
| OPERATING COSTS AND EXPENSES | |||||||||||||||||
| Selling, general and administrative | 361,690 | 372,561 | -2.9 | % | 1,133,384 | 1,214,895 | -6.7 | % | |||||||||
| Depreciation and amortization | 1,081 | 981 | 10.2 | % | 3,042 | 2,942 | 3.4 | % | |||||||||
| Marketing Fund Expenses | 186,930 | 293,469 | -36.3 | % | 631,025 | 859,516 | -26.6 | % | |||||||||
| Total Expense | 549,701 | 667,011 | -17.6 | % | 1,767,451 | 2,077,353 | -14.9 | % | |||||||||
| Income from operations | 218,832 | 204,924 | 6.8 | % | 566,769 | 513,354 | 10.4 | % | |||||||||
| Interest/other income | 14,597 | 17,903 | -18.5 | % | 43,219 | 50,164 | -13.8 | % | |||||||||
| Income taxes | (65,800 | ) | (62,500 | ) | 5.3 | % | (171,800 | ) | (159,000 | ) | 8.1 | % | |||||
| NET INCOME | $ 167,629 | $ 160,327 | 4.6 | % | $ 438,188 | $ 404,518 | 8.3 | % | |||||||||
| Earnings per share - basic and diluted | $0.02 | $0.02 | N/M | $0.06 | $0.06 | N/M | |||||||||||
| Average number of shares outstanding | 7,263,508 | 7,263,508 | 7,263,508 | 7,263,508 | |||||||||||||
FAQ**
How is BAB Inc. BABB planning to address the 11.9% decline in total revenue for the third quarter ended August 32025, given the ongoing challenges in franchise and marketing fund revenues?
Given the significant decrease in franchise and area development fee revenue for BAB Inc. BABB, what strategies is the company implementing to improve this income stream moving forward?
With the reported decrease in marketing fund expenses reducing operating costs for BAB Inc. BABB, how does the company plan to reinvest these cost savings to drive future revenue growth?
How does BAB Inc. BABB plan to enhance its royalty fee revenue, which has seen only marginal declines, to ensure sustained profitability and growth in the upcoming quarters?
**MWN-AI FAQ is based on asking OpenAI questions about BAB Inc (OTC: BABB).
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