EPS of $-5.50 decreased by 57.1% from previous year
Gross margin of 0.3%
Net income of -4.04M
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Portsmouth Square Inc (PRSI) QQ2 2025 Results – Revenue Stability Despite Heavy Leverage; San Francisco Hilton Asset Drives Significant Net Loss and Liquidity Risk
Executive Summary
Portsmouth Square Inc (PRSI) reported QQ2 2025 revenue of $9.965 million with a minimal gross profit of $32 thousand and an EBITDA of $0.541 million, yielding an EBITDA margin of 5.4%. The quarter posted a operating loss of $0.264 million and a net loss of $4.036 million, driven largely by an elevated interest expense of $3.742 million and an aggregate other income/expense impact of approximately $3.772 million. Despite a modest level of operating profitability (EBITDA positive), ongoing financing costs and non-cash or non-operating charges produced a meaningful bottom-line shortfall, culminating in a diluted EPS of -$5.50 on 734,187 shares.
From a cash-flow perspective, operating cash flow was negative at -$2.993 million, with capital expenditures of $0.346 million and free cash flow of -$3.327 million for the quarter. The balance sheet shows total assets of $39.646 million against total liabilities of $160.564 million, yielding a negative stockholders’ equity of -$120.918 million. The company also reported a current ratio of 0.15, quick ratio of 0.15, and cash ratio of 0.10, indicating stretched liquidity and a high reliance on colleague or external financing to fund ongoing operations.
Key takeaway for investors: in the near term, profitability remains constrained by the financing burden and residual fixed costs on a single-asset, Hilton-branded property in San Francisco. While EBITDA was positive, the substantial interest expense and net loss underscore a fragile liquidity profile unless operational improvements, cost optimization, or debt restructuring can meaningfully reduce cash burn and stabilize balance-sheet metrics. Given the absence of explicit forward guidance, the near-term outlook hinges on occupancy/ADR trends in San Francisco, the ability to renegotiate debt terms, and potential capital structure optimization.
Key Performance Indicators
Revenue
9.97M
QoQ: -15.69% | YoY:-2.54%
Gross Profit
32.00K
0.32% margin
QoQ: -98.49% | YoY:149.23%
Operating Income
-264.00K
QoQ: -114.92% | YoY:40.67%
Net Income
-4.04M
QoQ: -115.60% | YoY:-57.29%
EPS
-5.50
QoQ: -115.69% | YoY:-57.14%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $9.965 million in QQ2 2025, YoY -2.54%, QoQ -15.69%.
Operating Income: -$0.264 million (Operating Margin -2.65%).
Net Income: -$4.036 million; Net Margin -40.50% (Net Income Ratio -0.405).
Financial Highlights
- Revenue: $9.965 million in QQ2 2025, YoY -2.54%, QoQ -15.69%.
- Gross Profit: $32 thousand; Gross Margin 0.32% (grossProfitRatio 0.00321).
- EBITDA: $0.541 million; EBITDA Margin 5.43% (EBITDARatio 0.0543).
- Operating Income: -$0.264 million (Operating Margin -2.65%).
- Net Income: -$4.036 million; Net Margin -40.50% (Net Income Ratio -0.405).
- EPS: -$5.50; Weighted Average Shares Outstanding: 734,187.
- Cash Flow: Net cash from operating activities -$2.993 million; Capex -$0.346 million; Free Cash Flow -$3.327 million.
- Balance Sheet: Total Assets $39.646 million; Total Liabilities $160.564 million; Stockholders’ Equity -$120.918 million.
- Liquidity: Current Ratio 0.150; Quick Ratio 0.150; Cash Ratio 0.102; Cash and cash equivalents $3.106 million; Net Debt $127.068 million (Total Debt $130.174 million).
- Leverage and Coverage: Debt to Capitalization ~14%; Interest Coverage negative; Debt burden on a single asset remains a material risk.
- YoY/QoQ comparisons reflect a mixed picture: revenue stabilizing modestly, but profitability deteriorating due to financing costs and one-time or non-operating impacts.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
9.97M
-2.54%
-15.69%
Gross Profit
32.00K
149.23%
-98.49%
Operating Income
-264.00K
40.67%
-114.92%
Net Income
-4.04M
-57.29%
-115.60%
EPS
-5.50
-57.14%
-115.69%
Key Financial Ratios
currentRatio
0.15
grossProfitMargin
0.32%
operatingProfitMargin
-2.65%
netProfitMargin
-40.5%
returnOnAssets
-10.2%
returnOnEquity
3.34%
debtEquityRatio
-1.08
operatingCashFlowPerShare
$-4.08
freeCashFlowPerShare
$-4.53
priceToBookRatio
-0.01
priceEarningsRatio
-0.08
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript attached for QQ2 2025 PRSI results. As a result, there are no management quotes or segment-specific commentary available in this dataset to summarize thematically. If a transcript becomes available, the highlights will be updated to reflect management views on occupancy trends, ADR/RevPAR development, cost controls, and refinancing plans.
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Forward Guidance
No formal forward guidance was issued in the QQ2 2025 filing. Given the current data, the outlook hinges on: 1) occupancy and ADR recovery in San Francisco, 2) potential refinancings or restructurings to reduce the interest burden, and 3) ongoing cost containment and potential asset portfolio optimization. Investors should monitor: (a) occupancy/RevPAR trends for the Hilton-branded hotel in San Francisco, (b) any debt refinancing terms or covenant amendments, (c) signs of stabilization in working capital and liquidity, and (d) the company’s ability to generate positive free cash flow turning the balance sheet from a negative equity position toward a more sustainable capital structure.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PRSI Focus
0.32%
-2.65%
3.34%
-7.96%
GHG
39.80%
25.60%
3.97%
7.33%
LUXH
-1.22%
-1.45%
48.90%
-10.41%
IHG
24.70%
22.60%
-15.70%
12.32%
ATAT
42.10%
21.80%
11.40%
15.49%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
PRSI presents a high-risk, high-uncertainty investment proposition. The QQ2 2025 results show a structurally leveraged hotel asset with a large debt burden, negative equity, and strained liquidity, yet with a positive, albeit small, EBITDA contribution. The near-term catalysts required for a materially improved investment thesis include debt refinancing or equity support to resolve the negative equity and to reduce interest expense, coupled with an occupancy/ADR rebound in San Francisco that can meaningfully elevate revenue and cash flow. In the absence of explicit management guidance, the investment case relies on market recovery signals for San Francisco travel, improvements in the capital structure, and disciplined cost management. On a relative basis, PRSI trades with materially weaker profitability and liquidity metrics versus diversified peers in the hotel sector, suggesting a higher risk premium and a longer path to sustained profitability. Given the OTC listing, limited liquidity, and the current leverage profile, the investment case is best characterized as speculative, with a focus on potential strategic actions, refinancing outcomes, and a clear path to free cash flow generation.
Key Investment Factors
Growth Potential
Growth potential hinges on a rebound in San Francisco hotel demand, potential upgrades or repositioning of the property's premium offerings, and the ability to secure more favorable debt terms to reduce interest costs. Any improvement in occupancy, ADR, or brand-driven demand could lift EBITDA and mitigate cash burn.
Profitability Risk
Key risks include a high debt load with negative equity, constrained liquidity (current ratio 0.15), negative net cash flow, reliance on a single asset, and sensitivity to macro travel cycles and San Francisco market dynamics. A failure to refinance or restructure debt could exacerbate liquidity stress and increase default risk.
Financial Position
Financial position remains precarious: negative stockholders' equity (-$120.918 million) despite total assets of $39.646 million and total debt of $130.174 million. Net debt stands at $127.068 million, with negative free cash flow (-$3.327 million) in QQ2 2025 and EBITDA barely positive ($0.541 million).
SWOT Analysis
Strengths
Hilton-branded hotel asset with established brand equity in a premier San Francisco location.
544 rooms and luxury suites providing scale within a single-property revenue model; EBITDA positive in QQ2 2025, signaling some operating leverage on the venue.
Weaknesses
Negative stockholders’ equity (-$120.918 million) and a large debt burden (Total Debt $130.174 million).
Severe liquidity pressures (current/quick/cash ratios all at 0.15 or below); negative working capital and negative free cash flow.
Concentration risk from a single asset; high fixed costs and interest burden dominate profitability; limited ability to weather adverse travel cycles without external financing.
Opportunities
Potential occupancy/ADR recovery in San Francisco benefiting RevPAR and EBITDA quality.
Debt refinancing or covenant relief could materially improve interest coverage and cash flow dynamics.
Strategic portfolio actions (e.g., asset optimization or monetization options) could relieve leverage pressures if market conditions permit.
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