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Paysign, Inc. (PAYS)·Q2 2025 Earnings Summary

Executive Summary

  • Record revenue of $19.08M (+33.1% YoY) with gross margin expanding to 61.6%; pharma patient affordability drove growth (+189.9% YoY) while plasma declined 4.7% YoY amidst industry oversupply .
  • Against S&P Global consensus, revenue was a modest beat while EPS was a miss: Revenue $19.08M vs $18.73M consensus; EPS $0.02 vs $0.035 consensus. Q1 was a beat on both metrics; Q4 was in line/slight beat. Values retrieved from S&P Global*.
  • Full-year 2025 guidance raised: revenue to $76.5–$78.5M; adjusted EBITDA to $18–$20M; gross margin trimmed to 61–62% given mix and new contact center; Q3 guidance set at revenue $19.5–$20.5M and adj. EBITDA $4.5–$5.0M .
  • Catalysts: accelerating pharma program onboarding (30–40 more expected in 2H), plasma center additions (132 awarded; 123 live in June), SaaS donor engagement stack launch, and new contact center scaling (fourfold capacity) supporting growth and service differentiation .

What Went Well and What Went Wrong

What Went Well

  • Pharma patient affordability revenue surged 190% YoY to $7.75M; revenue per program rose to $79,937 (+83% YoY), with 97 active programs and >80% YoY growth in claims processed .
  • Gross margin expanded 870 bps YoY to 61.6%, reflecting mix shift to pharma and stable plasma margins despite onboarding costs; adjusted EBITDA doubled to $4.51M .
  • Management pipeline confidence and technology differentiation: “One of our biggest differentiators…dynamic business rules technology…helping manufacturers and patients overcome tactics used by co‑pay maximizers” (CEO) .

What Went Wrong

  • Plasma revenue declined 4.7% YoY to $10.74M with average monthly revenue per center down to $7,098 amid oversupply and increased collection efficiencies; gross dollar loads and spend were down 3.7% and 6.3% YoY .
  • EPS missed consensus due to upfront costs (~$300K) from rapid onboarding of 123 plasma centers late in the quarter and higher expense investments (SG&A +36.2%) to scale operations .
  • Guidance gross margin trimmed to 61–62% for FY25, with Q3 GM ~59% given higher plasma mix and startup costs from the new patient services contact center .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD)$15,606,448 $18,598,149 $19,078,353
Diluted EPS ($)$0.02 $0.05 $0.02
Gross Margin (%)58.9% 62.9% 61.6%
Adjusted EBITDA ($USD)$2,864,673 $4,962,387 $4,512,104
Adjusted EBITDA Margin (%)18.4% (2.86/15.61) — ref table 14.3% FY; quarterly margin disclosed 14.3% in FY table, Q2 shows 23.7% 26.7% 23.7%

Actuals vs Wall Street consensus (S&P Global):

MetricQ4 2024Q1 2025Q2 2025
Revenue Consensus Mean ($USD)$15,421,000*$17,488,600*$18,734,000*
Revenue Actual ($USD)$15,606,448 $18,598,149 $19,078,353
EPS Consensus Mean ($)$0.02*$0.02*$0.035*
EPS Actual ($)$0.02 $0.05 $0.02

Values retrieved from S&P Global.*

Segment revenue breakdown:

Segment Revenue ($USD)Q2 2024Q1 2025Q2 2025
Plasma$11,273,262 $9,409,880 $10,743,924
Pharma Patient Affordability$2,674,901 $8,618,653 $7,753,906
Other$383,436 $569,616 $580,523

KPIs and operational metrics:

KPIQ4 2024Q1 2025Q2 2025
Plasma centers (end of period)480 484 607
Avg monthly revenue per plasma center ($)$7,510 $6,517 $7,098
Active pharma programs (end of period)76 90 97
Avg quarterly revenue per pharma program ($)N/AN/A$79,937
Claims processed YoY change+176.2% (Q4) +160% (Q1) >+80% (Q2)
Gross dollar load volume YoY-6.4% (Q4) -4.5% (Q1) -3.7% (Q2)
Gross spend volume YoY-7.8% (Q4) -9.4% (Q1) -6.3% (Q2)
Unrestricted cash (end of period)$10.77M $6.85M $11.75M
Net income ($USD)$1,372,872 $2,586,100 $1,387,761

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)FY 2025$72.0–$74.0 $76.5–$78.5 Raised
Plasma % of RevenueFY 2025~57% ~56% Lowered
Pharma Patient Affordability % of RevenueFY 2025~43% ~40.5% Lowered
Gross Profit Margin (%)FY 202562–64 61–62 Lowered
Operating Expenses ($M)FY 202541–43 41–43 Maintained
Depreciation & Amortization ($M)FY 2025~8.0 ~8.4 Raised
Stock-based Compensation ($M)FY 2025~3.8 ~4.4 Raised
Interest Income ($M)FY 2025~2.9 ~2.5 Lowered
Net Income ($M)FY 20256–7 6–7 Maintained
Adjusted EBITDA ($M)FY 202516–17 18–20 Raised
Diluted Share Count (M)FY 202556.0 57.5 Raised
Total Revenue ($M)Q3 2025N/A19.5–20.5 New
Plasma % of RevenueQ3 2025N/A~60% New
Pharma Patient Affordability % of RevenueQ3 2025N/A~37% New
Gross Profit Margin (%)Q3 2025N/A~59 New
Operating Expenses ($M)Q3 2025N/A10.5–11.5 New
D&A ($M)Q3 2025N/A~2.2 New
Stock-based Compensation ($M)Q3 2025N/A~1.4 New
Adjusted EBITDA ($M)Q3 2025N/A4.5–5.0 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Plasma industry dynamicsInventory normalization and YoY plasma revenue decline in Q4; oversupply headwinds persisted in Q1 .Headwinds continue; added 132 centers (123 live in late June; 9 in July). Expect organic center-level growth return in 2026; 22 closures by a customer with donors likely retained; 6–8 new centers planned over next 10 months and another 6–8 the following year .Stabilizing near-term; positioned for improvement in 2026.
Patient affordability growthQ4: 21.7% of revenue; 76 programs; claim volume +176% YoY . Q1: 46.3% of revenue; 90 programs; +260.8% YoY revenue .Q2: 40.6% of revenue; 97 programs; revenue per program +83% YoY; >80% YoY claims growth; 30–40 programs expected in 2H .Accelerating scale with diversified revenue drivers.
Technology initiatives (Gamma; SaaS)Gamma acquisition announced Q4; integration and expected $4–$5M annual cash cost savings run-rate by end Q2; early synergies in Q1 .SaaS donor engagement suite (donor app, plasma-specific CRM, donor management system) introduced; DBR engine combats copay maximizers; new contact center to scale support capacity 4x .Ramping productization and operating leverage.
Regulatory (FDA)Not highlighted.Donor management system targeting FDA approval by end of year .Emerging regulatory milestone.
Cost structure/OpExQ4: SG&A up with scaling; Q1: OpEx guided lower post-Gamma synergies .Q2: SG&A +36% YoY to support growth; FY OpEx maintained at $41–$43M; Q3 OpEx $10.5–$11.5M with contact center startup costs .Investment phase near-term; leverage expected.

Management Commentary

  • “We reported record revenue of $19.1 million…gross margins…61.6%…we doubled adjusted EBITDA to $4.5 million…nearly doubled net income to $1.4 million.” — Mark Newcomer, CEO .
  • “One of our biggest differentiators…our proprietary dynamic business rules technology…helping manufacturers and patients overcome tactics used by co‑pay maximizers…” — Mark Newcomer, CEO .
  • “We are raising our revenue guidance to be in the range of $76.5 million to $78.5 million…Adjusted EBITDA…$18.0 million to $20.0 million…diluted share count…57.5 million.” — Jeff Baker, CFO .
  • “We exited the quarter with $11.8 million in unrestricted cash and zero debt…annual cash cost savings…at the high end of $4.0–$5.0 million.” — Jeff Baker, CFO .

Q&A Highlights

  • Pharma onboarding mix: 30–40 programs expected in 2H 2025, roughly split between new clients and expansions; leaning toward transition programs that ramp faster .
  • Plasma center cadence: 10–14 centers to be added in 2H including the nine already live in July; closures of 22 underperforming centers expected to redirect donors to nearby centers, mitigating impact .
  • Donor management system timing: Targeting FDA approval toward year-end .
  • Contact center cost impact: ~$60K/month facility cost plus headcount ramp; viewed as necessary capability to win and service pharma programs at high quality standards .

Estimates Context

  • Q2 2025: Revenue beat and EPS miss vs consensus; FY guidance raised for revenue and adjusted EBITDA suggesting upward pressure on Street revenue/EBITDA estimates and potential EPS recalibration given margin mix and startup costs .
  • Q1 2025: Strong beats on both revenue and EPS, indicating sustained positive estimate revisions momentum in H1 .
  • Q4 2024: In-line to slight beat dynamics; the Street may have underestimated the inflection from pharma programs and subsequent Gamma integration benefits .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Pharma patient affordability is the core growth engine; momentum and program adds support multi-quarter revenue visibility and margin resilience despite plasma headwinds .
  • Plasma business positioned for recovery leverage: 132 centers transitioned, share ~50%; donor retention strategy around closures should cushion near-term impact; scenario improves into 2026 .
  • Technology stack and contact center capacity are strategic moats for winning larger, complex pharma programs and elevating margins via value-added services (DBR, SaaS) .
  • FY25 guidance upgrades (revenue, adjusted EBITDA) are constructive; watch near-term gross margin mix (Q3 ~59%) with higher plasma contribution and contact center startup costs .
  • Near-term trading: potential positive bias on revenue/EBITDA revisions; EPS optics may lag due to investment cadence and mix—focus on cash generation, adjusted EBITDA scaling and pipeline conversion .
  • Medium-term thesis: diversified healthcare fintech with expanding SaaS capabilities and scale economics; plasma cyclicality becomes a call-option on recovery while pharma underpins growth .
  • Monitor FDA approval timing for donor management system and execution on 30–40 pharma programs; these are tangible catalysts for valuation re-rating .