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Paysign, Inc. (PAYS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue grew 14% YoY to $15.61M, modestly above consensus ($15.61M vs $15.42M*) while GAAP EPS was in line at $0.02 vs $0.02*; EBITDA missed consensus ($2.17M vs $2.70M*), but gross margin expanded 670 bps YoY to 58.9% on mix shift to higher-margin pharma programs . Values with * from S&P Global.
  • Patient Affordability remained the growth engine: Q4 pharma revenue +156.5% YoY to $4.31M; full-year pharma +214.5% YoY to $12.65M, with active programs up 33 to 76 .
  • Plasma softened: Q4 plasma revenue fell 6.2% YoY amid industry oversupply and higher yields reducing donation frequency/compensation; average revenue per plasma center declined to $7,510 (from $8,297) .
  • FY25 outlook: revenue $68.5–$70.0M, gross margin 62–64%, operating expenses $47.5–$50.0M, net income ~breakeven, adjusted EBITDA $12.5–$13.5M; Q1’25 revenue $17.5–$18.0M with 63–64% gross margin .
  • Potential stock reaction catalysts: pronounced mix shift to pharma with strong margin expansion vs. breakeven net income guidance; Gamma Innovation asset acquisition introduces a SaaS vector and new engagement/CRM capabilities for plasma and pharma .

What Went Well and What Went Wrong

  • What Went Well

    • Patient Affordability momentum: Q4 pharma revenue +156.5% YoY to $4.31M; FY’24 pharma +214.5% to $12.65M; active programs +33 to 76; Q4 claims +176.2% YoY .
    • Margin expansion: Q4 gross margin rose to 58.9% (vs 52.2% LY); FY gross margin +400 bps to 55.1% on higher pharma mix .
    • Strategic expansion: Acquisition of Gamma Innovation’s assets adds donor engagement app and plasma-focused CRM; CEO: “integration … greatly strengthens our capabilities … positions us … in the life sciences market and beyond” .

  • What Went Wrong

    • Plasma headwinds: Q4 plasma revenue -6.2% YoY; average revenue per plasma center per month fell to $7,510 (from $8,297); management expects oversupply conditions to persist at least through 2025 .
    • Operating cost growth: Q4 SG&A +31.9% YoY; employees rose to 173 vs 123 YoY to support growth, plus higher tech/security investments .
    • Consensus EBITDA miss: Q4 GAAP EBITDA $2.17M vs $2.70M*; FY’24 GAAP EBITDA $7.02M vs $9.45M*, though FY’24 adjusted EBITDA was $9.62M . Values with * from S&P Global.

Financial Results

Actuals vs prior periods (oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD)$13.69M $15.26M $15.61M
Diluted EPS (GAAP)$0.10 $0.03 $0.02
Gross Margin %52.2% 55.5% 58.9%
EBITDA ($USD)$1.81M $2.26M $2.17M
Adjusted EBITDA ($USD)$2.51M $2.83M $2.86M
Net Income ($USD)$5.62M $1.44M $1.37M

Q4 2024 results vs S&P Global consensus

MetricConsensusActual
Revenue ($USD)$15.42M*$15.61M
Primary EPS$0.02*$0.02
EBITDA ($USD)$2.70M*$2.17M

Values with * retrieved from S&P Global.

Segment revenue breakdown (oldest → newest)

Segment Revenue ($USD)Q4 2023Q3 2024Q4 2024
Plasma$11.52M $11.44M $10.80M
Pharma (incl. Patient Affordability)$1.71M $3.27M $4.31M
Other$0.47M $0.54M $0.49M
Total$13.69M $15.26M $15.61M

KPIs (operational)

KPIQ3 2024Q4 2024Notes
Plasma centers (period-end)478 480 +2 QoQ
Avg. revenue per plasma center per month$7,991 $7,510 Lower on plasma oversupply
Active patient affordability programs66 76 +10 QoQ
Patient affordability claim volume YoY+429.6% +176.2% Quarterly YoY growth
Cardholders (approx.)~7.1M ~7.3M Program base expansion

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025N/A$68.5M–$70.0M New
Plasma % of RevenueFY 2025N/A~57.5% New
Pharma Revenue GrowthFY 2025N/A≥100% YoY New
Gross Margin %FY 2025N/A62%–64% New
Operating ExpensesFY 2025N/A$47.5M–$50.0M New
Depreciation & AmortizationFY 2025N/A$10.5M–$11.5M New
Stock-based CompensationFY 2025N/A~$6.0M New
Interest IncomeFY 2025N/A~$2.8M New
Net IncomeFY 2025N/A~Breakeven New
Adjusted EBITDAFY 2025N/A$12.5M–$13.5M New
Total RevenueQ1 2025N/A$17.5M–$18.0M New
Gross Margin %Q1 2025N/A63%–64% New
Operating ExpensesQ1 2025N/A$10.5M–$11.0M New
D&AQ1 2025N/A~$1.9M New
SBCQ1 2025N/A~$2.1M New
Adjusted EBITDAQ1 2025N/A$4.0M–$5.0M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Patient Affordability growth and pipelineQ2: +266.8% YoY; raised FY’24 guide; pipeline robust . Q3: +219.1% YoY; 66 programs; gross margin +440 bps .FY’24 +214.5%; Q4 +156.5%; 76 programs; expect ≥2x revenue in 2025 .Strengthening growth driver
Gross margin trajectoryQ2: 52.9% (+207 bps) . Q3: 55.5% (+440 bps) .Q4: 58.9%; FY’24: 55.1%; FY’25 guide 62–64% .Sustained expansion
Plasma industry dynamicsQ3 noted headwinds (weather, employment, cardholder spend) .Oversupply and higher yields cut donations/compensation; expect softness through 2025 .Deteriorating near term
Technology/SaaS initiativesNot highlighted in Q2/Q3 earnings releases.Gamma Innovation assets acquired; entry to SaaS; donor engagement app and plasma CRM .New strategic vector
Opex investmentQ2/Q3: hiring, platform security; headcount 149 (Q2) → 164 (Q3) .Headcount 173; Q4 SG&A +31.9% YoY; FY’25 opex $47.5–$50.0M .Investment elevated
Legal/regulatoryQ3: one-time legal fees for settlements .No new items called out in Q4.Normalized

Management Commentary

  • “2024 marked another year of outstanding growth and strategic advancement… exceptional performance of our patient affordability business… we expect [it] to increase to over 37.0% of revenue in 2025” — Mark Newcomer, CEO .
  • “We have started to experience a near-term slowdown in our plasma business due to an industry-wide oversupply of plasma… we will continue to utilize the cash flow from this business to invest in our patient affordability business” — Jeff Baker, CFO .
  • “This strategic acquisition [Gamma] significantly enhances our capability to offer integrated solutions… marks our entry into the high-margin Software-as-a-Service market” — Mark Newcomer .
  • “Plasma… revenue declined 6.2%… average revenue per plasma center decreased 9.5% to $7,510… guidance for 2025… reflects the slowdown we expect to continue for the remainder of the year” — Jeff Baker .
  • “We fully expect our patient affordability business to sustain its strong growth trajectory in 2025, projecting to at least double” — Mark Newcomer .

Q&A Highlights

  • Pharma growth composition and seasonality: Higher revenue contribution in 1H as patients have not met out-of-pocket maximums; visibility supported by strong pipeline and 14 net new programs added early in Q1’25 .
  • Gamma impact: Minimal revenue included in guidance (“just over $1M/year”); applications not embedded in FY’25 guide—potential upside; earn-out aligns incentives .
  • Plasma slowdown drivers: Post-COVID overexpansion and ~9% higher yields per donation reduced need for independent plasma; expect temporary industry rationalization; costs ~50% variable mitigate deleverage .
  • Program adds: Planning +10–15 plasma centers in 2025 (4 already live); healthy mix of new pharma clients and expansions—won ~20% of new drug launches in 2024, trending higher in 2025 .
  • Quarterly cadence: Pharma likely highest in Q1; similar run-rate across Q2–Q3; Q4 typically lowest for pharma due to benefit design mechanics .

Estimates Context

  • Q4 2024: Revenue beat ($15.61M vs $15.42M*), EPS in line ($0.02 vs $0.02*), GAAP EBITDA missed ($2.17M vs $2.70M*). Values with * retrieved from S&P Global. Actuals: press release and reconciliation .
  • FY 2024: Revenue slightly above consensus ($58.38M vs $58.20M*), EPS above ($0.07 vs $0.06*), GAAP EBITDA below ($7.02M vs $9.45M*). Values with * retrieved from S&P Global. Actuals: press release and reconciliation .
  • FY 2025 consensus: Revenue $80.76M*, EPS $0.127* exiting the quarter; management FY’25 implies breakeven GAAP net income with higher gross margin but elevated opex/integration costs . Values with * retrieved from S&P Global.

Key Takeaways for Investors

  • Mix shift is accelerating: pharma’s contribution rose to 27.6% of Q4 revenue and is guided to ≥37% for FY’25—supportive of sustained gross margin expansion despite plasma softness .
  • Near-term headwind: plasma oversupply and higher yields likely pressure plasma revenue through 2025; expect lower average revenue per center until industry rebalances .
  • FY’25 setup: higher gross margin (62–64%) offset by elevated opex (including Gamma integration), driving ~breakeven GAAP net income; adjusted EBITDA targeted at $12.5–$13.5M—watch for synergy updates on Q2 call .
  • Upside optionality: Gamma apps/CRM are not in FY’25 guidance; any traction could provide incremental high-margin SaaS revenue and strengthen competitive moat in plasma and pharma .
  • Execution watchpoints: pace of pharma program adds (14 net added early Q1’25), scalability of support functions (customer care, program management) and fraud/network fees; track opex discipline vs growth .
  • Trading implications: modest Q4 revenue beat and in-line EPS are overshadowed by EBITDA miss vs consensus and breakeven FY’25 EPS guide; narrative likely hinges on confidence in pharma growth durability and visibility on plasma recovery and Gamma synergies .
  • FY’25 cadence: revenue and margins skew to 1H given patient affordability seasonality; consider timing around Q1 print and visibility into Q2–Q3 resiliency .

Supporting Documents Read

  • 8-K 2.02 Earnings Release (Q4/FY2024) and exhibits, including detailed financial tables and FY’25 outlook .
  • Earnings call transcript (Q4 2024), prepared remarks and Q&A .
  • Related press releases (Gamma acquisition; patient affordability performance; call logistics) .
  • Prior quarters’ releases for trend analysis (Q3’24, Q2’24) .

Note: Consensus estimates marked with * are values retrieved from S&P Global.