Paysign (PAYS) Q2 Revenue Jumps 33%

Key Points

• Revenue (GAAP) rose 33.1% to $19.08 million, beating analyst estimates by 2.1%.

• Adjusted EBITDA more than doubled year over year, driven by strong pharma segment growth.

• Gross margin expanded to 61.6%, aided by higher-margin pharma programs, while plasma revenue softened.

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Paysign (NASDAQ:PAYS), a payment solutions provider specializing in healthcare and pharmaceutical programs, released its second quarter 2025 earnings results on August 5, 2025. Paysign reported GAAP revenue of $19.08 million, up 33.1% from the prior year and above analyst expectations of $18.69 million (GAAP). Net income (GAAP) reached $1.39 million, or $0.02 per diluted share. Adjusted EBITDA rose sharply to $4.51 million, up 101.8% year-over-year (non-GAAP, Adjusted EBITDA). The pharma patient affordability segment saw robust growth, with revenue increasing 189.9% year-over-year. but weakening trends in the plasma business. Overall, Paysign outpaced estimates on GAAP revenue and non-GAAP operating profit but is managing cost pressures and sector-specific challenges in some business lines.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Paysign’s Business and Strategic Focus

Paysign provides prepaid card solutions serving the healthcare, pharmaceutical, and corporate sectors. Its platforms enable electronic payment processing, including tailored programs for plasma donor compensation and pharmaceutical patient affordability initiatives. By integrating advanced fintech tools, Paysign streamlines payments and offers detailed analytics for its clients.

Recently, Paysign has concentrated on expanding its pharma patient affordability programs, which help patients manage drug costs, and on software-as-a-service tools for donor engagement within its plasma business. Success factors include technological innovation, market demand for digital payments, and efforts to monitor and enhance regulatory compliance across complex financial transactions.

Quarterly Highlights and Segment Developments

Paysign’s revenue (GAAP) rose by $4.75 million due to strong gains in the pharma patient affordability segment. That segment’s revenue jumped 189.9% to $7.75 million, now accounting for 40.6% of total revenue. This surge was driven by the launch of new pharma affordability programs and higher claim volumes, reflecting robust demand and new customer wins. The company ended the period with 97 active pharma programs and reported that processed pharma claims climbed more than 80% year over year. Average revenue per program almost doubled from last year, increasing from $43,851 in Q2 2024 to $79,937 in Q2 2025, as Paysign continued to attract larger pharmaceutical programs.

The plasma industry segment, traditionally Paysign’s largest, reported a revenue decline of 4.7% to $10.74 million (GAAP). While the total number of plasma centers served grew by 123, these new centers came online late in the period, with all 123 launching in mid-June. This timing led to a drop in average revenue per center and weaker overall plasma revenue. According to the company, an “industry-wide oversupply in plasma inventories” has also weighed on segment performance, resulting in lower donor activity and card loads.

Paysign’s “Other” revenue category, encompassing retail, payroll, and other prepaid products, increased by 51.4% year-over-year on a GAAP basis. This reflects additional traction in alternative payment programs outside plasma and pharma, showing modest diversification. Usage metrics on Paysign’s platform--such as dollar load and spend volumes--fell approximately 4% and 6%, respectively, year over year.

Profitability improved considerably. Gross profit (GAAP) reached $11.76 million on expanding gross margin of 61.6%, up from 52.9% in the prior year. This improvement was driven by the increasing contribution of the pharma business, which carries higher average margins than plasma, as reflected in the gross profit margin of 61.6% compared to 52.9% in the prior year. Selling, general, and administrative expenses rose 36.2% to $8.20 million as the company invested in new hires, technology, and expanded customer support for pharma clients. Depreciation and amortization also grew as the company continued to invest in new software and technology platforms. Despite these pressures, Paysign nearly doubled its net income and posted year-over-year gains of 101.8% in adjusted EBITDA.

Paysign noted about $300,000 in one-time onboarding costs for the new plasma centers, which affected operating income. The company also faces volatility in the plasma segment as industry partners are both closing and opening locations, contributing to operational variability. Despite these swings, Paysign ended the period with $11.8 million in unrestricted cash and carried no bank debt.

Outlook and What to Watch

Paysign raised its guidance for FY2025, now expecting revenue between $76.5 million and $78.5 million, a 32.7% increase at the midpoint from last year. Gross margin (GAAP) is projected at 61.0% to 62.0%. Management forecasts net income of $6.0 million to $7.0 million, with adjusted EBITDA between $18.0 million and $20.0 million. Paysign expects GAAP revenue of $19.5 million to $20.5 million for the third quarter.

No dividend was declared for the period. Paysign does not currently pay a dividend. Investors should monitor trends in the plasma segment, where industry oversupply and customer center changes may affect near-term revenue, as noted in recent disclosures that plasma revenue decreased 4.7% year-over-year primarily due to an industry-wide oversupply in plasma inventories and changes in plasma center counts. The ongoing momentum in patient affordability programs is expected to drive a larger share of business growth, with management guidance indicating patient affordability revenue is expected to make up approximately 43.0% of total revenue, but seasonality and continued cost investment may introduce variability across quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Paysign. The Motley Fool has a disclosure policy.