Paysign at MicroCap Rodeo Conference: Strategic Growth in Healthcare Payments

On Wednesday, 04 June 2025, Paysign Inc. (NASDAQ:PAYS) presented at The MicroCap Rodeo Conference - NYC, offering insights into its strategic direction and financial performance. The company, a key player in healthcare payments, highlighted its strong cash flow, zero debt, and growth potential in patient affordability programs, while acknowledging temporary challenges in the plasma business due to inventory corrections.

Key Takeaways

• Paysign reported zero debt and strong cash reserves, with $111 million in cash.
• The Patient Affordability business is projected to grow by at least 135% year-over-year.
• The plasma business faces an 8% to 10% revenue decline this year but remains profitable.
• Paysign’s Dynamic Business Rules technology saved customers over $100 million in claims in 2024.
• The acquisition of Gamma Innovation is expected to save $4 million to $5 million annually.

Financial Results

• Revenue:

- 2024 revenue reached $58.4 million, with trailing twelve-month revenue at $64 million.

- Plasma business revenue was $87 million last year, while the Patient Affordability business generated $12.7 million.

- Future guidance for Patient Affordability business growth is projected between $28 million to $30 million.

• Profitability:

- Paysign is profitable from both net income and adjusted EBITDA perspectives, with a fully diluted EPS of $0.07.

• Gross Margins:

- First-quarter gross margins improved to 62.9%, up from 53% the previous year.

• Cash and Debt:

- The company maintains zero debt and holds approximately $7 million in unrestricted cash.

• Adjusted EBITDA:

- The trailing twelve-month adjusted EBITDA stands at $13 million.

Operational Updates

• Plasma Business:

- Paysign serves 480 plasma centers, holding a 40% market share.

- The plasma business is expected to see an 8% to 10% revenue decrease this year.

• Patient Affordability Business:

- The number of patient affordability programs grew from 76 at the end of 2024 to 90 by the first quarter.

• Gamma Innovation Acquisition:

- Acquired for $16 million in cash and stock, this acquisition is expected to yield $4 million to $5 million in annual savings.

• Technology:

- Paysign continues to develop its cloud-based platform, enhancing its Dynamic Business Rules technology.

• Market Dynamics:

- The U.S. supplies over 75% of the world’s plasma, and copay is applicable to 170 million non-government health plan individuals.

Future Outlook

• Patient Affordability Business:

- Anticipated to grow by at least 135%.

• Plasma Business:

- The downturn is expected to subside by the end of the year or early next year.

• Gamma Innovation:

- Exploring opportunities to sell software applications to international hardware companies.

• Analyst Coverage:

- Paysign is covered by five companies, all with buy ratings and target prices between $6 and $8.

Q&A Highlights

• Shift in Pharma Prepaid Space:

- Paysign exited a contract with a large hub provider in September 2022, moving to direct partnerships with pharma companies.

• Payment Methods:

- The company processes payments via ACH, virtual debit cards, and checks.

• Transparency:

- Provides pharmaceutical companies with detailed per-claim cost transparency for ROI assessment.

Concluding the session, readers are encouraged to refer to the full transcript for a detailed account of Paysign’s strategic initiatives and financial performance.

Full transcript - The MicroCap Rodeo Conference - NYC:

Operator: Ladies and gentlemen in attendance and to our webinar guests around the world, welcome back to the two thousand twenty five Microcap Rodeo. Next up, it is the CFO of PaySign Inc. I give you mister Jeff Baker. Jeff, come on up here.

Jeff Baker, CFO, PaySign: Thank you very much. Jeff, as he said, my name is Jeff Baker, CFO, PaySign. I’ve been with the company just over four years. Happy to present the company’s listed on the Nasdaq under the symbol PAYS. Some forward looking statements, I’m not going to read this, but you should read this as part of the housekeeping details, as well as management uses non GAAP financial measures.

Most of the companies that follow us look at adjusted EBITDA, which is EBITDA plus stockholders’ comp. So what does PaceTime do? We effectively what this slide says is that we are a program manager, processor. We do everything soup to nuts. So one one throat to choke, so to speak.

We do charge our own charge backs. We do our own customer service 24247365 bilingual customer service. We’re not relying on third parties. When we need to make a change to our software, we do it ourselves. We don’t have to wait in line three, six, nine months for processors to do what we need to do to be successful.

The company was incorporated in 1995. We’re headquartered in Southern Nevada. Actually, we’re just a suburb of Las Vegas. We’ve been around for more than twenty years, mostly providing payment services to the healthcare industry. We also do other prepaid areas where we’re replacing checks and cash just like other prepaid companies, but like I said, the predominant piece of our business is in healthcare payments.

Two vertical markets, I’ll talk about those in a moment. Some quick milestones here. In 02/2007, we actually entered the pharmaceutical prepaid space where we were providing electronic payments for other customers like hub service providers in the industry. One that everybody is pretty familiar with is called McKesson. I’m sure most people have heard of that company.

They have a division called CoverMyMeds where we were doing prepaid payments. In 2011, we moved into the plasma industry where people, when they go give plasma, they used to pay them with cash and check and now they put it on an open loop debit card, Visa branded card, and so we entered that space. The company went public through reverse merger in 2018 and then in 2019 we rebranded PaySign, again symbol PAYS. At the end of the fourth quarter, some metrics here, we had four eighty plasma centers that we did payments for. There’s about little over 1,200 in The US.

The US ironically provides over 75% of the world’s plasma. Plasma is used, that’s the clear liquid that comes out of the blood, so you can get plasma twice a week, eight times a month. I think you can get blood like every six weeks, but you sit in a machine and they separate the plasma from the red blood cells and put the red blood cells back in your body. Anyway, we have about 40% market share today in that business. We exited the year also with 76 patient affordability programs, that’s the other side of our business.

Patient affordability is also known as copay. So what happens is you get a script from your doctor, you go to the pharmacist, you’re trying to get that script filled, 80% is gonna be paid by your health insurance, usually with most health plans, and the other 20% they’re gonna say, Jeff, I need 20% from you. So a lot of these, especially pharma drugs, there’s over 800 in the country, in the market today, and like I said, with the end of the year we had 76, but they’re very expensive drugs and most people can’t afford a $200 copay. So what will happen at that point is that the pharmaceutical company will be willing to pay that because the abandonment rate for drugs for them filling a prescription at the pharmacy is over sixty five percent. So the pharmaceutical company would rather have 80% of something rather than 0% of nothing.

And they also realize that eventually, you’re gonna reach a point where you’re gonna reach your maximum out of pocket expenditure, and then the health insurance company’s gonna pay 100%. So this happens every year, and at the January 1 every year, your benefits reset as you know. Some investment highlights. So on our financials, we have strong cash flow. It’s been continuing to improve.

We had heavy investments in the patient affordability business over the past three years, twenty two, twenty three and ’24 and we’re starting to show that that investments paying off and you’re starting to see margin expansion and good cash flow, like I said, and we had zero debt. Both businesses, the plasma business in a normal world grows about 5% a year, it’s a good cash cow. Last year did about $87,000,000 in revenue. And then the Pharma Patient Affordability business, it’s our real growth driver and I’ve already given guidance this year that it’ll grow at least 135% over last year. Last year, did 12,700,000.0 and that’s kind of putting in that 28,000,000 to $30,000,000 camp this year.

We have great technology in the cloud. The platform continues to be developed and improved. We have superior products and services and really good sales and delivery and service Mean the plasma and patient affordability and pharmaceutical customers, they have zero appetite for systems that go down. So that’s the best way I can say it.

So uptime, service and and delivery is extremely important. And we can move very fast when things change or when our customers need to change. From a leadership perspective, if you look at our senior leadership, it’s people either out of the banking industry, the payments industry like myself, or out of the patient affordability industry. So a lot of great domain expertise. That’s one thing our CEO has done a really good job over the last, I’d say, five to six years, is bringing in good quality senior leadership.

Pason at a glance, so the stock closed just over $4.40 on, I think this is Monday, market cap just over $240,000,000, fully diluted shares outstanding 55,000,000, our 2024 revenue was 58,000,000, trailing twelve month revenue was 64,000,000. So and you see that here on the in the bottom slide with the green representing the first quarter. Fully diluted EPS was $07 Yes, we are profitable both from an earnings perspective from a net income perspective as well as adjusted EBITDA perspective. My gross margins at the end of the first quarter were 62.9%. That’s up from 53% the year same period last year.

And then, like I said, I have no debt and I’ve got $111,000,000 of cash of which $7,000,000 roughly is unrestricted. The rest of that restricted cash, about half of that is are are the the dollars that are sitting in a bank account waiting to be spent. These are people that have pay gone and given plasma and they’ve gotten paid $70.60, $70 per instance as they sell that, as they use those funds by going to buy groceries, gas, getting money off ATM, I make money, and that’s our card based revenue. This is just a quick screenshot of our twelve month chart. You’ll see it was in a downtrend for whatever reason, I have no idea, but it rallied after we reported first quarter earnings because I think the Street is starting to recognize the leverage that we now have that we’re showing with that Patient Affordability business.

That investment that was made, I think there was a lot of doubt from investors whether or not we could actually turn that into a leverageable business, and we started to demonstrate that in the first quarter. So by the numbers, mentioned 2024 revenue $58,400,000 the trailing twelve month revenue 64,000,000 We’ve got trailing twelve month adjusted EBITDA of $13,000,000 and total assets of $105,000,000 On the left here, you’ll see revenue by segment and the light blue is the plasma business, the darker blue is the patient affordability business, and then the green is kind of the other. So we have other prepaid programs that we use, we’ve got a payroll business, we’ve got a metal recycling business, we’ve got AAA where I do gift cards for them, but it’s a very small piece of our business. And then the chart on the right shows you our annual revenue growth from ’twenty two, ’21 through ’24 and then trailing twelve month. And I mentioned down here earlier that the revenue drivers we have, the cardholder fees, which I already explained, I also get interchange when those cards are used.

I also get interchange for my patient affordability business because we’ll pay some of those claims with a virtual debit card, so I get interchange there. I get monthly management fees in the patient affordability business, and then I get other fees like call center fees, etcetera. Very interesting point is that we’ve we’ve got to the point where we basically run our call center at breakeven. In other words, I’m able to bill out as much as it cost me to pay for the call center employees. That’s a very unique business from us.

And then the other thing I mentioned, I didn’t mention, claim fees. So on the patient affordability, it’s also transactional. I get paid based on the number of claims that I settle. And it doesn’t matter if the claim is for a thousand dollars or a hundred dollars, I get paid the same amount. And first quarter, the first half of the year is always the strongest from a claims perspective because people haven’t reached their maximum out of pocket yet.

Like I said, in the second half of the year, claims go down because your insurance company usually picks up that 100%. The Patient Affordability business, mentioned it a little bit. There’s kind of two areas. One of them is pharmacy benefit copay, just like what it says. You go to a pharmacy, Walgreens, Rite Aid, independent pharmacy, you get your prescription filled and we’re going to pay that claim.

The other one is the medical benefit copay solution, which is the same thing except it’s intravenous drugs to limit hospitals or urgent care facilities, etc. Again, pharmaceutical companies pay these on your behalf because they want you on the drug. One of the things that we have in this business that has really helped our success is this thing called Dynamic Business Rules. So Dynamic Business Rules, it’s a proprietary technology that we’re able to see in the transaction flow where we can identify on first fill whether or not a claim is being paid by or should be paid by from a co pay program or whether it’s gonna be paid by into these maximizers that are out there. And I don’t wanna lose people through the weeds here, but these maximizers are like Save On or Prudent Rx.

We can identify a transaction and stop that transaction. So in 2024, we saved our customers over $100,000,000 in claims that they would have made if they weren’t using this technology. And this year, it’ll be at least double that. So it’s real money, real dollars. We’ve had customers who are marquee customers for us who have agreed to be referenced, and they’ve said, PaySign is no longer a cost center for us, they’re a revenue generating center for us.

And that’s very powerful, especially as we are able to add more customers. And the numbers speak for themselves. I mean, is the Patient Affordability business. The green again is the first quarter of this year versus last year. It’s somewhat kind of the growth is masked a little bit.

Like I said earlier, in the normal world, the revenues will kind of fall off at the end of the second half of the year, but we’ve been adding so many programs. Exited 2024, like I said, with 76 programs. I exited the first quarter with 90 programs, and there’s more coming that we’ll add throughout the year and stage it for when the clock switches on January 1 and everything resets, now all those programs and all those claims will then hit in the first quarter next year. Another part of our business, the Plasma Donor Solutions, pretty self explanatory, 40% market share, told you how we make money on that. This business grows about 5% a year in a normal world.

Coming out of COVID, inventory levels were so depressed because the biggest risks of this business are people that sit at home and get free money from the government. People get plasma because they’re using it to supplement their income, not because they like sitting in a chair for two hours to have a needle in their arm. So coming out of COVID, the inventory levels were low. Plasma companies are trying to build those inventory levels back up and like anything else, they overcorrected. And about the fourth quarter last year, we started to see plasma companies starting to cut their hours.

They don’t shut the centers because you have to get it’s a six month process to get a center certified by the FDA to be selling plasma. So what they did is they’ve if they were open seven days a week, now they’re open five days a week. They’ve cut the weekend staff out. But this business, we’ve told the street that we expect it to be down eight to 10% this year. It’s a good variable business, so my revenues go down, my costs go down, still a nice margin, nice cash cow business.

This will all abate, plasma has a limited shelf life of it, but this will all abate over the next, by the end of this year or first half of next year. And this is plasma by the numbers. Plasma, usually the first quarter is the weakest quarter because what happens? Tax refunds, right? So people getting free money from the government and then it usually builds throughout the rest of the year.

And so there’s some seasonality with it when you’re looking at the business and trying to compare year over year. We recently bought a company named Gamma Innovation. I’m really excited about this. We paid $16,000,000 in cash and stock, structured it over four years, both the cash component and the stock vesting component of it. We bought three software applications that were really built for the plasma industry.

So the TAM in the plasma market is about $100,000,000 just on the payment side, and we have 40% market share. So that’s somewhat limited. The TAM on the patient affordability side, just on the payment side, is like over a half a billion dollars, and we’re early days on that. This acquisition, by bringing in three more software applications, expands the TAM, our opportunity in plasma in general. Now the plasma industry is dominated from a software and hardware perspective by one company out of Canada named Haemonetics.

And there really hasn’t been a lot of development from them and there hasn’t been a lot of disruption in the plasma space. But with these applications now, there are international hardware companies that are in the process of getting FDA approval for their machines to come to The US and they would like nothing more than to have an integrated software application that they could help sell into other plasma companies. So we were in Poland Two Weeks ago, I wasn’t, but my CEO and other individuals from the company were there, and the receptivity on these products was extremely positive. So we’ll see how that develops going forward. Even without that, if I don’t sell one, I’m already happy with this acquisition because it came with a guy who has a great development shop.

He was formerly with Google, Citibank, and he came in and immediately recognized over 4 to 5,000,000 in cash savings from the way just improving our development activities or our development. And we told the Street exiting the second quarter will be on that 4,000,000 to $5,000,000 annual run rate in cash savings. Now I won’t all drop to the bottom line because I was capitalizing on a lot of those costs, but it will improve my cash flow. And these are some of the other I mentioned, the payroll, I mentioned AAA for their gift card business and others. So we have kind of these small other prepaid areas that we go after that are still paying people in cash or checks.

But our main focus is in the healthcare payments. Every prepaid company has this probably same slide. This is huge market opportunity, and on the far right, you see all of the products that we have that we could sell in if we wanted to go after some of these. But I mean, I’ll be very I came from one of the largest retail prepaid companies in the world. We’re not going into retail.

It’s a pay to play game. It’s dominated by two companies, Blackhawk and and Income. So, you you know, if you’re you’re small like us and then will you find these little niches where you can make a difference, you can provide great service, and you can beat the competition based on innovation. So like I said, most of our stuff comes from the corporate funded incentive and rebates is what that area is called with the healthcare. So some financial highlights.

As I mentioned, if you look here on the second line, net income, we are profitable. You have to look at really same period this year versus same period last year, so Q1 versus Q1, Q2 versus Q2, etcetera. And we do have benefit from a really nice sponsorship deal where we get interest income on the balances that we keep at the bank. Depreciation and amortization has been climbing due to the investment, like I mentioned, in the Patient Affordability business, that capitalized software development. But if you go all the way down to the bottom, you’ll see our adjusted EBITDA is growing, you’ll see our adjusted EBITDA margins growing, you see our net income’s growing and our net income margin’s growing.

So I think it’s a testament to the vision that Mark had five years ago when he started back into the Patient Affordability business, built out a team, invested the company’s capital knowing that it wasn’t gonna happen overnight, and we’re finally reaching a point where we’re starting to see that operating leverage. We’re covered by five companies. They all have buy or buy equivalent ratings on us. Their target price is anywhere from 6 to 8 ish dollars and there’s some good analyst coverage here. Some resources, if you go to our website, our Investor Relations website, you can download this presentation.

And it’s very important because I put this in here, if you want to know whatever you want to know about the plasma industry, you can click on the top row here, those three areas. It’ll tell you how many plasma centers there are, it’ll tell you what plasma therapies are used, what therapies use plasma, etc. The bottom section here, due to the complexity and the patient affordability business and copay, it’s not as easy as I just told you, but if you’re interested, go do the research, you’ll find out why PBMs are not good. You’ll find out why Maximizers are not good. You’ll find out how complex and how inefficient our entire drug system is.

And people ask me, can you expand this outside The US? I’m like, no, it doesn’t exist outside The US. It’s socialist medicine, and the government pays for most of everything. In The US, the government doesn’t. And by the way, and I did mention this, copay is only applicable to non government health plans.

So if you’re on Medicare or Medicaid, you’re not even associated. You can’t even be a part of a copay program. So this is 170,000,000 roughly individuals who aren’t on government programs, which is unfortunate because I have parents who I would love to be able to subsidize their drug costs, but you know, they’re on Medicare, so unfortunately, they don’t qualify. The leadership team I mentioned here, you can look at these wonderful mugshots at your own leisure, but trust me when I say, 90% of the people on this page either came out of the three areas, banking, payments, or healthcare, patient affordability. We have a really good group of independent directors.

Dan Henry is an icon in the payments industry. He used to be the president of Euronet Worldwide, a public company. He then went on to be the CEO of Netspend, which is another prepaid company, and then went on to be the CEO of Green Dot. So great payment domain expertise, Dennis Triplett. He was at UMB Health the CEO of the health care side of UMB Bank, so he comes out of banking.

Jeff Newman used to work with Dan at Euronet. He was the general counsel there for many, many, many years. And then Bruce Mina, our audit chair, he has his own CPA firm. And with that, I will turn it over for questions. Yeah.

So the question is what happened in the pharma prepaid space is what we used to call it back in the early two thousands. So the prepaid space is just that. We were we were the the electronic or prepaid the prepaid provider for hubs like McKesson I mentioned. Before PaySign stepped into this market, the industry repaid claims using checks. That’s all it is.

Check. Check. They would send a flat file to a check processor. They mail out checks. In steps, based on it.

We knew that that was we were only getting a fraction of the opportunity for that business. So in 2022, September ’20 ’20 ’2, the contract that we were we had with the big provide hub provider, we exited out of that contract. Ended up going actually, going to other hub providers that didn’t have payment capabilities saying, let’s partner up. You do your hub stuff, we’ll do the payment stuff. And then, you know, here now we sit with that.

And then the other thing we did is we went direct to pharma. Before that, we didn’t have any way to go direct to pharma. So now we’ve gone direct to pharma to do the bigger companies’ payments for them. That’s what happened. Correct.

Yep. Well, that was a big that was a big change when we moved from just doing the electronic payments for one customer and little bitty piece of the business to going, boom. Now we can do payments for everybody. We can do payments for hubs, and and they act as kinda like our in indirect salespeople. They bring us their customers, And then we can go direct to pharma, which we couldn’t do before, and we do all their payments.

So I do check. I do ACH. I do virtual debit card. That’s how I pay. Most of my payments are electronic, ACH and virtual debit card.

I hate checks. I wish they would go away, but they’re not. You have to take the good to get the bad. And the other important thing is we open both the pharmaceutical companies. In the past, it was a big black box.

They did all these services. Payments was one of them. We went in and said, listen. Here’s how much you’re gonna pay per claim. Boom.

So you can figure out if you’re getting an ROI by paying those monies to cover that co pay. Totally different mentality. And I’m getting I’m getting the yanked. So thank you very much for your time. I appreciate it.

And please let me know if you have any questions. Thank you very much. Yeah. Appreciate it.

Operator: Folks. Once again, the CFO of PaySign Inc, Jeff Baker. And on deck, everybody, it’s Zenotech Zenotech coming up in, just a couple of minutes, and that will be followed by Sally Zapietz. Zenotech is next.

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