Q3 2023 PaySign Inc Earnings Call
Good afternoon, My name is Kevin and I'll be your conference operator today at this time I'd like to welcome everyone to the Pes aren't Inc. Third quarter 2023 earnings conference call. After the Speakers' remarks, there will be a question and answer session. If you'd like to be placed into the question queue. You May press star one at any time.
This conference call is being recorded.
Comments on today's call regarding pesos financial results will be on a GAAP basis, unless otherwise noted pesos earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website <unk> Dot com, which includes reconciliations of non-GAAP measures to GAAP reported amounts.
Additionally, as set forth in more detail at our earnings release I'd like to remind everyone that today's call will include forward looking statements regarding <unk> future performance actual performance could differ materially from those forward looking statements information about the factors that could affect <unk>.
Performance is summarized at the end of taste sense earnings release.
Our recent SEC filings lastly, a replay of this call will be available until February seven 2024. Please see P science earnings release for details on how to access. The replay is sound my pleasure to turn the call over to Mr. Mark Newcomer CEO. Please go ahead.
Thank you Kevin.
Good afternoon, everyone. Thank you for joining pay since third quarter 2023 earnings call I'm, Mark Newcomer Chief Executive Officer, and I am pleased to share our third quarter financial results with you.
I will briefly discuss our performance and provide updates on our plasma and patient affordability verticals before handing over to our CFO Jeff Baker.
Additionally, Matt Turner, President and patient affordability will be joining us for the question and answer session.
We delivered solid top and bottom line growth this quarter with revenue up 17% from last year's third quarter to $12 4 million and net profit improving by 29% with all business segments contributing to our growth. We continue to see healthy growth in our plasma donor compensation businesses. We added a total of 19 new centers in the quarter of which 16 are.
Fully mature.
We did not experience any center closures during the third quarter and we exited the quarter servicing 462 centers. The average monthly revenue per center increased seven 8% compared to Q3 of last year and six 7% from Q2 2023 to approximately $8100.
It should be noted that this level of eclipse the $8000 per center milestone last seen prior to the COVID-19 pandemic as our clients are focusing on increasing donations at the existing centers. We believe we will see this pattern continue into Q4 and beyond as a result in a shifting client focus we are adjusting our forecast of new center onboard.
In 2023 to 38 to 42 as many of the New center openings scheduled for Q4 had been pushed into next year.
We continue to bring new value adds in the plasma collection industry, including New interactive reporting features and portals designed to streamline center and managerial processes further strengthening our product offering with the goal of improving user engagement and increasing stickiness with special attention to helping our clients maximize the donor experience.
Affordability vertical showed strong growth in the third quarter, reaching some important milestones as we mentioned in our press release this quarter saw us earn more than a million dollars in top line revenue in this segment. While we were excited about this number we are more excited about the current pipeline. We have built for the remainder of this year and into next during the quarter we launched.
Three programs two of which were transitions one of the programs as the result of a year long selling cycle that resulted in pesos being identified as the vendor of choice by this manufacturer for all future programs. This manufacturer has a very strong biosimilar portfolio and a long term 10 plus year pipeline.
I'm, especially excited to announce that we completed contract negotiations to launch a program for the nation's second largest pharmaceutical company.
This will be our second program for that manufacturer.
The program launched in October and immediately began delivering claims volume.
This was a mid sized transition program with a substantial claim volume that provides benefit for an established product. We also completed contracts the transition the entire oncology portfolio for the nations ninth largest pharmaceutical manufacturer.
This represented four mature programs with consistent claims volume.
Those four programs launching in October as well and will be contributing to our increasing revenue in this vertical.
This manufacturer has also awarded US two additional programs that will launch in Q4 pending FDA approval. These are just a few examples of where our product offerings and subject matter expertise, our leading to major wins and strong growth in this vertical.
Overall, we are seeing consistent increases in our claims volume the unexpected double our average by end of the year.
With the addition of three new programs and others that launched in the beginning of October. We are now at 39 active patient affordability programs and expect to end the year with over 40 programs.
This represents strong year over year growth in this program acquisition claim volume and topline revenue.
Close of the fourth quarter, we plan to share some information with you around our overall client mix therapeutic class concentrations in some of the points. They may give you a better understanding of this vertical.
With that I'll turn it over to Jeff.
Thank you Mark good afternoon, everyone. My comments today will be brief given all of the information Mark shared with you and all of the information in our press release, and 10-Q, which will be filed before the market opens tomorrow as Mark said, we had a solid quarter and reached a number of milestones across our business and our plasma business. Our average revenue per plasma center per month.
<unk> grew to $8102 versus $7512 a year over year increase of seven 8%. This metric has not been over $8000 since before the COVID-19 pandemic began in the first quarter of 2020 more importantly, we've seen this trend can.
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We exited the quarter with 462 plasma centers and now expect to exit the year with approximately 465 plasma centers as customers have shifted their strategy to collections versus new openings as their financing costs have significantly increased.
R pharma patient affordability business, we exited Q3 with 34 active patient affordability programs and currently have 39 active programs, having launched in an additional five programs in October.
For the third quarter patient affordability revenues surpassed the $1 million Mark increasing a 142% versus the same period last year, our strategy to diversify our business into other health care payment verticals is starting to come to fruition.
As for the financial highlights of the third quarter of 2023 versus the same period last year total revenues of $12 $4 million increased $1.8 million or 17% gross profit margin for the quarter was 51, 1% versus 54, 3% during the same period last year due mainly to.
[noise] scenario pressures and the lack of farm of prepaid revenue this year, which was a 2.4% drag.
SG&A for the quarter increased 7% to $4 $7 million with total operating expenses, increasing 12% to $5 $7 million. We exited this quarter with 112 employees versus 95 employees. During the same period last year to support the growth across our business.
For the quarter, we posted net income of $1 $1 million versus net income of $852000 earnings per share for both periods were two cents per share.
The second quarter, adjusted EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA was $2 $3 million or four cents per diluted share versus $1.9 million enforce cents per diluted share for the same period last year.
The fully diluted share count for the quarters used in calculating the per share amounts was $553 5 million and $53 4 million respectfully.
Regarding the health of our company, we exited the quarter with $9 $9 million in unrestricted cash and zero debt at $2 2 million dollar increase over the second quarter of 2023 and a $228000 increase from the end of 2022.
Year to date, we have used $1 $1 million to repurchase 394558 shares of our common stock.
We expect operating improvements to continue into fourth quarter with year over year revenue growth slightly better than this quarter's revenue growth of 17% and operating expenses equivalent to our second quarter 2023, operating expenses of $6 $3 million, which reflects seasonal costs relative to the third quarter. We're on track to meet our revenue and adjusted.
That EBITDA guidance, we provided in March principally revenue to be in the range of $44 million to $46 million and adjusted EBITDA to be in the range of $6 million to $7 $5 million with that I would like to turn the call back over to Kevin for question and answers.
Thank you will not be conducting a question and answer session. If that can be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. One moment. Please while we poll for questions.
Our first question is coming from Gary Press to Pino from Barrington Research. Your line is that life.
Okay.
That's I'm hearing a lot of static back there is that.
Somebody moving paper.
Hello, Gary.
Your line is now live.
Okay.
Guys I kind of jumped on the call just a little bit late so.
And I caught some of the the narrative around the centers you added 19 plasma centers this quarter is that correct.
Yeah.
Got it.
You're only adding how many in the in Q4.
Okay.
Yeah.
Commercial et cetera.
Thank God.
Okay.
Hi.
Yes.
Safety perspective.
And then we've added.
<unk>.
Okay.
There's a lot of them.
Hi, guys.
Yes.
Got it.
And we have some new centers.
Got it significantly up for them.
Okay.
Net of opening new centers to get to the.
Yes.
They need.
Hey al.
Sure.
Continue.
Sure.
Okay.
So what about that one you you want a large contract and you hadn't really been putting any any new centers on the books.
And you said that that was going to maybe be a 'twenty 'twenty four event is that still.
Yep applicable.
Yeah, Hey, Gary it's Mark.
Hum.
Sure.
We've been.
They have no layoffs.
With their organization technology points.
Hopefully going to believe us anywhere between six and 12 months.
Yeah.
I think we should keep a.
Sure.
Probably call that out.
Okay, So and again I don't know, there's a lot of static on the line. So I'm kind of trying to hear these answers but.
It does that.
As we go into 2024 then.
Is it safe to assume that because these these players have kind of pulled back on their expansion that.
Your response to that would you you wouldnt have to be investing more money into growth.
To.
Service. These new centers is that a correct assumption.
Roger Shannon.
And the number of new openings.
There so.
2022.
2023.
Yes.
We have been.
Through the third.
Yeah.
Now.
Well see where everything lands.
So we're still maintaining our market share.
Yes.
We can't control what the industry is doing we can only control undergoing.
2020.
Interest rates stay where they are.
Financing costs stay where they are.
All right.
Yeah.
We see a slowdown in the number of new openings.
Like I said earlier.
That's me at all because they're transitioning.
Try to reduce the payout that was the strategy.
Today.
And more people will come back.
Sure.
Increase the payout.
Covid level people.
People are coming back because as they try to sell.
And do other things.
You saw that at all.
Average revenue per <unk>.
So just really a shift in the shop.
To maintain our market share of about 40%.
And our next year and going forward.
As long as you know unless we win a big cause.
Well done.
Some out there.
Okay.
Yes, depending on the pricing.
Okay. Thank you.
Yeah.
Thank you as a reminder, that star one to be placed into question queue. One moment. Please while we poll for further questions.
We reached end of our question and answer session I like to turn the floor back over for any further or closing comments.
Thanks, Kevin.
Thank you everybody for joining us today, and we'll look forward to seeing you on the next quarterly call.
Thank you. Thank you that does conclude today's teleconference and webcast. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.