Q2 2024 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 Paysign, Inc. second quarter 2024 earnings conference call.

Unknown Executive: I'd like to welcome everyone to Paysign Inc. 2nd quarter of 2024 earnings conference call.

Operator: Welcome everyone to the Paysign Inc. Second Quarter 2024 Earnings Conference Call. After the speaker's remarks, there will be a question and answer session. If you'd like to be placed in the question queue, you may press star 1 on your telephone keypad at any time.

Unknown Executive: After the speakers are marked, there'll be a question and answer session. If you'd like to be placed in the question, Q, you may press star one on your telephone keypad at any time. As a reminder, this conference call is being recorded.

After the speaker's remarks, there will be a question and answer session. If you'd like to be placed into question queue, you may press star 1 on your telephone keypad at any time. As a reminder, this conference call is being recorded.

Operator: As a reminder, this conference call is being recorded. The comments on today's call regarding Paysign's financial results will be on a gap basis unless otherwise noted. Paysign's earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website, Paysign.com, which includes reconciliations of non-GAAP measures to GAAP-reported amounts. Additionally, as set forth in more detail in our earnings release, I'd like to remind everyone that today's call will include forward-looking statements regarding Paysign's future performance. However, actual performance could differ materially from these forward-looking statements.

Unknown Executive: The comments on today's call regarding Paysign's financial results will be on a GAAP basis unless otherwise noted.

Speaker Change: The comments on today's call regarding Paysign's financial results will be on a gap basis unless otherwise noted.

Unknown Executive: Paysign's earnings release was disseminated to the SEC earlier today and could be found on the investor-relations section of our website, Paysign.com, which includes reconciliation of non-GAAP measures to GAAP reported amounts. Additionally, as set forth in more detail on our earnings release, I'd like to remind everyone that today's call will include forward-looking statements regarding Paysign's future performance. Actual performance could differ materially from these forward-looking statements. Information about the factors that could affect future performance is summarized at the end of Paysign's earnings release and in our recent SEC filings.

Speaker Change: Paysign's earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website, Paysign.com, which includes reconciliations of non-GAAP measures to GAAP-reported amounts.

Speaker Change: Additionally, as set forth in more detail in our earnings release, I'd like to remind everyone that today's call will include forward-looking statements regarding Paysign's future performance.

Operator: Information about the factors that could affect future performance is summarized at the end of Paysign's earnings release and in our recent SEC filing. Lastly, a replay of this call will be available until October 29th, 2024. Please see Paysign's 2nd Quarter Earnings Call Announcement for details on how to access the replay. It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO. Please go ahead.

Speaker Change: Actual performance could differ materially from these forward-looking statements.

Speaker Change: Information about the factors that could affect future performance is summarized at the end of Paysign's earnings release and in our recent SEC filings.

Unknown Executive: Lastly, replay of this call will be available until October 29th, 2024. Please see Paysign's 2nd quarter earnings call announcement for details on how to access the replay.

Speaker Change: Lastly, a replay of this call will be available until October 29, 2024. Please see Paysign's 2nd Quarter Earnings Call Announcement for details on how to access the replay.

Unknown Executive: It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO. Please go ahead.

Mark R. Newcomer: Thank you, Kevin. Good afternoon, everyone, and welcome to Paysign's second quarter earnings call. I'm Mark Newcomer, the President and CEO of Paysign. Alongside me today for our discussion is Jeff Baker, our Chief Financial Officer. Later during the question and answer session, we will be joined by Matt Turner, our President of Patient Affordability, and Matt Lanford, our Chief Payments Officer. Today, we shared our financial results for the second quarter of 2024. I'm pleased to report that we've achieved remarkable growth, both sequentially and year over year, in both our top and bottom lines.

Speaker Change: It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO . Please go ahead.

Mark Newcomer: Thank you, Kevin. Good afternoon, everyone, and welcome to Paysign's 2nd quarter earnings call. I'm Mark Newcomer, the President and CEO of Paysign. Alongside me today, for our discussion, is Jeff Baker, our chief financial officer. Later, during the question and answer session, we will be joined by Matt Turner, our president and a patient affordability, and Matt Lantford, our chief payments officer.

Mark R. Newcomer: Thank you, Kevin. Good afternoon, everyone, and welcome to Paysign's second quarter earnings call. I'm Mark Newcomer, the President and CEO of Paysign. Alongside me today for our discussion is Jeff Baker, our Chief Financial Officer.

Speaker Change: Later, during the question and answer session, we will be joined by Matt Turner, our President of Patient Affordability, and Matt Lanford, our Chief Payments Officer.

Mark Newcomer: Today, we shared our financial results for the 2nd quarter of 2024. I'm pleased to report that we've achieved remarkable growth both sequentially and year over year, and in both our top and bottom lines. Our revenue for the 2nd quarter reached 14.3 million, a robust increase of nearly 30% compared to the 2nd quarter of 2023, and an 8.7% increase from the 1st quarter of 2024. Our adjusted EBITDA increased 96% to 2.24 million, translating to 4 cents per fully diluted share, a substantial rise from 1.14 million or 2 cents per fully diluted share a year earlier. A significant highlight of this quarter is the exceptional performance of our patient affordability business, which is proven to be a major catalyst for our growth.

Mark R. Newcomer: Our revenue for the second quarter reached $14.3 million, a robust increase of nearly 30% compared to the second quarter of 2023 and an 8.7% increase from the first quarter of 2024. Our adjusted EBITDA increased 96% to $2.24 million, translating to $0.04 per fully diluted share, a substantial rise from $1.14 million or $0.02 per fully diluted share a year earlier.

Speaker Change: Today we shared our financial results for the second quarter of 2024. I'm pleased to report that we've achieved remarkable growth both sequentially and year-over-year and in both our top and bottom lines.

Speaker Change: Our revenue for the second quarter reached $14.3 million, a robust increase of nearly 30% compared to the second quarter of 2023, and an 8.7% increase from the first quarter of 2024.

Speaker Change: Our adjusted EBITDA increased 96% to $2.24 million translating to $0.04 per fully diluted share. A substantial rise from $1.14 million or $0.02 per fully diluted share a year earlier.

Mark R. Newcomer: A significant highlight of this quarter is the exceptional performance of our patient affordability business, which has proven to be a major catalyst for our growth. The revenue from this segment has impressively increased by 267 percent from the same quarter last year, from $730,000 in the second quarter of 2023 to roughly $2.7 million in the same quarter this year. Additionally, the number of claims processed increased by 365% versus the same quarter last year.

Speaker Change: A significant highlight of this quarter is the exceptional performance of our patient affordability business, which has proven to be a major catalyst for our growth.

Mark Newcomer: The revenue from the segment has impressively increased by 267% from the same quarter last year, from 730,000 in the 2nd quarter of 2023 to roughly 2.7 million in the same quarter this year. The number of claims processed increased by 365% versus the same quarter last year. Patient affordability alone contributed to 59% of our total revenue growth year over year and has been pivotal in our 200 basis point increase in gross margin. We expect to see this margin expansion continue as patient affordability remains the dominant growth driver of the company. During this period, we added 8 new patient affordability programs, including both retail and specialty brands, bringing our total to 61 active programs. We are particularly proud of the confidence our clients have in our solutions, which has led to multiple wins from many of them.

Speaker Change: The revenue from this segment has impressively increased by 267% from the same quarter last year, from $730,000 in the second quarter of 2023 to roughly $2.7 million in the same quarter this year.

Speaker Change: The number of claims processed increased by 365% versus the same quarter last year.

Mark R. Newcomer: Patient affordability alone contributed to 59% of our total revenue growth year over year and has been pivotal in our 200 basis point increase in gross margin. We expect to see this margin expansion continue as patient affordability remains the dominant growth driver of the company. During this period, we added eight new patient affordability programs, including both retail and specialty brands, bringing our total to 61 active programs. We are particularly proud of the confidence our clients have in our solutions, which has led to multiple wins from many of them.

Speaker Change: Patient affordability alone contributed to 59% of our total revenue growth year over year and has been pivotal in our 200 basis point increase in gross margin. We expect to see this margin expansion continue as patient affordability remains the dominant growth driver of the company.

Speaker Change: During this period, we added eight new patient affordability programs, including both retail and specialty brands, bringing our total to 61 active programs.

Speaker Change: We are particularly proud of the confidence our clients have in our solutions, which has led to multiple wins from many of them. For example, in the third quarter of 2023, we onboarded a new cornerstone client, AstraZeneca.

Mark R. Newcomer: For example, in the third quarter of 2023, we onboarded a new cornerstone client, AstraZeneca, and since then, we have increased the number of programs from their initial four to a total of 12 by the end of the second quarter. The AstraZeneca programs encompass a mix of retail and specialty therapies, covering a wide array of therapeutic classes and including both new launch and transition programs. This is only one example, as we currently manage programs for six of the 20 largest pharmaceutical companies in the world.

Mark Newcomer: For example, in the 3rd quarter of 2023, we onboarded a new cornerstone client, AstraZeneca. Since then, we have increased the number of programs from their initial 4 to a total of 12 by the end of the 2nd quarter. The AstraZeneca programs encompass a mix of retail and specialty therapies covering a wide array of therapeutic classes and include both new launch and transition programs. This is only one example, as we currently manage programs for six of the 20 largest pharmaceutical companies in the world. Our sales pipeline remains extremely robust, filled with promising opportunities slated for launch later this year and into 2025.

Speaker Change: Since then, we have increased the number of programs from their initial four to a total of 12 by the end of the second quarter.

Speaker Change: The AstraZeneca programs encompass a mix of retail and specialty therapies, covering a wide array of therapeutic classes, and include both new launch and transition programs.

Speaker Change: This is only one example as we currently manage programs for six of the twenty largest pharmaceutical companies in the world.

Mark R. Newcomer: Our sales pipeline remains extremely robust, filled with promising opportunities slated for launch later this year and into 2025. The Ford momentum positions us to continue scaling our patient affordability solutions as we secure our leadership position in the market. We're confident that our operational cash flow will robustly support these ambitions. Additionally, our plasma donor compensation business also showed strong performance this quarter, with plasma revenues rising to $11.3 million, a 13% increase from the same quarter last year and an 8.7% increase over the first quarter of this year.

Speaker Change: Our sales pipeline remains extremely robust, filled with promising opportunities slated for launch later this year and into 2025.

Mark Newcomer: This forward momentum positions us to continue scaling our patient affordability solutions as we secure our leadership position in the market.

Speaker Change: This forward momentum positions us to continue scaling our patient affordability solutions as we secure our leadership position in the market. We are confident that our operational cash flow will robustly support these ambitions.

Mark Newcomer: We are confident that our operational cash flow will robustly support these ambitions. Additionally, our plasma donor compensation business also showed strong performance this quarter, with plasma revenues rising to 11.3 million, a 13% increase from the same quarter last year and an 8.7% increase over the first quarter of this year. This revenue growth is supported by a 4.4% increase in revenue per center from 7,581 in the second quarter of last year to 7,916 in this year. We added eight new plasma centers this quarter, reaching a total of 477 centers, and we plan to add another 5 to 10 centers by year end.

Speaker Change: Additionally, our plasma donor compensation business also showed strong performance this quarter with plasma revenues rising to $11.3 million, a 13% increase from the same quarter last year, and an 8.7% increase over first quarter of this year.

Mark R. Newcomer: This revenue growth is supported by a 4.4% increase in revenue per center from $7,581 in the second quarter of last year to $7,916 this year. We added 8 new plasma centers this quarter, reaching a total of 477 centers, and we plan to add another 5 to 10 centers by year-end.

Speaker Change: This revenue growth is supported by a 4.4% increase in revenue per center from $7,581 in the second quarter of last year to $7,916 in this year.

Speaker Change: We added 8 new plasma centers this quarter, reaching a total of 477 centers, and we plan to add another 5 to 10 centers by year-end. Our expansion underscores our commitment to helping our clients focus on enhancing center productivity after a period of rapid expansion.

Mark R. Newcomer: Our expansion underscores our commitment to helping our clients focus on enhancing center productivity after a period of rapid expansion. We are anticipating moderate and stable growth in our plasma donor compensation business in the foreseeable future. To conclude, the second quarter of 2024 marks another period of significant growth, particularly for our patient affordability business. The investments we are making in that business are poised to yield substantial long-term revenue growth, enhancing shareholder value considerably.

Mark Newcomer: Our expansion underscores our commitment to helping our clients focus on enhancing center productivity after a period of rapid expansion. We are anticipating moderate and stable growth in our plasma donor compensation business in the foreseeable future.

Speaker Change: We are anticipating moderate and stable growth in our plasma donor compensation business in the foreseeable future. To conclude, the second quarter of 2024 marks another period of significant growth, particularly for our patient affordability business.

Mark Newcomer: To conclude, the second quarter of 2024 marks another period of significant growth, particularly for our patient affordability business. The investments we are making in that business is poised to yield substantial long-term revenue growth, enhancing shareholder value considerably. We remain dedicated to pioneering advanced and innovative fintech solutions that address key challenges in patient affordability and healthcare payments and beyond. With our steady growth in the plasma business and ongoing exploration of new opportunities in the evolving payments landscape, we are well positioned to capitalize on future opportunities and deliver substantial value for our shareholders.

Speaker Change: The investments we are making in that business is poised to yield substantial long-term revenue growth, enhancing shareholder value considerably. We remain dedicated to pioneering advanced and innovative fintech solutions that address key challenges in patient affordability and healthcare payments and beyond.

Mark R. Newcomer: We remain dedicated to pioneering advanced and innovative FinTech solutions that address key challenges in patient affordability and healthcare payments and beyond. With our steady growth in the plasma business and ongoing exploration of new opportunities in the evolving payments landscape, we are well positioned to capitalize on future opportunities and deliver substantial value for our shareholders. I would like to extend my deepest thanks to every member of the Paysign team for their relentless effort and commitment. It is your hard work and dedication that propels our success. I will now pass the call over to Jeff, who will delve deeper into our financial details for the quarter.

Speaker Change: With our steady growth in the plasma business and ongoing exploration of new opportunities in the evolving payments landscape, we are well positioned to capitalize on future opportunities and deliver substantial value for our shareholders.

Mark Newcomer: I would like to extend my deepest thanks to every member of the pay sign team for their relentless effort and commitment. It is your hard work and dedication that propels our success.

Speaker Change: I would like to extend my deepest thanks to every member of the Paysign team for their relentless effort and commitment. It is your hard work and dedication that propels our success. I will now pass the call over to Jeff who will delve deeper into our financial details for the quarter.

Mark Newcomer: I will now pass the call over to Jeff, who will delve deeper into our financial details for the quarter. Thank you, Mark.

Jeffery B. Baker: Thank you, Mark. Good afternoon, everyone.

Jeffery Baker: Good afternoon, everyone. As Mark said, we had another solid quarter. Plasma donor compensation revenue increased $1.26 million versus the same period last year, or 12.6%, to $11.27 million. Driven by more plasma centers, 477 versus 443, an increase in the average monthly revenue per plasma center of $7,916 versus $7,581, a 12.7% increase in gross dollar card loads, and an 11.2% increase in the gross spin volume. All while the average load amounts remain fairly steady. Farmer patient affordability revenue increased $1.95 million, or 267%, to $2.67 million, primarily driven by the addition of 30 net new Farmer patient affordability programs launched over the past 12 months.

Jeffery B. Baker: As Mark said, we had another solid quarter. Plasma donor compensation revenue increased $1.26 million versus the same period last year, or 12.6% to $11.27 million, driven by more plasma centers, 477 versus 443, an increase in the average monthly revenue per plasma center of $7,916 versus $7,581, a 12.7% increase in gross dollar card loads, and an 11.2% increase in gross spend volume, all while the average load amounts remain fairly steady. Pharma patient affordability revenue increased $1.95 million, or 267%, to $2.67 million, primarily driven by the addition of 30 net new pharma patient affordability programs launched over the past 12 months.

Jeff: Thank you, Mark. Good afternoon, everyone. As Mark said, we had another solid quarter.

Jeff: Plasma donor compensation revenue increased $1.26 million versus the same period last year, or 12.6%, to $11.27 million, driven by more plasma centers, 477 versus 443,

Jeff: An increase in the average monthly revenue per plasma center of $7,916 vs. $7,581.

Speaker Change: A 12.7% increase in gross dollar card loads and an 11.2% increase in the gross spend volume. All while the average load amounts remain fairly steady.

Speaker Change: Pharma patient affordability revenue increased $1.95 million, or 267%, to $2.67 million, primarily driven by the addition of 30 net new pharma patient affordability programs launched over the past 12 months.

Jeffery B. Baker: Pharma patient affordability revenue equated to 18.7% of total revenue during the quarter versus 6.6% during the same period last year. We exited the quarter with 61 active pharma patient affordability programs, an increase of 18 programs since the end of 2023. Other revenue increased $86,000 or 28.9% to $383,000 due to the growth in our payroll, retail, and other corporate incentive business. As in previous calls, with all of the details we provided in the press release, and it will be available in our 10-Q filing tomorrow morning, I will simply hit the financial highlights for the second quarter of 2024 versus the same period last year.

Jeffery Baker: Farmer patient affordability revenue equated to 18.7% of total revenue during the quarter versus 6.6% during the same period last year. We exited the quarter with 61 active Farmer patient affordability programs and an increase of 18 programs since the end of 2023.

Jeff: Pharma patient affordability revenue equated to 18.7% of total revenue during the quarter versus 6.6% during the same period last year.

Jeff: We exited the quarter with 61 active pharma patient affordability programs, an increase of 18 programs since the end of 2023.

Jeffery Baker: Newcomer. Other revenue increased $86,000, or 28.9%, to $383,000 due to the growth in our payroll, retail, and other corporate incentive businesses.

Jeff: Other revenue increased $86,000 or 28.9% to $383,000 due to the growth in our payroll, retail, and other corporate incentive businesses.

Jeffery Baker: As in previous calls, with all of the details we provided in the pressure lease and that will be available in our 10-Q filing tomorrow morning, I will simply hit the financial highlights for the second quarter of 2024 versus the same period last year. First, second quarter, 2024 total revenues of $14.3 million increased, $3.3 million or up, 29.8% versus the same period last year. Gross profit margin for the quarter was 52.9% versus 50.9% during the same period last year, and improvement of 200 basis points. SG&A for the quarter increased 13.5% to $6 million, with total operating expenses increasing 19.1% to $7.5 million.

Speaker Change: As in previous calls, with all of the details we provided in the press release and that will be available in our 10-Q filing tomorrow morning, I will simply hit the financial highlights for the second quarter of 2024 versus the same period last year.

Jeffery B. Baker: First second quarter 2024 total revenues of $14.3 million increased $3.3 million, or up 29.8% versus the same period last year. Gross profit margin for the quarter was 52.9% vs. 50.9% during the same period last year, an improvement of 200 basis points. SG&A for the quarter increased 13.5% to $6 million, with total operating expenses increasing 19.1% to $7.5 million. We continue to make significant investments in IT and personnel to support the continued growth of our business, especially our patient affordability business.

Speaker Change: First, second quarter 2024 total revenues of $14.3 million increased $3.3 million or up 29.8% versus the same period last year.

Speaker Change: Gross profit margin for the quarter was 52.9% versus 50.9% during the same period last year, an improvement of 200 basis points.

Speaker Change: SG&A for the quarter increased 13.5% to $6 million, with total operating expenses increasing 19.1% to $7.5 million. We continue to make significant investments in IT and personnel to support the continued growth of our business, especially our patient affordability business.

Jeffery Baker: We continue to make significant investments in IT and personnel to support the continued growth of our business, especially our patient affordability business. We exited this quarter with 149 employees versus 108 during the same period last year. For the quarter, we posted a net income of $697,000 or 1 cent per fully diluted share versus a net loss of $104,000 or just under break even for share for the same period last year. We recorded a tax expense of $242,000 during the quarter for an effective tax rate of 25.8%. Our fully diluted share count for the quarter was 55.9 million shares.

Jeffery B. Baker: We exited this quarter with 149 employees versus 108 during the same period last year. For the quarter, we posted a net income of $697,000, or 1 cent per fully diluted share, versus a net loss of $104,000, or just under break-even per share for the same period last year. We recorded a tax expense of $242,000 during the quarter for an effective tax rate of 25.8%.

Speaker Change: We exited this quarter with 149 employees versus 108 during the same period last year.

Speaker Change: For the quarter we posted a net income of $697,000 or 1 cent per fully diluted share versus a net loss of $104,000 or just under break-even per share for the same period last year.

Speaker Change: We recorded a tax expense of $242,000 during the quarter for an effective tax rate of 25.8%. Our fully diluted share count for the quarter was 55.9 million shares.

Jeffery B. Baker: Our fully diluted share count for the quarter was 55.9 million shares. The second quarter adjusted EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA, was $2.2 million, or 4 cents per diluted share, versus $1.1 million, or 2 cents per diluted share for the same period last year. This equates to a 96% year-over-year growth in our adjusted EBITDA. The fully diluted share count for the quarters used in calculating the per share amount was 55.9 million shares and 54.5 million shares, respectfully, which reflects additional in-the-money options that were previously out-of-the-money.

Jeffery Baker: The second quarter, just at EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA, was $2.2 million or $4 cents per diluted share versus $1.1 million or $2 cents per diluted share for the same period last year. This equates to a 96% year-over-year growth in our adjusted EBITDA. The fully diluted share count for the quarters used and calculated in the per share amount was 55.9 million shares and 54.5 million shares, respectfully, which reflects additional in-the-money options that were previously out of the money. The adjusted EBITDA margin improved to 15.6% versus 10.3% during the same period last year, further highlighting the positive operating leverage in our business model.

Speaker Change: The second quarter adjusted EBITDA, which is a non-gap measure that adds back stock compensation to EBITDA, was $2.2 million, or $0.04 per diluted share, versus $1.1 million, or $0.02 per diluted share for the same period last year.

Speaker Change: This equates to a 96% year-over-year growth in our adjusted EBITDA.

Speaker Change: The fully diluted share count for the quarters used in calculating the per share amount was 55.9 million shares and 54.5 million shares, respectfully, which reflects additional in-the-money options that were previously out-of-the-money.

Jeffery B. Baker: The adjusted EBITDA margin improved to 15.6% versus 10.3% during the same period last year, further highlighting the positive operating leverage in our business model. Regarding the health of our company, we exited the quarter with an adjusted $8.6 million in unrestricted cash and zero debt. This was a $1.7 million decline from the adjusted unrestricted cash balance of $10.3 million at the end of 2023 but an increase of $1.6 million from the adjusted unrestricted cash balance of $7 million at the end of Q1 2024.

Speaker Change: The adjusted EBITDA margin improved to 15.6% versus 10.3% during the same period last year, further highlighting the positive operating leverage in our business model.

Jeffery Baker: Regarding the health of our company, we exited the quarter with an adjusted $8.6 million and unrestricted cash and zero debt. This was a $1.7 million decline from the adjusted unrestricted cash balance of $10.3 million at the end of 2023, but an increase of $1.6 million from the adjusted unrestricted cash balance of $7 million at the end of Q1 2024. The adjusted amounts take out the impact of accounts receivable, accounts payable, and cash collections related to pass-through invoice in our patient affordability business. As discussed in the past, patient affordability customers invoice at the end of the period to reimburse refunds used to cover related copay amounts for the monthly patient affordability claims. The changes in these balances do not equate to the revenue per claim we charge the pharmaceutical companies for paying such claim amounts.

Speaker Change: Regarding the health of our company, we exited the quarter with an adjusted $8.6 million in unrestricted cash and zero debt.

Speaker Change: This was a $1.7 million decline from the adjusted unrestricted cash balance of $10.3 million

Speaker Change: 2023, but an increase of $1.6 million from the adjusted unrestricted cash balance of $7 million at the end of Q1 2024.

Jeffery B. Baker: The adjusted amounts take out the impact of accounts receivable, accounts payable, and cash collections related to pass-through invoicing for our patient affordability business. As discussed in the past, patient affordability customers invoice at the end of the period to reimburse refunds used to cover related copay amounts for the monthly patient affordability claims. The changes in these balances do not equate to the revenue per claim we charge the pharmaceutical companies for paying in such claim amounts.

Speaker Change: The adjusted amounts take out the impact of accounts receivable, accounts payable and cash collections related to pass-through invoicing of our patient affordability business.

Speaker Change: As discussed in the past, patient affordability customers are invoiced at the end of the period to reimburse refunds used to cover related copay amounts for the monthly patient affordability claims.

Speaker Change: The changes in these balances do not equate to the revenue per claim we charge the pharmaceutical companies for paying in such claim amounts. We expect that as the business grows, so will the fluctuations in AR, AP, and unrestricted cash.

Jeffery Baker: We expect that as the business grows, so will the fluctuations in AR, AP, and unrestricted cash. Restricted cash increased $10 million to $102.2 million from December 31, 2023, primarily due to the increases in funds on cards of $3.7 million and customer deposits for plasma and pharma customers of $6.3 million. Restricted cash or funds used for customer card funding and pharmaceutical claims with a corresponding offset under current. As we did not complete any share repurchases during the second quarter, $3.9 million remains outstanding under our share repurchase program.

Jeffery B. Baker: We expect that as the business grows, so will the fluctuations in AR, AP, and unrestricted cash. Restricted cash increased $10 million to $102.2 million from December 31, 2023, primarily due to the increases in funds on cards of $3.7 million and customer deposits for our plasma and pharma customers of $6.3 million. Restricted cash or funds used for customer card funding and pharmaceutical claims with a corresponding offset under current liability.

Speaker Change: Restricted cash increased $10 million to $102.2 million from December 31, 2023, primarily due to the increases in funds on cards of $3.7 million and customer deposits for our plasma and pharma customers of $6.3 million.

Speaker Change: Restricted cash or funds used for customer card funding and pharmaceutical claims with a corresponding offset under current liabilities.

Jeffery B. Baker: As we did not complete any share repurchases during the second quarter, $3.9 million remains outstanding under our share repurchase program. Now, turning your attention to our full year 2024 guidance, due to the outperformance of our business during the first two quarters of the year relative to our initial expectations, we are raising our full year guidance as follows. Total revenues are estimated to be in the range of $56.5 million to $58.5 million, reflecting year-over-year growth of 20% to 24%.

Speaker Change: As we did not complete any share repurchases during the second quarter, $3.9 million remains outstanding under our share repurchase program.

Jeffery Baker: Now turning your attention to our full year 2024 guidance. Due to the outperformance of our business during the first two quarters of the year relative to our initial expectations, we are raising our full-year guidance as follows. Total revenues are estimated to be in the range of $56.5 million to $58.5 million, reflecting your over-year growth of 20% to 24%. Plasma revenues are estimated to account for approximately 78% of total revenue, while pharma revenue is estimated to account for approximately 20% of total revenue. Full year growth profit margins are expected to be between 54% and 55%, reflecting increased revenue contribution from our patient affordability business.

Speaker Change: Now turning your attention to our full year 2024 guidance.

Speaker Change: Due to the outperformance of our business during the first two quarters of the year relative to our initial expectations, we are raising our full year guidance as follows.

Speaker Change: Total revenues are estimated to be in the range of $56.5 million to $58.5 million, reflecting year-over-year growth of 20% to 24%.

Jeffery B. Baker: Plasma revenues are estimated to account for approximately 78% of total revenue, while pharma revenue is estimated to account for approximately 20% of total revenue. Full year gross profit margins are expected to be between 54% and 55%, reflecting increased revenue contribution from our patient affordability business. Operating expenses are expected to be between $30 million and $32 million as we continue to make investments in people and technology to support the growth of our business.

Speaker Change: Plasma revenues are estimated to account for approximately 78% of total revenue, while pharma revenue is estimated to account for approximately 20% of total revenue.

Speaker Change: Full year gross profit margins are expected to be between 54% and 55%, reflecting increased revenue contribution from our patient affordability business.

Jeffery Baker: Operating expenses are expected to be between $30 million and $32 million as we continue to make investments in people and technology to support the growth of our business. All of this amount, depreciation and amortization are expected to remain unchanged between $6 million and $6.5 million, while stock-based compensation is expected to remain unchanged between $2.7 million and $3 million. Given the continued increases in our average daily balance of unrestricted and restricted cash, the current interest rate environment, we expect to generate interest income of $3 million to $3.2 million. We expect our tax rate to be between 28% and 29%, and our fully diluted share count outstanding to be 55.8 million to 56.0 million shares.

Speaker Change: Operating expenses are expected to be between 30 million dollars and 32 million dollars as we continue to make investments in people and technology to support the growth of our business.

Jeffery B. Baker: Of this amount, depreciation and amortization are expected to remain unchanged between $6 million and $6.5 million, while stock-based compensation is expected to remain unchanged between $2.7 million and $3 million. Additionally, given the continued increases in our average daily balance of unrestricted and restricted cash and the current interest rate environment, we expect to generate interest income of $3 million to $3.2 million. We expect our tax rate to be between 28% and 29% and our fully diluted share count outstanding to be 55.8 million to 56.0 million shares.

Speaker Change: Of this amount, depreciation and amortization are expected to remain unchanged between $6 million and $6.5 million, while stock-based compensation is expected to remain unchanged between $2.7 million and $3 million.

Speaker Change: Given the continued increases in our average daily balance of unrestricted and restricted cash and the current interest rate environment, we expect to generate interest income of $3 million to $3.2 million.

Speaker Change: We expect our tax rate to be between 28% and 29%, and our fully diluted share count outstanding to be 55.8 million to 56.0 million shares.

Jeffery Baker: Taking all of the factors above into consideration, we expect net income to be in the range of $2 million to $3 million, or $4.6 to $6 per diluted share, and adjusted EBITDA to be in the range of $9 million to $10 million, which is 15% to 17% of total revenues, or $16.18 per diluted share.

Jeffery B. Baker: Taking all of the factors above into consideration, we expect net income to be in the range of $2 million to $3 million, or $0.04 to $0.06 per diluted share, and adjusted EBITDA to be in the range of $9 million to $10 million, which is 15% to 17% of total revenues, or $0.16 to $0.18 per diluted share.

Kevin: or $0.04 to $0.06 per diluted share, and adjusted EBITDA to be in the range of $9 million to $10 million, which is 15% to 17% of total revenues, or $0.16 to $0.18 per diluted share. With that, I would like to turn the call back over to Kevin for questions and answers.

Unknown Executive: With that, I would like to turn the call back over to Kevin for questions and answers. Thank you.

Operator: With that, I would like to turn the call back over to Kevin for question and answer.

Operator: Thank you, and I'll be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to move your question from the queue. Once again, that's Star 1 to be placed into the question queue. Our first question today is coming from Gary Prestopino from Barrington Research. Your line is now active.

Unknown Executive: When I'll be conducting a question and answer session, if you'd like to be placed into question Q, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question q. You may press star two if you'd like to move your question from the Q. Once again, that star one to be placed into question Q.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to be placed into question queue, please press star 1 on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. Once again, that's star 1 to be placed in the question queue. Our first question today is coming from Gary Prestopino from Barrington Research. Your line is now live.

Gary Prestopino: Our first question today is coming from Gary Pristhepino from Variant and Research for Linus. Now, why?

Gary Frank Prestopino: Hi, good afternoon, everyone. Um, a number of questions here. First of all, on the patient affordability business. How many pharmaceutical companies are you currently working with now in all of your programs that you have?

Gary Prestopino: Hi, good afternoon, everyone. A number of questions here.

Gary Frank Prestopino: Hi, good afternoon everyone. A number of questions here. First of all, on the patient affordability business, how many pharmaceutical companies are you currently working with now within all of your programs that you have?

Gary Prestopino: First of all, on the patient affordability business, how many pharmaceutical companies are you currently working with now within all of your programs that you have?

Matthew Turner: Hi, this is Matt.

Matthew Turner: Hi, this is Matt.

Matthew Turner: You know, I could have that number in front of me, but I don't. I think it's in excess of 40 as it stands right now.

Gary Frank Prestopino: Hi, this is Matt. You know, I could have that number in front of me, but I don't. I think it's in excess of 40 as it stands right now.

Unknown Executive: Keep in mind, Gary; some of those are direct; some of those are through hubs that represent a number of different pharmaceutical companies. So it's hard, I mean, we have the number, to say that it is. You know, XYZ Pharma company, if they're coming through a hub with another XYZ Pharma company, has no relationship. So that, I don't know if that helps you, but like Matt said, it's in excess of 40.

Matthew Turner: Oh, Gary, keep in mind. Keep in mind, Gary, some of those are direct. Some of those are through hubs, which represent a number of different pharmaceutical companies. So it's hard. I mean, we have the number.

Matthew Turner: Bye. to say that it's XYZ Pharmacompany, if they're coming through a hub with another XYZ Pharmacomy has no relationship, so that, I don't know if that helps you, but like Matt said, it's an excess of 40.

Gary Frank Prestopino: to say that it's

Unknown Executive: No, I just wanted to get an idea of the diversification of the customer base. And then, as you look at the pipeline... you know, building a lot of that pipeline coming from farmers that you have not done anything for, or is most of the pipeline built just with your existing clients?

Gary Prestopino: No, I just wanted to get an idea of the diversification of the customer base, and then as you look at the pipeline, you know, building is a lot of that pipeline coming from farmers that you have not done anything for, or is most of the pipeline built just with your existing clients. No, I would say I'm a jar to the pipeline as Newclientel.

Gary Frank Prestopino: coming from

Gary Frank Prestopino: PhRMAs that you have not done anything for or is most of the pipeline billed just with your existing clients?

Unknown Executive: No, I would say a majority of the pipeline is new.

Matthew Turner: It is okay. Newclient. Yeah, I mean, it's a mix, right? Like, so it's not to say, we obviously, you know, as you've heard Mark's commentary about, you know, the AstraZeneca business and the movement there, right, you know, four programs up to 12. You know, we do have clients that are continuing to add programs, but if you look at the pipeline and, you know, between say now and the end of next year, the lion's share of that pipeline is going to be New Clients, but many of those clients will be launching multiple programs at one time.

Gary Frank Prestopino: No, I would say a majority of the pipeline is new clientele.

Unknown Executive: Yeah, I mean, it's a mix, right? Like, so it's not to say we obviously, you know, as you heard Mark's commentary about, you know, the AstraZeneca business and the movement there, right, you know, four programs up to 12. You know, we do have clients that are continuing to add programs. But if you look at the pipeline, and between, say, now and the end of next year, the lion's share of that pipeline is going to be new clients, but many of those clients will be launching multiple programs at one time.

Gary Frank Prestopino: [inaudible]

Speaker Change: All right. And then just for our purposes... Yeah, so there's... Go ahead. I'm sorry. Yeah, I mean, it's a mix, right? Like, so it's not to say we... I mean, obviously, you know, as you heard Mark's commentary about, you know, the AstraZeneca business and the movement there, right, you know, four programs up to 12.

Speaker Change: You know, we do have clients that are continuing to add programs.

Speaker Change: But if you look at the pipeline, and, you know, between, say, now and the end of next year, the lion's share of that pipeline is going to be new clients, but many of those clients will be launching multiple programs at one time.

Unknown Executive: So, you know, when we look at a cornerstone account, we're not looking at that just from the perspective of, say, one brand. Our goal is to, you know, go in, get an MSA, prove ourselves with them, and then begin to migrate more and more brands over time. You know, so that's kind of the goal there. So there's a mix.

Matthew Turner: So, you know, when we look at a cornerstone account, you know, we're not looking at that just from the perspective of, say, one brand. Our goal is to, you know, go in, get an MSA, prove ourselves with them, and then begin to migrate more and more brands over time, you know, so that's kind of the goal there. So, there's a mix; there's certainly existing clients that are going to grow out as they get new indications for, or they get new products that they're launching, or potentially they're not satisfied with the service or the products that their current vendor; they may move stuff over. But then we have a decent chunk of stuff that is entirely, there'll be new MSAs.

Gary Frank Prestopino: So, you know, when we look at a cornerstone account...

Gary Frank Prestopino: You know, we're not looking at that just from the perspective of, say, one brand. Our goal is to, you know, go in, get an MSA, prove ourselves with them, and then begin to migrate more and more brands over time.

Unknown Executive: There's certainly existing clients that are going to grow out as they get new indications for, or they get new products that they're launching, or potentially they're not satisfied with the service or the products of their current vendor. They may move stuff over, but then we have a decent chunk of stuff that is entirely new. There'll be new MSAs. It's going to be all new. And then, just lastly, I'll let somebody else go.

Gary Frank Prestopino: So that's kind of the goal there. So there's a mix. There's certainly existing clients that are going to grow out.

Gary Frank Prestopino: As they get new indications for, or they get new products that they're launching, or potentially they're not satisfied with the service or the products of their current vendor, they may move stuff over, but then we have a decent chunk of stuff that is entirely, there'll be new MSAs. It's going to be all new paper.

Matthew Turner: It's going to be all new paper.

Matthew Turner: And then just last and only somebody else go, how are these programs structured? Do you have an actual contract that runs for a duration of time? Or is it something that a pharmaceutical company can, you know, walk away from you if they're unhappy with the performance of what you do? Yes, so we have master service agreements that, you know, are, you know, varying in lengths, you know, I mean, anywhere from five, you know, I guess two to five years I think is probably about the average that we see, and then we have statement of work that will guide each program.

Unknown Executive: How are these programs structured? Do you have an actual contract that runs for a duration of time? Or is it something that the pharmaceutical company can, you know, walk away from you if they're unhappy with the performance?

Speaker Change: And then just lastly, and I'll let somebody else go, how are these programs structured? Do you have an actual contract that runs for a duration of time? Or is it something that...

Speaker Change: The pharmaceutical company can, you know, walk away from you if they're unhappy with the performance.

Unknown Executive: What you do. Yeah, so we have master service agreements that, you know, are, you know, varying in length. I mean, anywhere from five, you know, I guess, two to five years, I think is probably about the average that we see.

Speaker Change: So we have master service agreements that

Speaker Change: you know, are, you know, varying in length. You know, I mean, anywhere from five, you know, I guess, two to five years, I think, is probably about the average that we see. And then we have statement of work that will guide each program.

Unknown Executive: And then we have statements of work that will guide each program. Some of those SOWs, some of those MSAs do contain outs for, you know, our clients. So, you know, it's not like they're locked in forever. They can leave if they're unhappy with the services, which is also one of the reasons why, you know, you hear Mark and Jeff both talk about investing their financial resources into people. And we do that so that we don't have customer service issues and that we make sure we're providing the level of service that they that they want.

Matthew Turner: Some of those SOW, some of those MSAs do contain outs for, you know, for our clients, so, you know, it's not like they're locked in forever. You know, so they can leave if they're unhappy with the services, which is also one of the reasons why, you know, you hear Mark and Jeff both talk about investing, you know, the financial resources into people, and we do that so that we don't have customer service issues and that we make sure we're providing the level of service that they want.

Gary Frank Prestopino: Some of those SOWs, some of those MSAs do contain outs for, you know, for our clients.

Speaker Change: So, you know, it's not like they're locked in forever, you know, so they can leave if they're unhappy with the services, which is also one of the reasons why, you know, you hear Mark and Jeff both talk about investing, you know, the financial resources into people.

Unknown Executive: And Gary.

Gary Frank Prestopino: And we do that so that we don't have customer service issues and that we make sure we're providing the level of service that they want.

Unknown Executive: And Gary, listen, hey a lot of these pharma companies are international, right? So the idea of a long-term lock-in contract really only exists in the United States. If you go to Europe and you're looking at contracts overseas, pretty much all of them have 30, 60, 90 days out for whatever reason. So, you know, we have to earn the business every day, and We're willing to put our money where our mouth is. And the other good thing is that if you do a good job for the pharmaceutical guys, they

Matthew Turner: And Gary, listen, hey, a lot of these pharma companies are international, right?

Unknown Executive: Okay, I'll let somebody else go. I do have some follow-up questions.

Matthew Turner: So the idea of a long-term lock-in contract really only exists in the United States. If you go to Europe and you're looking at contracts overseas, over there, pretty much all of them have 30, 15, 90 days out for whatever reason. So, you know, we have to earn the business every day, and we're willing to put our money where our mouth is. Another good thing is if you do a good job for the pharmaceutical guys, they'll stay with you. So they're very loyal, but you got to earn their business every day.

Gary: And Gary listen, hey a lot a lot of these pharma companies are international, right? So the idea of a long-term lock-in contract really only exists in the United States If you go to Europe and you're looking at contracts overseas

Gary: over there. Pretty much all of them have 30, 60, 90 days out for whatever reason. So, you know, we have to earn a business every day.

Speaker Change: and we're willing to put our money where our mouth is. And the other good thing is if you do a good job for the pharmaceutical guys, they'll stay with you. So they're very loyal, but you gotta earn their business every day.

Gary Prestopino: Okay, I'll let somebody else go. I do have some follow-up questions.

Speaker Change: Okay, I'll let somebody else go. I do have some follow-up questions.

Unknown Executive: As a reminder, that Star 1 to be placed in the question queue. Once again, please press Star 1 to be placed in the question queue at this time. One moment please, while we pull for further questions.

Operator: As a reminder, that's star one to be placed in the question queue. Once again, please press star one to be placed in the question queue at this time. One moment, please, while we pull for further questions. Gary, please go ahead with your follow-up. Your line is now live.

Speaker Change: As a reminder, that's star 1 to be placed in the question queue. Once again, please press star 1 to be placed in the question queue at this time. One moment, please, while we pull for further questions.

Gary Prestopino: Gary, please, you ahead with your follow-up. Your line is now alive.

Speaker Change: Gary, please go ahead with your follow-up. Your line is now live.

Matthew Turner: Okay, Matt, could you possibly size up the total TAM on a worldwide basis for this business? So, I don't want to be pedantic here, but I'm not going to size up the TAM on a worldwide basis because patient affordability as a product is a byproduct of the U.S. health care ecosystem. And it does not exist in the form that we know of it at Paysign in other countries and math. I'm sure there are some examples of it as far as like a mail-in rebate or something like that, but we believe right now the TAM is north of 500 million.

Gary Frank Prestopino: And Matt, could you possibly size up the total TAM on a worldwide basis for this business?

Speaker Change: Okay.

Matt: And Matt, could you...

Matt: possibly

Matt: size up the total TAM on a worldwide basis.

Matthew Turner: So, I don't want to be pedantic here, but I'm not going to size up the TAM on a worldwide basis because patient affordability as a product is a byproduct of the U.S. healthcare ecosystem, and it does not exist in the form that we know of it at Paysign in other countries en masse. I'm sure there are some examples of it as far as a mail-in rebate or something like that, but we believe right now the TAM is north of $500 million. Okay.

Speaker Change: for this business.

Speaker Change: So I'm.

Speaker Change: I don't want to be pedantic here, but I'm not going to size up the camera on a worldwide basis because patient affordability as a product.

Matt: is a byproduct of the U.S. healthcare ecosystem, and it does not exist in the form that we know of it at Paysign.

Matt: in other countries in mass. I'm sure there are some examples of it as far as like a mail-in rebate or something like that. But we believe right now the TAM is north of 500 million.

Matthew Turner: Okay. It takes a lot of back in napkin math to kind of get there. We've worked with some consultants inside the industry to really try to help us narrow down that answer. No pharma company comes out and says, "Hey, last month, across our entire company, we processed, or we helped 90,000 patients last month." They don't tell us that, so we can't. We don't have hard numbers to go off of. We kind of have to look at industry trends. Okay.

Gary Frank Prestopino: We, you know, it takes a lot of back and napkin math to kind of get there. We've worked with some consultants inside of the industry to really try to help us narrow down that answer. You know, no pharma company comes out and says, hey, last month across our entire company, we processed, you know, or helped, you know, 90,000 patients last month. They don't tell us that. So we can't; we don't have hard numbers to go off of. We kind of have to look at the industry.

Matt: We've, you know, it takes a lot of back and napkin math to kind of get there. We've worked with some consultants inside of the industry to really try to help us narrow down that answer. You know, no pharma company comes out and says, hey, you know, last month.

Matt: Across our entire, you know, company, we processed, you know, or we helped, you know, 90,000 patients last month. They don't tell us that, so we can't, we don't have hard numbers to go off of. We kind of have to look at industry trends.

Gary Frank Prestopino: Okay, and then as you're building these programs, I mean, obviously, you're going to have a very strong positive impact on your gross margin. But in terms of the SG&A to support it, is there a lot of leverage there? I mean, I'm looking at your SG&A expenses just this quarter, and they were up about 13 and a half percent, and your farmer revenues were up over 200%. But I just try to get an idea of how, as you add programs, can you scale this so that you don't have to, you can..., eventually start reducing the additional personnel that you need to support.

Gary Prestopino: And then, as you're building these programs, I mean, obviously you're going to have a very strong positive impact on your gross margin. But in terms of the S-GNA to support it, is there a lot of leverage there? I mean, I'm looking at your S-GNA expenses just this quarter and they work about 13.5%, and your pharma revenues were up over 200%. But I just try as you add programs; can you scale this so when you don't have to, you can eventually start reducing the additional personal that you need to support what you're doing.

Speaker Change: Okay, and then as you're building these programs, I mean, obviously you're going to have very strong positive impact to your gross margin.

Speaker Change: Is there a lot of leverage there? I mean, I'm looking at your SG&A expenses just this quarter and they were up about 13 and a half percent and your pharma revenues were up over 200%, but I just try to get an idea.

Speaker Change: As you add programs, can you scale this so where you don't have to, you can...

Speaker Change: Eventually start reducing the additional personnel that you need to support what you're doing.

Jeffery B. Baker: So, Gary, listen up there, a couple of things to look at on OPEX. One of the bigger increases there is DNA. And that's a byproduct of us capitalizing software development costs, which is part of the growth, right? We're doing a lot of IT development. And so you have to kind of back that out of the number, back out your stock comp, and then you're going to kind of get to an SG&A number.

Jeffery Baker: So Gary, so listen, a couple of things to look at on the op-x. One of the bigger increases there is DNA. And that's the byproduct of us capitalizing software development costs, which is part of the growth, right? We're doing a lot of IT development. And so you've got to kind of back that out of the number, back out your stock comp, and then you're going to kind of get to an S-GNA number.

Speaker Change: So, Gary, so listen, a couple of things to look at on the, on the OPEX. One of the bigger increases there is DNA.

Speaker Change: And that's a byproduct of us capitalizing software development costs, which is part of the growth, right? We're doing a lot of IT development. And so you've got to kind of back that out of the number, back out your...

Speaker Change: your stock top and then you're going to kind of get to an SG&A number. Now,

Jeffery Baker: Now, the other thing to look at on the leverage side is your adjusted EVADA operating margin. So we did 15.6% this quarter, up from 10.3% last year. First quarter, we did 12.8 versus 7.1. So you are seeing there in the numbers that there is operating leverage here, but make no mistake about it.

Jeffery B. Baker: Now, the other thing to look at on the leverage side is your adjusted EBITDA operating margin. So we did 15.6% this quarter, up from 10.3% last year. First quarter, we did 12.8% versus 7.1%. So you are seeing in the numbers that there is operating leverage here. But make no mistake about it.

Speaker Change: The other thing to look at on the leverage side is your adjusted EBITDA operating

Matt: margin.

Matt: So we did 15.6% this quarter, up from 10.3% last year. First quarter we did 12.8% versus 7.1%. So you are seeing there in the numbers...

Jeffery B. Baker: I mean, we are having to invest as we grow these programs, and as part of the guidance that we gave, we've already been given indications of opportunities that we'll see in the fourth quarter of this year in new pharma programs. And we're going to have to hire people in front of that. We can't bring those guys in and then hire them afterwards. So that's reflected in the guidance that $30 plus million in SG&A for the year is expected hiring that we're going to have to make in account management.

Jeffery Baker: I mean, we are having to invest as we grow these programs, and part of the guidance that we gave, like we've already been given indications of opportunities that we'll see towards the quarter of this year in new pharma programs. And we're going to have to hire people in front of that. We can't bring those guys on and then hire afterwards. So that's reflected in the guidance that that 30 plus million in S-GNA for the year is expected hiring. So we're going to have to make an account management. So you'll keep in mind when I bring on big pharma big pharma companies like in AstraZeneca, I've got to hire account managers.

Matt: that there is operating leverage here, but make no mistake about it. I mean, we are having to invest as we grow these programs and part of the guidance that we gave, like we've already been given

Matt: you know, indications of opportunities that we'll see at the

Matt: Towards the fourth quarter of this year in new New pharma programs and we're going to have to hire people in front of that. We can't

Matt: You know, we can't bring those guys on and then hire afterwards. So that's reflected in the guidance.

Matt: 30-plus million in SG&A for the year is expected hirings that we're going to have to make in account management. So, you know, keep in mind...

Jeffery B. Baker: So keep in mind, when I bring in big pharma companies like AstraZeneca, I've got to hire account managers. I've got to hire at least one senior account manager, and a support account manager. I've got to hire claims analysts, and I've got to hire a call center. There's hiring across the business, but the best way for you to look at whether we are getting operating leverage from the business is that adjusted EBITDA margin. Okay.

Matt: When I bring on big pharma companies like in AstraZeneca, I've got to hire account managers, I've got to hire at least one senior account manager, a support account manager, I've got to hire claims analysts, I've got to hire a call center. I mean, there's hiring across

Jeffery Baker: I've got to hire at least one senior account manager, support account manager. I've got to hire claims analysts. I've got to hire a call center. I mean, there's hiring across the business, but it is the best way for you to look at are we getting operating leverage to the business is that adjustity, but I'm hard.

Matt: across the business. But it is the best way for you to look at are we getting operating leverage to the business? Is that adjusted EBITDA margin?

Gary Prestopino: Anderson. Okay. You know, it's all good. I'm just trying to get an idea of how this business works. Okay. Thank you very much. I appreciate it. Appreciate your time. Thank you.

Gary Frank Prestopino: Okay, you know, it's all good. I'm just trying to get an idea of how this business works.

Speaker Change: Okay, you know, it's all good. I'm just trying to get an idea of how this business works. Okay. Thank you very much. I appreciate it. Appreciate your time.

Gary Frank Prestopino: Okay. Thank you very much. I appreciate it. I appreciate your time.

Operator: Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.

Unknown Executive: We reschedule our question and the session.

Unknown Executive: I might turn the floor back over to management for further closing comments.

Speaker Change: Thank you.

Speaker Change: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.

Mark R. Newcomer: Thank you, Kevin. Thank you all for joining today's call. Your continued interest and support fuels our journey towards transforming health care payments and enhancing patient access to vital treatments. We look forward to sharing more about our progress in the coming quarters and building a healthier future together. Have a great day, everyone.

Unknown Executive: Thank you, Kevin. Thank you all for joining today's call. Your continued interest and support fuels our journeying towards transforming healthcare payments and enhancing patient access to vital treatments. We look forward to sharing more about our progress in the coming quarters and to build a healthier future together. Have a great day, everyone. See you next time. Thank you.

Speaker Change: Thank you, Kevin. Thank you all for joining today's call. Your continued interest and support fuels our journey towards transforming healthcare payments and enhancing patient access to vital treatments. We look forward to sharing more about our progress in the coming quarters and to build a healthier future together. Have a great day, everyone. See you next time.

Operator: 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.

Unknown Executive: That does conclude today's teleconference webcast. Me this connector line after time and have a wonderful day. We thank you for your participation today.

Speaker Change: 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.