Q4 2024 Paysign Inc Earnings Call

Speaker Change: [music].

Good afternoon, My name is Kevin and I'll be your conference operator today at this time I'd like to welcome everyone to their pace Honey fourth quarter and full year 2024 earnings conference call.

Kevin: 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 fourth quarter and full year 2024 earnings conference call. 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 at any time. 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.

After the Speakers' remarks will be a question and answer session.

If you'd like to be placed in the question queue. You May press star one at any time.

As a reminder, this conference call is being recorded.

The comments on today's call regarding pay science financial results will be on a GAAP basis, unless otherwise noted.

<unk> earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website pay signed dot com, which includes reconciliations of non-GAAP measures to GAAP reported amounts.

Kevin: 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. 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 in our recent SEC filing.

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 pace on its 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 <unk> earnings release, and our recent SEC filings.

Kevin: Lastly, replay of this call will be available until June 25, 2025. 4th Quarter and Full Year 2024 Earnings Call Announcement for details on how to access the replay.

Lastly, a replay of this call will be available until June 25th 2025, Please see page science fourth quarter and full year 2024 earnings call announcements for details on how to access the replay.

Mark Newcomer: It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO, please go ahead. Thank you, Kevin. Good afternoon, everyone, and thank you for joining us on today's Earnings We are excited to share Paysign's results for the fourth quarter and full year 2020.

Speaker Change: 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 thank you for joining us on today's earnings call. We are excited to share pay signs results for the fourth quarter and full year 2024.

Mark Newcomer: I'm Mark Newcomer, President and Chief Executive Officer, and joining me today is Jeff Baker, our Chief Financial Officer. Additionally, Matt Turner, our President of Patient Affordability, and Matt Lamford, our Chief Payments Officer, will be available during the Q&A session. Earlier today, we announced our fourth quarter and full year financial results for 2024, which demonstrated continued strength and exceptional momentum in revenue growth and adjusted For the full year, revenue increased by 23.5% to $58.4 million and adjusted EBITDA increased 43.3% to $9.6 million. Equally impressive, our adjusted EBITDA margins improved by 230 basis points to 16.5% as we continue to demonstrate operating leverage in our business.

Mark Newcomer: I'm, Mark newcomer President and Chief Executive Officer, and joining me today is Jeff Baker, our Chief Financial Officer. Additionally, Matt turning our president of patient affordability, and Matt Lanford, our chief payments officer will be available during the Q&A session.

Mark Newcomer: Earlier today, we announced our fourth quarter and full year financial results for 2024, which demonstrated continued strength and exceptional momentum in revenue growth and adjusted EBITDA.

Mark Newcomer: For the full year revenue increased by 23, 5% to $58 4 million and adjusted EBITDA increased 43, 3% to $9 6 million equally impressive our adjusted EBITDA margins improved by 230 basis points to 16, 5% as we continue.

Mark Newcomer: To demonstrate operating leverage in our business model.

Mark Newcomer: In 2024, our patient affordability business firmly established itself as our primary growth driver, delivering exceptional results across all key performance indicators. Annual revenue in this segment grew 212% year over year, reaching $12.7 million compared to $4.1 million in 2020. Claims processed increased by an impressive 272%, and we added 33 net programs, representing a 77% increase over the previous year. These new programs consisted of both new and transition programs across various therapeutic classes, including both retail and specialty drugs, covering pharmacy and medical benefits. Our continued ability to win additional programs from our current customers is a testament to our excellent processes, exceptional service, and the tangible cost savings exceeding $100 million that our proprietary dynamic business rules delivered to our clients in 2024.

Mark Newcomer: In 2020 for our patient affordability business firmly established itself as our primary growth driver delivering exceptional results across all key performance indicators annual revenue in this segment grew 212% year over year, reaching $12 7 million compared to $4 1 million in 2023.

Mark Newcomer: Hi.

Mark Newcomer: Claims processed increased by an impressive 272% and we added 33 net programs, representing a 77% increase over the previous year.

Mark Newcomer: These new programs consisted of both new and transition programs across various therapeutic classes, including both retail and specialty drugs covering pharmacy and medical benefits. Our continued ability to win additional programs from our current customers is a testament to our excellent processes exceptional service.

Mark Newcomer: And the tangible cost savings exceeding $100 million that are proprietary dynamic business rules delivered to our clients in 2024.

Mark Newcomer: Our sales cycle remains efficient within the 90 to 120 day range. And our sales pipeline continues to be robust. We fully expect our patient affordability business to sustain its strong growth trajectory in 2025, projecting to at least double in revenue once again this year. Turning to our plasma donor compensation business, this segment contributed $43.9 million in revenue for the year, representing a 4.6% increase over 2023's $42 million. We exited 2024 with 480 centers, an increase of 16 centers over the previous year, and anticipate adding an additional 10 to 15 centers in 2025, with four centers already added today.

Mark Newcomer: Our sales cycle remains efficient within the 90 to 120 day range and our sales pipeline continues to be robust.

Mark Newcomer: We fully expect our patient affordability business to sustain its strong growth trajectory in 2025 projecting to at least double in revenue once again this year.

Mark Newcomer: Turning to our plasma donor compensation business. This segment contributed $43 9 million in revenue for the year, representing a 4.6% increase over 2023s $42 million, we exited 2024 with 480 centers and increase of 16 centers over the previous year and.

Mark Newcomer: Adding an additional 10 to 15 centers in 2025 with four centers already added to date.

Mark Newcomer: Fourth quarter plasma revenue was down 6.2%, primarily driven by fractionators working through an oversupply of source plasma. A Natural Outcome Following Rapid Industry Expansion of Centers from 2020 to 2022. Another contributing factor was increased donation yields resulting from the latest plasmapheresis hardware upgrade cycle, leading to reduced donor compensation payments and fewer overall donations in the fourth quarter. We expect these conditions to persist through at least the remainder of the year. As this is a high variable cost business, we believe that we can effectively manage through this down. Our long term strategy remains focused on expanding the depth and breadth of our solutions to create new revenues.

Mark Newcomer: Fourth quarter plasma revenue was down six 2%, primarily driven by fractionator is working through an oversupply of source plasma a natural outcome. Following rapid industry expansion of centers from 2020 to 2023. Another contributing factor was increased donation yields resulting from the latest plasmapheresis.

Mark Newcomer: Hardware upgrade cycle, leading to reduced donor compensation payments and fewer overall donations in the fourth quarter.

Mark Newcomer: We expect these conditions to persist through at least the remainder of the year. As this is a high variable cost business. We believe that we can effectively manage through this downturn.

Mark Newcomer: Our long term strategy remains focused on expanding the depth and breadth of our solutions to create new revenue streams, especially in the maturing segments of our business, we envision payments as a component of the overall consumer engagement ecosystem and not just the completion of a monetary transaction.

Mark Newcomer: especially in the maturing segments of our business. We envision payments as a component of the overall consumer engagement ecosystem and not just the completion of a monetary transaction.

Mark Newcomer: To that end, we announce the acquisition of Gamma Innovation LLC and the appointment of Michael Ngo as Paysign's Chief Innovation Officer, as outlined in a press release earlier today. I encourage you to read the announcement if you haven't already done so. Michael and his talented team bring considerable expertise and an innovative product portfolio of existing applications that target both the plasma collection and pharmaceutical industry. This strategic acquisition significantly enhances our capability to offer integrated solutions for plasma donor and pharmaceutical patient engagement, adherence, resource management, and market intelligence.

Speaker Change: To that end, we announced the acquisition of Gamma innovation L. L C and the appointment of Michael No pay Science, Chief Innovation Officer as outlined in our press release earlier today I encourage you to read the announcement if you haven't already done so Michael and his talented team bring considerable expertise and an innovative product portfolio of exist.

Mark Newcomer: Applications that target, both the plasma collection and pharmaceutical industries.

Mark Newcomer: This strategic acquisition significantly enhances our capability to offer integrated solutions for plasma donor and pharmaceutical patient engagement adherence resource management and market intelligence. This marks our entry into the high margin software as a service market and meaningfully expands our total addressable market.

Mark Newcomer: This marks our entry into the high margin software as a service market and meaningfully expands our total addressable market. This is certainly an exciting time at Paysign, and we look forward to capitalizing on these opportunities as we enter 2025 and beyond.

Mark Newcomer: This is certainly an exciting time at baseline and we look forward to capitalizing on these opportunities we entered 2025 and beyond with that I'll turn the call over to Jeff for additional details on our quarterly and full year financial results.

Jeff Baker: With that, I'll turn the call over to Jeff for additional details on our quarterly and full-year finances. Thank you, Mark. Good afternoon. As Mark said, we close 2024 with a solid fourth quarter driven by momentum we're experiencing with our patient affordability. Our results for the quarter and year were in line with our expectations despite some weakening in our plasma business due to excess inventory supplies that we started to see in the third quarter and expect to last through year-end 2025.

Jeff Baker: Thank you Mark good afternoon, everyone.

Jeff Baker: As Mark said, we closed 2024 with a solid fourth quarter driven by momentum, we're experiencing with our patient affordability business our results for the quarter and year were in line with our expectations. Despite some weakening in our plasma business due to excess inventory supplies that we started to see in the third quarter and expect to last through.

Jeff Baker: Year end 2025.

Jeff Baker: And last week we closed on a very exciting acquisition that should help expand our presence in the plasma and pharmaceutical industry. As well as bring cost savings to our own organization. I will talk more about that later. The plasma business grew 4.6% in 2024 to $43.9 million as we added 16 net plasma centers and maintained our market share of just under 40%. We exited the year with 480 plasma. and thus far in 2025, we have already added an additional four net. For the fourth quarter, revenues declined 6.2%. 10.8 million dollars with two NetCenters added. Gross dollars loaded to cards decreased 6.4%.

Jeff Baker: And last week, we closed on a very exciting acquisition that should help expand our presence in the plasma and pharmaceutical industries as well as bring cost savings to our own organization I will talk more about that later.

Jeff Baker: Our plasma business grew four 6% and 2024 to $43 $9 million as we added 16 net plasma centers and maintain our market share of just under 40% we exited the year with 480 plasma centers and thus far in 2025, we have already added an additional four.

Jeff Baker: <unk> net programs.

Jeff Baker: For the fourth quarter revenues declined six 2% to $10.8 million with two net centers added <unk>.

Jeff Baker: Gross dollars loaded to cards decreased six 4%.

Jeff Baker: Total number of loads decreased 7.8%. Gross spend volume decreased 7.8%. and the average revenue per plasma center decreased 9.5%.

Jeff Baker: Total number of loads decreased seven 8% gross spend volume decreased seven 8%.

Jeff Baker: And the average revenue per plasma center decreased nine 5% to $7510.

Jeff Baker: The guidance for 2025 that I will provide in just a moment reflects the slowdown we expect to continue for the remainder Moving to our Pharma Patient Affordability We heard Mark talk about the traction we experienced in 2024, which has continued into 2025. Fourth Quarter, Pharma Revenue. $12.7 million 21.7% of total revenue versus 8% of total revenue. during the same period. We added 10 net programs in the fourth quarter exiting the year with 76 pharma patient affordability programs. increase of 33 net programs over 2023. As far as 2025, we have already added an additional 14 net in the first quarter.

Jeff Baker: The guidance for 2025, then I will provide in just a moment reflects the slowdown we expect to continue for the remainder of the year.

Jeff Baker: Moving to our pharma patient affordability business you heard Mark talk about the traction we experienced in 2024, which has continued into 2025 fourth quarter pharma revenues of $12 $7 million or 21, 7% of total revenue versus eight 6% during the same peer.

Jeff Baker: Last year, we added 10 net programs in the fourth quarter exiting the year with 76 pharma patient affordability programs, an increase of 33 net programs over 2023.

Jeff Baker: Thus far in 2025, we have already added an additional 14 net programs in the first quarter of 2025.

Jeff Baker: With the hyper growth we have experienced in our pharma patient affordability We expect it will continue to make up a greater percentage of total revenue.

Jeff Baker: With a hyper growth we have experienced in our pharma patient affordability business. We expect it will continue to make up a greater percentage of total revenue in 2025.

Jeff Baker: As in previous calls, with all the details we provided in the press release and that will be available in our 10K filing tomorrow morning, I will simply hit the financial highlights for the fourth quarter of 2024 versus the same period last year. Fourth quarter 2024 total revenues of $15.6 million increase $1.9 million or $14.5 million. Gross profit margin for the quarter was 58.9%. 52.2% during the same period last year. SG&A for the quarter, excluding depreciation and amortization and stock-based competition. increase $36.7 34.2% to 8.7%. We have made significant investments in IT and employees over the past year.

Jeff Baker: As in previous calls with all the details we provided in the press release and it will be available in our 10-K filing tomorrow morning, I will simply hit the financial highlights for the fourth quarter of 2024 versus the same period last year fourth quarter 'twenty 'twenty four total revenues of $15.6 million increased 1.9.

Jeff Baker: Dollars or 14% grew.

Jeff Baker: Gross profit margin for the quarter was 58.9% versus 52.2% during the same period last year.

Jeff Baker: SG&A for the quarter, excluding depreciation and amortization and stock based compensation increased 36, 7% to $6 $3 million with total operating expenses, increasing 34, 2% to $8.7 million. We have made significant investments in I T and employees over the past.

Jeff Baker: Year to support the continued growth of our businesses.

Jeff Baker: Support the continued growth of Exiting this year with 171 versus 123 employees during the same period last year. The quarter we posted a net income of $1.4 million, or $0.02 per fully diluted share, versus $5.6 million, or $0.05 per fully diluted share for this same period last year. 2023's net income included a tax benefit of $4.3 million as we released the valuation allowance on our deferred tax assets related to both federal and state taxes. The fourth quarter adjusted EBITDA, which is a non-gap measure that adds back stock compensation to EBITDA. $2.9 million or $0.05 per diluted gallon.

Jeff Baker: Exiting this year with 171 employees versus 123 employees. During the same period last year for the quarter, we posted a net income of $1.4 million or two cents per fully diluted share versus $5 $6 million or five cents per fully diluted share for the same period last year 'twenty 'twenty.

Jeff Baker: <unk> net income included a tax benefit of $4 $3 million as we released the valuation allowance on our deferred tax assets related to both federal and state taxes.

Jeff Baker: The fourth quarter, adjusted EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA was $2.9 million or five cents per diluted shares versus $2.5 million or five cents per diluted share for the same period last year.

Jeff Baker: $2.5 million or $0.05 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 $55.5 million. 3.8. regarding the health of our company. We exited the year with $10.8 million in unrestricted cash and zero . 6.3 million dollar decrease over the year 2023. As you recall, we have passed through receivables and payables related to our pharma patient affordability business that causes large swings in our cash balance. Adjusting for those movements, our cash balance at the end of 2020. was $11.1 million versus $10.3 million the prior year.

Jeff Baker: The fully diluted share count for the quarters used in calculating the per share amounts was $55 5 million and $53 8 million respectfully.

Jeff Baker: Regarding the health of our company, we exited the year with $10.8 million in unrestricted cash and zero debt a $6 3 million dollar decrease over the year 2023 if you recall, we have pass through receivables and payables related to our pharma patient affordability business that causes large swings in our cash.

Jeff Baker: Adjusting for those movements, our cash balance at the end of 'twenty 'twenty, four was $11.1 million versus $10.3 million. The prior year, we repurchased 36700 shares in the fourth quarter for approximately $135000 and for the year, we repurchased 136700 <unk>.

Jeff Baker: We repurchased 36,700 shares in the fourth quarter for approximately $135,000, and for the year we repurchased 136,700 shares for approximately $495,000.

Jeff Baker: Shares for approximately $495000.

Jeff Baker: Now turning your attention to our initial guidance for 2025, which incorporates various assumptions related to acquisition. We expect. Total revenues to be in the range of $68.5 million to $70 million. reflecting year-over-year growth of 17.5%. Plasma is estimated to make up approximately 57.5% of total... While pharma revenue is expected to continue its growth of at least 100% year-over-year as we receive a full-year benefit for all pharma patient affordability programs added in 2020. and we continue to add new pharma patient affordability programs throughout 2025. Given the early trends we are seeing with the year-over-year decline in our plasma Seasonality we see with our patient affordability.

Jeff Baker: Now turning your attention to our initial guidance for 2025, which incorporates various assumptions related to the acquisition of gamma.

Jeff Baker: We expect.

Jeff Baker: Total revenues to be in the range of $68.5 million to $70 million, reflecting year over year growth of 17.5% to 20%.

Jeff Baker: Plasma is estimated to make up approximately 57, 5% of total revenue while pharma revenue is expected to continue its growth of at least 100% year over year as we receive a full year benefit for all pharma patient affordability programs added in 2024, and we continue to add new pharma patient affordability programs throughout.

Jeff Baker: 2025 gig.

Jeff Baker: Given the early trends, we have seen with the year over year decline in our plasma business and the seasonality, we see with our patient affordability business, we expect revenue to be higher in the first half of the year compared to the second half of the year with a corresponding impact on operating income.

Jeff Baker: We expect revenue to be higher in the first half of the year compared to the second half with a corresponding impact on operating. Full year gross profit margins are expected to be between 62% and 64%. Reflecting increased revenue contribution from our pharma patient affordability Operating expenses are expected to be between $47.5 million and $50 million as we continue to make investments in people and technology. This amount also includes the labor costs, estimated goodwill amortization, and the cost Stock Expense associated with the acquisition we announced this morning, but it does not include operating synergies we expect to benefit from during the second half of the year.

Jeff Baker: Full year growth gross profit margins are expected to be between 62% and 64% reflecting increased revenue contribution from our pharma patient affordability business.

Jeff Baker: Operating expenses are expected to be between $47.5 million and $50 million as we continued to make investments in people and technology. This amount also includes the labor costs estimated goodwill amortization and stock expense associated with the acquisition, we announced this morning, but it does not include operating synergies.

Jeff Baker: We expect to benefit from during the second half of the year.

Jeff Baker: We plan on giving an update to the acquisition related operating expense assumptions and anticipated synergies on our Q2 2025 earnings call after we have completed our purchase price allocation. Appreciation and Amortization Expense is expected to be between $10.5 million and $11.5 million while Stock-Based Compensation is expected to be approximately $6 million. Given our large unrestricted and restricted cash balances in the current interest rate environment, we expect to generate interest income of approximately $2.8 billion. Taking all of the factors above into consideration, we expect net income to be approximately break even for the year and adjusted EBITDA to be in the range of $12.5 million and $13.5 million or $22.5 million.

Jeff Baker: We plan on giving an update to the acquisition related operating expense assumptions and anticipated synergies on our Q2 'twenty 25 earnings call. After we have completed our purchase price allocation.

Jeff Baker: Depreciation and amortization expense is expected to be between $10.5 million, an $11.5 million, while stock based compensation is expected to be approximately $6 million.

Jeff Baker: Given our large unrestricted and restricted cash balances in the current interest rate environment, we expect to generate interest income of approximately $2.8 million.

Jeff Baker: Taking all of the factors above and the consideration we expect net income to be approximately breakeven for the year and adjusted EBITDA to be in the range of $12.5 million and $13 $5 million or 22 cents to 324 cents per diluted share.

Jeff Baker: $0.24 per diluted share The diluted share count for the year is estimated to be 56.5 million shares. For the first quarter of 2025, we expect total revenue to be in the range of $17.5 million to $18 million reflecting the seasonally strong period for our patient affordability business offset by the seasonally weak period for our plasma. We expect patient affordability revenues to be 40 to 45 percent of revenue for the Gross profit margins are expected to be between 63 and 64 percent, driven largely by increased revenue contribution from our pharma patient affordability business. Operating expenses are expected to be between $10.5 million and $11 million, of which depreciation and amortization will be approximately $1.9 million and stock-based compensation will be approximately $1.9 million.

Jeff Baker: The diluted share count for the year is estimated to be $56 5 million shares.

Jeff Baker: For the first quarter of 2025, we expect total revenue to be in the range of $17.5 million to $18 million, reflecting the seasonally strong period for our patient affordability business offset by the seasonally weak period for our plasma business, we expect patient affordability revenues to be 40% to 45% of revenue for the <unk>.

Jeff Baker: Quarter.

Jeff Baker: Gross profit margins are expected to be between 63, and 64% driven largely by increased revenue contribution from our pharma patient affordability business.

Jeff Baker: Operating expenses are expected to be between $10.5 million and $11 million of which depreciation and amortization will be approximately $1.9 million and stock based compensation will be approximately $2 $1 million adjusted.

Jeff Baker: Adjusted EBIT odds expected to be in the range of $4 million and $5 million or 21.7% to 27.7% For those looking for more information on the structure of the gamma aqueous... Included a combination of cash and stock and a continued consideration related to gross revenue performance.

Jeff Baker: Adjusted EBITDA is expected to be in the range of $4 million and $5 million or 21, 7% to 27, 2% of revenue.

Kevin: For those looking for more information on the structure of the Gam acquisition, which included a combination of cash and stock and a contingent consideration related to gross revenue performance targets I would point you to our disclosure in our 8-K and 10-K filings with that I would like to turn the call back over to Kevin for question and answers.

Jeff Baker: I would point you to our disclosure in our 8K and 10K files.

Kevin: With that, I would like to turn the call back over to Kevin. Thank you.

Kevin: Thank you well now be conducting a question and answer session.

Kevin: We'll 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. A confirmation tone will indicate your line is in the question queue.

Kevin: If you'd like to be placed in the question queue. Please press star one on your telephone keypad.

Kevin: A confirmation tone will indicate your line is in the question queue.

Kevin: me press star Q if you'd like to move your question. One moment, please, while we poll for questions.

Speaker Change: You May press star two if like Jim over to a question from the queue.

Kevin: One moment, please while we poll for questions.

Jacob Stefan: Our first question is coming from Jacob Stefan from Lake Street Capital Markets. Your line is now live. Hey guys, congrats on the quarter and I appreciate you taking the question.

Kevin: Our first question is coming from Jacobs to far from Lake Street Capital markets. Your line is now live.

Kevin: Yeah.

Speaker Change: Hey, guys congrats on the quarter and I appreciate you taking the questions.

Unknown Executive: Just to start off here, maybe you could kind of help us understand the strength in Q4 and kind of looking at thus far in 2025, but help us understand kind of the strength between existing pharma patient affordability programs and kind of new ones that you launched in Q4. Unknown Speaker – That's a very complex question to answer, Jacob. We We've launched a number of new programs already this year, 14, and we added 10 in the fourth quarter. Some of these are fairly large pharmaceutical partners. That's the first thing. The second thing is, in the first half of the year, you'll see typically higher revenue contribution from our patient affordability business, all else being equal if we don't add any new businesses, which business which...

Speaker Change: Just to start off here, maybe you could kind of help us understand the strength in Q4 and kind of looking at thus far in 2025.

Speaker Change: Help us understand kind of the strike between existing.

Speaker Change: Pharma patient affordability programs.

Speaker Change: And kind of new ones that you'd wash in Q4.

Speaker Change: [laughter].

Speaker Change:

Speaker Change: That's a very complex question to answer Jacob.

Speaker Change: Yes.

Speaker Change: We.

Speaker Change: We've launched a number of new programs already this year 14.

Speaker Change: And we added 10 in the fourth quarter as.

Speaker Change: Some of these are fairly large.

Speaker Change: Our pharmaceutical partners.

Speaker Change: That's the first thing the second thing is in the first half of the year, you'll see typically higher revenue contribution from our patient affordability business all else being equal if we don't add any new businesses, which business, which.

Unknown Executive: I think it's highly unlikely given our pipeline, but what you will see is that the first half of the year is higher from a revenue contribution because people haven't met their out-of-pocket maximum deductions yet. As they do, and that flows down usually mid-year, sometimes a little earlier depending on what drug they're on, but as that flows through, then obviously copay payments aren't being made any longer. Then we're just basically collecting money from the monthly management fees and some other ancillary fees that we charge, maybe call center or some other things.

Speaker Change: I think is highly unlikely given our pipeline but.

Speaker Change: What will you will see is that the first half of the year is higher from a revenue contribution because people haven't met their out of pocket maximum deductions yet.

Speaker Change: As they do and that flows down usually mid year, sometimes a little earlier, depending on what drug thereon, but as that flows through then obviously copay payments arent being made any longer.

Speaker Change: And then we're just basically collecting money from the <unk>.

Speaker Change: Monthly management fees and some other ancillary fees that we charge maybe call center or some other things.

Unknown Executive: I don't know if that answers your question, but the revenue visibility we have in patient affordability is good because of the historical programs and what we're already seeing come through in the first quarter of the year. Okay, that's helpful.

Speaker Change: So I don't know if that answers your question, but the data.

Speaker Change: <unk> revenue visibility we have in patient affordability is good because of the historical programs and what we're already seeing that come through in the first quarter of the year.

Speaker Change: Okay. That's helpful.

Unknown Executive: Maybe just kind of pivoting to gamma then kind of explain you know, what the what the overall kind of marching strategy is here with opening your the opportunity to a much larger opportunity and ultimately the SAS revenue portion. Kind of just explain how that factors into your guidance and what assumptions for revenue that has Yeah, in regards to the strategy, you know, we look at we look at the acquisition purely to help us with both our plasma and our pharmaceutical business in the way of adding additional engagement tools, you know, additional capabilities really that are going to allow us to really make a difference and differentiate ourselves within the market and our offerings.

Speaker Change: Maybe just kind of pivoting to gamma then kind of explain you know what the what the are all kind of arching strategy is here.

Speaker Change: With opening your you know the.

Speaker Change: Opportunity to a much larger opportunity and ultimately the SaaS revenue portion.

Speaker Change: Kind of just explain how that factors into your guidance and what assumptions for revenue that has.

Speaker Change: Yeah in regards to the strategy.

Speaker Change: We look at we look at the acquisition purely to.

Speaker Change: Help us with both our our plasma and our pharmaceutical business in the way of adding additional engagement tools.

Speaker Change: You know the additional capabilities really that are going to allow us to really make a difference and differentiate ourselves within the market.

Speaker Change: Our offerings.

Unknown Executive: You know, we're really excited about the talent that these guys bring on and the products that they're going to allow us to roll out to both sides of the market, both in patient affordability and both in the donor space. I think it's going to make a huge impact and really a very positive move on the part of Paysign. And as it relates to the guidance, there's nothing in these three applications that we acquired in the guidance. So it's all additional gravy upside. What I assets to us is highly incentivized to drive meaningful revenue to the business to our business, and in hopes to get additional compensation in the form of shares in the company.

Speaker Change: We're really excited about the talent that these guys bring on.

Speaker Change: And the products that they're that they're going to.

Speaker Change: Allow us to rollout to two both.

Speaker Change: Both sides of the market both in patient affordability and both in the donor space.

Speaker Change: I think it's going to make a huge a huge impact and really a very positive. It's a positive move on the part of Pacer.

Speaker Change: And as it relates to the guidance there's nothing in these three days at three applications that we acquired in the guidance. So it's it's all additional gravy upside what I what I can tell you is that our the.

Speaker Change: Gentlemen that sold the business or the assets to us is highly incentivized to drive meaningful revenue.

Speaker Change: To the business to our business and and hopes to get additional compensation in the form of shares in the company. So there.

Unknown Executive: So there was a contract that came over with one of our existing customers. It's not huge. But, you know, every dollar helps. And this is the beginning, hopefully, of some very nice additional business in the two existing channels that we have that we will benefit from longer term.

Speaker Change: There was a contract.

Speaker Change: Contract that came over with one of our existing customers it's not huge.

Speaker Change: But you know every every dollar helps and and this is the beginning hopefully of some very nice additional business in the two existing channels that we have that we will benefit from longer term.

Unknown Executive: Okay, just to clarify, so the there's no revenue really associated with sorry, there's minimal revenue associated with gamma. It's just over a million dollars a year, it wasn't a lot. Okay, very helpful. I appreciate all the color. Thank you.

Speaker Change: Okay, just to clarify so that theres no revenue really associated with sorry, theres minimal revenue associated with <unk> gamma.

Speaker Change: Gamma.

Guy: That's factored into Guy yeah.

Speaker Change: Ed.

Speaker Change: It's just over $1 million a year wasn't it wasn't a lot.

Speaker Change: Okay very helpful. I appreciate all the color.

Speaker Change: Yeah.

Gary Recipe: Thank you next question is coming from Gary recipe, though from Barrington Research. Your line is now live.

Gary Prestopino: Next question is coming from Gary Prestopino from Barrington Research Alliance. Hi, good afternoon, all several questions here. First of all, let's let's talk about the plasma. You know, realizing you kind of went into a little bit about what's going on there, but could you maybe give us like a deeper dive into some of the issues here that are causing this slowdown? Yeah, sure, I can I can talk about that. Thanks for the question. As I mean, as you may know, the plasma collection industry is comprised of two separate groups. There's fractionators, who use their own plasma as raw material to produce their therapies.

Gary Recipe: Hi, good afternoon, all several questions here first of all let's let's let's talk about the plasma business.

Gary Recipe: Realizing you you kind of went into a little bit about what's going on there, but could you maybe give us like a deeper dive into some of the issues here that are causing the slowdown.

Gary Recipe: Yeah sure I can I can talk about that thanks.

Gary Recipe: For the question as I mean, as you May know the plasma collection industry is comprised of two separate groups.

Gary Recipe: Theres fractionator is who use their own plasma as raw material to produce their therapies and then there is independent to collect plasma to sell these fractionator. So the independence of the ones that are most affected by changes to the supply demand equation and that's pretty important difference in the industry.

Unknown Executive: And then there's independents who collect plasma to sell to these fractionators. So the independents are the ones that are most affected by changes to the supply demand equation. And that's pretty important difference in the industry. So getting to the oversupply that I mentioned, this happened for two reasons. First, the overproduction that occurred post COVID, which includes the massive expansions we saw from both fractionators and independents. Shortly thereafter, upgrades to the plasma process increased plasma yields by approximately 9% per donation. So as well as reducing the time necessary to complete a donation. So the combination of these events meant there was much less demand for plasma from the independents.

Gary Recipe: So getting to the oversupply that I've mentioned this.

Gary Recipe: This happened for two reasons first the overproduction that occurred post Covid, which includes the massive expansions we saw from both fractionator and independence. Shortly thereafter upgrades to the plasmapheresis process increased plasma yields by approximately nine.

Gary Recipe: Percent per donation.

Gary Recipe: So.

Gary Recipe: As as well as reducing the time necessary to complete a donation. So the combination of these events meant there was much less demand for plasma from the independence and as their contracts to supply of plasma expired the fraction areas, where much more capable of meeting their own requirements, making it harder for the.

Unknown Executive: And as their contract to supply plasma expired, the fractionators were much more capable of meeting their own requirements, making it harder for the independents to find buyers for their plasma, especially if they're not under contract. And, you know, for our purposes, this has led to a lower number of donations as well as lower compensation for the donor.

Gary Recipe: Independents to find buyers for their plasma, especially if they're not under contract and you know for our purposes. This has led to a lower number of donations as well as lower compensation for the donor so that kind of sums up what's going on a little bit.

Unknown Executive: So that kind of, you know, sums up what's going on a little bit.

Unknown Executive: Okay, so the question I would have is, you had I think 16 centers added this in 2024, you're expecting to add 10 to 15 centers in 2025, which I assume are all these independents. Are these new centers competitive takeaways? I mean, you know, if we're getting into a situation where there's an oversupply, what incentive is there for an independent to put up a site? Well, I mean, and first of all, they're not all independents. So, you know, that that makeup of centers is across the board. So, you know, that's their, their, you know, I can't speak to their incentive to throw up new sites, but 10 to 15, we certainly feel that we will see at least those 10 to 15 that will be onboarded.

Speaker Change: Okay. So the question I would have is you had I think 16 centers added. This in 2024, you're expecting to add 10 to 15 centers in 2025, which I assume are all these independents.

Gary Recipe: Are these new centers competitive takeaways I mean.

Gary Recipe: We're getting into a situation where there was an oversupply what incentive is there for an independent to put up a site.

Gary Recipe: Well I mean.

Gary Recipe: First of all they're not all independents.

Gary Recipe: So you know that that makeup of centers is across the board. So you know.

Gary Recipe: That's fair.

Gary Recipe: You know I can't speak to their incentive to throw up new sites, but the 10 to 15, we certainly feel that we will see at least those 10 to 15 that will be on boarded and theres nothing that.

Mark Newcomer: And there's nothing that, you know, to the point I made earlier, I think I mentioned or Jeff mentioned that four of those centers have already gone live this year. So of the 10 to 15, so I don't think we're going to have a problem hitting those numbers. But even if though there's an oversupply, there's still put up, or maybe I'm not misunderstanding. So are these competitive takeaways, Mark? No, they're they're all from our existing client base. Okay, so this is expansion. That's what I'm getting at. I mean, it's a little hard to conceptualize that. All right.

Jeff Baker: The point I made earlier I think I've mentioned are Jeff mentioned that four of those centers have already gone live this year.

Jeff Baker: So of the 10% to 15, so I don't think we're going to have a problem hitting those numbers.

Jeff Baker: But even if though there is an oversupply there still.

Jeff Baker: You know there still.

Jeff Baker: Wanting to put up or maybe I'm not misunderstanding. So are these competitive takeaways mark.

Jeff Baker: No they're all.

Speaker Change: From our existing client base.

Speaker Change: Okay. So this is expansion so that's what I'm getting at I mean, it's it's a little hard to conceptualize that alright, well, they're they're all from ours is there are from our existing customer base and just I mean this is.

Mark Newcomer: Well, they're, they're all from our, they're all from our existing customer base. And just, I mean, look, this is just like anything else with inventory. If you're in retail or whatever, this hopefully is just a temporary phenomenon, they'll work through the industry, and it'll come back the other way. So people that are making the investments today are going to between our customers, where they're opening centers, they may, you know, focus on, you know, smaller towns, or they may focus on colleges, or they may focus on whatever it is. But, you know, it's clearly not going to be the 40 plus centers we had coming out of COVID when everybody, you know, opened a spigot and interest rates were low, and the cost of capital was low, and boom, now the cost of capital has come back up, the industry is rationalizing, and that's kind of what we're getting.

Speaker Change: It's just like anything else with inventory, if if you're in retail or whatever this hopefully it's just a temporary phenomenon that will work through the industry and it'll come back the other way. So people that are making the investments today youre going to benefit from that and people that arent. Then then they're not so and then there's different strategies between our customers where they're opening.

Speaker Change: And centres they may focus on smaller towns or they may spokes oncologists or they may focus on whatever it is but it's clearly not going to be the 40 plus centers, we had coming out of Covid. When everybody you know openness spirketting interest rates were low and the cost of capital was low and but now the cost of capital.

Speaker Change: Come back up the industry is rationalizing and that's kind of what we're getting the good news Gary is that most of our cost and we've said this before you know 50% variable costs in this product. So you know when it de levers.

Mark Newcomer: The good news, Gary, is that most of our costs, and we've said this before, you know, 50% variable costs in this product. So, you know, when it de-levers, we should see the cost drop along with it. And on the revenue side, when that de-levers, the cost, you know, we're not going to, shouldn't be hit as bad as if somebody had high fixed costs infrastructure in a business. So, the cost and the revenues are going to ebb and flow together, I guess is the best way to say it. Okay, that helps.

Speaker Change: We should see this cost drop along with it and are on the revenue side when that when that de levers are the cost yeah, we're not going to it shouldn't be hit as bad as as if somebody had high fixed cost infrastructure in our business. So that the costs and the revenues are going to ebb and flow together I guess is the best way.

Speaker Change: Okay that helps and then in terms of switching to the patient affordability you added 33 programs.

Gary Prestopino: And then in terms of switching to the patient affordability, you added 33 programs. this year or last year. You didn't mention anything about how many you. participate adding this year? I mean, you mentioned what you were going to add on the plasma side, so can you give us any idea of what you think you're going to add this year? The only thing we can say is that we added 14 already that went live in the first quarter. Some of them were teed up at the end of the year, but they went live. I mean, that's pretty much all we're ready to talk about at this point.

This year or last year.

Speaker Change: You didn't mention anything about how many you anticipate.

Speaker Change: We anticipate adding.

Speaker Change: This year I mean, you you talk you mentioned, what you were going to add on the plasma side. So can you give us any idea of what's what do you think you're going to add this year.

Speaker Change: The only thing we can say is that we added 14 are already in there.

Speaker Change: That went live in the in the first quarter.

Speaker Change: There were some of them were teed up at the end of the year, but they went live I mean, that's pretty much all we're ready to talk about at this point yeah. Okay. Yeah, we okay.

Speaker Change: Alright, well certainly give more color to that as the year goes on.

Matthew Turner: I mean, we'll certainly get more color to that as the year goes on, but at this point, I think, you know, representing a 77% increase last year over the prior year, you know, we're trying to target, you know, at least, you know, double numbers again, so we'll be going at the same thing, same pace, I expect. Okay, so if you added 33, and you're going to add 14 in the first quarter 47 over the last 15 months or so, are the majority of those. programs with existing pharmaceutical customers, or are you getting a healthy blend of new pharmaceutical customers coming?

Speaker Change: But at this point I think.

Speaker Change: You know representing a 77% increase last year over the prior year, we're trying to target at least.

Speaker Change: Double numbers again, so we'll be going at the same thing same pace I expect.

Speaker Change: Okay. So if you added 33, and you're Gonna add 14 in the first quarter 47.

Speaker Change: Over the last.

Speaker Change: 15 months or so are the majority of those.

Speaker Change: Programs with existing pharmaceutical come.

Speaker Change: Customers or are you are you getting a healthy blend of new pharmaceutical customers coming on board.

Matthew Turner: Yeah, hi, Gary, this is Matt Turner. I think we're we're getting a healthy blend. We obviously focus heavily on on the farming aspect of what we do. And once we're in with a client and You know, we know they have other business there. They're a portfolio size pharmaceutical manufacturer. We focus heavily on farming there. But, you know, if you were to look across last year, you know, we we took somewhere around 20 percent of all new new drug launches. You know, we we won those programs this year. So far, you know, I think we're we're trending higher than that as far as new drug launches.

Yes, Hi, Gary This is Matt Turner.

Speaker Change: We're getting a healthy blend we obviously focus heavily on the farming aspect of what we do and once were in with a a client and.

Speaker Change: We know they have other business there if there are portfolio size pharmaceutical manufacturer, we focus heavily on farming there but.

Speaker Change: If you were to look across last year.

Speaker Change: We took somewhere around 20% of all new new drug launches.

Speaker Change: We know we won those programs.

Speaker Change: This year. So far you know I think were trending higher than that as far as new drug launches. So.

Matthew Turner: So, you know, and some of those are from brand new pharma companies that this is their first commercial product. And some of them are from, you know, the top 20 Goliath. So I think it's certainly a mix across the board. And we're not we don't have a sole focus on just trying to grow existing business lines. We are heavily invested in continuing to bring on new clients as well as.

Speaker Change: Some of those are from brand new pharma companies that this is their first commercial product and some of them are from the top 20, Goliath. So I think it's certainly a mix.

Speaker Change: Across the board and we're not we don't have a sole focus on just trying to grow existing business lines. We are heavily.

Speaker Change: Adjusted and continuing to bring on new clients as well as the programs.

Gary Prestopino: Okay, thank you. I'll let somebody else Thank you.

Speaker Change: Okay. Thank you I'll, let somebody else go.

Speaker Change: Yeah.

Speaker Change: Thank you. Your next question is coming from Peter Heckmann from D. A Davidson your line is now live.

Peter Heckmann: Next question is coming from Peter Heckman from D.A. Davidson. Your line is now live. Good afternoon, thanks for taking the question. Can you quantify the cash? Pete, we didn't disclose that. What we did disclose is that it is paid out over five years. You know, obviously, we don't have a huge amount of unrestricted cash on our balance sheet. I think, you know, unadjusted, excuse me, adjusted cash, we had about $11.1 million at the end of the year. But we certainly are very cognizant of our cash position. We still have no debt, was able to pay the consideration out of current cash flow, out of our current cash balance.

Peter Heckmann: Hey, good afternoon. Thanks for taking the question I Havent seen the 10-K, yet can you talk can you quantify the cash portion of the purchase price related to gamma.

Speaker Change: P. We didn't disclose that Oh, well, we did disclose is that it is paid out over five years.

Peter Heckmann: You know obviously, we don't have a huge amount of.

Speaker Change: Unrestricted cash on our balance sheet I think.

Speaker Change: Our adjusted excuse me adjusted cash we had about $11 $1 million at the end of the end of the year, but we certainly certainly are very cognizant of our cash position, we still have no debt.

Speaker Change: I was able to pay the consideration out of current cash flow.

Speaker Change: Out of our current cash balance.

Peter Heckmann: and plan on doing that for the next four years.

Speaker Change: And plan on doing that for the next four years. Okay. Okay. So it's the both the cash the cash will be paid out over five years the shares vest over four years and then there's an earn out so.

Unknown Executive: Okay, so both the cash cash will be paid out over five years, the shares Experts. app that they have, the CRM system, some of the other solutions. I guess, where do ability to correct I feel like it's just a skill set. No, we absolutely see existing paths to both sides of the business utilizing the donor, the what we would call the application, the engagement app, the CRM, and the donor management system.

Speaker Change: On the success of the business.

Speaker Change: We can make some calculations around that and then.

Speaker Change: Certainly if it's your expectation that the the app that they have the CRM system some of the other solutions.

Speaker Change: I guess, where do you see do you see direct applicability flexibility to current customers or do you feel like it's just a skill set that you can use to then build new solutions for your customers.

Speaker Change: No, we absolutely see existing paths to both sides of the business utilizing.

Speaker Change: The donor.

Speaker Change: What we would call the application the engagement app, the CRM and the donor management system.

Speaker Change: Okay Alright.

Speaker Change: That's very helpful. And then just just to clarifying it.

Unknown Executive: And then just clarifying the guidance. Well, I wouldn't I wouldn't characterize it like that. I don't I don't look for it to decline significantly. It first quarter will be the highest more than likely, bearing, you know, just with what we loaded in. And then it'll decline in the third and the fourth and the second, third and fourth quarter. I think I mean, looking at my crystal ball, which is, you know, cloudy right now, as we try to figure out what's going to happen with the plasma business. I mean, I think you know, you're kind of looking at three quarters of similar revenue, and then the fourth quarter, you know, maybe maybe seeing the lowest for the year, but it's really hard.

Speaker Change: The guidance for the first quarter just suggest that you know pharma has a very significant first quarter.

Speaker Change: And then and then falls off significantly would you expect it to decline sequentially every quarter in 2035.

Speaker Change: Why wouldn't I wouldn't characterize it like that I don't I don't look for it to decline significantly.

Speaker Change: First quarter will be the highest in more than likely be.

Speaker Change: Barring just with what we loaded in <unk> and then it will decline in the third and the fourth.

Speaker Change: Second third and fourth quarter, I think I mean, looking at my Crystal ball, which is cloudy right now as we try to figure out what's going to happen with the plasma business. I mean, I think you kind of look at it at three quarters of similar revenue and then the fourth quarter.

Speaker Change: Maybe seeing the lowest for the year, but it's really hard.

Unknown Executive: You know, there's patient affordability is so heavily weighted in the relatively speaking in the first quarter versus the fourth quarter. And then we're just dealing with, you know, the plasma trends rolling through the model. So but but patient affordability should, you know, we've already, we've said that it'll at least double when we feel very good about that number.

Speaker Change: Patient affordability so heavily.

Speaker Change: Weighted enough relatively speaking in the first quarter versus the fourth quarter and then we're just dealing with the plasma trends rolling through the model. So.

Speaker Change: But the patient affordability should weave.

Speaker Change: We've already.

Speaker Change: We've said that it will at least double and we feel very good about that number.

Speaker Change: Okay. Okay that helps and then anything notable going on with the other programs I think you called out the payroll card as a as a help but.

Unknown Executive: That helps.

Matthew Lamford: And then anything notable going on. Payroll card as a help, but. a couple initiatives in there. If you're just Matt Lanford, I mean, no, not really. I mean, they're fairly steady programs. They're moving along. We continue to look at other areas to utilize our capabilities. And we will continue to do that going forward to see what else we can bring on.

Speaker Change: A couple of initiatives in there and anything that.

Speaker Change: Popping out as maybe having more potential than you thought.

Matt Lanford: Hey, Matt Lanford.

Matt Lanford: No not really I mean, they're fairly steady programs.

Matt Lanford: They're moving along we continue to look at other areas too.

Matt Lanford: To utilize our capabilities.

Matt Lanford: And we will continue to do that going forward to see what else. We can we can bring on.

Unknown Executive: Okay, great. I appreciate Thank you.

Matt Lanford: Okay, Great I appreciate it.

Matt Lanford: Yeah.

Speaker Change: Thank you as a reminder, that star one to be placed in the question queue. One moment. Please while we poll for further questions.

Kevin: As a reminder, that's star one to be placed in the question... One moment please while we pull for further questions.

Mark Newcomer: We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing. Thank you, Kevin. And thanks everyone for joining today's call.

Speaker Change: We have reached out of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Speaker Change: Yeah.

Speaker Change: Thanks, Kevin.

Speaker Change: And thanks, everyone for joining today's call. We believe 2025 will be a watershed year for pay sign and we're very much looking forward to updating everyone on upcoming calls thank you and have a great day.

Kevin: We believe 2025 will be a watershed year for Paysign and we're very much looking forward to updating everyone on upcoming calls. Thank you and have a great day. Thank you. That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation.

Speaker Change: Thank you that does conclude today's teleconference. You may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.

Speaker Change: Yeah.