10-Q: Paysign Q3 2025 Earnings Soar on Pharma Growth, Plasma Centers

Paysign, Inc. reported a significant increase in Q3 2025 net income and revenue, driven by robust growth in its pharma patient affordability programs and expansion in plasma centers.

Summary

• Total revenues for the three months ended September 30, 2025, increased by 41.6% to $21.6 million, and by 38.6% to $59.3 million for the nine months, compared to the prior year periods.
• Net income for the three months ended September 30, 2025, rose 54.2% to $2.2 million, and for the nine months, it increased 153.3% to $6.2 million.
• Pharma industry revenue surged by 141.9% in the third quarter of 2025 and 191.3% for the nine months, primarily due to 39 net new patient affordability programs launched in the past 12 months.
• Plasma industry revenue grew 12.4% in the third quarter of 2025, driven by the addition of 117 net plasma centers, despite a decline in plasma donations and dollars loaded to cards per center as inventory levels normalized.
• Gross profit increased by 43.4% in the third quarter of 2025 and 54.8% for the nine months, with gross margin improving to 56.3% and 60.1% respectively, benefiting from the higher-margin pharma business.
• Adjusted EBITDA for the three months ended September 30, 2025, was $5.0 million, up 78.1%, and $14.5 million for the nine months, up 114.8%.
• Acquired Gamma Innovation LLC on March 19, 2025, for a total preliminary purchase consideration of $15.6 million, expanding technology and market presence in the blood and plasma collection industry.
• Unrestricted cash decreased by $2.8 million to $7.5 million as of September 30, 2025, primarily due to payment timing on pass-through claim reimbursement receivables.
• Ongoing legal proceedings include a settled securities class action and four pending stockholder derivative actions, with a preliminary settlement approval for the derivative actions granted on August 28, 2025, and a final approval hearing scheduled for November 14, 2025.

Sentiment

Score: 8

Explanation: The company demonstrated robust financial growth across key metrics, particularly in its high-margin pharma segment, and made a strategic acquisition to bolster its plasma industry offerings. While unrestricted cash saw a temporary dip due to operational timing, management's confidence in liquidity for the next 24 months is positive. Ongoing legal proceedings, though largely settled or in settlement, remain a minor overhang.

Positives

• Total revenues increased by 41.6% to $21,596,478 for the three months ended September 30, 2025, and by 38.6% to $59,272,980 for the nine months.
• Pharma industry revenue showed exceptional growth, increasing by 141.9% in Q3 2025 and 191.3% for the nine months, driven by 39 new patient affordability programs.
• Net income significantly increased by 54.2% to $2,215,135 in Q3 2025 and by 153.3% to $6,188,996 for the nine months.
• Gross profit margins expanded to 56.3% in Q3 2025 and 60.1% for the nine months, indicating improved profitability and a favorable revenue mix.
• Income from operations surged by 129.3% in Q3 2025 and 888.7% for the nine months, reflecting strong operational leverage.
• Adjusted EBITDA grew substantially by 78.1% to $5,037,962 in Q3 2025 and by 114.8% to $14,512,453 for the nine months.
• The acquisition of Gamma Innovation LLC enhances the company's technology and market presence in the blood and plasma collection industry.
• Gross dollar volume loaded on cards increased to $552 million in Q3 2025 and $1.399 billion for the nine months, indicating strong program usage.
• Management believes available cash on hand, excluding restricted cash, along with forecast revenues and cash flows, will be sufficient to sustain operations for the next twenty-four months.

Negatives

• Plasma revenue per center declined due to normalized plasma inventory levels and reduced donations, despite an increase in the number of plasma centers.
• Operating expenses increased significantly, with compensation and benefits rising by approximately $847,000 in Q3 and $3,366,000 for the nine months, and stock-based compensation increasing by approximately $692,000 in Q3 and $985,000 for the nine months.
• Unrestricted cash decreased by $2,764,160 to $7,529,047 as of September 30, 2025, primarily due to payment timing on pass-through claim reimbursement receivables.
• Other income decreased by $137,049 in Q3 and $314,392 for the nine months, partly due to implied interest expense related to the Gamma acquisition and slightly lower interest rates.

Risks

• Concentration of credit risk exists as cash and restricted cash are primarily held with one financial institution, with approximately $923,023 in excess of federally insured limits as of September 30, 2025.
• A concentration of accounts receivable risk is present, as one pharma patient affordability program customer individually represented 14% of the accounts receivable balance as of September 30, 2025.
• Four stockholder derivative actions are currently pending, alleging violations of the Exchange Act, breach of fiduciary duty, unjust enrichment, waste, and insider trading against certain individual defendants. While a settlement in principle has been reached and preliminarily approved, final approval is pending, and litigation is subject to inherent uncertainties.
• The preparation of financial statements requires management to make estimates and assumptions, and actual results could differ materially from these estimates, potentially affecting reported financial position and results of operations.
• The company is currently evaluating the potential effects of recently issued accounting pronouncements (ASU 2025-06, ASU 2024-03, and ASU 2023-09) on its consolidated financial statements and related disclosures.

Future Outlook

Management plans to continue investing in technology improvements, sales and marketing, cybersecurity, fraud prevention, customer service, and regulatory compliance for the remainder of 2025. The company believes its available cash on hand, excluding restricted cash, along with forecast revenues and cash flows through Q3 2027, will be sufficient to sustain operations for the next twenty-four months. The company also evaluates raising capital to diversify into new market verticals, but believes it can support existing business and expand into new vertical markets using internally generated funds if new capital is not raised.

Management Comments

• We do not anticipate any losses with respect to accounts with balances exceeding federally insured limits.
• Our platform can be seamlessly integrated with our clients' systems.
• Our distinctive positioning allows us to provide end-to-end technologies that securely manage transaction processing, cardholder enrollment, value loading, account management, data and analytics, and customer service.
• Our architecture is known for its cross-platform compatibility, flexibility, and scalability allowing our clients and partners to leverage these advantages for cost savings and revenue opportunities.
• For the remainder of 2025, we plan to continue to invest additional funds in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance.
• From time to time, we evaluate raising capital to enable us to diversify into new market verticals. If we do not raise new capital, we believe that we will still be able to support our existing business and expand into new vertical markets using internally generated funds.
• We believe that our available cash on hand, excluding restricted cash, along with our forecast for revenues and cash flows for the remainder of 2025 and through the third quarter of 2027, will be sufficient to sustain our operations for the next twenty-four months.

Industry Context

Paysign operates in the growing prepaid card market, which has seen significant expansion due to improved technology, convenience, and flexibility, serving both banked and unbanked populations. The company's strong performance in pharma patient affordability programs aligns with broader trends in healthcare cost management and patient support. While the plasma industry segment shows growth in center count, the normalization of plasma inventory levels suggests a maturing market where per-center revenue might stabilize or face pressure, requiring continued focus on efficiency and donor engagement solutions like those acquired through Gamma Innovation LLC.

Corporate Governance

Legal Proceedings

• Securities Class Action: Yilan Shi v. Paysign, Inc. et al., Lorna Chase v. Paysign, Inc. et al., and Smith & Duvall v. Paysign, Inc. et al. (consolidated as In re Paysign, Inc. Securities Litigation). Allegations included violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 related to materially false or misleading statements regarding internal control over financial reporting and financial statements. A settlement of $3,750,000, fully covered by the company's directors-and-officers insurance policy, was preliminarily approved on January 4, 2024, and finally approved on April 17, 2024.
• Stockholder Derivative Actions: Four pending actions (Andrzej Toczek, John K. Gray, Simone Blanchette, and Mo Jeewa) were consolidated and assigned to one judge. Allegations include violations of Section 14(a) and 10(b) of the Exchange Act, breach of fiduciary duty, unjust enrichment, waste, and insider trading. Parties agreed in principle to a settlement on October 4, 2024, with preliminary approval granted on August 28, 2025, and a final approval hearing scheduled for November 14, 2025.

Stakeholder Impact

• Shareholders: Positive impact from strong financial performance, increased net income and EPS, and strategic acquisition. Potential benefit from the stock repurchase program. Uncertainty from ongoing derivative lawsuits, though settlement is in progress.
• Employees: Increased compensation and benefits due to continued hiring and wage inflation. Stock-based compensation for new hires and retention.
• Customers (Pharma): Benefit from expanded pharma patient affordability programs and increased claim processing capabilities.
• Customers (Plasma): Benefit from new plasma centers and enhanced donor engagement solutions from the Gamma acquisition.
• Creditors: Improved financial health and liquidity forecast for 24 months suggest reduced credit risk.

Next Steps

• Continue investing in technology improvements, sales and marketing, cybersecurity, fraud, customer service, and regulatory compliance for the remainder of 2025.
• Complete the final valuation of the Gamma acquisition within the one-year measurement period.
• Monitor the health and soundness of bank relationships.
• Attend the final approval hearing for the derivative settlement scheduled for November 14, 2025.
• Evaluate potential effects of new accounting pronouncements (ASU 2025-06, ASU 2024-03, ASU 2023-09).

Key Dates

Recommendation

Paysign's Q3 2025 results demonstrate robust growth, particularly in the high-margin pharma segment, which is significantly outperforming. The strategic acquisition of Gamma Innovation LLC strengthens its position in the plasma industry, offering future growth avenues. While unrestricted cash saw a temporary dip, the overall financial health, strong profitability metrics (gross profit, Adjusted EBITDA), and management's confidence in future liquidity are compelling. The ongoing legal proceedings, while a concern, are progressing towards settlement, mitigating long-term risk. The company's continued investment in technology and market expansion suggests a strong growth trajectory, making it an attractive 'buy' for investors seeking exposure to the growing prepaid card and patient affordability markets.

Keywords

prepaid cards, payment processing, pharma patient affordability, plasma industry, fintech, corporate incentives, SEC filing, earnings report, Q3 2025, Paysign