8-K: Paysign Reports Strong 2024 Results and Acquires Gamma Innovation to Enhance Technology Solutions

Paysign announces a 23.5% revenue increase for 2024, driven by growth in patient affordability programs, and strategically acquires Gamma Innovation to bolster its technology offerings.

Summary

• Paysign reported full-year 2024 total revenues of $58.38 million, a 23.5% increase from 2023.
• Net income for 2024 was $3.82 million, or $0.07 per diluted share, compared to $6.46 million, or $0.12 per diluted share, in 2023.
• Adjusted EBITDA for 2024 increased by 43.3% to $9.62 million, with diluted Adjusted EBITDA per share at $0.17.
• The company added 33 net patient affordability programs in 2024, ending the year with 76 active programs, resulting in a 212.3% increase in pharma revenue.
• Paysign exited the year with $10.77 million in unrestricted cash and no debt, while repurchasing 136,700 shares of common stock for $495 thousand.
• For the fourth quarter of 2024, total revenues were $15.61 million, a 14.0% increase from the same period in 2023.
• Fourth quarter net income was $1.37 million, or $0.02 per diluted share, compared to $5.62 million, or $0.10 per diluted share, in the fourth quarter of 2023, which included a one-time benefit.
• Adjusted EBITDA for the fourth quarter of 2024 was $2.86 million, a 14.3% increase from $2.51 million in the fourth quarter of 2023.
• Paysign acquired the assets of Gamma Innovation LLC to enhance its capabilities in plasma donor and pharmaceutical patient engagement technologies.
• For full-year 2025, Paysign expects total revenues to be in the range of $68.5 million to $70.0 million, reflecting year-over-year growth of 17.5% to 20.0%.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong revenue growth, strategic acquisitions, and a healthy balance sheet. While there are some challenges in the plasma business, the overall tone is optimistic and forward-looking.

Positives

• Significant revenue growth of 23.5% for the full year 2024.
• Strong growth in Adjusted EBITDA, increasing by 43.3% for the full year 2024.
• Successful expansion of patient affordability programs, leading to a substantial increase in pharma revenue.
• Strategic acquisition of Gamma Innovation to enhance technology offerings.
• Healthy balance sheet with $10.77 million in unrestricted cash and no debt.

Negatives

• Net income decreased in both the fourth quarter and full year 2024 compared to the previous year.
• Plasma revenue decreased by 6.2% in the fourth quarter of 2024.
• Gross dollar load volume and gross spend volume decreased in the fourth quarter of 2024.
• Average revenue per plasma center per month decreased in the fourth quarter of 2024, from $8,297 to $7,510.

Risks

• The company acknowledges a near-term slowdown in the plasma business due to an industry-wide oversupply.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
• The company operates in a highly regulated environment, which could impact its business.
• A data security breach could expose the company to liability and costly litigation.
• The company's future performance is subject to various economic and market conditions.

Future Outlook

Paysign expects total revenues for full-year 2025 to be in the range of $68.5 million to $70.0 million, reflecting year-over-year growth of 17.5% to 20.0%. Pharma revenue is expected to grow at least 100% year-over-year. Net income is expected to be approximately break-even, or $0.00 per diluted share, and adjusted EBITDA to be in the range of $12.5 million and $13.5 million, or $0.22 to $0.24 per diluted share.

Management Comments

• 2024 marked another year of outstanding growth and strategic advancement for Paysign, demonstrated by our strong revenue increase of 23.5%, an impressive 400 basis point improvement in gross margins and an equally impressive 230 basis point improvement in adjusted EBITDA margins said Mark Newcomer, President & CEO of Paysign.
• We are particularly pleased with the exceptional performance of our patient affordability business, which grew revenues by 214.5% over the prior year and concluded 2024 with 76 active programs, reflecting a net addition of 33 programs said Mark Newcomer, President & CEO of Paysign.
• Looking ahead, we are thrilled to embark on a new chapter for Paysign, driven by our strategic acquisition of the assets of Gamma Innovation, LLC, announced earlier today said Mark Newcomer, President & CEO of Paysign.
• In 2025 we expect that percentage to significantly increase again to at least 37.0% of our revenue said Jeff Baker, Paysign CFO.
• As we have started to experience a near-term slowdown in our plasma business due to an industry-wide oversupply of plasma, we will continue to utilize the cash flow from this business to invest in our patient affordability business and engage in impactful acquisitions like the one we announced this morning, said Jeff Baker, Paysign CFO.

Industry Context

Paysign's focus on patient affordability programs aligns with the broader trend of increasing demand for healthcare payment solutions. The acquisition of Gamma Innovation positions Paysign to better compete in the growing market for technology-driven solutions in the plasma and pharmaceutical industries.

Comparison to Industry Standards

• Paysign's revenue growth of 23.5% significantly outpaces the average growth rate for the prepaid card and payment processing industry.
• Companies like Green Dot and Netspend, which also operate in the prepaid card space, have shown slower growth rates in recent years.
• The 43.3% increase in Adjusted EBITDA indicates strong operational efficiency compared to industry peers.
• The focus on patient affordability programs differentiates Paysign from competitors primarily focused on general-purpose reloadable cards or corporate payments.

Management Changes

Stakeholder Impact

• Shareholders can expect continued growth and strategic advancements.
• Employees will benefit from the company's expansion and new opportunities.
• Customers will gain access to enhanced technology solutions and services.
• Suppliers may see increased demand due to the company's growth.

Next Steps

• Integrate Gamma Innovation's technologies into Paysign's existing platform.
• Continue to invest in the patient affordability business.
• Provide an update on acquisition-related operating expense assumptions and anticipated synergies on the Q2 2025 earnings call.

Key Dates

Keywords

Paysign, financial results, patient affordability, plasma, revenue, EBITDA, acquisition, Gamma Innovation, prepaid card programs, digital banking