Paysign expects $114M-$117M in 2026 revenue while projecting 63.5%-64.5% gross margin

• "Earlier today, we reported our third quarter results, delivering record revenue, operating income and adjusted EBITDA." (Co-Founder, President, CEO & Director Mark Newcomer)
• "One of our customers has informed us that it will be moving the payment processing for 113 centers to another provider with the transition expected to be completed in the fourth quarter." (CEO Newcomer)
• "The quarter's strength was primarily driven by better-than-expected results from our patient affordability business, where revenue more than doubled year-over-year to $16.6 million and claim volume increased approximately 55%." (CEO Newcomer)
• "We expect gross and operating margins to continue to expand as patient affordability becomes a greater part of our revenue mix." (CEO Newcomer)
• "We recently completed in-center testing and submitted the results as part of that process, and we will update you as it progresses." (CEO Newcomer)
• "Revenue, operating margin and net income all finished above the high end of our guidance and operating margin more than tripled to 23.8%." (CFO & Treasurer Jeffery Baker)

Outlook

• "[W]e'll land within our full year 2026 revenue outlook of $114 million to $117 million, but exceed our prior full year margin and profitability outlook even after accounting for the 113 centers that we anticipate transitioning to another provider during the fourth quarter." (CFO Baker)
• "We expect full year gross profit margins of 63.5% to 64.5%, supported by increasing patient affordability revenues." (CFO Baker)
• "We expect GAAP net income of $23 million to $24 million or $0.37 to $0.38 per diluted share." (CFO Baker)
• "We expect adjusted EBITDA of $38.5 million to $40 million." (CFO Baker)
• "We expect to exit the year with 190 to 195 active patient affordability programs and 445 to 450 plasma centers." (CFO Baker)

Financial Results

• The company reported revenue of $30.8 million, net income of $6.7 million (or $0.11 per fully diluted share), and gross margin of 64.7%.
• The company reported patient affordability (pharma) revenue of $16.6 million and plasma revenue of $13.8 million.
• The company reported operating margin of 23.8%, adjusted EBITDA of $11 million (35.7% margin), and income before taxes of $8.2 million.
• The company reported an income tax provision of $1.5 million and an effective tax rate of 17.8%, and said, "The higher rate reflects discrete item adjustments primarily related to the increase in our stock price at September 30, 2026, compared to the same period last year." (CFO Baker)
• The company reported $34.5 million in unrestricted cash and "0 bank debt," and reported restricted cash of $201.8 million.
• "For the fourth quarter, we expect the transition to reduce revenue by $1.5 million and gross profit by $700,000." (CFO Baker)

Q&A

• Gary Prestopino, Barrington Research Associates, Inc., Research Division: "[I]s there enough business out there... that you can replace what the loss of these centers were in terms of the revenue and profitability"? Mark Newcomer: "Yes... there absolutely is enough centers out there for us to replace what we're losing."
• Gary Prestopino, Barrington Research Associates, Inc., Research Division: "[T]here was nothing in the loss of this business that had to do with price"? Mark Newcomer: "Yes, correct."
• Gary Prestopino, Barrington Research Associates, Inc., Research Division: "[I]s there expense reductions that can come along with the fact that this business has been lost"? Jeffery Baker: "[T]here's not a lot of cost to take out, maybe some call center if we -- as we see volumes go back off."
• Jacob Stephan, Lake Street Capital Markets, LLC, Research Division: "[H]ow you're thinking about... future program wins... [and] any other kind of products or solutions that you can cross-sell"? Jeffery Baker: "You don't see a lot of programs move in the first half of the year"; Matthew Turner: "[A]ny time we look at building a product, we try to make it as available to all of our clients as possible."
• Jacob Stephan, Lake Street Capital Markets, LLC, Research Division: "[A]ny update from the FDA"? Matthew Turner: "We don't have a time line at this point."
• Jon Hickman, Ladenburg Thalmann & Co. Inc., Research Division: "Has the seasonality in your pharma business... [been] changing"? Matthew Turner: "[A]s we keep onboarding more and more programs, it does hide the seasonality."
• Jon Hickman, Ladenburg Thalmann & Co. Inc., Research Division: "[T]he FDA approval, is there something they're concerned about"? Mark Newcomer: "I mean it's something we really don't have control over. It's a question-and-answer period."
• Jon Hickman, Ladenburg Thalmann & Co. Inc., Research Division: "Is this like your second or third round of questions"? Mark Newcomer: "I really can't speak to that at this point."
• Gary Prestopino, Barrington Research Associates, Inc., Research Division: "[T]he level of interest... is pretty high"? Mark Newcomer: "There is a lot of interest... both in the U.S. and the European Union market"; and on ramp timing post-approval: "I think that we will have a quicker ramp than expected."

Sentiment Analysis

• Slightly negative (analysts): questions repeatedly pressed on durability and replacement of the 113 plasma centers ("replace what the loss of these centers were") and the lack of an FDA timeline ("I think if we would have talked last year, you would have expected approval by now").
• Slightly positive (management): prepared remarks emphasized momentum and operating leverage ("record revenue, operating income and adjusted EBITDA"), while FDA-related answers were constrained ("something we really don't have control over"; "I really can't speak to that at this point").
• Versus previous quarter: Q3 included more defensive phrasing around FDA timing ("something we really don't have control over") and a new near-term headwind disclosure (a customer moving 113 centers), while maintaining confidence language on the model ("We expect gross and operating margins to continue to expand").

Quarter-over-Quarter Comparison

• Guidance framing shifted from Q2’s explicit raise to Q3’s reaffirmation on revenue with higher profitability expectations: "we're raising our outlook for the full year today" (CEO Newcomer, Q2) vs. "we'll land within our full year 2026 revenue outlook of $114 million to $117 million, but exceed our prior full year margin and profitability outlook" (CFO Baker, Q3).
• The plasma narrative moved from recovery to customer churn: Q2 described plasma as having "recovered from the high inventory levels" (CFO Baker, Q2), while Q3 disclosed a customer transition of 113 centers expected to be completed in Q4.
• Patient affordability scale expanded quarter-to-quarter, with active programs discussed at 148 exiting Q2 and 167 exiting Q3, alongside year-end expectations reiterated in Q3 for 190 to 195 programs.
• Analyst focus in Q3 concentrated on (1) replacing plasma centers and cost elasticity, and (2) delayed FDA timing for Apherion, with multiple follow-ups seeking specificity.

Risks and Concerns

• "[O]ne of our customers has informed us that it will be moving the payment processing for 113 centers to another provider" and "we expect the transition to reduce revenue by $1.5 million and gross profit by $700,000" in Q4. (CEO Newcomer; CFO Baker)
• "The donor management system remains under regulatory review" and "We don't have a time line at this point" regarding regulator feedback for Apherion’s BECS donor management system. (CEO Newcomer; President of Patient Affordability Matthew Turner)
• "Gross margins expanded 840 basis points to 64.7%, as patient affordability became a larger share of our revenue mix" alongside "We expect gross and operating margins to continue to expand" as that mix shifts further. (CEO Newcomer)

Final Takeaway

Paysign described Q3 as a record quarter driven by patient affordability growth and mix-driven margin expansion, while disclosing an expected Q4 headwind from a plasma customer moving 113 centers. Management reaffirmed full-year revenue of $114 million to $117 million, raised its margin and profitability expectations, and pointed to program momentum and operating leverage as key supports, while providing no timeline on the ongoing regulatory review for Apherion.

Read the full Earnings Call Transcript

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