PaySign, Inc. (PAYS) Earnings

Management highlights

- Overall Financial and Strategic Performance * Q1 2026 marked the strongest start to a year in PaySign's history, with net income up 110% YoY to $5.4 million, adjusted EBITDA up 113% YoY to $10.6 million, and operating margins expanding 10.4% YoY to 23.8%, demonstrating significant operating leverage as the business scales. * Gross profit margin expanded to 65% from 62.9% YoY, driven by the higher mix of higher-margin patient affordability revenue. Total operating expenses grew only 25.5% YoY, well below revenue growth, further highlighting operating leverage. * The company exited the quarter with $20.5 million in unrestricted cash and zero bank debt. - Patient Affordability Segment Operational Updates * 4 new programs were launched in Q1, bringing total active programs at quarter end to 135. Management expects to exceed the 55 net program additions achieved in 2025, with a robust pipeline of new opportunities. * The segment delivered over $540 million in patient financial assistance in Q1, up from ~$320 million YoY, reflecting growing scale and demand for services supporting access to high-cost branded therapies. * The company's dynamic business rules technology helps pharmaceutical partners navigate copay maximizer and accumulator programs, delivering differentiated value to clients and patients. * The 2026 Assembia Specialty Pharmacy Summit generated over 50 industry meetings, closed on-site new business, and reinforced management confidence in the demand environment for the rest of the year. - Plasma Segment Operational Updates * Recent advances in plasmapheresis hardware have unlocked excess capacity at existing centers, driving efficiency improvements. Large clients have consolidated operations by closing 19 low-performing centers in May 2026; management expects minimal impact as donors typically transition to nearby open centers. * PaySign sponsored the 2026 International Plasma Protein Congress in Milan, where the company made meaningful progress on its SaaS solution for plasma collection, including discussions of direct software integration with plasmapheresis device manufacturers to eliminate manual steps and reduce implementation friction. * Management views Europe and Asia as significant long-term expansion opportunities for the company's blood and plasma collection SaaS solutions.

Guidance

- Full-year 2026 revenue guidance is maintained at $106.5 million to $110.5 million, representing 30% to 35% YoY growth. Gross profit margin guidance is maintained at 60% to 62%. - Full-year 2026 net income guidance is maintained at $13 million to $16 million ($0.21 to $0.26 per diluted share), and adjusted EBITDA guidance is maintained at $30 million to $33 million ($0.49 to $0.53 per diluted share). - Following Q1 results that exceeded guidance across all income statement lines, management is increasingly confident in achieving the upper end of the 2026 full-year guidance ranges. - Management expects 147 to 150 active patient affordability programs by the end of Q2 2026, and expects active plasma center count to decline to 555 to 560 by end of Q2 following the May 2026 center closures, with no material financial impact expected. - Seasonal trends (higher patient affordability revenue in Q1, lower plasma revenue in Q1 that builds through the year) are unchanged and fully incorporated into full-year guidance.

Segment performance

Total company revenue for Q1 2026 grew 50.8% year-over-year (YoY) to $28 million, exceeding prior guidance. 1. Patient Affordability (Pharma): Revenue grew 81.9% YoY to $15.7 million. For the first time, this segment became PaySign's largest revenue contributor, accounting for 56.1% of total Q1 2026 revenue. Processed claim volume increased 49% YoY, driven by 45 net new programs launched in the prior 12 months. 2. Plasma Donor Compensation: Revenue grew 24.9% YoY to $11.7 million, accounting for 41.8% of total Q1 2026 revenue. Average monthly revenue per center increased to $6,671 from $6,517 YoY, and average loads per center increased YoY for the first time since the 2024 industry inventory correction. The segment exited the quarter with 573 active centers, 89 more than Q1 2025 but 22 fewer than the end of 2025 due to client sales and closures of low-performing centers.

Risks & headwinds

- Forward-looking statements are inherently uncertain, and actual results may differ materially from guidance due to factors disclosed in recent SEC filings. - Industry-wide seasonal operational constraints in Q1 (related to annual plan year transitions, formulary changes, and deductible resets) could create implementation headwinds for new programs. - The plasma industry is still recovering from the inventory correction that began in 2024, though early indicators suggest the overhang has passed. - Client consolidation and closure of low-performing plasma centers could create unanticipated revenue disruption if donors do not transition to nearby centers as expected. - New SaaS product development and FDA approval processes carry inherent uncertainty around launch timing and revenue generation.

Analyst Q&A

• Q: What is driving management confidence in exceeding 2025's 55 net patient affordability program additions, what is the split between new and existing client programs, and does PaySign have enough operational capacity to support this growth? /

  A: The current pipeline is roughly 50% new clients and 50% additional programs from existing clients, with no one-time event driving the strength. This growth is the result of the scalable platform PaySign has built over time. Management confirms existing IT systems are robust enough to handle projected growth, and the company will hire additional account management staff as needed to support incremental programs. The outcome of hitting program targets remains unchanged for 2026.

• Q: What are the competitive advantages of PaySign's integrated plasma platform, and does any competitor have a comparable set of technological capabilities? /

  A: No other competitors have built a full integrated ecosystem matching PaySign's platform, which combines the donor app, CRM, and data analysis modules that all communicate with each other. Direct integration with plasmapheresis hardware reduces operational friction, eliminates manual error, simplifies implementation, and improves donor engagement for collection centers, creating a clear step up from existing industry solutions. This differentiation has been highlighted as a game changer by industry participants.

• Q: Why does adjusted EBITDA conversion of incremental revenue drop from Q1's ~60% rate in the full year guidance, and is this driven by a shift in business mix? /

  A: The drop in projected full-year conversion is purely a function of seasonal and mix shift, as patient affordability (which has higher margins) has peak revenue in Q1 due to annual deductible resets, and claims volume moderates through the rest of the year. Lower-margin plasma revenue grows sequentially through the year, creating an expected mix shift that reduces overall full-year margin. No unplanned incremental spending beyond normal growth is baked into guidance, and the original guidance framework remains unchanged.

• Q: PaySign has strong unrestricted cash levels with no major obligations; how is management planning to allocate this cash, and were there any share repurchases in Q1? /

  A: The only outstanding material cash obligation is $6 million remaining in founder acquisition payments for Gamma, paid out in annual installments over the next three years. There were no share repurchases in Q1. Management is holding cash to build the company's balance sheet, and is evaluating future uses including acquisitions and potential return of capital to shareholders, with no immediate plans announced.