Paysign — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 reached $30.80 million, a 42.6% increase year-over-year from Q3 2025.
• GAAP net income was $6.74 million ($0.11 per fully diluted share), up 204.1% from $2.22 million ($0.04 per share) in Q3 2025.
• Adjusted EBITDA was $10.98 million, an 118.0% increase from $5.04 million in Q3 2025.
• Gross profit margin improved to 64.7% in Q3 2026 from 56.3% in Q3 2025.
• Operating margin expanded to 23.8% in Q3 2026 from 7.3% in Q3 2025.
• Cost of revenues increased 15.2% to $10.88 million, while total operating expenses rose 19.2% to $12.60 million.
• The company exited the quarter with $34.54 million in unrestricted cash and zero bank debt.
• Restricted cash increased to $201.79 million from $143.92 million at December 31, 2025.
• Total assets were $347.47 million as of September 30, 2026, compared to $276.25 million at December 31, 2025.

Guidance and Future Outlook:

• Confirmed full-year 2026 revenue guidance of $114.0 million to $117.0 million.
• Raised full-year 2026 guidance for Gross Profit Margin to 63.5%–64.5%, Net Income to $23.0 million–$24.0 million, GAAP Diluted EPS to $0.37–$0.38, and Adjusted EBITDA to $38.5 million–$40.0 million.
• Expects to exit 2026 with 190–195 active patient affordability programs and 445–450 plasma centers.
• Anticipates patient affordability growth will continue to drive revenue and margin expansion in 2027.
• Expects a software platform, pending regulatory clearance, to further enhance margins and unlock operating leverage.

Business Segments and Product Lines:

• Pharma revenue increased 109.8% to $16.62 million in Q3 2026, driven by 62 net new patient affordability programs added over the past 12 months, bringing the total to 167 active programs.
• Plasma revenue increased 7.5% to $13.83 million in Q3 2026, with average monthly revenue per center rising to $8,187 from $7,122 in the prior year.
• The plasma segment ended the quarter with 562 centers, a decrease of 33 centers from the previous year.
• Processed claims increased approximately 55% year-over-year.
• Stock compensation expense increased 7.1% to $1.36 million.

Market and Competitive Landscape:

• Third quarter 2026 gross dollar load volume decreased 1.0% and gross spend volume decreased 1.3% compared to Q3 2025.
• The company remains a leading processor in the plasma industry, leveraging insights to develop a software platform for customers.
• Patient affordability is identified as a second source of growth intended to offset volatility in the plasma segment.

Risks and Challenges:

• A plasma customer notified the company of a decision to transition payment processing for 113 centers to another provider by year-end due to a banking relationship.
• The 113 centers generated $11.3 million in trailing 12-month revenue and $5.2 million in gross profit; the estimated fourth-quarter impact is $1.5 million in revenue and $700,000 in gross profit.
• The company remains the processor for the customer's other centers under existing agreements.
• Risks include potential regulatory delays for the new software platform, failure to retain plasma centers, and economic downturns affecting customer demand.

Management Commentary and Tone:

• CEO Mark Newcomer described the quarter as "strong," noting that patient affordability is compounding and driving margin expansion.
• CFO Jeff Baker stated that revenue, gross margin, net income, and Adjusted EBITDA finished above the high end of Q3 guidance.
• Management expressed confidence that the company will exceed its prior full-year profitability outlook despite the anticipated plasma center transition.
• Management highlighted that the patient affordability business has higher operating and profitability margins than the legacy plasma payment processing business.

Other Key Points:

• The company recorded an effective tax rate of 17.8% in Q3 2026, up from 1.4% in Q3 2025, driven by discrete items related to stock price increases.
• The Gamma acquisition contributed to increased depreciation and amortization expenses of $119,000 (5.4% increase).
• A new customer service contact center went live in November 2025, contributing to higher operating costs.
• The company has no bank debt and a strong balance sheet supporting continued investment and growth initiatives.