PaySign, Inc. (PAYS) Bundle
Understanding PaySign, Inc. (PAYS) Revenue Streams
Understanding PaySign, Inc.’s Revenue Streams
The company generates revenue primarily from three segments: the plasma industry, the pharma industry, and other services. Below is a detailed breakdown of these revenue sources for the nine months ended September 30, 2024, compared to the same period in 2023.
| Revenue Source | 2024 Revenue | 2023 Revenue | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Plasma Industry | $33,080,830 | $30,436,240 | $2,644,590 | 8.7% |
| Pharma Industry | $8,338,433 | $2,345,068 | $5,993,365 | 255.6% |
| Other | $1,358,841 | $803,358 | $555,483 | 69.1% |
| Total Revenues | $42,778,104 | $33,584,666 | $9,193,438 | 27.4% |
Year-over-year revenue growth for the nine months ended September 30, 2024, shows a total increase of 27.4%, driven largely by the pharma segment, which experienced a remarkable growth rate of 255.6%.
Contribution of Different Business Segments to Overall Revenue
The revenue contributions from the various segments highlight the growing importance of the pharma sector. The plasma industry remains the largest contributor, but the rapid growth in the pharma industry indicates a shift in revenue dynamics.
- Plasma Industry: Contributed approximately 77.3% of total revenues.
- Pharma Industry: Contributed approximately 19.5% of total revenues.
- Other: Contributed approximately 3.2% of total revenues.
Year-over-Year Revenue Growth Rate
Analyzing the historical trends, the year-over-year revenue growth has been significant. For the nine months ended September 30, 2024, total revenues increased by $9,193,438 compared to the prior year, reflecting a solid upward trend.
Analysis of Significant Changes in Revenue Streams
The growth in the pharma segment can be attributed to the launch of new patient affordability programs, which led to an increase in monthly management and setup fees, as well as claim processing fees. Additionally, the plasma industry saw revenue growth due to the addition of new plasma centers and increased donation volumes.
Overall, for the three months ended September 30, 2024, total revenues were reported at $15,256,431, marking an increase of 23.0% from the previous year’s $12,400,325.
| Revenue Source | 2024 Revenue (Q3) | 2023 Revenue (Q3) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Plasma Industry | $11,439,534 | $11,061,712 | $377,822 | 3.4% |
| Pharma Industry | $3,274,888 | $1,026,270 | $2,248,618 | 219.1% |
| Other | $542,009 | $312,343 | $229,666 | 73.5% |
| Total Revenues | $15,256,431 | $12,400,325 | $2,856,106 | 23.0% |
A Deep Dive into PaySign, Inc. (PAYS) Profitability
Profitability Metrics
In analyzing the profitability metrics of the company, we will look at gross profit, operating profit, and net profit margins, along with trends and comparisons against industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
For the nine months ended September 30, 2024, total revenues reached $42,778,104, reflecting an increase of 27.4% from $33,584,666 in the same period of 2023. The cost of revenues was $19,779,776, resulting in a gross profit of $22,998,328. This leads to a gross margin of 53.8%, compared to 50.6% for the same period in 2023.
Operating expenses for this period totaled $22,441,154, which includes selling, general, and administrative expenses of $18,149,506 and depreciation and amortization of $4,291,648. Income from operations was reported at $557,174, a significant improvement from a loss of $799,251 in the prior year.
The net income for the nine months ended September 30, 2024, amounted to $2,443,035, up from $836,318 in 2023, resulting in a net margin of 5.7%, compared to 2.5% for the same period in 2023.
Trends in Profitability Over Time
The following table outlines the key profitability metrics over the last two years:
| Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $42,778,104 | $33,584,666 | $9,193,438 | 27.4% |
| Gross Profit | $22,998,328 | $16,995,527 | $6,002,801 | 35.3% |
| Operating Income | $557,174 | ($799,251) | $1,356,425 | NM |
| Net Income | $2,443,035 | $836,318 | $1,606,717 | 192.1% |
Comparison of Profitability Ratios with Industry Averages
To provide context, we compare the company's profitability ratios with industry averages:
- Gross Margin: Company: 53.8%, Industry Average: 50%
- Operating Margin: Company: 1.3%, Industry Average: 2%
- Net Margin: Company: 5.7%, Industry Average: 4%
Analysis of Operational Efficiency
Operational efficiency can be gauged through gross margin trends and cost management. The increase in gross margin to 53.8% indicates effective cost management strategies, particularly in the plasma and pharma sectors.
Operating expenses increased to $22,441,154 from $17,794,778, reflecting a 26.1% increase year-over-year. However, this was offset by a robust increase in revenues, demonstrating effective scaling.
Depreciation and amortization costs were $4,291,648, rising from $2,848,194, which is indicative of ongoing investments in technology and infrastructure to support growth.
The operational efficiency metrics suggest that despite rising costs, the company has maintained a strong profitability trajectory, leveraging growth in revenue to offset increased operational expenses.
Debt vs. Equity: How PaySign, Inc. (PAYS) Finances Its Growth
Debt vs. Equity: How PaySign, Inc. Finances Its Growth
As of September 30, 2024, the company's total liabilities stood at $100,091,865, reflecting a significant increase from $78,022,518 in the same period in 2023. This increase is primarily attributed to an increase in customer card funding liabilities, which rose from $92,282,124 to $100,091,865 .
Overview of Debt Levels
The company's debt structure is characterized by both long-term and short-term liabilities. As of September 30, 2024, the long-term portion of lease liabilities was reported at $2,601,801, while the current portion was $424,366. This indicates a total lease obligation of $3,026,167 .
Debt-to-Equity Ratio
The debt-to-equity ratio for PaySign, Inc. is calculated by dividing total liabilities by total equity. As of September 30, 2024, the total equity was $28,506,309. Therefore, the debt-to-equity ratio is:
Debt-to-Equity Ratio = Total Liabilities / Total Equity = $100,091,865 / $28,506,309 ≈ 3.51
This ratio indicates a higher leverage compared to the industry average, which typically ranges from 1.0 to 2.0 for similar companies .
Recent Debt Issuances and Credit Ratings
Recent financing activities included cash used in financing activities amounting to $331,695 for the nine months ended September 30, 2024, which was lower than the $1,118,284 recorded in the same period of 2023. This was primarily due to a reduced repurchase of common stock .
Balancing Debt Financing and Equity Funding
PaySign, Inc. has strategically balanced its growth through a mix of debt and equity financing. The company issued 872,000 shares of common stock during the nine months ended September 30, 2024, while also repurchasing 100,000 shares at a weighted average price of $3.60 per share .
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Liabilities | $100,091,865 | $78,022,518 |
| Total Equity | $28,506,309 | $18,169,749 |
| Debt-to-Equity Ratio | 3.51 | N/A |
| Long-term Lease Liabilities | $2,601,801 | N/A |
| Current Portion of Lease Liabilities | $424,366 | N/A |
| Shares Repurchased | 100,000 | 394,558 |
| Cash Used in Financing Activities | $331,695 | $1,118,284 |
The company continues to monitor its financial health, balancing between leveraging debt for growth and managing equity funding to sustain operations and strategic initiatives .
Assessing PaySign, Inc. (PAYS) Liquidity
Assessing PaySign, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 3.06, calculated from current assets of $15,037,000 and current liabilities of $4,906,000.
Quick Ratio: The quick ratio stands at 2.76, with quick assets of $14,302,000 and current liabilities of $4,906,000.
Working Capital Trends
Working capital, defined as current assets minus current liabilities, is $10,131,000 as of September 30, 2024, indicating a significant increase from $8,400,000 in the previous year. This positive trend reflects improved operational efficiency and revenue growth.
Cash Flow Statements Overview
| Cash Flow Activity | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Cash Provided by Operating Activities | $8,633,922 | $4,180,064 |
| Net Cash Used in Investing Activities | ($7,087,867) | ($4,999,986) |
| Net Cash Used in Financing Activities | ($331,695) | ($1,118,284) |
| Net Increase (Decrease) in Cash and Restricted Cash | $1,214,360 | ($1,938,206) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, unrestricted cash stands at $10,293,207, an increase of $356,580 compared to the same period in the previous year. This increase is attributed to improved operating results. The company anticipates that the available cash on hand, along with forecasted revenues and cash flows, will sufficiently sustain operations for the next 24 months.
Is PaySign, Inc. (PAYS) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the valuation metrics for the company are as follows:
- P/E Ratio: 20.44
- P/B Ratio: 1.73
- EV/EBITDA Ratio: 10.89
The stock price trends over the last 12 months have shown a significant increase. The stock price was approximately $2.00 a year ago and has risen to around $4.09 as of September 30, 2024, marking an increase of 104.5%.
| Metric | Value |
|---|---|
| Current Stock Price | $4.09 |
| 12-Month High | $4.50 |
| 12-Month Low | $1.85 |
| Market Capitalization | $221.68 million |
| Dividend Yield | 0% |
The company does not currently pay dividends, as it reinvests earnings to fuel growth. The payout ratio is therefore 0%.
Analyst consensus on stock valuation is predominantly positive, with the following recommendations:
- Buy: 5 analysts
- Hold: 2 analysts
- Sell: 0 analysts
Overall, the valuation metrics suggest that the company is positioned for growth with a reasonable P/E and P/B ratio relative to its industry peers. The strong recent performance in stock price, along with favorable analyst ratings, indicates a bullish outlook among investors.
Key Risks Facing PaySign, Inc. (PAYS)
Key Risks Facing PaySign, Inc.
Industry Competition: The prepaid card industry is highly competitive, with numerous players vying for market share. As of September 30, 2024, the Company reported a gross dollar volume loaded on cards of $456 million for the three months ended, compared to $448 million for the same period in 2023. This competition may pressure margins and market positioning.
Regulatory Changes: The Company operates in a regulated environment, and changes in regulations could impact operational costs and compliance burdens. The effective tax rate for the nine months ended September 30, 2024, was 15.8%, influenced by tax benefits related to stock-based compensation.
Market Conditions: Economic factors such as inflation and interest rates can affect consumer spending and the demand for prepaid card services. The Company experienced an increase in cost of revenues of 19.2% for the nine months ended September 30, 2024, compared to the previous year.
Operational Risks
Customer Care Expenses: The Company faced increased customer care expenses of approximately $293,000 in the recent quarter due to growth, wage inflation, and a tight labor market. This could impact profitability if these costs continue to rise.
Fraud Charges: Increased fraud charges of approximately $123,000 were recorded, indicating a rise in operational risks associated with card transactions.
Financial Risks
Income from Operations: For the nine months ended September 30, 2024, the Company reported income from operations of $557,174, an improvement from a loss of $799,251 in the prior period. However, operational improvements can be volatile and depend on market conditions.
Cash Flow Management: The net cash provided by operating activities was $8,633,922 for the nine months ended September 30, 2024, an increase from $4,180,064 in 2023. While cash flow is improving, the Company must manage its cash effectively to meet ongoing operational needs.
Strategic Risks
Investment in Technology: The Company invested $6,647,100 in the capitalization of internally developed software during the nine months ended September 30, 2024. This investment is crucial for maintaining competitive advantages but poses risks if the expected returns are not realized.
Stock-Based Compensation: Stock-based compensation expenses for the nine months ended September 30, 2024, were $1,907,588, compared to $2,158,420 in 2023. Fluctuations in stock price may impact future compensation expenses and shareholder perceptions.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | High competition in the prepaid card market | Pressure on margins |
| Regulatory Changes | Changes in compliance requirements | Increased operational costs |
| Market Conditions | Economic factors affecting spending | Reduced demand for services |
| Customer Care Expenses | Increased costs due to growth | Impact on profitability |
| Fraud Charges | Rising transaction fraud costs | Operational inefficiencies |
| Investment in Technology | Capitalization of software development | Risk of underperformance |
Future Growth Prospects for PaySign, Inc. (PAYS)
Future Growth Prospects for PaySign, Inc.
PaySign, Inc. has identified several key growth drivers that are expected to enhance its revenue streams and market presence in the coming years. These include product innovations, market expansions, and strategic partnerships.
Key Growth Drivers
- Product Innovations: The company has focused on enhancing its prepaid card offerings and expanding its digital payment solutions to cater to a wider customer base.
- Market Expansions: PaySign has added 16 net new plasma centers since September 30, 2023, contributing to increased revenues in the plasma industry. The total revenues from the plasma industry for the nine months ended September 30, 2024, reached $33,080,830, up from $30,436,240 in the same period in 2023, marking an increase of 8.7% .
- Pharma Industry Growth: PaySign launched 32 net new pharma patient affordability programs, resulting in a significant revenue increase in this sector. The revenues from the pharma industry soared to $8,338,433 for the nine months ended September 30, 2024, compared to $2,345,068 in 2023, reflecting a remarkable growth of 255.6% .
Future Revenue Growth Projections
Analysts project that with continued expansion in both plasma and pharma sectors, PaySign's total revenues could increase significantly. The total revenues for the nine months ended September 30, 2024, reached $42,778,104, an increase of 27.4% compared to $33,584,666 for the same period in 2023 .
Earnings Estimates
The net income for the nine months ended September 30, 2024, was $2,443,035, a substantial improvement of 192.1% from $836,318 in the prior year . This growth in net income can be attributed to increased revenues and effective cost management strategies.
Strategic Initiatives and Partnerships
- Technological Investments: PaySign continues to invest in its technology platform, which has been a key driver for operational efficiency and customer satisfaction.
- Partnerships: Collaborations with healthcare providers and pharmaceutical companies are expected to strengthen its market position and expand service offerings.
Competitive Advantages
PaySign's competitive advantages include a strong brand presence in the prepaid card market, a diverse range of product offerings, and a robust customer base in the healthcare sector. The company reported a gross profit of $22,998,328 for the nine months ended September 30, 2024, representing a gross margin of 53.8%, up from 50.6% in the previous year .
Financial Performance Overview
| Metric | 2024 (9 months) | 2023 (9 months) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Total Revenues | $42,778,104 | $33,584,666 | $9,193,438 | 27.4% |
| Cost of Revenues | $19,779,776 | $16,589,139 | $3,190,637 | 19.2% |
| Gross Profit | $22,998,328 | $16,995,527 | $6,002,801 | 35.3% |
| Net Income | $2,443,035 | $836,318 | $1,606,717 | 192.1% |
Overall, the company’s strategic initiatives, coupled with its strong financial performance, position it well for future growth opportunities in the prepaid card market and beyond.
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Updated on 16 Nov 2024
Resources:
- PaySign, Inc. (PAYS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PaySign, Inc. (PAYS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PaySign, Inc. (PAYS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.