PAYS - Earnings call transcript Q2 2022

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Operator

Hello and welcome to the PaySign Second Quarter 2022 Earnings Conference Call.

As a reminder, this conference is being recorded. This call may include comments that may be deemed to be forward-looking statements under the federal securities laws and the company intends that such forward-looking statements be subject to the safe harbor created thereby. All statements other than statements of fact included on this call are forward-looking statements. Such forward-looking statements include, among others, that our unrestricted cash, anticipated revenues and profits will be sufficient to sustain operations for the next 12 months; that the expected total revenue, gross profit margin, operating expenses, depreciation and amortization, stock-based compensation, adjusted EBITDA, plasma revenues, new plasma center additions, pharma revenues and new pharma co-pay customer additions for 2022 meet our expectations; that the company will continue to post year-over-year improvements; that the company's growth prospects in plasma, pharma and other prepaid business materialize; and that the company will continue to be affected by COVID-19-related labor shortages. such statements that by to could from reflected these and risks, differ that those factors other cause by caution are important qualified uncertainties materially We statements. forward-looking actual results rate products as could among as include, our further as and services downturn to current that the Such reduce of could base have in economy, COVID-XX demand factors and periods; including others, future the well measures cash our result which continue customer government inability adverse business, and our stimulus growth a on effect in financial variance a and profitability flows. condition, an our association XX, a XX-K Operating business; breach by applicable rules us industry security protracted in in cost standards comply failure litigation in with a environment, expose ban to set highly a the or other to regulations, for business our year card laws, in us forth or data that affecting factors regulated December other our risk partners changes XXXX. and credit Form liability and could ended regulations, company the the federal result made whether new otherwise. a extent by events obligation or future no any or securities information, required today, as publicly laws, statements of to revise to Except update undertakes based necessarily adjusted is by presented any call with and neither accordance similarly financial prepared measures standardized companies. conference nor financial GAAP EBITDA, in methodology to by not an includes This on comments measure titled also in other about prepared accordance non-GAAP prescribed a that is comparable alternative measures to call to turn the to pleasure my over now It’s Mr. Officer. Executive Chief Newcomer, Mark Please go ahead.

Mark Newcomer

Chief Officer, Mark Newcomer, this me XXXX quarter PaySign's is Jeff am also everyone Chief Baker, I and with and afternoon, Good to call. second welcome Executive Financial Officer; our afternoon. earnings

since with XX% $X.X $X.X have quarter times. say finished was pre-COVID revenue second QX we to a Earlier million, experienced haven't that over quarter of million an delighted I'm of or we today, our optimism First, announced that level XXXX. second the we increase

of added XX the the centers with plasma The late all were maturity new majority utilizing XXX quarter services. added foremost, and stages ended centers of very of contribution. a quarter. total our with these in centers, very We transition various being we First centers revenue this little quarter in

an participated plasma the in currently RFP do of to informed us two were U.S. in provide In the selected supplier. by largest which be we the collection early company sponsored one not companies any we services. that Additionally, a July, we

expect in We begin early to client new onboarding this XXXX.

for live also entrants space. plasma initial the see center continue these new during entrants. with new the in three collection we quarter, And to of went We this

clients plasma As segment. aggressive their our continued continue prospects this growth remain to execute in our growth for on we strategies, confident

new three Looking at and loaded and as spend donations XX.X% year in over quarter increased for we quarter. the last as we in the XX average cards four the compensation. remainder centers quarter, an of on second month centers of onboard over XX increase to number last XX.X% was total to year, up expect seeing as Funds up donor our trends Throughout to XXXX. to continue of an plasma see improve the additional a each load well

new first Adding the The quarter. growth, to last our from increased XX.X% up in last launched over we quarter. spend year second and quarter was volume one plasma affordability XX.X% patient program

mature programs market volumes increase they claims medical benefit share. Our continue increase support and products the and in pharmaceutical to pharmacy month-to-month as

devote as industry margin. selling resources and to accumulators such to co-pay continue We and development spread addressing business issues,

new data-driven to are insights and providing future program will helping drive have solutions successful current been to and confident clients, we deep to conversations in We that lead wins.

RFPs for hub partners pharmaceutical our and to to and additional offered new business, quarter participate second direct through opportunities in both manufacturers. bids submit The

client. strong pipeline past remainder with earnings signed a launch to processing an track into of We and on year payroll does only this Spentra, and the client space additional provider. we this live for I offering this wage the We a that we Mastercard. our expand launch, connect am next. pleased earned product a card into on to our new the with we are call payroll are say Not with programs deal have mentioned direct but that now year with completed this

allows to clients our connection additional our choice network Our offerings. to Mastercard greater payments adding us an to by offer

not general contactless connection, brand. incentive and gift, Mastercard Additionally, purpose now corporate also with enables our only Mastercard support for payroll this EMV, on tokenization the reloadable, products. support enabled are we and The to debit but connection

by bring. connection are this the excited very that new will opportunities We with Mastercard

have Daniel Spence; him previously may resignation and Dan the Director, original in Lanford, announcement Board we of instrumental are enough the technical earlier Board one leadership X-K his PaySign's you company seen the and was to of He in President of getting COO. we the direction. founders of Matthew with Finally, appointment was of Director, the CTO. the thank today and the and held for position and where can't us today

I the Australia. has that, more quarter. at you over are PaySign over are Mr. you familiar our industry. to to for Board. of With here with time our spend to I'll Matt within been And him give encourage it the on years www.paysign.com. Jeff in the wishes payments with Matt XX best organization in to his than not for experience Everyone more force driving his insight decision of Lanford the and a more website to pass the years three at visit if his has financials and highly Matt's to We future welcome our baton supportive We of bio, hand endeavors. you luck family in

Jeff Baker

Good you, Thank everyone. Mark. afternoon,

the and the of pleased XXXX. per foundation we second improved the from second of quarter operating loss XXXX. increased all built the quarter donation As year-over-year. we It from into number and revenue, adjusted are wallet, results Mark with may clear and negatively XX% again, pointed Once cardholder's XXXX operations, transactional and out, EBITDA center our over loads remainder EBITDA, is have average for trends of be XX% environment the of quarter the inflationary impacting as first XXXX

second that to expenses and centers quickly added with donation half during plasma in quarter these our the of number offset the were very ramped were we revenue little as this investment. June, large contribution up the expected cash usage centers of than higher Given

for As $X,XXX, deal Moss be our $XX,XXX, Adams the bringing of quarter accounting June, a auditing to plasma versus an $X.X Increased an With an that XXXX. million to XX quarter available firm all of a a We over and experience number revenue press six the $X at December year million our also last of an per July, result, public total was ending positive profit $X.XX with margin we of end public our well-regarded $X,XXX monthly will total we to fiscal XX, centers marks QX registered percentage great XXX since XX%. points. payment was EBITDA in was details versus additional to month average the and X for provided as to Of will the revenue a were $X was year. in which of monthly increase plasma mark $X,XXX million, revenue To of engaged $X.X companies. donation of is centers a consecutive during center Pharma for and financial million stock XXXX. quarter that tomorrow, revenue the adds XX.X%, release XX%. quarter million in hit operating these firm that impact get the the the highlights million. the independent have simply XX% we diluted I center XX.X% The read-through $XXX,XXX, centers note, or quarter, back XXX. of XXXX. adjusted was expenses up pleased amount, decrease Gross forward, end year XXXX the per second plasma per plasma revenues. depressed per LLP increase will revenue center revenues announce the Moss our fifth for or was $X,XXX. the versus And company's per over Adams of ago of eclipsing of increased XX-Q at of relative revenue $X.X the to XX.X% EBITDA, the I centers $XXX,XXX during EBITDA. am added period. have going XX%. was July accounting in versus $X.X was second Total SG&A the Adjusted the XXX with of of centers compensation XX.X% ending share Also added increase centers quarter other

to related cash Regarding the We cash pharma I of health and X with million the and company. our new decline vendors. $XXX,XXX decrease is of by timing quarter to mentioned ending upfront centers unrestricted from costs in which of driven the debt mainly required was balance. a quarter the The payables fourth $X.X launch donation exited our our

versus end Our quarter. current was of the restricted adjusted excludes the cash, which X.Xx at fourth ratio X.Xx

is about Now if to at of with our abate. with estimated to up donation revenue to upside Mexican $XX.XX plasma make at year. XX% $XX.XX to of the our We market million to the turning XXXX grow nationals range centers high Plasma donate million XXXX. to your coming over that some attention labor expect the allowed range for total remainder guidance of the around end adjusted headwinds now the revenues of and tourist guidance our tight for being of visas XX.X% total

and sequential million XX%, expected and QX are XXXX revenue $X higher adjusted EBITDA pressures. to mid-November. expenses, XXXX to we slightly continue expected pharma to entertainment the in two people million. $X.X in be margins expected profit $XX.X being mentioned $XX above be EBITDA while to between inflationary and QX higher increases insurance, amortization pharma total million programs compensation prepaid to million ending gross technology Full million is to to approximately in XXXX Within operating the travel despite prepaid approximately QX with to end and XX% costs and expected approximately QX is We invest $X.X expect and approximately experience Adjusted depreciation the with is expected as expenses revenue approximately total expenses. operating stock-based be $X.X $XX.X be be be due and to to of other XXXX in operating million and total be than million programs year

to bank operating turn to our Lastly, I back be would with due we provision balances and that, the to interest narrowing With like XXXX. over expect interest answers. questions increasing higher moderator approximately call for and the $XX,XXX rates, losses tax and to for income

Operator

from Research. Instructions] question Gary is today first from [Operator Barrington Our coming Prestopino

Gary Prestopino

you to solid this the the go what is, business the do could here. or I to enabling new plasma Jeff, bring And these would on up putting through get results. you ability in maybe that [ph] and drive and table I you doing what you're new guess that's question phenomenal that? are do awards What's good Really to you industry have I that's centers Don allowing to you you to the you going to this? giving do mean

Mark Newcomer

in difference on. no period Yes, have really happy that. Primarily, for lot been participating have value-added I'd that a time brought be with clients the is that to a of There's RFPs. had long the address same providers and services we're of

So different, as to we they've business. things they the the to That the may beginning added services, with relationship. a product, service be back of winning since value-added we've has doing our uptime dealing of I that consistently with our product and one think, strive with additional features gone products. cash just functionalities rewards, our ways new the dealing very been cards, discount combined with really our we're as us add And that such number same the -- and of a to pharmacy long that's of

Gary Prestopino

I or it the share time, in I was the now positive. favor shifting believe business? one [ph] are of something you of cusp the that's mean, like in that Okay, market XX.XX at at the...

Mark Newcomer

believe we to the that the plasma with have of We quarter, this premier provider become marketplace. Yes. services

Gary Prestopino

still… are And you

Jeff Baker

And Gary, on the...

Gary Prestopino

mean Jeff. didn’t ahead, to… I’m sorry, go I’m sorry, I

Jeff Baker

last from I just the based just say actual the to was to with on out going public there, No, quarter. we've information this that's on XX% numbers, gone XX% over

Gary Prestopino

XX%. to Okay,

Okay.

Jeff Baker

Over XX%, yes.

Gary Prestopino

Over to XX%. greater than XX%

of of the you centers. didn’t your you centers if these alluding -- function of on -- relatively to you of these keep said the of flat increase you with most you new then of was QX would cost the hadn’t new or cost And that to a is QX, really goods -- goods on that if fact in fine. That’s expenses cost the Is or -- are that come board? have kind goods Okay. had able been

Jeff Baker

centers What as some that were June. been they launched given we that happened, have wouldn't moving were higher. had They XXth the is these Gary, numbers QX. have in the Remember, high there pieces that QX would to of been as caused all high. guidance, probably be But after

issued there. all side was a the sheet. less to get -- the card the FedEx to a it, And So and on centers. a inventory, balance of let's had placed so of say, how XX get a those that sheet then had card, of then cost donate that We one Every the sales. of -- that balance person that to off over and cards new came We XX-plus hit donation card these was quarter. centers, days moves a the every to card. that out centers, in cost than when of And expense

little a quarter. the hitting expense and revenue of So we P&L lot had this very

XX%, being we've guidance profits So given around gross between year XX%, there. full to those

Gary Prestopino

center that to does from your more system, start is the when sites per average mature reaching So the center generate? revenue your that it time connected a

Jeff Baker

in. bleed a is There

thing novo this to talking get novo would in as to we up our were quarter, there best six and get de center. the of to for back at of envelope you're what a nine centers months is call to numbers de healthier So centers least the more

of pretty already centers Some active. were these

when the in little through for a July month for actually run up number $X in through guidance over average read all so with was we if centers per revenue I revenue then you the over $X,XXX numbers of X,XXX, saw we July center gave of the revenue brought on, million. our over And And that's plasma July. the those why that

Operator

from coming Ladenburg from next Your question Hickman is Jon Thalman.

Jon Hickman

you around in comment legislation Looks inflation most Medicare provisions negotiate everything the your Or legislation, health stay this changing to maybe anticipate there's going like now really has Could for guys. And same? can to reduced turning care are with quarter. companies And this do to things and new nothing and you but say what to Nice some notably, that is business anything co-pays? do with Is pharma pharma pricing. anything for going you legislation? it.

Matthew Turner

PaySign. with here Turner Matt is This

on our funded not beneficiaries excluded So are should impact from have assistance. that utilizing co-pay an business. Government

So that at business model shouldn't our have any on impact all.

us going industry [ph]. that able services a concerns such to I of could positive pharmaceutical is the nothing or think most other business are recent that AMCAP out to as our business. of being some increase we're on necessarily drive have this the to manufacturers removed any there 'XX either threat But and provide to legislation number impact is in a additional

Jon Hickman

back questioner. revenue kind per there -- Okay. target Is you would to that there previous Is like I some wanted reach go center the to to that’s of optimal?

Jeff Baker

was always Well, border come the center give I remaining Mexican the I in prepared revenue headwinds few the mean, are not that said I mean, visa pre-COVID, there, But tourist we've remarks, the average as my over mentioned $X,XXX. we nationals the across with out up a being as and to two long have per able being plasma. one still

do Before COVID, they able that. to were

that. do to able not they're Now

some And centers those consider I of what supercenters. were would

center donations through people's the just saw being up. having plasma average plasma activity, by inflationary arms. where business are see out had the are revenue like there, pressures in where the the on cardholders that get increase labor pushing per the we we people But of they can't plasma And that's I they the I look that enough centers mean, like every force per impacted obviously other to of are the and definitely they out pressures. other mean sequential there still is inflationary seeing get then a in driving factor, negatively our So issues we lot just the center.

are imbalance dollar I the in being increased supply these centers that plasma marketplace. -- really per that, because demand coupled a offering individuals that So and there’s are load think -- with are

on we So a one Hopefully, of of not -- $X,XXX. on with factor. But another. $X,XXX factors north plateau it’s just love be There’s pushing multiple a one to lot constant yes, would reaching that we’re it basis. over center per

So the rest out. how we’ll the year turns see of

Operator

from Prestopino from a follow-up is next question Research. Your Gary Barrington

Gary Prestopino

you revenue in I statistics but of center them There’s Jeff, what here. -- per your can couldn’t can copy down go we plasma QX? lot a was back?

Jeff Baker

can X,XXX -- my yes. I Yes, total if it was find $X,XXX QX notes in here, yes, XXXX. for The

Gary Prestopino

was $X,XXX. QX? What for it

Jeff Baker

was QX $X,XXX.

Gary Prestopino

just it $X,XXX July? jumped then up And to in Okay.

Jeff Baker

Over $X,XXX, Correct. yes.

Gary Prestopino

Greater than $X,XXX.

Okay.

Jeff Baker

with more Again, I on last in enough had you you of all days centers coming the denominator the literally month, mean not -- in those in have and numerator. XX really the the

Gary Prestopino

No. you out play -- the on I'm said just and an -- that is get donate the to what economy that's the going trying what's a plasma an shifts. the with flows I it's ebbs thesis comment idea that of interesting more should here. people which and to about driving mean

definitely the seeing are through coming like you something So that doors.

these and it? the on does basis? mature, a all your -- Like border they though What you X% these about is right? percentage As smaller much centers of business become new whole, southern should add revenue in the before centers on it came a

Jeff Baker

It a of It no, in X% was more XX% was. not the basis. X% revenues. XX% our revenue, It was to on closer It -- locations. a location revenues. was per It of center on no, was to

Gary Prestopino

All right. Okay.

the right. where comes in. that’s All impact So

-- obviously, as sites. pipeline looks and adding pretty as your So good you’re far

say. the things improving step So safe as you to mean, really I overall back, for are company,

Jeff Baker

and very the XXXX. And optimistic foundation pretty that that company we've for Like And I XXXX start and plasma mentioned a We're opportunity. Mark XXXX. should said, we that's laid the boarding good good about RFP were future. a awarded in

Gary Prestopino

one down. I listen. Yes. get trying a didn’t thing and write write to That’s was I to chance

that is boarding in you’ve Mark? going XXXX, So are start won an to RFP that? what That’s those and

Mark Newcomer

correct. That's

Gary Prestopino

Are many Okay. is sites say how liberty or… at that to you

Mark Newcomer

currently we're not mean larger obviously, the of -- I'm servicing. that I it's two companies one

it's mean, us mean don't you over going I But right to what know that's up to I So that could XXX. now. come probably

centers be to at going know how time to point many do we allocated in not are So this us.

be my speculation would it part. So purely on

Jeff Baker

were we didn't It's these We fortunately, to the numbers very -- that hopeful guidance just to we what awarded the It some quarter, akin this that was And received. happened we were know it our We Gary. portion. of initial into and going a gave. built we sites we get timing. were large

Operator

reached the or comments. floor of like to question-and-answer turn back for session. our any end over further I'd We the closing

Mark Newcomer

we next we I thank in strides making will conference. thank great we Again, see for want And all you towards we’re that today’s to participation to you. everybody want and their feel recovery. quarter. Thank you

Operator

That teleconference today's you. does and Thank webcast. conclude

time your your have you wonderful a today. thank disconnect lines this day. at may and We You for participation

PaySign (PAYS) 10 Aug 222022 Q2 Earnings call transcript