Paysign, Inc. (PAYS) - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 30, 2026. Paysign, Inc. is a vertically integrated provider of prepaid card products, processing services, and life science software solutions (Apherion brand). The company operates as a single reporting segment, serving the plasma, pharmaceutical, and corporate incentive markets. As of July 30, 2026, there were 56,462,156 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Revenues | $28.25 million | $19.08 million | $56.29 million | $37.68 million |
| Gross Profit | $17.90 million | $11.76 million | $36.12 million | $23.45 million |
| Gross Margin | 63.3% | 61.6% | 64.2% | 62.2% |
| Net Income | $6.76 million | $1.39 million | $12.20 million | $3.97 million |
| Diluted EPS | $0.11 | $0.02 | $0.20 | $0.07 |
| Operating Cash Flow (YTD) | $20.08 million (2026) vs. $(2.39) million (2025) | |||
| Cash & Restricted Cash | $176.48 million (as of June 30, 2026) | |||
| Total Liabilities | $256.83 million (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 48.1% QoQ and 49.4% YTD. This was driven by an 88.9% increase in Pharma industry revenue (due to 51 net new patient affordability programs) and a 21.4% increase in Plasma industry revenue (market normalization after 2025 inventory levels).
- Profitability: Net income surged 386.9% for the quarter and 206.9% YTD. Operating income improved by 387.7% QoQ.
- Expense Management: Cost of revenues increased 41.4% QoQ, primarily due to higher network fees and call center support costs associated with business growth. SG&A expenses rose 4.3% QoQ but were offset by a one-time $990,000 gain from the reduction of contingent consideration liability.
- Balance Sheet: Accounts receivable increased to $103.17 million (from $72.19 million) due to growth in pass-through claims. Customer card funding liability rose to $148.20 million.
Guidance, Outlook, and Risks
- Outlook: Management believes available cash ($27.37 million unrestricted) and forecasted cash flows are sufficient to sustain operations for the next 24 months. The company plans to continue investing in technology, sales, and cybersecurity.
- Acquisition Update: The contingent consideration ("earn-out") liability related to the March 2025 Gamma Innovation LLC acquisition was reduced to $0 and terminated in June 2026, as revenue targets were not met. This resulted in a $990,000 gain.
- Stock Repurchase: A new $5 million stock repurchase program was authorized on May 8, 2026, expiring May 7, 2029. No shares were repurchased under this plan in Q2 2026.
- Risks:
- Concentration Risk: One pharma customer represented 36% of accounts receivable as of June 30, 2026.
- Liquidity Risk: Significant cash balances are held with a single financial institution, exceeding FDIC insurance limits (though deposit swapping programs are utilized).
- Regulatory/Compliance: Ongoing costs associated with SOX 404(b) readiness.
Investor Verification Checklist
- Customer Concentration: Verify the stability of the single pharma customer representing 36% of receivables.
- Cash Position: Confirm the accessibility of the $149.1 million in restricted cash and the safety of the $27.4 million in unrestricted cash held at the primary bank.
- Gamma Acquisition: Review the terms of the terminated earn-out and the new restricted stock unit agreement with the Gamma principal owner pending shareholder approval.
- Plasma Market Trends: Assess the sustainability of the "normalized growth" in the plasma sector following the 2025 inventory surplus.
- Working Capital: Monitor the trend in accounts receivable days, which increased significantly alongside the growth in pass-through claims.