Paysign's Q3 Net Income Jumps 54% on Strong Pharma Growth

TL;DR

**PAYS is crushing it with pharma, buy the dip if you can get it.**

AI Summary

Paysign, Inc. (PAYS) reported a significant increase in net income and total revenues for the three and nine months ended September 30, 2025. For the three months, net income rose to $2,215,135 from $1,436,837 in the prior year, a 54.1% increase. Total revenues for the quarter increased by 41.6% to $21,596,478 from $15,256,431, driven primarily by a 141.8% surge in Pharma industry revenue to $7,920,604. For the nine months, net income more than doubled to $6,188,996 from $2,443,035, and total revenues grew by 38.6% to $59,272,980 from $42,778,104. A key business change was the acquisition of Gamma Innovation LLC on March 19, 2025, which resulted in $4,487,637 in goodwill and contributed to a substantial increase in intangible assets to $23,341,906 from $12,239,717 at December 31, 2024. The company faces concentration of credit risk with cash held primarily at one financial institution, exceeding federally insured limits by $923,023 as of September 30, 2025, though a deposit swapping program mitigates some of this risk. Strategic outlook appears positive with growth in the pharma segment and continued investment in internally developed software, with $5,734,468 capitalized in the nine months ended September 30, 2025.

Why It Matters

Paysign's robust revenue and net income growth, particularly in the pharma segment, signals strong execution and market penetration in a high-growth sector, which is crucial for investors seeking expansion. The acquisition of Gamma Innovation LLC and significant investment in internally developed software suggest a strategic focus on innovation and expanding service offerings, potentially enhancing its competitive position against other payment processors. For employees, this growth could mean increased job security and opportunities. Customers in the pharmaceutical industry benefit from Paysign's specialized payment solutions, while the broader market sees a fintech player successfully diversifying its revenue streams beyond its traditional plasma industry base.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant concentration of credit risk, with $923,023 in cash exceeding federally insured limits at one financial institution as of September 30, 2025. Additionally, one pharma patient affordability program customer represented 14% of accounts receivable, indicating customer concentration risk. While a deposit swapping program is in place, these concentrations still present potential vulnerabilities.

Analyst Insight

Investors should consider Paysign's strong growth in the pharma segment as a key driver for future performance. Monitor the integration of Gamma Innovation LLC and the impact of internally developed software on profitability. Evaluate the company's efforts to diversify its cash holdings and customer base to mitigate identified concentration risks.

Financial Highlights

debt To Equity

3.58

revenue

$59,272,980

operating Margin

9.3%

total Assets

$209,509,085

total Debt

$149,755,828

net Income

$6,188,996

eps

$0.10

gross Margin

60.1%

cash Position

$7,529,047

revenue Growth

+38.6%

Revenue Breakdown

Key Numbers

• $2.2M — Net Income (Q3 2025) (Increased 54.1% from $1.4M in Q3 2024)
• $6.2M — Net Income (YTD 2025) (Increased 153.3% from $2.4M in YTD 2024)
• $21.6M — Total Revenues (Q3 2025) (Increased 41.6% from $15.3M in Q3 2024)
• $59.3M — Total Revenues (YTD 2025) (Increased 38.6% from $42.8M in YTD 2024)
• $7.9M — Pharma Industry Revenue (Q3 2025) (Increased 141.8% from $3.3M in Q3 2024)
• $24.3M — Pharma Industry Revenue (YTD 2025) (Increased 191.3% from $8.3M in YTD 2024)
• $4.5M — Goodwill (Resulted from Gamma Innovation LLC acquisition on March 19, 2025)
• $923K — Uninsured Cash Balance (Cash in excess of FDIC limits at one financial institution as of September 30, 2025)
• 14% — Accounts Receivable Concentration (One pharma customer represented 14% of accounts receivable as of September 30, 2025)
• $5.7M — Capitalized Software Costs (Internally developed software costs capitalized for nine months ended September 30, 2025)

Key Players & Entities

• Paysign, Inc. (company) — registrant
• Gamma Innovation LLC (company) — acquired company
• Nasdaq Stock Market LLC (regulator) — exchange where PAYS trades
• Securities and Exchange Commission (regulator) — regulatory body for 10-Q filing
• Nevada (person) — state of incorporation and headquarters
• $2,215,135 (dollar_amount) — net income for three months ended September 30, 2025
• $6,188,996 (dollar_amount) — net income for nine months ended September 30, 2025
• $21,596,478 (dollar_amount) — total revenues for three months ended September 30, 2025
• $59,272,980 (dollar_amount) — total revenues for nine months ended September 30, 2025
• $4,487,637 (dollar_amount) — goodwill from Gamma Innovation LLC acquisition

FAQ

Risk Factors

• Concentration of Credit Risk [medium — financial]: As of September 30, 2025, the company held cash exceeding federally insured limits by $923,023 at a single financial institution. While a deposit swapping program is in place, this concentration exposes the company to potential losses if that institution fails.
• Customer Concentration [medium — market]: One pharma customer represented 14% of accounts receivable as of September 30, 2025. The loss of this significant customer could materially impact revenue and cash flow.
• Integration of Acquisitions [medium — operational]: The acquisition of Gamma Innovation LLC on March 19, 2025, resulted in $4,487,637 of goodwill. Failure to successfully integrate this acquisition and realize its expected synergies could lead to impairment charges and negatively affect financial performance.
• Dependence on Key Personnel [low — operational]: While not explicitly detailed in this 10-Q excerpt, companies of this size often rely on key management and technical personnel. The loss of such individuals could disrupt operations and strategic initiatives.
• Compliance in Pharma Sector [medium — regulatory]: The significant growth in the pharma industry revenue suggests increased exposure to regulatory scrutiny within that sector. Changes in healthcare regulations or compliance failures could adversely affect the company's operations and profitability.

Industry Context

Paysign operates in the dynamic payment processing and prepaid card industry, which is characterized by rapid technological advancements and increasing demand for digital payment solutions. The company also has a significant presence in the pharmaceutical sector, providing patient affordability solutions, an area experiencing growth due to healthcare costs and evolving patient support programs. Competition is intense, with established players and emerging fintech companies vying for market share.

Regulatory Implications

The company's operations, particularly in the pharma sector, are subject to various regulations, including those related to data privacy, financial transactions, and healthcare compliance. Any changes in these regulations or failure to adhere to them could result in fines, legal challenges, and reputational damage.

What Investors Should Do

1. Monitor the continued growth and integration of the Pharma segment, as it is the primary driver of recent revenue acceleration.
2. Assess the company's strategy for managing credit risk associated with its cash holdings, particularly the effectiveness of its deposit swapping program.
3. Evaluate the long-term impact of capitalized software development costs on future revenue generation and profitability.
4. Observe any further acquisitions or strategic partnerships that could accelerate growth or expand market reach.

Key Dates

• 2025-03-19: Acquisition of Gamma Innovation LLC — Added $4,487,637 in goodwill and contributed to increased intangible assets, indicating strategic expansion.
• 2025-09-30: End of Q3 and Nine Months Reporting Period — Period for which financial results are reported, showing significant revenue and net income growth.
• 2025-09-30: Uninsured Cash Balance Identified — Highlighted a concentration of credit risk with $923,023 in cash exceeding FDIC limits.

Glossary

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (Represents the premium paid for the acquisition of Gamma Innovation LLC, indicating expected future economic benefits.)

Intangible assets, net

Assets that lack physical substance but have value, such as patents, copyrights, trademarks, and customer lists. 'Net' implies accumulated amortization. (Significant increase to $23,341,906 from $12,239,717 indicates investment in acquired intellectual property or other non-physical assets.)

Customer card funding

Represents funds provided by customers or partners to facilitate prepaid card transactions. (A significant liability, indicating the scale of the company's prepaid card operations.)

Capitalization of internally developed software

Costs incurred in developing software that are recorded as an asset on the balance sheet rather than expensed immediately. (The company capitalized $5,734,468 in nine months, showing investment in its technology platform.)

Operating lease right-of-use asset

An asset representing the right to use an underlying leased asset for the lease term under an operating lease. (Increased significantly to $5,935,797, reflecting new lease agreements, likely for office space or equipment.)

Restricted cash

Cash that is not available for general use by the company because it is pledged as collateral or set aside for a specific purpose. (A substantial portion of the company's cash balance ($111,022,839), often related to customer card funding or regulatory requirements.)

Year-Over-Year Comparison

Compared to the prior year, Paysign has demonstrated robust growth. Total revenues increased by 38.6% year-to-date to $59.3 million, while net income more than doubled to $6.2 million. This performance is largely attributed to a significant surge in Pharma industry revenue, which grew by 191.3% year-to-date. The balance sheet reflects the impact of the Gamma Innovation LLC acquisition, with a substantial increase in goodwill and intangible assets. Operating expenses have also risen, but at a slower pace than revenue, leading to improved profitability and operating margins.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share PAYS The Nasdaq S
• $250,000 — ion ("FDIC") insurance on deposits over $250,000. Under this program, deposit networks d

Filing Documents

• paysign_i10q-093025.htm (10-Q) — 742KB
• paysign_ex3101.htm (EX-31.1) — 8KB
• paysign_ex3102.htm (EX-31.2) — 8KB
• paysign_ex3201.htm (EX-32.1) — 3KB
• paysign_ex3202.htm (EX-32.2) — 3KB
• 0001683168-25-008281.txt ( ) — 4161KB
• pays-20250930.xsd (EX-101.SCH) — 30KB
• pays-20250930_cal.xml (EX-101.CAL) — 43KB
• pays-20250930_def.xml (EX-101.DEF) — 125KB
• pays-20250930_lab.xml (EX-101.LAB) — 284KB
• pays-20250930_pre.xml (EX-101.PRE) — 242KB
• paysign_i10q-093025_htm.xml (XML) — 507KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 29

Controls and Procedures

Item 4. Controls and Procedures 29

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 30

Risk Factors

Item 1A. Risk Factors 31

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31

Other Information

Item 5. Other Information 32

Exhibits

Item 6. Exhibits 32

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. PAYSIGN, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 (Unaudited) December 31, 2024 (Audited) ASSETS Current assets Cash $ 7,529,047 $ 10,766,982 Restricted cash 111,022,839 111,576,204 Accounts receivable, net 49,644,417 32,639,242 Other receivables 651,294 1,606,276 Prepaid expenses and other current assets 2,456,060 2,247,929 Total current assets 171,303,657 158,836,633 Fixed assets, net 1,451,605 1,157,975 Intangible assets, net 23,341,906 12,239,717 Goodwill 4,487,637 – Operating lease right-of-use asset 5,935,797 2,792,922 Deferred tax asset, net 2,988,483 4,000,950 Total assets $ 209,509,085 $ 179,028,197 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 39,441,663 $ 34,330,217 Customer card funding 110,360,889 111,328,270 Operating lease liability, current portion 583,773 448,008 Other liabilities, current portion 1,728,852 – Total current liabilities 152,115,177 146,106,495 Operating lease liability, long-term portion 5,495,452 2,480,070 Other liabilities, long-term portion 6,140,651 – Total liabilities 163,751,280 148,586,565 Commitments and contingencies (Note 9) – Stockholders' equity Preferred stock: $ 0.001 par value; 25,000,000 shares authorized; none issued and outstanding – – Common stock; $ 0.001 par value; 150,000,000 shares authorized, 55,977,596 and 54,358,382 issued at September 30, 2025 and December 31, 2024, respectively 55,978 54,358 Additional paid-in capital 34,133,548 24,632,205 Treasury stock at cost, 934,708 and 834,708 shares, respectively ( 2,148,715 ) ( 1,772,929 ) Retained earnings 13,716,994 7,527,998 Total stockholders' equity 45,757,805 30,441,632 Total liabilities and stockholders' equity $ 209,509,085 $ 179,028,197 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 3 PAYSIGN, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues Plasma industry $ 12,860,478 $ 11,439,534 $ 33,014,282 $ 33,080,830 Pharma industry 7,920,604 3,274,888 24,293,163 8,338,433 Other 815,396 542,009 1,965,535 1,358,841 Total revenues 21,596,478 15,256,431 59,272,980 42,778,104 Cost of revenues 9,446,089 6,783,117 23,676,598 19,779,776 Gross profit 12,150,389 8,473,314 35,596,382 22,998,328 Operating expenses Selling, general and administrative 8,378,018 6,217,844 23,976,238 18,149,506 Depreciation and amortization 2,190,420 1,565,621 6,111,520 4,291,648 Total operating expenses 10,568,438 7,783,465 30,087,758 22,441,154 Income from operations 1,581,951 689,849 5,508,624 557,174 Other income Interest income, net 663,666 800,715 2,031,024 2,345,416 Income before income tax provision 2,245,617 1,490,564 7,539,648 2,902,590 Income tax provision 30,482 53,727 1,350,652 459,555 Net income $ 2,215,135 $ 1,436,837 $ 6,188,996 $ 2,443,035 Net income per share Basic $ 0.04 $ 0.03 $ 0.11 $ 0.05 Diluted $ 0.04 $ 0.03 $ 0.10 $ 0.04 Weighted average common shares Basic 54,797,527 53,450,613 54,205,002 53,102,454 Diluted 61,770,520 56,051,960 58,955,421 55,613,026 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 4 PAYSIGN, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) Common Stock Additional Paid-in Treasury Stock Retained Total Stockholders' Shares Amount Capital Shares Amount Earnings Equity Balance, December 31, 2024 54,358,382 $ 54,358 $ 24,632,205 ( 834,708 ) $ ( 1,772,929 ) $ 7,527,998 $ 30,441,632 Stock issued upon vesting of restricted stock 724,000 724 ( 724 ) – – – – Stock-based compensation – – 672,318 – – – 672,318 Repurchase of common stock – – – ( 100,000 ) ( 375,786 ) – ( 375,786 ) Issuance of stock in business combination – – 5,950,000 – – – 5,950,000 Net income – – – – – 2,586,100 2,586,100 Balance, March 31, 2025 55,082,382 55,082 31,253,799 ( 934,708 ) ( 2,148,715 ) 10,114,098 39,274,264 Stock issued upon vesting of restricted stock 86,000 86 ( 86 ) – – – – Exercise of stock options 177,414 178 591,356 – – – 591,534 Stock-based compensation – – 954,400 – – – 954,400 Net income – – – – – 1,387,761 1,387,761 Balance, June 30, 2025 55,345,796 55,346 32,799,469 ( 934,708 ) ( 2,148,715 ) 11,501,859 42,207,959 Stock issued upon vesting of restricted stock 603,000 603 ( 603 ) – – – – Exercise of stock options 28,800 29 69,091 – – – 69,120 Stock-based compensation – – 1,265,591 – – – 1,265,591 Net income – – – – – 2,215,135 2,215,135 Balance, September 30, 2025 55,977,596 $ 55,978 $ 34,133,548 ( 934,708 ) $ ( 2,148,715 ) $ 13,716,994 $ 45,757,805 Common Stock Additional Paid-in Treasury Stock Retained Total Stockholders' Shares Amount Capital Shares Amount Earnings Equity Balance, December 31, 2023 53,452,382 $ 53,452 $ 21,999,722 ( 698,008 ) $ ( 1,277,884 ) $ 3,712,091 $ 24,487,381 Stock issued upon vesting of restricted stock 214,000 214 ( 214 ) – – – – Stock-based compensation – – 663,951 – – – 66

financial statements

financial statements. 5 PAYSIGN, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 6,188,996 $ 2,443,035 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 2,892,309 1,907,588 Depreciation and amortization 6,111,520 4,291,648 Noncash lease expense 385,529 314,414 Deferred income taxes, net 1,012,467 425,777 Changes in operating assets and liabilities: Accounts receivable ( 17,005,175 ) ( 16,574,530 ) Other receivables 954,982 ( 150,404 ) Prepaid expenses and other current assets ( 208,131 ) ( 379,893 ) Accounts payable and accrued liabilities 5,372,312 8,832,156 Operating lease liability ( 377,257 ) ( 285,610 ) Customer card funding ( 967,381 ) 7,809,741 Net cash provided by operating activities 4,360,171 8,633,922 Cash flows from investing activities: Purchase of fixed assets ( 618,469 ) ( 318,167 ) Capitalization of internally developed software ( 5,734,468 ) ( 6,647,100 ) Purchase of intangible assets ( 83,402 ) ( 122,600 ) Net assets acquired in business combination ( 2,000,000 ) – Net cash used in investing activities ( 8,436,339 ) ( 7,087,867 ) Cash flows from financing activities: Repurchase of common stock ( 375,786 ) ( 360,495 ) Proceeds from exercise of options 660,654 28,800 Net cash provided by (used in) financing activities 284,868 ( 331,695 ) Net change in cash and restricted cash ( 3,791,300 ) 1,214,360 Cash and restricted cash, beginning of period 122,343,186 109,351,013 Cash and restricted cash, end of period $ 118,551,886 $ 110,565,373 Cash and restricted cash reconciliation: Cash $ 7,529,047 $ 10,293,207 Restricted cash 111,022,839 100,272,166 Total cash and restricted cash $ 118,551,886 $ 110,565,373 Supplemental cash flow information: Non-cash as

financial statements

financial statements. 6 PAYSIGN, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES The foregoing unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all the disclosures required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2024. In the opinion of management, the unaudited interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expec

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