Paysign (PAYS) Q3 2026 earnings review
Paysign's drug programs double, but a plasma client pulls 113 centers
Paysign, which runs payment cards for plasma donors and drug-company copay programs, grew fast enough in drugs to absorb a major customer loss in plasma. Third-quarter revenue rose 43% from a year ago to $31 million, and operating margin more than tripled to 24%. Chief executive Mark Newcomer kept the full-year revenue outlook unchanged and raised the profit plan, even though a plasma client is moving 113 of Paysign's 562 centers to a rival.
| Revenue | $30.8M +42.6% from a year ago |
|---|---|
| Pharma revenue | $16.6M +110% from a year ago (54% of total) |
| Operating margin | 23.8% 7.3% a year ago |
| Full-year profit outlook | Raised revenue held at $114–117M despite losing 113 plasma centers |
⚖️ Verdict: 🟢 Bullish
The story got better because drug programs proved they can carry the business and management restored the key number needed to track them. Newcomer disclosed that quarterly revenue per drug program jumped 32% to $99,524, lifting profit enough to raise the full-year earnings plan past the $1.5 million fourth-quarter hit from the departing plasma centers. The bad news: those 113 centers brought in $11.3 million over the past year, so their exit leaves a nearly $10 million hole to fill in 2027.
The question now is whether drug-program additions can outrun the lost plasma revenue in 2027 without another customer defection. One view is that adding 60 drug programs a year at nearly $100,000 a quarter easily replaces the lost centers; the other is that mature drug programs do not grow and plasma banks can take more locations. Fourth-quarter program launches and the first 2027 outlook will decide it.
🐂 Bull Case
Per-Program Drug Revenue Disclosed Again, Up 32%
Paysign's patient affordability business runs payment programs that help patients cover out-of-pocket drug costs. After withholding per-program revenue for three quarters, chief executive Mark Newcomer reported that the company "increased the quarterly revenue per program by approximately 32% to $99,524." Drug-company revenue more than doubled from a year ago to $16.6 million, making up 54% of total sales.
The fintech provider added 19 net programs during the third quarter to reach 167 active programs, up 59% from a year ago. Processed claims rose about 55%. Because revenue grew nearly twice as fast as the program count, newer programs and added services are bringing in more money per launch. Management expects to end the year with 190 to 195 active programs, which by our math implies 23 to 28 net additions in the fourth quarter.
What to watch: fourth-quarter net program additions against that 23 to 28 implied range. Landing inside that range would match last year's fourth-quarter record of 26 additions and keep next year's growth on track.
Pharma Mix Lifts Operating Margin Above 23%
Drug-company programs carry wider margins than plasma donor cards, so their growing share of sales is lifting profitability. Third-quarter gross margin rose 8.4 percentage points from a year ago to 64.7%, and operating margin more than tripled from 7.3% to 23.8%. Last quarter's operating margin needed a $990 thousand non-cash accounting gain to reach 24.8%, but this quarter's 23.8% margin had no one-off help.
- Cost of revenues (network and call-center costs): 35.3% of sales, down 8.4 percentage points from a year ago
- Selling, general and administrative (staff and overhead): 33.4% of sales, down 5.4 percentage points
- Depreciation and amortization (past equipment and software costs): 7.5% of sales, down 2.7 percentage points
What to watch: fourth-quarter gross margin, which by our math the full-year outlook puts at about 63.0% at the middle of the range. Holding above 63% as plasma centers leave would show drug programs keep lifting the baseline.
🐻 Bear Case
Plasma Customer Moves 113 Centers to a Rival
Paysign's older business loads compensation onto prepaid cards for people who donate blood plasma. Spending per center recovered this quarter, as average monthly revenue per center rose 15% from a year ago to $8,187 and pushed plasma sales up 7.5% to $13.8 million. However, after the quarter ended, a customer told Newcomer of a decision to "move their payment processing for 113 centers to another provider where they have a banking relationship."
Those 113 locations represent one-fifth of the company's 562 active centers and brought in $11.3 million of revenue and $5.2 million of gross profit over the past 12 months. The transition will cut fourth-quarter sales by $1.5 million and gross profit by $700 thousand, dropping the year-end count to between 445 and 450 centers. Finance chief Jeff Baker called the drug business a "second source of growth that we believe can help offset changes like this." That buffer kept the full-year revenue outlook intact, but losing a fifth of the network creates a nearly $10 million revenue hole for 2027.
What to watch: the active plasma center count at the end of the fourth quarter against the 445 to 450 outlook. A count below 445 would mean the customer moved additional locations now under existing contracts.
Card Load and Spend Volumes Turned Negative
Paysign tracks gross dollar load volume, the total money clients load onto its cards, and gross spend volume, the amount cardholders spend. In the first half of 2026, both volumes grew 24% to 27% from a year ago alongside rising sales. In the third quarter, total revenue rose 42.6%, and Newcomer said plasma continued to generate consistent results while drug-program claims grew 55%.
Despite that revenue growth, gross dollar load volume fell 1.0% from a year ago and gross spend volume dropped 1.3%. The release did not explain why total dollars loaded onto cards shrank while both segments grew sales. Because plasma revenue depends on card loads and cardholder spending fees, a drop in total volume cuts against the picture of a broad volume recovery before the 113 plasma centers even leave.
What to watch: gross dollar load volume growth in the fourth quarter and the quarterly filing's breakdown of card activity. A steeper drop as the 113 centers exit would show how much card-fee volume the departure removes.
Risks this quarter didn't answer
Four standing concerns about the software pipeline, customer concentration, and cost savings got no new data in the earnings release.
- Plasma software clearance: Newcomer said the donor management platform, "if cleared by regulators, will offer our customers a value-added way to streamline and more effectively operate their business," leaving the US Food and Drug Administration review undated three quarters after a 60-day target lapsed.
- Drug-client concentration and mature-program churn: the release gave average revenue per program, but the quarterly filing or call must show whether older programs are shrinking or how much revenue comes from top drugmakers.
- Copay policy and cash-pay channels: management gave no update on whether insurer rules on copay assistance or manufacturer direct-to-consumer cash pricing are affecting demand.
- Gamma acquisition savings: the release mentioned higher amortization from the Gamma deal, but did not say whether the previously promised $4 million to $5 million in annual cash savings has materialized.
💲 Other KPIs
Accounts receivable — money owed by clients, including pass-through funds for drug claims — fell 26.6% from last quarter's $103.17 million and sits near year-end's $72.19 million. Meanwhile, restricted cash held for client programs jumped 35.3% from last quarter to $201.79 million as clients deposited $52.70 million more since year-end to pre-fund claims.
Cash the company owns free of client obligations rose 26.2% from last quarter's $27.37 million and is up $13.47 million since December. Higher profit and client payment timing drove the gain, offsetting software development spending, Gamma acquisition payments, and tax withholding on employee shares. The healthcare payments group carries zero bank debt.
The fully diluted share count rose 1.5% from a year ago and 1.2% from last quarter's 61.98 million. Year-over-year share growth slowed from 7.1% in the second quarter and 10.7% in the first quarter as last year's equity grants entered the comparison base. Stock-based compensation rose 7.1% from a year ago to $1.36 million.
🔮 Guidance
Unchanged. The plan still calls for 39% to 43% growth, or 40.8% at the middle of the range, after Paysign raised the midpoint by $7 million last quarter. By our math, that leaves $28.4 million for the fourth quarter, or 24.9% growth from a year ago against a harder comparison and the $1.5 million plasma customer loss.
Raised. Management lifted the full-year gross margin target by 1.5 percentage points after drug programs drove the nine-month margin to 64.3%. By our math, the middle of the new range leaves about 63.0% for the fourth quarter, down from 64.7% in the third quarter.
Raised. The middle of the range moved up $1.25 million, tripling last year's profit, and still includes the $990 thousand non-cash accounting gain from the second quarter. By our math, that leaves $4.57 million at the midpoint for the fourth quarter, down from $6.74 million in the third quarter.
Raised. The full-year target moved up 1.5 cents at the middle of the range to nearly triple last year's $0.13. By our math, the outlook leaves about $0.075 per share for the fourth quarter, compared with $0.11 in the third quarter.
Raised. It is the second raise this year: +$5.0 million in the second quarter and +$2.75 million now at the middle of the range, nearly doubling last year's result. By our math, that leaves $8.06 million for the fourth quarter (a 28.4% margin), down from $10.98 million in the third quarter but above the $6.55 million the old plan implied.
Raised. Management previously planned to match or beat last year's 55 net additions, which meant ending 2026 with at least 186 programs; the new range calls for 59 to 64 net additions for the year. By our math, that leaves 23 to 28 net additions in the fourth quarter, up from 19 added in the third quarter.
New. The year-end target drops by 112 to 117 centers from the 562 active at the end of the third quarter. Almost all of that drop comes from the single plasma customer moving 113 centers to a rival provider before year-end.
❓ Key Questions
How many centers remain with the departing plasma client?
A plasma customer is moving 113 centers to a bank-affiliated rival, and Paysign still processes other centers for that client. Investors need to know how many locations remain under contract with that customer and when those agreements come up for renewal.
Why did card load volume fall 1% while sales jumped?
Gross dollar load volume fell 1.0% from a year ago and spend volume fell 1.3%, down from 24% growth in the second quarter, even as plasma sales rose 7.5% and drug claims rose 55%. What caused total card loads to shrink?
What drove the 32% jump in revenue per drug program?
Quarterly revenue per drug program rose 32% from a year ago to $99,524. Because management previously said mature programs stay flat, how much of that increase came from one-time setup fees on new launches versus recurring management and claim fees?
Where does the FDA review for the plasma software stand?
Three quarters after management expected a response from regulators within 60 days, the release still says only "if cleared by regulators." Has the US Food and Drug Administration asked for additional testing, and how much is Paysign spending on the software meanwhile?