With Apple and Amazon each introduced their own payment solution (Apple Pay Later & Buy with Prime), the payment space is getting more crowded. Yet $Paysign Inc(PAYS)$, a micro-cap company as a provider of prepaid card programs with integrated payment processing is operating in a niche market. The company creates customized, innovative payment solutions for clients across all industries, including pharmaceutical, healthcare, hospitality and retail. Most of its revenue comes from plasma industry.
Due to the COVID-19 outbreak that caused plasma center closures, and the stimulus packages distributed, PAYS has suffered loss since 2020. Thanks to the availability of vaccines, the world has gradually recovered. Subsequently, we can see some improvement in PAYS business, increasing revenue and decreasing losses. From the latest 10Q report, Q2 2022, PAYS three-month net loss was 228 thousand dollars. Q1 2022 net loss was 309 thousand dollars.
However, there are still some headwinds that will drag on PAYS revenue, the labor shortages at plasma donation centers and restrictions preventing Mexican nationals with tourist visas from being compensated for donating plasma.
PAYS added 62 new plasma centers in the quarter and ended Q2 with 437 centers, with average monthly revenue per center of $6625. That was lower than Q1 figure ($6672) but management reported July monthly revenue per center was over $7000. This was due to the large number of plasma donation centers that were added in the second half of June incurred more expenses before revenue comes in. For information, the average monthly revenue per center pre-COVID was up over $8000.
PAYS expect Q3 2022 total revenue to be approximately $10.2 million and full year total revenue guidance in range of $35.25 million to $38.35 million. Full-year gross profit margins are expected to be between 56% and 57%, with operating expenses expected to be approximately $22 million.
With 2019 total revenue of $34.6million and total operating expenses $13.1million, I think we may not see net profit this year.
Lastly, the PAYS CEO has mentioned about the Mastercard connection in the Q2 earning calls, yet I cannot find further details about it. He said:
“I am pleased to say that we are now live with this new client (Spentra). Not only does this client expand our product offering into the payroll card space, but with this launch, we completed our direct connect with Mastercard. Our Mastercard connection allows us to offer greater choice to our clients by adding an additional payments network to our offerings. Additionally, with this connection, we are now enabled to support not only payroll but gift, general purpose reloadable, corporate incentive and debit on the Mastercard brand. The Mastercard connection also enables EMV, contactless and tokenization support for our products. We are very excited by the opportunities that this new connection with Mastercard will bring.”
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