Marvelous Microcaps

Paysign, Inc. (PAYS)

INTRO:

At Perritt Capital Management, we take focused positions in companies where we have a high conviction in their success; companies that are out of the mainstream of small cap investing. To highlight our process, we are pleased to present the newest installment in our ongoing series “Marvelous Microcaps – Big Ideas on Small Companies.”  This series profiles companies that we believe have a niche in their existing markets or are launching a product that could disrupt their marketplace.

THE COMPANY:

Paysign, Inc. (PAYS) provides prepaid card programs, comprehensive patient affordability offerings, digital banking services, and integrated payment processing service for businesses, consumers, and government institutions.  It offers solutions for corporate rewards, prepaid gift cards, general purpose reloadable debit cards, employee incentives, consumer rebates, donor compensation, clinical trials, healthcare reimbursement payments and pharmaceutical payment assistance, and demand deposit accounts accessible with a debit card.  The company also operates a customer service center; and offers a communication suite, including a kiosk, mobile app, two-way SMS, text alerts, and cardholder web portal.  It markets its prepaid card solutions under the Paysign brand. The company serves companies and municipalities that require payment solutions for rewards, rebates, payment assistance, and other payments to their customers, employees, agents, and others. Paysign, Inc. was founded in 1995 and is headquartered in Henderson, Neveda.

WHY WE OWN: THE PERRITT ADVANTAGE

We were initially attracted to Paysign, Inc. due to their market position within the plasma center marketplace, where they are a dominant player in the prepaid debit card market.  Through their services, plasma centers can issue prepaid debit cards to their donors.  This has been a consistent and reliable source of revenue for the company.  They serve over 480 plasma donation centers as of the end of the most recent quarter.  Since that time, they have signed up an additional 132 established plasma donation centers through an expansion of a relationship with a major plasma collection company.  These recent customer acquisitions will bring in an incremental $9-10 million in revenue to the company per analyst estimates on top of the estimated $87 million in revenue they are projected to do in 2026 from their existing business.  Their plasma line of business is their primary source of revenue, with plasma centers accounting for approximately 75% of their revenue in 2024.

More recently, the company has been making forays into the pharmaceutical benefits program space where they issue cards for programs that administer discounts and rebates to patients.  This segment accounts for approximately 22% of their revenue and is the growth engine for the company.  In 2024, they added thirty-three new programs and so far, have added at least 14 more in 2025.  Revenues in this segment increased by 252% as of Q4 2024 due to the addition of new programs.  The company projects that this segment will grow to 37% of revenue by the end of 2025.  We are encouraged by the company’s growth in this segment as these are long lived programs with healthy margins.

We believe this is a classic source of stable revenue feeding the growth vehicle story with the plasma segment supporting growth in the pharmaceutical benefits business.  While they have experienced lackluster growth from the plasma segment recently, it generates respectable cashflow and supports the growth in their new lines of business.  The recent addition of new customers, as well as the acquisition of a company called Gamma Innovation, should bring growth back into the plasma segment.  With growth returning to the plasma segment and continuing for the pharmaceutical benefits segment, we believe Paysign is positioned for a robust year of growth in 2026 and beyond.