Home Finance PaySign, Inc. (PAYS) Stock Down Following Disclosure of Troubling Q1 2021 Financial...

PaySign, Inc. (PAYS) Stock Down Following Disclosure of Troubling Q1 2021 Financial Reports

PaySign, Inc. (PAYS) stock prices were down 15.0568% early in the trading day on May 12th, 2021, bringing the price per share down to USD$2.99 shortly after aftermarket trading commenced.

Devastating Revenue Reports

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Revenues reported for the first quarter of the fiscal year 2021 were down 40.6% from the same time period over the prior year, having been reported at USD$4.3 million. With the global onset of the coronavirus, a pandemic has resulted in substantially lower plasma donations and dollars loaded to cards, PAYS experienced a dip in plasma revenue of 26.7%, bringing it down to USD$2 million. The average revenue generated by each center was also down by a worrying 38.8%.

Plasma Centers

With a forecast of financials returning to normalcy once the restrictions and regulations associated with the pandemic have been removed, the company has added 3 new plasma centers over the course of the first quarter of 2021. Having reported 286 centers at the end of March 2020, PAYS reported having ended the first quarter of the fiscal year 2021 with 343 centers.

Pharma Revenue Down

Pharmaceutical revenue was down USD$2.1 million, has experienced a 70.8% decrease down from the same time period of the previous year. This decrease was primarily attributable to the change in accounting estimate in the third quarter of the prior fiscal year 2020. The change impacted the recognition of settlement income during the first quarter of 2021 as compared to the first quarter of 2020.

Reduction in Revenue Expenses

PAYS reported a 29% reduction in costs of revenues, with Q1 2021 reports pegging them at USD$1.4 million. This total includes transaction processing fees, data connectivity, and center expenses, network fees bank fees, card production and postage costs, customer service, program management, application integration setup, and sales and commission expense. The decrease is primarily attributable to the decline in plasma transactions, given how many of the costs associated with plasma transactions are variable in nature.

Gross Profits and Margins

Gross profits for the first quarter of 2021 were reported at USD$2.9 million, representing a 50.5% decrease as compared to the same quarter of the prior year. This decrease was primarily driven by the aforementioned reduction in pharmaceutical revenue. The gross margin for Q1 2021 came out to 45.1%, down from the 54.1% reported in the first quarter of 2020.

Future Outlook for PAYS

The global Covid-19 pandemic has impacted every economy in the world, with PAYS having been hit especially hard. The company has reported financials that have really suffered these past few quarters since the pandemic took hold. The company is keenly looking forward to the completion of universal immunizations that will return the global economy to the way it used to be, one wherein PAYS can leverage the resources at its disposal to ensure profitability.

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