Good afternoon, everybody. My name is Brennan McCarthy. I'm an analyst here at Sidoti, and welcome to Sidoti's August MicroCap Conference. Presenting with us today, we have Paysign, and leading the discussion from the firm will be CFO Jeff Baker. Before I hand it over, a quick reminder that the Q&A tab is located at the bottom of your screen. Feel free to type in any questions throughout the presentation, and we can save time for Q&A at the end. But with that said, take it away, Jeff.
Thank you, Brennan, and thank you, everyone, for joining the presentation today. As Brennan said, I'm the CFO with Paysign. Just a quick history on myself. I've been at the company as CFO since February of 2021, so a little over about three and a half years. Prior to that, I ran mergers and acquisitions for InComm for 10 years, which is the largest prepaid provider in the world. And prior to that, I ran mergers and acquisitions for Global Payments, a publicly traded Fortune 500 company, also in a payment space.
And before that, believe it or not, I was on Wall Street for 10 years covering financial tech and service companies as an equity research analyst. The presentation I'm gonna make today will include forward-looking statements, or may include forward-looking statements. I'm not gonna read this verbatim. Just know that that there could have forward-looking statements, and you can find more information from our 10-K and 10-Q filings that are out there under the SEC website.
Also just to note, this presentation can be found at paysign.com, under our Investor Relations tab, which will be important if you wanna do more research on the company. At the end, there's a slide that I'll direct you to, where you can find more information about the industries that we participate in. So Paysign basically is a prepaid card provider. We do everything from payment processing, to program management, to helping customers retain their clients. We do everything except issue cards, because you have to be a bank to issue cards, and print the cards. No need to be in the card printing business.
Most of our business, 98% of our business, comes from the healthcare vertical market, although we do have other programs that you know and that are that cover other prepaid markets, and I'll talk about that later. We do everything in-house, customer service, chargebacks, fraud. Our customer service is available 365 days a year, seven days a week, and it's bilingual, English and Hispanic. We were incorporated in 1995. We're headquartered in Henderson, Nevada. We have been, you know, in business for over 20 years.
The business has pivoted a number of times over that timeline. But, the two areas that we've been, you know, that we've found success in the healthcare payments and our plasma donation payments and our patient affordability pharmaceutical payments, have been around in one form or fashion pretty much since the mid-early 2000s. A quick financial snapshot of our business.
We have a market cap around $250 million, almost 56 million shares outstanding, trailing 12-month revenue of just under $54 million, $8.6 million of unrestricted cash at the end of the second quarter, and that's an adjusted number. If you look at our filings, I think we reported $31 million in unrestricted cash, and that has to do with some timing of receivables and payables related to our patient affordability business. But if you adjust for that, $8.6 million unrestricted cash, no debt. If you include the restricted cash on our balance sheet, which we get interest income on, it was $111 million, adjusted.
About $50 million of that are funds that have been loaded onto consumers' cards who have paid, who have been paid for donating plasma, and is set there to spend over the months and years ahead. That's how we make our money, is based on the transaction or transactional model, where they go spend the money, and then we get interchange, cardholder fees, et cetera. A little bit about our quarterly revenue. Here's a 8-quarter snapshot. We have a little seasonality in the first quarter because of our plasma business.
When the federal government gives out free money, like they do in the first quarter with tax rebates, people that are unbanked and underbanked don't go give plasma. They don't spend time, you know, out of their week to supplement their income by giving a $65 donation. So you see a little seasonality drop off here, and then the business typically ramps, you know, back up throughout the remaining of the year. Our mission and core value, very important. I'm not gonna spend a lot of time on here.
You can read them, but you know, the best thing I could say is that we do run our business based on these missions and values. They're not just, you know, words on a spreadsheet or on a presentation. And our customers appreciate the fact that, you know, if we do something wrong, we're gonna make it right. Quick investment highlights. Financials, we have, like I mentioned earlier, no debt, strong cash flow. Revenue growth has been very positive. In the second quarter, we grew year-over-year at 29.8%. I think our plasma business grew about 13%.
Our patient affordability business grew about 266%, and I'll talk about what's going on there, and more in a moment. We have a leading proprietary technology. Like I said, we're our own processor, so we do everything from soup to nuts. We're expected to have excellent uptime, especially with customers that we deal with. You know, top pharmaceutical, top 10, 20 pharmaceutical companies, or top, you know, plasma donation centers. Much larger companies than ours. We offer, you know, we address a large market opportunity. I'll show you that slide in a moment.
Our leadership has a great deal of domain expertise, whether they come out of the payments industry, the banking industry, or the pharmaceutical industry, and we have superior client retention. Quick milestones here. When I joined the company in February of 2021, you know, we were coming into that year with 340 plasma donation centers. We had about 30%, 31% market share. At the end of 2023, we had 464 donation centers and around 40% market share. At the end of the second quarter, we had grown, you know, those number of donation centers up to 477 plasma donation centers.
On the patient affordability, pharma patient affordability biz side, this is the business that we pivoted in about 4.5 years ago. We exited the quarter with 61 pharma patient affordability programs. That was up from 43 at the end of 2023. If you look back over the last year, we had exited the second quarter of 2023 with 21 programs. So we've added 40 programs in a year, and we haven't even, you know, gotten the full benefit of that full year revenue cycle from that business. I mentioned a large addressable market opportunity. We have products in pretty much every one of these segments.
Most of our revenue, though, is generated by this consumer incentive and rebate segment. It's a $21+ billion market. But we do have, you know, I mentioned a payroll card, general purpose reloadable cards, et cetera. And, you know, we do offer and do have programs that address some of these other markets. I mentioned this earlier, we're a full service provider. I focus you on the bottom right-hand corner, this compliance tab. Not insignificant. I mean, we're level one PCI DSS certified. We have SOC 1 Type 2 certifications. We're, you know, subject to bank audits. We're subject to the Bank Secrecy Act audit.
We're HIPAA compliant because of our patient affordability business. I mean, we're... I think we have an audited audit, some form of state or federal audit going on pretty much every other week here. But we do everything in-house. That's very important for our clients because if something goes wrong, they want one throat to choke. And we also are not dependent upon a third party getting us into their service queue if we need to make changes to our platform. We do it internally. So let's talk about the plasma donation, donor solutions real quick. Plasma is that clear liquid that comes out of your blood.
So while you and I may go give blood every six weeks, you can give plasma twice a week or eight times a month. Again, I mentioned earlier, most of the people that are donating plasma are unbanked and underbanked individuals or college kids that want extra spending money for the weekend. The largest customers out there, the largest plasma companies are our customers. You have CSL. It's a company based out of Australia. You have Grifols. That's a company based out of Spain. What happens is we're integrated into those donor management systems, where it's seamless to the individual.
They go and give plasma. Again, it takes about two hours. They're paid $60-$65. That's loaded on a card, and then they take that card, and they go buy gas with it, or they go buy groceries, or whatever. We make interchange off that. We make per transaction fees off that. If they wanna take the money off at an ATM, we make money like that, off that. But it's a, it's a transactional-based model. Some of the things that set us apart from our competitors, we offer a cashback rewards program. We offer a healthcare, a benefit card, kinda, kinda like GoodRx, that's out there.
That's all part of what we offer the plasma donors. If you lose a card, and they get lost all the time, it's a seamless replacement, where some of our competitors aren't seamless. So, we do, we do differentiate ourselves with technology and other products and services. The plasma companies don't pay us, but they do pay to load the funds on, onto the cards. Our pharmaceutical patient affordability solutions business, this is also known in the industry as copay.
So when you get a script from your doctor, and you take that script to the pharmacy, typically, most, most insurance programs are gonna cover 80% of that. They're gonna ask the other 20% to come from you, and, you know, with a lot of these specialty pharmaceutical drugs, they're very expensive, the copays are, and most people can't even afford a $200 copay solution. So what the pharmaceutical companies have realized, they need to recoup their investment in the, you know, R&D, phase I , phase II, phase III drug trials, et cetera.
Everything it's taking to get this drug to market, and then they have a finite time period that they have to recoup that investment and actually get an ROI before that drug goes in the generic stage. So they will help pay the copay solutions. They want you on their drug, they want it to be effective, and they want you to keep using it, because they also know that the pharmaceutical, the health plans, your, your UnitedHealthcare, Humana, or whatever, they're gonna eventually- you're gonna reach your out-of-pocket maximum, and they're gonna end up paying 100% of your claims.
So I know everybody's seen commercials, Skyrizi. I think it doesn't matter what TV program you watch, there's probably one on all the time, but Skyrizi is a perfect example. At the end of that program, you will see, "Ask AbbVie how we can help." Well, they're telling you they have a copay program, and you're gonna either go to AbbVie and register online to participate in that program, and you're gonna give the doctor a script. Excuse me, the pharmacy a script, or the doctor's gonna give you a voucher when he writes the script for you.
You're gonna take that to the pharmacist, and when they fill the drug, they're gonna run those vouchers as secondary insurance. We make our money on all the claims that are adjudicated. There are a bunch of rules that are associated, you know, as far as qualifying for these, copay programs, and we may make $3 a claim. Well, that's a pharmacy benefit copay solution. It doesn't matter how many claims, or how much the claims are, whether they're, you know, $200, $500, $1,000, we're gonna charge the pharmaceutical company $3.
O ne of our competitive advantages is that we've gone into the pharmaceutical industry, which has, historically been a black box industry, and we've offered them transparent pricing. So they know exactly what is costing them to have a copay solution, and we provide them the reporting and a lot of other things, to help them. The medical benefit copay solution, just like a pharmacy copay solution, except that's done at a hospital, a doctor's office, or a urgent care facility, and those are typically intravenous bags.
So, you know, you have to have a nurse or somebody to give you that, medication, and we may charge $10 or $15 for that. But it's the same thing, transactional-based, claims-driven, business model. We also have some IP that none of our competitors have as it relates to accumulators and maximizers.
These are companies out there that are trying to push more the liability for healthcare costs away from the company back to the individual employee, and we're able to identify a transaction where we know that the maximizer or minimizer solution does not qualify, and therefore, the pharmaceutical company should not have to pay the maximizer or minimizer cost for that drug. Because you're already on, or you've been given a copay solution, and the pharmaceutical company's already paid that to the pharmacy.
We have saved one of our customers over $10 million in January alone by cutting out these double payments that the pharmaceutical companies have been making over the past, and that's a big cost savings. A lot of our customers tell us now that we're no longer a cost center for them, that we're a revenue-producing center, based on the savings that we've offered them. As I mentioned earlier, the other part of our business, which is about, you know, 2%, you know, we've got a digital banking solution, like, Chime.
Chime's a big company out there that offers digital banking solutions. We've got other corporate disbursement solutions, go in, and metals recycling. We have, you know, instead of them paying, when you bring your metals in, and the recycling company paying you with cash, you know, they now put it on a card. We have rewards and incentive solutions. We've got a GPR payroll solution, and we've got an open loop gift card solution.
Now, we're also smart enough to know we're a $250 million market cap company with 150 people, that we're not gonna have a balance sheet to go compete against a Chime or an InComm, which is in the retail space, or a Blackhawk, some of these names you may have heard of. You know, where there's a pay-to-play game. We know our niches, and we, we do a good job with niches that are very attractive. I mentioned our key differentiators. I'll move on from this so we have some time for Q&A. A little bit more behind the numbers.
Here on the, on the- in the light blue is our plasma business. You can see the seasonality there associated with that. I mentioned first quarter. Then in the middle here, in the yellow, is this pharma patient affordability business and the growth that we've experienced over the last eight quarters. We did exit the pharma prepaid business. As I mentioned, we pivoted about four and a half years ago. This was a business that, where we were doing the only electronic payments for McKesson.
We realized that that was a small market opportunity, and decided to go direct to pharma with our pharma patient affordability business. We're the only pure-play payment provider out there. McKesson hired us because they can't do electronic payments. Other hubs have hired us because they don't have a payment solution. We pay claims via ACH, we pay claims via virtual debit cards, we pay claims via check, but it doesn't matter to us, but we pay those claims via a number of different mechanisms, which is very important for the pharmaceutical companies and the pharmacies.
The pharmacies are looking to be reimbursed as quickly as possible, and some of them get, you know, dependent on the type of transaction, they may get paid in two weeks, you know, or up to, you know, 45 days. But, you know, nowhere near the 90 days or 60-90 days that a check payment may take. You see over here on the right, our... I mentioned our revenue growth for the second quarter was up 29.8%. Our Adjusted EBITDA on a trailing 12-month basis, just under $9 million. We have zero debt, assets of $182 million.
And then our revenue drivers, like I mentioned earlier, cardholder fees from on the plasma side, interchange, program management fees from the patient affordability will make anywhere from, you know, $5,000-$20,000, depending on the complexity of these programs per month. And then we get, you know, claim fees, and then other fees, like customer service fees or member number generation fees. There's a myriad of other services that we offer our pharma companies, where we make revenue, but all transactional base.
This is a little bit more detail on our income statement for those that like to look at our net income. Although I will tell you that, you know, we're followed by four analysts on Wall Street, they all look at our Adjusted EBITDA, and it takes out the noise of our interest income, although I make interest on all those cash balances I mentioned earlier. It takes out our D&A as we continue to invest. You know, I have a lot of software, capitalized software development, so my amortization is pretty hefty and grows month-over-month. And then it takes out our stock-based compensation. It's a non-cash charge.
So most of the people focus on that Adjusted EBITDA. And as we transition the business or continue to invest in our patient-pharma patient affordability business, you're seeing the fruits of that labor through our Adjusted EBITDA margin. At the end of the second quarter, that was 15.6% versus 10.3% the year earlier, same quarter. You know, that's a 50% growth. In the first quarter, it was twelve point, drawing a blank here. Excuse me, seven point eight percent. I'm sorry, 12.8% versus 7.1% the year before. So you're seeing the operating leverage that we have in our business model.
We did update guidance at the end of our second quarter. If you're interested in the story, you can pull up a press release, but we gave guidance that our revenues for the year are gonna be between $56.5 million and $58.5 million, with an adjusted operating margin between 15% and 17%. Last year it was 14.3% for the full year. I mentioned going onto our website, and if you're interested in looking at more, doing more research here, the three really good areas are sources on the plasma side, and these will hyperlink to those sites.
These are independent sites that you can read about, more about, you know, why do we need plasma? What is plasma therapeutics, therapies for? Most of them are for blood disorders, believe it or not, and Chinese are the largest consumers of blood, of plasma therapies. One of the other things I forgot to mention, the U.S., you know, is responsible for over 75% of the worldwide plasma donations. That's because in Western Europe, they don't pay people for plasma donations, so they think it's your civic duty that you should go and give plasma.
Nobody's going twice a week for two hours at a time to donate plasma just because it's their civic duty. In Latin America, you know, the Catholic faith believes that you should not sell body parts or body fluids. So you know, that takes out a big population of the world. So, you know, really the U.S. is one of, I think, three or four countries around the world that actually compensate people for plasma donations, and by far the largest population that does that. Patient affordability, I mentioned minimizers and maximizers.
You can read more about that, you know, down here on the lower left, identifying copay accumulator impact. Here's two reports out here, you know, that really highlights the dysfunction of our pharmaceutical industry, where you have pharmacy benefit managers. They'll report out of the FTC saying how these middlemen are causing drug costs to be so expensive and squeezing mainstream pharmacies.
You know, unfortunately, it doesn't matter which side of the aisle you're on, either Republican, Democrat, or in the middle as a you know, undecided, but, you know, the fact of the matter is, they all want to talk about lowering prescription drug costs, but you have to fix the fundamental problem of the pharmaceutical industry, and neither one, no one is willing to tackle that challenge. So unfortunately, we're stuck in this, you know, inefficient market with a bunch of middlemen who are getting kickbacks, and it's really, you know, it's a problem.
People ask me. What's the opportunity international for your co-pay business? There isn't any. Most companies that have socialistic medicine, and the drug costs are already predetermined and paid for by the government. But I don't see the issue ever going away here in the United States, and the complexities of our pharmaceutical industry. Here's just you know, you can go look at the leadership team and the backgrounds. You'll see what I said, patient payments industry expertise, banking industry expertise, you know, pharmaceutical industry expertise.
And we have a great independent board of directors with a lot of domain expertise as well. Dan Henry, who's you know, former CEO and president of Green Dot, and big you know, in the prepaid space. Dennis Triplett, former CEO of Healthcare Services at UMB Bank.
Jeff Newman, you know, a very well-respected attorney, who was general counsel at Euronet Worldwide, another public company, for many years. And then Bruce Mina, our Audit Chair, who has his own business and is a certified public accountant. So, Brennan, with that, I am finished giving a high-level overview, and I will turn it back over to you for Q&A.
Fantastic. Thanks, Jeff. We can now get into Q&A. I wanted to start off with the patient affordability solutions business. What do you estimate the addressable market is there? I know you mentioned international opportunities are quite limited, but can you talk about the addressable market there?
Yeah, sure. Let me give it for both. So, plasma, like I said, we have about 40% market share. We did just over $40 million in revenue last year, so it's about a little over $100 million TAM, which is good because it's not gonna attract, you know, a lot of people. There's pretty much four providers in that space, but it's meaningful for us and provides a nice cash cow for us to invest in other things, like the patient affordability business that we've done for the last four and a half years.
The TAM on the patient affordability business, we think is about $500 million market, and that's just on the payment side. We don't do a lot of the other hub services. These hubs that are out there that are helping pharmaceutical companies, they'll help you know, do the phase I , phase II , phase III drug trials, stuff like that. It's very labor and capital intensive. You know, we don't have to do that. You know, we have 150 people, and we're able to scale the business with a fraction of the people that these hubs have to employ to service the pharmaceutical companies.
Got it, and as a follow-up question, you know, what's a reasonable timeframe for the patient affordability business to surpass the plasma business in terms of revenue? I know you mentioned the former is growing a lot quicker than the latter.
Yeah, that's a great question. So we, you know, we grew, like I said, over 260% year-over-year in the second quarter. In 2023, we did $4 million. This year, if you back in the numbers on the guidance I've given, you're talking about $10 million-$11 million, you know, so over a doubling. We think, you know, I haven't given guidance for 2024 or 2025 or 2026 yet, but we've got a really nice pipeline, and we think the patient affordability business can continue to grow rapidly.
And as long as we keep delivering, I don't think it's unreasonable that, you know, we're looking at a $40+ million business in, you know, a five-year timeframe. You know, we had 61 programs at the end of the second quarter. There's over 1,800 specialty pharmaceutical drug programs that are out there today, more drugs coming every day, and most of them, I'm not gonna say every one, but most of them have co-pay programs. So we're in the early stages of this business.
Got it, and I know you mentioned, you know, the two businesses have relatively low capital intensity. You know, how do you think about optimizing your balance sheet? You know, I know you mentioned little to no debt position, you know, solid free cash flow and cash balance, but I guess, are you, you know, engaging in shareholder returns by any means, or how do you think about optimizing your balance sheet?
Yeah, we have a share repurchase in place. It's about, it was—it's a $5 million share repurchase, 36 months. We're about a year into it. Last year, we repurchased $1.1 million. And quite honestly, you know, as we generate cash flow, you know, depending on where the stock is, et cetera, and, and what other uses we have for the cash, you know, we'll go in, in the market and buy, and repurchase our, our shares. You know, I'd like to have another third l—I'd like to have a third leg of the stool. I'd love to have another healthcare payments. We're, we're really good in healthcare, and we know what we're doing.
If we could find something with a moat, like we have today with our other two businesses, that would be something we would look to deploy capital to purchase. But, you know, having done M&A for 18 years in my previous life, I know what I'm looking for. I know we're not gonna leverage the company, you know, and put all of our eggs in one basket. You know, if we did something like that, it would be or made an acquisition, ideally, it would be like a tuck-in acquisition, a $10-$15 million revenue business. But, you know, it's a lot of characteristics to consider, there.
So in the meantime, until I find that, that perfect acquisition, we're just gonna continue to deliver shareholder returns by, you know, executing on the business and, you know, repurchasing shares where, where need be.
Got it. That's helpful. I wanted to ask one more question. You're heading into an election year, do you foresee any significant changes in the regulatory environment? Or, yeah, I guess, how are you thinking about potential regulatory changes heading into an election year?
Yeah, so we, we were building. I didn't mention this. We were building a lot of momentum in the pharma industry because there was a change that was going to occur in early 2023 that ended up getting struck down.