Why Paysign Inc (NASDAQ: PAYS) stock is crashing

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Paysign Inc (NASDAQ: PAYS) stock lost over 23.8% in the pre-market session of 14th August, 2020 (as of 4:55 am GMT-4; Source: Google finance). The firm’s revenues lost 25% yoy to $6.4 million during the second quarter of 2020 while Net income was a loss of $0.2 million against the net income of $1.7 million in the prior year. Adjusted EBITDA was $0.5 million from $2.6 million for the second quarter for the prior year. Fall in plasma donations as well as in pharma revenues due to lockdown led load volume pressure. The gross dollar volume loaded to cards fell 11% yoy to $183 million during the quarter against $205 million. Non-GAAP adjusted EBITDA fell to $503,989 or $0.01 per basic share from $2,593,675 or $0.05 per basic share the prior year. The adjusted EBITDA margin fell to 7.8% down from 30.0% the prior year.

The firm added one new pharmaceutical program to Patient Affordability business line, first full end-to-end medical claims processing program, while added several new pharma and patient affordability programs to the pipeline. The group continues to expand their footprint in the plasma space, adding further 49 plasma and blood center locations, expecting to complete go-live by early fourth quarter.

Revenue conversion rate, which is revenue divided by the GDV, rose to 353 bps, against 324 bps in the first quarter, but fell against 421 bps in the same period last year. The decline in revenue conversion rate on pharma on a yoy basis was due to lower unspent balances. But, revenue conversion rate on the plasma side was actually stronger than the first quarter,while the revenue conversion rate on the pharma side was better than the first quarter, and expected toimprove in the second and third quarter.

For the rest of 2020, the firm expects a partial recovery owing to easing of government restrictions in the latter portion of the second quarter, while a better Q4, driven by onboarding a number of new client programs. Solid pipeline coupled with more COVID relief, are forecasted to be the drivers for productions to return to the growth trajectory in 2021.

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