Core Insights - Waystar Holding (WAY) reported revenue of $268.65 million for the quarter ended September 2025, marking an 11.9% year-over-year increase and exceeding the Zacks Consensus Estimate of $256.52 million by 4.73% [1] - The company achieved an EPS of $0.37, up from $0.14 a year ago, surpassing the consensus EPS estimate of $0.34 by 8.82% [1] Revenue Breakdown - Subscription revenue reached $134.45 million, exceeding the average estimate of $130.16 million from three analysts [4] - Revenue from implementation services and other totaled $1.86 million, compared to the estimated $1.44 million [4] - Volume-based revenue was reported at $132.34 million, surpassing the average estimate of $123.44 million from three analysts [4] Stock Performance - Over the past month, Waystar's shares have returned +4.1%, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Waystar Holding (WAY) reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing a significant increase from $0.14 per share a year ago, representing an earnings surprise of +8.82% [1] - The company achieved revenues of $268.65 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.73% and increasing from $240.11 million year-over-year [2] - Waystar has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The future performance of Waystar's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $256.63 million, while for the current fiscal year, the estimate is $1.39 on revenues of $1.04 billion [7] Industry Context - The Internet - Software industry, to which Waystar belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $269 million, reflecting a 12% year-over-year growth, with an adjusted EBITDA margin of 42% [7][20][22] - Adjusted EBITDA increased by 17% year-over-year to $113 million, with the adjusted EBITDA margin exceeding the long-term target of approximately 40% [22][23] - Net revenue retention rate (NRR) was 113%, indicating strong client retention and expansion [21][17] Business Line Data and Key Metrics Changes - Subscription revenue grew to $134 million, a 14% increase year-over-year, while volume-based revenue was $132 million, up 10% year-over-year [22] - The client base generating over $100,000 in trailing 12-month revenue increased by 11% year-over-year to 1,306 clients [17][21] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and enhance innovation capabilities [9][10] - The healthcare financial system is described as complex and fragmented, with a significant opportunity for modernization through Waystar's platform [8][15] Company Strategy and Development Direction - Waystar aims to simplify healthcare payments through a cloud-based platform that integrates clinical, administrative, and financial data [8][10] - The company is focused on leveraging AI to enhance operational efficiencies and client satisfaction, positioning itself as a leader in the healthcare revenue cycle management space [9][15][68] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing rising denial rates and workforce shortages in the healthcare sector, which are pressuring margins [12][60] - The company is optimistic about capturing growth opportunities through the integration of Iodine's capabilities and the ongoing demand for AI-driven solutions [9][10][68] Other Important Information - Waystar received recognition as one of the best workplaces for innovators and was named Healthcare Company of the Year by the Stevie Awards [18] - The company is committed to maintaining high cash flow conversion rates, with unleveraged free cash flow of $96 million in Q3 2025 [24][25] Q&A Session Summary Question: Feedback from Iodine clients during the True North conference - Management reported 100% positive feedback from clients regarding the Iodine acquisition, highlighting the strategic fit and potential benefits for healthcare [31][32] Question: Cadence of replacing legacy processes in RCM - Management noted that Iodine's capabilities will facilitate faster transitions from legacy systems, enhancing the overall efficiency of revenue cycle management [35][36] Question: Patient utilization trends and seasonality - Management indicated that patient utilization is returning to historical levels, with expectations for continued growth in the volume-based revenue segment [41][42] Question: Transition from mail payments to mobile - Management discussed the ongoing shift towards digital payment solutions, emphasizing the long-term transformation in patient financial engagement [46][49] Question: Acceleration of product roadmap due to Iodine acquisition - Management provided examples of how Iodine's clinical data will enhance existing products, potentially accelerating the product development timeline by nearly two years [52][56] Question: Competitive landscape and go-to-market strategy - Management acknowledged increased competition but emphasized Waystar's comprehensive platform approach and strong client relationships as key differentiators [66][68] Question: Sustainability of EBITDA margin efficiencies - Management expressed confidence in maintaining margin efficiencies through ongoing operational improvements and AI-driven solutions [82]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $269 million, reflecting a 12% year-over-year growth, with an adjusted EBITDA margin of 42% [7][20][22] - Adjusted EBITDA for the quarter was $113 million, representing a 17% increase year-over-year [22] - Net Revenue Retention Rate (NRR) was 113%, indicating strong client retention and expansion [21][17] Business Line Data and Key Metrics Changes - Subscription revenue increased by 14% year-over-year to $134 million, while volume-based revenue grew by 10% year-over-year to $132 million [22] - The number of clients generating over $100,000 in trailing 12-month revenue grew to 1,306, an 11% increase year-over-year [17][21] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and enhance innovation capabilities [9][10] - The healthcare financial system is described as complex and fragmented, with a significant opportunity for modernization through Waystar's platform [8][15] Company Strategy and Development Direction - Waystar aims to simplify healthcare payments through a cloud-based platform that integrates clinical, financial, and administrative data [8][10] - The company is focused on leveraging AI to enhance operational efficiencies and client outcomes, with a strong emphasis on automation and data integration [11][16][75] - Waystar's strategy includes continuous innovation, with hundreds of new capabilities launched each quarter to improve automation and accuracy [15][17] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing rising utilization, denial rates, and workforce shortages as key challenges in the healthcare sector [12][13] - The company remains optimistic about capturing growth opportunities, driven by its AI-powered solutions and strong client relationships [9][18] Other Important Information - Waystar received recognition as one of the best workplaces for innovators and was named Healthcare Company of the Year by the Stevie Awards [18] - The company ended the quarter with $421 million in cash and equivalents and a leverage ratio of 1.9 times, down from earlier in the year [24][25] Q&A Session Summary Question: Feedback on Iodine Software and client introduction - Management reported overwhelmingly positive feedback from clients regarding the Iodine acquisition, highlighting its strategic fit and potential benefits [30][31] Question: Cadence of replacing legacy processes in RCM - Management discussed the integration of Iodine's capabilities into Waystar's platform, which is expected to accelerate the transition from legacy systems [34][36] Question: Patient utilization trends and seasonality - Management noted that patient utilization is returning to historical levels, with expectations for continued growth in the volume-based revenue segment [40][42] Question: Transition from mail payments to mobile - Management emphasized the ongoing shift towards digital payment solutions, which are expected to enhance efficiency and client satisfaction [46][49] Question: Acceleration of product roadmap with Iodine - Management provided examples of how Iodine's capabilities will enhance Waystar's offerings, particularly in prior authorizations and claims management [52][56] Question: Competitive landscape and go-to-market strategy - Management acknowledged increased competition but emphasized Waystar's unique platform approach and strong client relationships as key differentiators [66][68] Question: Monetization strategy for AI capabilities - Management outlined multiple monetization strategies, including pricing to value and introducing new software modules [71][75] Question: Sustainability of EBITDA margin trends - Management expressed confidence in maintaining margin efficiencies through ongoing operational improvements and AI integration [83]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $269 million, reflecting a 12% year-over-year growth, with an adjusted EBITDA margin of 42% [6][19] - Adjusted EBITDA for the quarter was $113 million, representing a 17% increase year-over-year [20] - Net Revenue Retention Rate (NRR) was 113%, indicating strong client retention and expansion [19][16] Business Line Data and Key Metrics Changes - Subscription revenue increased by 14% year-over-year to $134 million, while volume-based revenue grew by 10% year-over-year to $132 million [20] - The number of clients generating over $100,000 in trailing 12-month revenue grew to 1,306, an 11% increase year-over-year [16] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and accelerate innovation [9][10] - The healthcare financial system is experiencing rising utilization and denial rates, which are pressuring margins for providers [12][60] Company Strategy and Development Direction - The company aims to simplify healthcare payments through a cloud-based platform that integrates clinical, administrative, and financial data [7][10] - Waystar is focused on leveraging AI to enhance operational efficiency and client satisfaction, positioning itself as a leader in the healthcare payment modernization space [8][14] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing data fragmentation and integration challenges in the healthcare sector [13][14] - The company is optimistic about capturing growth opportunities as the demand for efficiency and transparency in healthcare increases [9][60] Other Important Information - Waystar received recognition as one of the best workplaces for innovators and was named Healthcare Company of the Year by the Stevie Awards [17] - The company is committed to maintaining a strong cash flow, ending the quarter with $421 million in cash and equivalents [23] Q&A Session Summary Question: Feedback on Iodine Software and client introduction - Management reported overwhelmingly positive feedback from clients regarding the Iodine acquisition and its integration with Waystar's offerings [28][31] Question: Cadence of replacing legacy processes in RCM - Management indicated that the integration of Iodine's capabilities will facilitate faster transitions from legacy systems to modern solutions [33][36] Question: Patient utilization trends and seasonality - Management noted that patient utilization is returning to historical levels, with expectations for continued growth in the volume-based revenue segment [39][41] Question: Shift from mail payments to mobile - Management discussed ongoing efforts to digitize patient payments, emphasizing the long-term transformation required in this area [44][46] Question: Acceleration of product roadmap due to Iodine - Management provided examples of how Iodine's capabilities will enhance Waystar's product offerings and accelerate development timelines [51][54] Question: Margin sustainability and internal efficiencies - Management expressed confidence in maintaining adjusted EBITDA margins around 40% while investing in innovation and operational efficiencies [80]

3Q'25 Earnings Presentation October 29, 2025 This presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to, among other things, statements regarding Waystar's expectations relating to future operating results and financial position, including full year 2025, and future periods; anticipated future investments; our industry, business strategy, goals, and deployment of artificial intelligence in ...

Core Insights - Waystar Holding Corp. reported a 12% year-over-year revenue growth for Q3 2025, with total revenue reaching $268.7 million [1][8] - The company achieved a net income of $30.6 million, resulting in a net income margin of 11% and a non-GAAP net income of $67.8 million [1][8] - Waystar raised its revenue and adjusted EBITDA guidance for the full fiscal year 2025, reflecting strong operational performance and integration of Iodine Software [2][8] Financial Highlights - Q3 2025 revenue was $268.7 million, up from $240.1 million in Q3 2024, marking a 12% increase [8] - Net income for Q3 2025 was $30.6 million, with a diluted GAAP net income per share of $0.17 [8] - Non-GAAP net income was reported at $67.8 million, translating to a non-GAAP net income per diluted share of $0.37 [8] - Adjusted EBITDA for Q3 2025 was $112.7 million, with an adjusted EBITDA margin of 42% [8] Operational Metrics - Cash flow from operations for Q3 2025 was $82 million, with unlevered free cash flow amounting to $96 million [8] - The company reported a net revenue retention rate (NRR) of 113%, indicating strong client retention and upsell opportunities [8] - Subscription revenue reached $134.5 million, reflecting a 14% increase year-over-year, while volume-based revenue was $132.3 million, up 10% [8] Guidance and Outlook - For the full fiscal year 2025, Waystar expects total revenue to be between $1.085 billion and $1.093 billion [8] - Adjusted EBITDA is anticipated to be between $451 million and $455 million, with non-GAAP net income projected between $271 million and $274 million [8] - Diluted non-GAAP net income per share is expected to range from $1.46 to $1.47 [8] Company Overview - Waystar serves approximately 30,000 clients, processing over 6 billion healthcare payment transactions annually, which includes over $1.8 trillion in gross claims [18][19] - The company aims to simplify healthcare payments, allowing providers to focus on patient care and financial performance [18][19]

Financial Performance - Revenue for Q3 2025 reached $268,651,000, a 11.9% increase from $240,112,000 in Q3 2024[19] - Net income for Q3 2025 was $30,648,000, compared to $5,413,000 in Q3 2024, representing a significant increase[21] - Basic net income per share for Q3 2025 was $0.18, compared to $0.03 in Q3 2024, indicating a substantial improvement[19] - For the nine months ended September 30, 2025, Waystar reported a net income of $92,101,000, a significant improvement compared to a net loss of $38,204,000 for the same period in 2024[29] - Net income for the three months ended September 30, 2025, was $30.6 million, a substantial increase of $25.2 million or 466.2% compared to $5.4 million in 2024[169] - For the nine months ended September 30, 2025, revenue was $795.7 million, an increase of $96.3 million or 13.8% from $699.4 million in 2024[177] Assets and Liabilities - Total current assets increased to $613,582,000 as of September 30, 2025, up from $371,041,000 at December 31, 2024, reflecting a growth of 65.3%[17] - Total assets rose to $4,746,356,000 as of September 30, 2025, compared to $4,577,004,000 at December 31, 2024, marking an increase of 3.7%[17] - Total liabilities increased to $1,523,760,000 as of September 30, 2025, from $1,497,218,000 at December 31, 2024, an increase of 1.8%[17] - The accumulated deficit decreased to $(128,799,000) as of September 30, 2025, from $(220,900,000) at December 31, 2024, showing improvement[18] - Waystar's total liabilities decreased from $2,239,979,000 as of September 30, 2024, to $2,128,799,000 as of September 30, 2025, a reduction of approximately 4.96%[26] Cash Flow and Investments - Cash and cash equivalents increased significantly to $421,056,000 as of September 30, 2025, compared to $182,133,000 at December 31, 2024, a growth of 131.5%[17] - Operating cash flow for the nine months ended September 30, 2025, was $243,039,000, compared to $104,998,000 for the same period in 2024, indicating a 131% increase[29] - Cash flows used in investing activities decreased to $17.1 million for the nine months ended September 30, 2025, down from $21.0 million for the same period in 2024, a decrease of $4.0 million[205] - Cash flows provided by financing activities were $14.8 million for the nine months ended September 30, 2025, compared to $15.0 million for the same period in 2024, a decrease of $0.2 million[206] Revenue Breakdown - Waystar's revenue is primarily derived from subscription and volume-based services, which together account for 99% of total revenue[41] - Subscription revenue for the three months ended September 30, 2025, was $134.5 million, up 14.0% from $118.0 million in 2024[68] - Volume-based revenue for the three months ended September 30, 2025, increased to $132.3 million, a rise of 9.0% from $120.7 million in 2024[68] - Subscription revenue constituted approximately 70% of total revenue for the three and nine months ended September 30, 2025[164] Expenses - Operating expenses for Q3 2025 totaled $208,419,000, a decrease of 2.6% from $212,966,000 in Q3 2024[19] - Total operating expenses decreased by $4.5 million or 2.1% to $208.4 million, primarily due to a significant reduction in depreciation and amortization expenses[170] - General and administrative expenses rose by $9.7 million or 42.8% to $32.4 million, driven by increased third-party professional fees related to acquisition activities[172] - Research and development expenses for Q3 2025 were $12,403,000, slightly up from $11,082,000 in Q3 2024, reflecting a focus on innovation[19] Stock and Equity - The company issued 2,559,600 shares under employee equity plans, resulting in additional paid-in capital of $22,439,000 for the nine months ended September 30, 2025[26] - Waystar's total stockholders' equity increased to $3,222,596,000 as of September 30, 2025, compared to $3,052,747,000 at the same date in 2024, marking a rise of 5.57%[26] - The total fair value of options vested for the nine months ended September 30, 2025 was $16.5 million, compared to $4.8 million for the same period in 2024[119] Taxation - The effective income tax rate for the three months ended September 30, 2025, was 28.3%, down from 37.7% for the same period in 2024[93] - The company recognized income tax expense of $12.1 million for the three months ended September 30, 2025, compared to an income tax benefit of $3.3 million for the same period in 2024[93] - The company reported an income tax expense of $43.5 million for the nine months ended September 30, 2025, compared to an income tax benefit of $17.4 million in 2024, marking an increase of $60.9 million[184] Acquisitions - The company completed the acquisition of Iodine on October 1, 2025, for total cash consideration of approximately $458.6 million and 16,639,920 shares of common stock valued at $37.31 per share[140] - The acquisition of Iodine was completed on October 1, 2025, for a total purchase price of $1.25 billion, consisting of approximately $458.6 million in cash and 16,639,920 shares of common stock valued at $37.31 per share[153] Market and Client Metrics - Waystar facilitated over six billion healthcare payment transactions in 2024, including over $1.8 trillion in gross claims volume, covering approximately 50% of patients in the United States[147] - The company has a Net Revenue Retention Rate of 113.1% as of September 30, 2025, with 1,306 clients generating over $100,000 in revenue over the same twelve-month period[149] - Customer count generating over $100,000 in revenue rose to 1,306 in 2025 from 1,173 in 2024, a growth of 11.3%[198] Debt and Interest Rates - As of September 30, 2025, total outstanding debt is $1,234,795,000, a decrease from $1,243,545,000 as of December 31, 2024, representing a reduction of approximately 0.7%[11] - The First Lien Credit Facility has an effective interest rate of 6.34% as of September 30, 2025, following a repricing on August 12, 2025, which set the interest rate at 2.00% per annum above the SOFR rate[100] - Interest expense decreased significantly by $71.5 million or 56.7% to $54.7 million for the nine months ended September 30, 2025, due to paydowns on the First Lien Credit Facility[183] Risk Management - Credit risk is mitigated through a diversified client base, with regular assessments of clients' financial strength[213] - The company is exposed to market risks primarily associated with credit risk and interest rate risk[212] - Interest rate risk exposure is related to the First Lien Credit Facility, which bears interest at SOFR plus 2.00% as of September 30, 2025, with a hypothetical 100 basis point change impacting interest expense by approximately $3.2 million for the three months and $9.4 million for the nine months ended September 30, 2025[215]

Waystar Reports Third Quarter 2025 Results Q3 revenue growth of 12% year-over-year Q3 net income of $30.6 million and non-GAAP net income of $67.8 million Q3 net income margin of 11%; adjusted EBITDA margin of 42% Raising revenue and adjusted EBITDA guidance for 2025 LEHI, Utah and LOUISVILLE, Ky., October 29, 2025 — Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today reported results for the third quarter ended September 30, 2025. "Waystar delivered another quarter ...

Company Overview - Waystar provides a cloud-based software platform for healthcare payments, including solutions for financial clearance, patient financial care, claims and payment management, denial prevention and recovery, revenue capture, and analytics [4][10] - The company serves healthcare organizations as its primary customers, targeting providers seeking to optimize revenue cycle management and payment processes [5] - Waystar was founded in 2017 and is headquartered in Lehi, Utah, operating in the technology sector with approximately 1,500 employees [8] Financial Performance - As of October 16, 2025, Waystar's stock price was $36.81, with a market capitalization of $7.06 billion [3] - The company reported a total revenue of $1.01 billion and a net income of $85.94 million for the trailing twelve months (TTM) [3] - In Q2, Waystar's sales rose 15% year over year to $270.7 million, and the company expects to reach $1 billion in revenue for the year, up from $944 million in 2024 [10] Investment Insights - Capricorn Fund Managers Ltd established a new position in Waystar, acquiring 505,122 shares valued at approximately $19.15 million, which accounts for 6.4% of the fund's 13F reportable assets under management [1][2] - Waystar is now the largest holding by reported market value in Capricorn Fund Managers' portfolio [2] - The consistent sales growth and a forward price-to-earnings ratio of about 25 make Waystar an attractive long-term investment [11]