Core Insights - Waystar reported strong Q2 2025 earnings, with GAAP revenue of $270.7 million, exceeding estimates by $11.17 million, and non-GAAP EPS of $0.36, above the expected $0.34 [1][5][13] - The company raised its full-year 2025 guidance, indicating robust demand and rapid client onboarding, while maintaining high adjusted EBITDA margins of 41.6% [1][13] Financial Performance - Q2 2025 revenue increased by 15.4% year-over-year, driven by strong demand for provider solutions and AI-powered features [2][5] - Non-GAAP EPS rose by 38.5% from $0.26 in Q2 2024 to $0.36 in Q2 2025 [2][6] - Adjusted EBITDA reached $112.6 million, a 19.9% increase from $93.9 million in Q2 2024 [2][6] - Unlevered free cash flow surged by 120.1% to $110.8 million compared to $50.3 million in Q2 2024 [2][6] Business Overview - Waystar specializes in cloud-based healthcare payment technology, processing over six billion transactions annually [3] - The company aims to enhance AI integration in revenue cycle management and deepen relationships with major hospital systems [4] Strategic Initiatives - The company is focused on rapid client onboarding and expanding its capabilities through partnerships and acquisitions [4][10] - Waystar's AltitudeAI software has improved appeal productivity by 70% and helped prevent nearly $6 billion in denied claims [8][12] Client and Revenue Dynamics - Three large clients were onboarded faster than expected, contributing to immediate and future subscription revenue [7] - Provider solutions account for about 70% of total revenue, with subscription revenue reaching $131.1 million [6][11] Future Outlook - Waystar raised its full-year 2025 revenue guidance to $1.03 billion to $1.04 billion, with adjusted EBITDA guidance of $418 million to $426 million [13] - The company anticipates revenue in the second half of 2025 to be lower than the first half due to seasonality and patient payment trends [14]

Core Insights - Waystar Holding (WAY) reported revenue of $270.65 million for the quarter ended June 2025, marking a year-over-year increase of 15.4% and an EPS of $0.36 compared to $0.04 a year ago [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $271 million, resulting in a revenue surprise of -0.13%, while the EPS exceeded the consensus estimate of $0.33 by 9.09% [1] Revenue Breakdown - Subscription revenue reached $131.11 million, surpassing the four-analyst average estimate of $126.61 million [4] - Revenue from implementation services and other totaled $1.26 million, which was below the four-analyst average estimate of $1.46 million [4] - Volume-based revenue was reported at $138.29 million, exceeding the average estimate of $130.74 million from four analysts [4] Stock Performance - Over the past month, Waystar's shares have returned -9.4%, contrasting with the Zacks S&P 500 composite's increase of +3.4% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Company Performance - Waystar Holding (WAY) reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and significantly up from $0.04 per share a year ago, representing an earnings surprise of +9.09% [1] - The company posted revenues of $270.65 million for the quarter ended June 2025, slightly missing the Zacks Consensus Estimate by 0.13%, but up from $234.54 million year-over-year [2] - Over the last four quarters, Waystar has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Future Outlook - The sustainability of Waystar's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $253.74 million, and for the current fiscal year, it is $1.32 on revenues of $1.02 billion [7] - The estimate revisions trend for Waystar was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Software industry, to which Waystar belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $271 million, representing a 15% year-over-year growth with an adjusted EBITDA margin of 42% [11][26] - Adjusted EBITDA increased by 20% year-over-year to $113 million, driven by revenue growth and a shift to higher-margin provider solutions [28] - The company raised its full-year revenue guidance to a range of $1.03 billion to $1.042 billion, reflecting a 10% year-over-year growth [30] Business Line Data and Key Metrics Changes - Subscription revenue increased by 17% year-over-year to $131 million, while volume-based revenue grew by 14% year-over-year to $138 million [27] - The number of clients generating more than $100,000 in trailing twelve-month revenue increased by 14% year-over-year to 1,268 [17] Market Data and Key Metrics Changes - The company noted a strong demand for its AI-powered software platform as providers face margin pressures and workforce shortages [11][12] - Waystar's net revenue retention rate was 115%, benefiting from rapid onboarding of clients affected by a competitor's cyber event [26] Company Strategy and Development Direction - The acquisition of Iodine Software is expected to expand Waystar's total addressable market by over 15% and enhance its product roadmap [8][9] - Waystar aims to lead in automating the revenue cycle and maximizing reimbursement for healthcare providers [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience against potential Medicaid funding cuts, estimating less than a 1% revenue impact from a hypothetical 15% reduction in Medicaid funding [13][87] - The company is optimistic about the demand environment, citing strong provider interest in efficiency and technology adoption [54] Other Important Information - Waystar was recognized as the best overall healthcare payments solution provider by MedTech Breakthrough [23] - The company added two new independent board members to strengthen its governance [24] Q&A Session Summary Question: Impact of client migration post-cyber attack on revenue - Management indicated that the year-over-year benefit from client migration has normalized, and there were no notable impacts in Q2 [34][35] Question: Recurring nature of volume-based revenue from large clients - Management expects that volume-based revenue from newly onboarded large clients will become recurring as contracts mature [42][46] Question: Drivers behind the sequential increase in subscription revenue - Management attributed the growth to strong performance in provider solutions and continued adoption of subscription services [50][57] Question: Volume growth and digital payment penetration - Management noted that higher utilization and digital payment solutions are driving volume growth, with a good mix from both patient payment and provider solutions [60][64] Question: AI's impact on client demand and revenue - Management highlighted that AI is embedded in their solutions, significantly improving claim processing and denial prevention [72][73] Question: Analysis of Medicaid funding changes and their impact - Management reassured that the diverse client base insulates the company from significant impacts due to funding changes, with alternative solutions available to providers [84][87] Question: Mid-cycle opportunities and AI's role - Management emphasized the potential of AI in mid-cycle revenue cycle management, particularly through the acquisition of Iodine [101][102]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached $271 million, representing a 15% year-over-year growth with an adjusted EBITDA margin of 42% [10][24] - Adjusted EBITDA for Q2 2025 was $113 million, an increase of 20% year-over-year, driven by revenue growth and a shift to higher margin provider solutions [26][30] - The company raised its full-year revenue guidance to a range of $1.03 billion to $1.042 billion, reflecting a 10% year-over-year growth [29] Business Line Data and Key Metrics Changes - Subscription revenue increased to $131 million, up 17% year-over-year, while volume-based revenue reached $138 million, a 14% increase year-over-year [25] - The number of clients generating more than $100,000 in trailing twelve-month revenue increased to 1,268, a 14% year-over-year growth [15] Market Data and Key Metrics Changes - The company noted a strong demand for its AI-powered software platform as providers face margin pressures and workforce shortages [10][12] - Waystar's net revenue retention rate was 115%, benefiting from rapid onboarding of clients affected by a competitor's cyber event [24] Company Strategy and Development Direction - The acquisition of Iodine Software is expected to expand Waystar's total addressable market by over 15% and enhance its product roadmap [6][7] - Waystar aims to lead in the revenue cycle management space by leveraging AI to improve efficiency and reduce administrative burdens for healthcare providers [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience against potential Medicaid funding cuts, estimating less than a 1% impact on revenue from a hypothetical 15% reduction in Medicaid funding [12][85] - The demand environment remains robust, with providers prioritizing technology that enhances efficiency and cash flow [51][52] Other Important Information - Waystar was recognized as the best overall healthcare payments solution provider by MedTech Breakthrough and named one of the U.S. News Best Companies to Work For [22][23] - The company has established a strong governance structure with the addition of two new independent board members [23] Q&A Session Summary Question: Impact of client migration post-cyber attack on Q2 revenue - Management indicated that the year-over-year benefit from client migration had normalized by Q2, with no significant impact noted [34][36] Question: Recurring nature of volume-based revenue from large clients - Management expects that volume-based revenue from newly onboarded large clients will transition to subscription revenue as contracts mature [45][46] Question: Drivers behind the sequential increase in subscription revenue - The increase in subscription revenue was attributed to strong performance in provider solutions, which comprise a significant portion of total revenue [50][55] Question: Volume growth and digital payment penetration - Management noted that higher utilization in the healthcare system and the adoption of digital payment solutions contributed to volume growth, with a good mix from both patient payment and provider solutions [58][61] Question: Competitive landscape and client demand - Management reported strong win rates against competitors and noted an increase in client demand for AI-driven solutions [106]

2Q'25 Earnings Presentation July 30, 2025 © 2025 Waystar. All rights reserved. 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 deploym ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number 001-42125 Waystar Holding Corp. (Exact name of registrant as specified in its charter) Delaware 84-28 ...

Financial Performance - Waystar Holding Corp reported Q2 revenue of $270.7 million, reflecting a 15% year-over-year growth [1][6] - The net income for Q2 was $32.2 million, with a net income margin of 12% [1][6] - Non-GAAP net income for Q2 was $65.7 million, translating to a non-GAAP net income per diluted share of $0.36 [6][31] - Adjusted EBITDA for Q2 was $112.6 million, with an adjusted EBITDA margin of 42% [1][6] Guidance and Outlook - The company raised its revenue and adjusted EBITDA guidance for the full fiscal year 2025 [2] - Total revenue is expected to be between $1.030 billion and $1.042 billion, with adjusted EBITDA projected between $418 million and $426 million [6][20] Client Metrics - Waystar serves approximately 30,000 clients, including 1,268 clients contributing over $100,000 in last twelve months (LTM) revenue, which is a 14% increase year-over-year [6][19] - The net revenue retention rate (NRR) stands at 115% [6] Strategic Developments - The company announced an agreement to acquire Iodine Software, which is expected to expand its total addressable market and enhance its financial profile [2]

Group 1 - Waystar Holding Corp. announced a definitive agreement to acquire 100% of Iodine Software [4] - The conference call featured remarks from CEO Matt Hawkins and CFO Steven Oreskovich [3] - The investor update included a presentation slide deck available on the company's Investor Relations website [4] Group 2 - The call was recorded and included instructions for participants [2] - The operator welcomed attendees and introduced the first speaker from Investor Relations [2] - The call will open to questions after the initial remarks from company executives [4]

Acquisition Overview - Waystar is set to acquire Iodine Software for a total enterprise value of $1.25 billion [7] - Iodine shareholders will own approximately 8% of Waystar on a fully diluted, pro forma basis [9] - Advent, Iodine's largest shareholder, is expected to receive 100% of its transaction consideration in Waystar common stock [9] Strategic Rationale - The acquisition aims to simplify healthcare payments and accelerate AI-powered transformation [5] - It expands Waystar's total addressable market by more than 15% [5] - The deal integrates clinical intelligence software to prevent denials and ensure optimal reimbursement [5] Financial Impact - Iodine's profile includes approximately 99% revenue derived from software subscriptions [26] - Iodine's gross margin is approximately 75% [26] - Iodine's Adjusted EBITDA margin is approximately 40% [26] Q2 2025 Preliminary Results - Waystar's approximate Q2 2025 revenue is $271 million [31] - Waystar's approximate year-over-year growth is 15% [32]