Core Insights - Waystar has successfully repriced its first lien term loan, reducing the interest rate to adjusted SOFR +2.00%, a 25-basis-point decrease from previous terms, driven by strong lender demand [1][2] - The company plans to add $250 million of incremental term loans to fund the acquisition of Iodine Software, which is part of its growth strategy [1] - Since its IPO in June 2024, Waystar has reduced borrowing costs by 211 basis points through three successful repricings of the term loan [2] Company Overview - Waystar provides healthcare payment software and serves approximately 30,000 clients, including 16 of the top 20 institutions on the U.S. News Best Hospitals list [4] - The company's platform processes over 6 billion healthcare payment transactions annually, amounting to over $1.8 trillion in gross claims, covering about 50% of U.S. patients [4] - Waystar's mission is to simplify healthcare payments, allowing providers to focus on patient care and optimize financial performance [4] Management Perspective - The CEO of Waystar emphasized the strong demand from lenders and the favorable financing terms that will help accelerate growth and strengthen the company's competitive advantage [3] - The company is committed to innovation and delivering sustained long-term value for shareholders [3]

Core Insights - Waystar Holding Corp. reported a strong performance in Q2 2025, driven by a strategic acquisition of an AI-powered entity, leading to significant revenue growth [1] Financial Performance - The company's revenue experienced a notable increase, although specific figures were not disclosed in the provided text [1] Strategic Moves - The acquisition of an AI-powered entity is highlighted as a key factor in the company's recent success, indicating a focus on technological advancement and innovation [1]

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]

Financial Performance Highlights - Waystar achieved a revenue growth of 15% in 2Q'25 compared to 2Q'24[11] - Adjusted EBITDA grew by 20% year-over-year in 2Q'25[11] - The Adjusted EBITDA margin was 42% in 2Q'25[11] - Unlevered free cash flow reached $111 million[12] Client and Revenue Retention - There was a 14% year-over-year growth in clients with over $100,000 in TTM (Trailing Twelve Months) revenue[12] - Net revenue retention was 115% for the twelve months ended June 30, 2025[12] Debt and Leverage - Over $1 billion in debt was paid in 2024, reducing annual interest by over $100 million[28] - The adjusted net leverage ratio was 22x at the end of 2Q'25[28] Guidance and Future Outlook - The company raised its FY'25 revenue guidance by $22 million at the midpoint[35] - The company raised its FY'25 adjusted EBITDA guidance by $12 million at the midpoint[35]

Financial Performance - Revenue for Q2 2025 reached $270,654,000, a 15.4% increase from $234,543,000 in Q2 2024[20] - Net income for Q2 2025 was $32,184,000, compared to a net loss of $27,685,000 in Q2 2024, marking a significant turnaround[20] - For the six months ended June 30, 2025, Waystar reported a net income of $61,453,000, a significant improvement compared to a net loss of $43,617,000 for the same period in 2024, representing a turnaround of approximately 241%[30] - Consolidated net income for the six months ended June 30, 2025, was $61.5 million, a significant improvement from a net loss of $43.6 million in 2024[79] - Non-GAAP net income for Q2 2025 was $65.7 million, compared to a loss of $27.7 million in Q2 2024, representing a significant turnaround[193] Revenue Breakdown - Subscription revenue for the three months ended June 30, 2025, was $131.1 million, up 16.7% from $112.3 million in 2024[69] - Volume-based revenue for the three months ended June 30, 2025, reached $138.3 million, representing a 14.3% increase from $120.9 million in 2024[69] - Revenue increased by $67.8 million, or 14.8%, to $527.1 million for the six months ended June 30, 2025, with $37.7 million attributed to subscription revenue and $30.2 million to volume-based revenue[177] Expenses and Cost Management - Operating expenses decreased to $205,808,000 in Q2 2025 from $226,298,000 in Q2 2024, a reduction of 9.0%[20] - Total operating expenses decreased by 9.1% to $205.8 million for the three months ended June 30, 2025, compared to $226.3 million in the same period in 2024[168] - Sales and marketing expense decreased by $2.2 million, or 4.8%, to $43.5 million for the three months ended June 30, 2025, primarily due to a reduction in stock-based compensation[171] - General and administrative expense decreased by $10.8 million, or 26.9%, to $29.2 million for the three months ended June 30, 2025, mainly due to a reduction in stock-based compensation[172] - Research and development expense decreased by $3.3 million, or 20.6%, to $12.6 million for the three months ended June 30, 2025, primarily due to a reduction in stock-based compensation[173] Cash Flow and Liquidity - Cash and cash equivalents rose to $290,300,000 as of June 30, 2025, up from $182,133,000 at the end of 2024, a growth of 59.5%[18] - Cash flows from operating activities surged to $161.0 million for the six months ended June 30, 2025, a 515.0% increase from $26.2 million in the same period of 2024[202] - The net increase in cash and restricted cash was $106.9 million for the six months ended June 30, 2025, a 205.1% increase from $35.0 million in 2024[202] - Cash used in investing activities was $61,718,000 for the first half of 2025, compared to $12,428,000 in the prior year, indicating a significant increase in investment activity[30] Assets and Equity - Total assets increased to $4,677,922,000 as of June 30, 2025, up from $4,577,004,000 at the end of 2024, reflecting a growth of 2.2%[18] - Total stockholders' equity increased to $3,173,140,000 as of June 30, 2025, from $3,079,786,000 at the end of 2024, an increase of 3.1%[18] - Waystar's total stockholders' equity increased to $3,173,140,000 as of June 30, 2025, compared to $2,946,098,000 at the same time in 2024, marking an increase of about 8%[30] Debt and Financing - Long-term debt, net of current portion, decreased to $1,160,234,000 as of June 30, 2025, from $1,185,411,000 at the end of 2024, a reduction of 2.1%[18] - Total outstanding debt as of June 30, 2025, is $1,237.7 million, a slight decrease from $1,243.5 million on December 31, 2024[101] - The effective interest rate for the First Lien Credit Facility is 6.82% as of June 30, 2025, with principal payments due in 20 equal quarterly installments until October 22, 2029[102][103] Market Position and Client Base - The company has a strong market presence in the U.S. healthcare sector, providing cloud technology solutions that enhance data integrity and improve billing accuracy[34] - The company serves over 30,000 clients, representing over one million distinct providers, and facilitated over six billion healthcare payment transactions in 2024, amounting to over $1.8 trillion in gross claims volume[147] Acquisitions and Growth Strategy - The company entered into an agreement to acquire Iodine for $1.25 billion, which includes $625.0 million in cash and 16,751,541 shares of common stock[142] - The company announced the acquisition of Iodine for $1.25 billion, which includes $625 million in cash and shares, aimed at enhancing its AI capabilities and improving financial performance for providers[153] Stock-Based Compensation and Equity Awards - The company recognized $18,274,000 in stock-based compensation for the six months ended June 30, 2025, compared to $39,497,000 in the same period of 2024, a reduction of approximately 54%[30] - The company expects to incur a compensation expense of approximately $45.4 million over a weighted average of 3.5 years for all unvested time-based awards outstanding on June 30, 2025[124] - The company recorded $11.5 million of stock-based compensation expense for the three months ended June 30, 2025, down from $37.0 million in 2024[133]

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]