Financial Results 4Q'24 Earnings Presentation February 18, 2025 © 2025 Waystar. All rights reserved. FORWARD - LOOKING STATEMENTS 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; ...

Core Insights - Waystar Holding Corp. reported a fiscal year 2024 revenue of $944 million, representing a 19% year-over-year increase, with Q4 revenue growth of 18% year-over-year [1][5] - The company achieved a Q4 net income of $19.1 million, with a non-GAAP net income of $52.1 million, and a fiscal year 2024 net loss of $19.1 million, showing a 62.7% improvement year-over-year [1][5] - Adjusted EBITDA for fiscal year 2024 was $383 million, up 15% year-over-year, with a Q4 adjusted EBITDA margin of 41% [1][5] Financial Performance - Q4 revenue was $244.1 million, with a net income margin of 8% and adjusted EBITDA of $100.2 million [5][23] - The company reported cash flow from operations of $65 million and unlevered free cash flow of $80 million for Q4 [5][29] - The net revenue retention rate (NRR) was 110%, with subscription revenue of $121.6 million and volume-based revenue of $121.2 million, both up 18% and 19% year-over-year respectively [5][21] Future Outlook - Waystar anticipates total revenue for fiscal year 2025 to be between $1.0 billion and $1.016 billion, with adjusted EBITDA expected to be between $399 million and $407 million [5][21] - The company aims to leverage its cloud-based software platform to achieve solid revenue growth and compelling adjusted EBITDA margins in the future [2][5] Client Base and Market Position - Waystar serves approximately 30,000 clients, representing over 1 million distinct providers, including 16 of the top 20 institutions on the U.S. News Best Hospitals list [21] - The company processes over 6 billion healthcare payment transactions annually, amounting to over $1.8 trillion in gross claims, covering approximately 50% of U.S. patients [21]

Healthcare Payment Ecosystem - The healthcare payment ecosystem is complex, involving over 10,000 diagnosis codes and unique payer contracts, leading to significant challenges in reimbursement accuracy [35]. - In 2024, the company facilitated over 6 billion healthcare payment transactions, amounting to over $1.8 trillion in gross claims volume [36]. - Approximately 17% of healthcare claims were initially denied in 2021, underscoring the demand for solutions that reduce denials and simplify appeals [40]. - The healthcare sector accounted for 17.6% of the U.S. GDP in 2023, with total healthcare spending reaching $4.9 trillion [39]. Market Opportunity and Growth - The total addressable market (TAM) for the company's software solutions was estimated at $15 billion in 2022, with potential growth to nearly $20 billion by 2027, reflecting a 5% CAGR [41]. - Waystar serves over 1 million providers today, with an estimated 7.5 million providers that could benefit from its solutions, indicating a large market opportunity for growth [53]. - The company has the potential to approximately double its revenue through cross-selling and up-selling solutions to existing clients, leveraging a significant whitespace within its current client base [53]. - The number of clients generating over $100,000 in revenue increased from 982 in 2022 to 1,203 in 2024, driven by new client wins and successful cross-selling efforts [70]. Client Base and Retention - The company serves over 30,000 clients, representing over 1 million distinct providers, with the top 10 clients accounting for only 11.2% of total revenue [36]. - The company achieved a Net Revenue Retention Rate of 110.1% for the year ended December 31, 2024, indicating strong client loyalty and growth [46]. - Waystar's client base is highly diversified, with the top 10 clients accounting for only 11.2% of total revenue for the year ended December 31, 2024 [70]. - Client contracts typically have a two to three-year term, with automatic renewal for one-year terms, but clients can terminate with limited notice, impacting renewal rates [129]. Competitive Landscape - The company operates in a highly fragmented and competitive market, with principal competitors including revenue cycle technology vendors and point solution vendors, emphasizing the need for continuous innovation and quality [80][81]. - The company has a win rate of 83% against competitors from fiscal years 2022 to 2024 when clients switch vendors or purchase new solutions [50]. - The company faces competitive pressures from both smaller niche companies and large technology firms entering the revenue cycle technology market [122]. - Pricing pressures may arise due to competition, potentially affecting margins and overall results of operations [125]. Innovation and Development - The company leverages AI and advanced algorithms to enhance claim and billing accuracy, reduce labor costs, and improve the overall payment experience [33]. - Research and development expenses for the years ended December 31, 2024, 2023, and 2022 were $48.8 million, $35.3 million, and $32.8 million, respectively, indicating a significant increase in investment in innovation [79]. - The company has over 280 team members dedicated to product and research and development as of December 31, 2024, highlighting its commitment to enhancing its product offerings [79]. - Waystar's ability to innovate and develop new products is crucial, as the pace of change in the revenue cycle technology market is rapid [124]. Compliance and Regulatory Risks - The company must comply with NACHA rules and card network requirements for payment processing, with potential penalties for non-compliance [169]. - The company is subject to HIPAA regulations, with potential penalties for violations reaching up to $250,000 and ten years in prison, alongside civil penalties of up to $68,928 per violation, capped at $2,067,813 annually [207]. - The evolving healthcare regulatory framework poses uncertainties that could adversely affect the company's financial condition and operations [204]. - The company faces risks related to compliance with healthcare laws and data privacy regulations, which could result in civil and criminal penalties if not adhered to [156]. Financial Position and Performance - As of December 31, 2024, the company had outstanding indebtedness of approximately $1.2 billion, including $1.2 billion under the First Lien Credit Facility and $80 million under the Receivables Facility [231]. - The company had $400 million of availability under its Revolving Credit Facility as of December 31, 2024, with no outstanding balance on that facility [231]. - Goodwill and other intangible assets represented approximately 89% of the company's total assets as of December 31, 2024, indicating a significant reliance on these assets [229]. - The company is subject to legal and regulatory proceedings that could result in significant penalties, which may adversely affect its business operations and financial condition [221]. Employee Engagement and Culture - 83% of team members indicated they would recommend working at Waystar to friends and family, reflecting positive employee sentiment and company culture [72]. - The company has implemented a range of training and development opportunities to engage its workforce, including annual training that reinforces company values and promotes a respectful workplace [74][75]. - The company has an Inclusion & Diversity Council and various mentorship programs aimed at fostering a sense of belonging and empowerment among employees [78]. - The company emphasizes the importance of employee engagement and satisfaction, conducting annual surveys to gather feedback on various aspects of the workplace [75].

Revenue Performance - Fiscal year 2024 revenue reached $944 million, representing a 19% year-over-year increase[1] - Q4 revenue was $244.1 million, up 18% year-over-year, with a net income of $19.1 million and a net income margin of 8%[4] - Subscription revenue for Q4 was $121.6 million, up 18% year-over-year, while volume-based revenue was $121.2 million, up 19% year-over-year[8] - Revenue for the three months ended December 31, 2024, increased to $244.1 million, up 18.0% from $206.7 million in the same period of 2023[25] Profitability Metrics - Fiscal year 2024 adjusted EBITDA was $383 million, reflecting a 15% increase year-over-year, with an adjusted EBITDA margin of 41%[1] - Net income for the twelve months ended December 31, 2024, was a loss of $19.1 million, an improvement from a loss of $51.3 million in 2023[29] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $383.5 million, representing a 14.9% increase from $333.7 million in 2023[31] - Non-GAAP net income for Q4 2024 reached $52,073 thousand, compared to $19,455 thousand in Q4 2023, representing a 167% increase[35] Cash Flow and Financial Health - Cash flow from operations for Q4 was $65 million, with unlevered free cash flow of $80 million[4] - The company reported a net cash provided by operating activities of $169.8 million for the twelve months ended December 31, 2024, compared to $51.5 million in 2023[29] - Operating cash flow for the twelve months ended December 31, 2024, was $169,768 thousand, compared to $51,460 thousand in 2023, representing a 229% increase[37] - Unlevered free cash flow for Q4 2024 was $80,128 thousand, up from $54,983 thousand in Q4 2023, indicating a 45% growth[37] Client and Market Metrics - The company reported a net revenue retention rate (NRR) of 110%, with 1,203 clients contributing over $100,000 in last twelve months (LTM) revenue, a 15% increase year-over-year[4] - The company serves approximately 30,000 clients, processing over 6 billion healthcare payment transactions annually, amounting to over $1.8 trillion in gross claims[23] Future Projections - For fiscal year 2025, total revenue is expected to be between $1.0 billion and $1.016 billion, with adjusted EBITDA projected between $399 million and $407 million[8] - Non-GAAP net income for fiscal year 2025 is expected to be between $237 million and $243 million, with diluted non-GAAP net income per share projected between $1.29 and $1.32[8] Balance Sheet and Liabilities - Cash and cash equivalents increased significantly to $182.1 million as of December 31, 2024, compared to $35.6 million at the end of 2023[27] - Total current assets rose to $371.0 million in 2024, up from $222.1 million in 2023, reflecting a 67.0% increase[27] - Total liabilities decreased to $1.5 billion as of December 31, 2024, down from $2.5 billion in 2023, indicating a reduction of 41.0%[27] - Net debt decreased to $1,061,413 thousand as of December 31, 2024, down from $2,213,236 thousand a year earlier, reflecting a reduction of 52%[39] Research and Development - Research and development expenses for the twelve months ended December 31, 2024, were $48.8 million, up from $35.3 million in 2023, marking a 38.1% increase[25] Stock and Compensation - The weighted-average shares outstanding for basic shares increased to 172.5 million in 2024 from 121.7 million in 2023[25] - Stock-based compensation for Q4 2024 was $7,037 thousand, up from $2,343 thousand in Q4 2023, indicating a 200% rise[35] Tax and Adjustments - Tax effect of adjustments for the twelve months ended December 31, 2024, was $(50,170) thousand, compared to $(36,660) thousand in 2023, reflecting an increase in tax adjustments[35] Financial Ratios - Adjusted Gross leverage ratio improved to 3.2x in Q4 2024 from 6.7x in Q4 2023, showing enhanced financial stability[39]

Core Insights - Waystar Holding Corp. has been recognized as the leading AI-powered healthcare payment software platform, ranking 1 in eight categories according to a survey by Black Book Market Research [1][2] - The company outperformed 80 vendors in the survey, with no other vendor securing more than one top ranking [2] - Waystar's AI capabilities have significantly improved claims submission, denial reduction, and reimbursement turnaround time, establishing its leadership in financial accuracy and efficiency [2][3] Company Performance - Waystar achieved the 1 ranking in various AI-driven financial and payment management categories, including reduction in claim rejection and denial rates, and improvement in overall claims reimbursement turnaround time [3] - The platform has been recognized for its effectiveness in patient collections and engagement, leading in upfront patient payment collection rates and automated payment processing [3] - Waystar's software processes over 5 billion healthcare payment transactions annually, managing over $1.2 trillion in gross claims and covering approximately 50% of U.S. patients [4] Technological Advancements - The launch of Waystar AltitudeAI™ introduced a comprehensive set of AI capabilities, including AltitudeCreate™, aimed at enhancing the appeal process for denied claims [2] - The platform utilizes AI-driven predictive analytics to minimize claim denials by identifying errors before submission [5] - Waystar enhances patient financial interactions through intuitive, patient-friendly portals that provide real-time cost estimates and higher collection rates with minimal friction [5]

Core Insights - Waystar Holding Corp. has achieved top rankings in multiple 2025 Best in KLAS categories, specifically in Claims Management & Clearinghouse and Patient Access, highlighting the effectiveness of its AI-powered software platform [1][2] - The recognition reflects Waystar's commitment to client support excellence and its status as a leading software provider in revenue cycle management, marking over a dozen consecutive years of being named Best in KLAS [2][5] Group 1: Company Performance and Recognition - Waystar's software platform is designed to optimize revenue cycle workflows by integrating front-end patient access with back-end claims management, enhancing operational efficiency and return on investment (ROI) [3] - The company has received multiple prestigious awards, including Forbes' Most Trusted Companies in America and Fortune's Best Workplaces in Health Care, further solidifying its reputation in the industry [5] - Waystar serves approximately 30,000 clients, representing over 1 million distinct providers, and processes over 5 billion healthcare payment transactions annually, amounting to over $1.2 trillion in gross claims [6] Group 2: Client Impact and Industry Response - Following a cyber incident that disrupted claims processing nationwide, Waystar's claims and clearinghouse solutions were pivotal in stabilizing the healthcare industry, leading to the onboarding of over 30,000 providers through the Accelerated Implementation Program [4] - The platform's automation capabilities enhance denial prevention and accelerate reimbursements, allowing providers to navigate operational complexities and improve financial performance [3] - Waystar's continuous innovation and focus on client satisfaction empower healthcare providers to address pressing industry challenges effectively [1][3]

LEHI, Utah and LOUISVILLE, Ky., Jan. 28, 2025 /PRNewswire/ -- Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, announced today that it will report financial results for the fourth quarter and fiscal year ended December 31, 2024, before market open on Tuesday, February 18, 2025. The company will discuss its financial results on a conference call at 8:30 a.m. Eastern Time that same day.A live audio webcast of the conference call will be available on Waystar's investor re ...

Healthcare providers gain access to first-of-its-kind generative AI technology, leading to faster and more accurate payments LEHI, Utah, and LOUISVILLE, Ky., Jan. 13, 2025 /PRNewswire/ -- Waystar (Nasdaq: WAY), a provider of leading healthcare payment software, today announced the launch of Waystar AltitudeAI™, a comprehensive set of AI capabilities for providers, including AltitudeCreate™, a new generative AI innovation focused on appealing denied claims. By autonomously generating appeal letters, Waystar ...

Group 1 - Waystar Holding Corp. will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 13, 2025, at 11:15 a.m. PT [1] - The event will be available via live webcast on Waystar's Investor Relations website, with a recording accessible afterward [1] Group 2 - Waystar provides healthcare payment software designed to simplify payment processes, allowing providers to focus on patient care and financial performance [2] - The company serves approximately 30,000 clients, representing over 1 million distinct providers, including 16 of the top 20 institutions on the U.S. News Best Hospitals Honor Roll [2] - Waystar's platform processes over 5 billion healthcare payment transactions annually, amounting to over $1.2 trillion in gross claims, covering about 50% of U.S. patients [2]

Enhancements expected to boost flexibility and lower borrowing costsLEHI, Utah and LOUISVILLE, Ky., Dec. 30, 2024 /PRNewswire/ -- Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today announced an amendment to its first lien credit agreement (the "amended credit agreement") with its lenders. The amendment reprices Waystar's term loan and increases its revolving credit facility.Under the amended agreement, the term loan will now carry a reduced interest rate of adjuste ...