Waystar Holding Corp.(US:WAY)2025-10-29 20:03Financial 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]