WALTHAM, Mass.--(BUSINESS WIRE)--Wolters Kluwer Health announces that two UpToDate® solutions are ranked #1 in the 2026 Best in KLAS – Software and Services report released today. KLAS Research, which independently measures the performance of healthcare technology and services vendors based on provider feedback, rated UpToDate Patient-Driven Care Management and Patient Education as top performing solutions that enable patients to help manage and participate in their own care. This recognition m. ...

Group 1 - The company reaffirmed its full year forecast adjusted diluted EPS of $1.75 [1] - Medicaid results for July and August indicate a positive trend in the Health Benefits Ratio (HBR) improvement for the second half of the year [2] - The company has successfully refiled Marketplace rates in states covering 95% of its membership, with approvals expected by the end of the month [2]

Financial Data and Key Metrics Changes - Waystar reported Q1 2025 revenue of $256 million, reflecting a 14% year-over-year increase and an adjusted EBITDA of $108 million, which is a 16% increase year-over-year [8][26][29] - The adjusted EBITDA margin was 42%, aligning with the long-term target of approximately 40% [29][30] - The net leverage ratio at the end of Q1 was 2.5 times, indicating a decrease of approximately a quarter turn in the quarter [20][30] Business Line Data and Key Metrics Changes - Subscription revenue increased by 18% year-over-year and 3% sequentially, while volume-based revenue grew by 11% year-over-year, adjusted for a prior contract termination benefit [27][28] - The number of clients generating over $100,000 in trailing twelve-month revenue increased by 15% year-over-year to 1,244 [12][26] Market Data and Key Metrics Changes - Waystar serves over a million US-based providers across various care settings, indicating a broad market presence [9] - The company reported a 114% net revenue retention rate, which is above the typical range of 108% to 110% experienced over the past three years [26] Company Strategy and Development Direction - Waystar is focused on sustainable revenue growth, operational profitability, and innovation through its cloud-based software platform [8][11] - The company is pursuing a strategic software product roadmap that emphasizes scale, automation, and substantial ROI, including the launch of Altitude AI [14][70] - Waystar aims to leverage generative AI to enhance operational efficiency and reduce costs for clients, positioning itself as a leader in healthcare payments [16][89] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance despite macroeconomic volatility, citing the recession-resistant nature of its business model [9][30] - The company raised its full-year revenue guidance to a range of $1,060 million to $1,022 million, reflecting confidence in continued strong patient payment utilization [31][32] Other Important Information - Waystar's software platform is designed to help providers optimize cash flow and reduce administrative costs, which is critical in challenging economic conditions [9][10] - The company has maintained high cybersecurity standards and regularly audits its platform against industry-leading frameworks [19] Q&A Session Summary Question: Breakdown of Q1 outperformance and guidance components - Management indicated that strong patient payment utilization contributed to Q1 performance and guidance, with 98% of revenue coming from contracted solutions [35][36] Question: Drivers of net revenue retention rate - Management highlighted robust bookings from revenue cycle solutions and strong client advocacy as key factors driving the 114% net revenue retention rate [44][46] Question: Trends in utilization and seasonality - Management noted that utilization has trended above historical averages, benefiting the business model, with no changes in expectations for seasonality [50][53] Question: Impact of cybersecurity on sales cycles - Management confirmed that cybersecurity remains a critical factor in client decision-making, with strong demand for solutions that enhance cash flow [56][58] Question: RFP activity and tariff impact - Management observed strong demand for AI and automation solutions, with clients prioritizing efficiency amid economic challenges [68][70] Question: AI's impact on business model - Management believes that the trend of bringing outsourced RCM back in-house due to AI capabilities will benefit the business model and expand market opportunities [88][90] Question: M&A strategy post-leverage target achievement - Management expressed a disciplined approach to M&A, focusing on companies that align with Waystar's technology and client base [102][104]

Financial Data and Key Metrics Changes - Q4 revenue was $109.7 million, up 15% year over year [10] - Q4 adjusted EBITDA was $16.4 million, reflecting a significant increase from the previous year [10] - Q4 average healthcare services clients reached $4,341, an increase of $104 from the prior quarter and $379 from the prior year [10] - Q4 total revenue per AhSE was $25,266, up 5% year over year [10] - Q4 operating cash flow was positive at $16.3 million, up $19.3 million year over year [10] - Q4 free cash flow was positive at $9.2 million, up $20.1 million year over year [10] - Cash position improved to $84.2 million as of January 31, up $2.5 million from October 31, 2024 [11] Business Line Data and Key Metrics Changes - The Appresia platform was used in approximately 14% of patient visits across the United States, equating to around 170 million sites [9] - Strong growth was noted in network solutions, with expectations for similar market conditions in 2026 as in 2025 [18][19] Market Data and Key Metrics Changes - The company is monitoring macroeconomic factors closely, including consumer confidence and Medicaid changes, but has not seen significant impacts on business as of now [66][68] Company Strategy and Development Direction - The company aims to continue generating positive free cash flow while investing in long-term profitable revenue growth [11] - The revenue outlook for fiscal year 2026 is maintained at a range of $472 million to $482 million, with adjusted EBITDA expected between $78 million and $88 million [12] - The company is focused on leveraging AI and automation to improve productivity and drive business growth [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth despite potential macroeconomic challenges, emphasizing a strong operational foundation [66][70] - The company is committed to capital allocation strategies that prioritize durable and profitable growth, considering both organic and inorganic opportunities [70][72] Other Important Information - The company has not made any acquisitions in fiscal year 2025, but previous acquisitions are contributing to growth [75] - The company is excited about the rollout of new products that enhance patient engagement and medication adherence [8][49] Q&A Session Summary Question: What is the potential for gross margin expansion? - Management indicated that mix is a significant driver of gross margin, with expectations for higher growth in certain revenue lines contributing to expansion [16][18] Question: How are market conditions expected to change in 2026? - Management expects market conditions in 2026 to be similar to those in 2025 [19] Question: Can you explain the postscript engagement product? - The product operates on an impression-based model, leveraging data to remind patients about prescriptions [24][25] Question: What impact did the calendar have on revenue per AhSE? - Management noted that calendar factors, including holidays and weather, significantly impacted Q4 performance [30] Question: What progress has been made in leveraging AI? - Management reported positive real-time impacts from AI applications, particularly in forecasting and productivity improvements [34] Question: How is the company positioned in the competitive landscape? - Management noted improved close rates and a beneficial position as a market leader amidst new entrants [42] Question: What is the strategy for capital deployment in 2026? - The company will continue to prioritize capital allocation for durable growth, considering both organic and inorganic opportunities [70][72]