Waystar Holding Corp.(WAY) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $269 million, reflecting a 12% year-over-year growth, with an adjusted EBITDA margin of 42% [6][19] - Adjusted EBITDA for the quarter was $113 million, representing a 17% increase year-over-year [20] - Net Revenue Retention Rate (NRR) was 113%, indicating strong client retention and expansion [19][16] Business Line Data and Key Metrics Changes - Subscription revenue increased by 14% year-over-year to $134 million, while volume-based revenue grew by 10% year-over-year to $132 million [20] - The number of clients generating over $100,000 in trailing 12-month revenue grew to 1,306, an 11% increase year-over-year [16] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and accelerate innovation [9][10] - The healthcare financial system is experiencing rising utilization and denial rates, which are pressuring margins for providers [12][60] Company Strategy and Development Direction - The company aims to simplify healthcare payments through a cloud-based platform that integrates clinical, administrative, and financial data [7][10] - Waystar is focused on leveraging AI to enhance operational efficiency and client satisfaction, positioning itself as a leader in the healthcare payment modernization space [8][14] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing data fragmentation and integration challenges in the healthcare sector [13][14] - The company is optimistic about capturing growth opportunities as the demand for efficiency and transparency in healthcare increases [9][60] Other Important Information - Waystar received recognition as one of the best workplaces for innovators and was named Healthcare Company of the Year by the Stevie Awards [17] - The company is committed to maintaining a strong cash flow, ending the quarter with $421 million in cash and equivalents [23] Q&A Session Summary Question: Feedback on Iodine Software and client introduction - Management reported overwhelmingly positive feedback from clients regarding the Iodine acquisition and its integration with Waystar's offerings [28][31] Question: Cadence of replacing legacy processes in RCM - Management indicated that the integration of Iodine's capabilities will facilitate faster transitions from legacy systems to modern solutions [33][36] Question: Patient utilization trends and seasonality - Management noted that patient utilization is returning to historical levels, with expectations for continued growth in the volume-based revenue segment [39][41] Question: Shift from mail payments to mobile - Management discussed ongoing efforts to digitize patient payments, emphasizing the long-term transformation required in this area [44][46] Question: Acceleration of product roadmap due to Iodine - Management provided examples of how Iodine's capabilities will enhance Waystar's product offerings and accelerate development timelines [51][54] Question: Margin sustainability and internal efficiencies - Management expressed confidence in maintaining adjusted EBITDA margins around 40% while investing in innovation and operational efficiencies [80]