Waystar's Impressive Q3 Growth and Financial Highlights

Waystar Reports Third Quarter Results

Q3 revenue growth of 12% year-over-year.

Q3 net income of $30.6 million and non-GAAP net income of $67.8 million.

Q3 net income margin of 11%; adjusted EBITDA margin of 42%.

Raising revenue and adjusted EBITDA guidance for the fiscal year.

Waystar Holding Corp. (NASDAQ: WAY), a leader in healthcare payment software, has announced its results for the third quarter. Their significant growth trajectory continues as they have reported remarkable figures this quarter.

"Waystar delivered an outstanding quarter of double-digit revenue growth alongside robust margins, exceeding our guidance expectations across both metrics," stated Matt Hawkins, Chief Executive Officer of Waystar. "The integration of Iodine Software is progressing well, enhancing our AI-driven platform and unlocking exciting opportunities to drive profitability and growth. Ongoing demand and focused execution continue to boost our confidence in updating our full-year expectations upward."

Financial Highlights for Q3

Here are the key financial highlights from Waystar's third quarter:

• Revenue reached $268.7 million, reflecting a 12% increase from the previous year.
• Net income was reported at $30.6 million, with a GAAP net income per diluted share of $0.17, resulting in a net income margin of 11%.
• When accounting for non-GAAP measures, net income was $67.8 million with a non-GAAP net income per diluted share of $0.37.
• Adjusted EBITDA was at $112.7 million, with an impressive adjusted EBITDA margin of 42%.
• Cash flow from operations stood at $82 million, while unlevered free cash flow totaled $96 million.

Key Metrics and Revenue Disaggregation

The third quarter performance includes notable metrics:

• Around 1,306 clients contributed over $100,000 in Last Twelve Months (LTM) revenue, marking an 11% increase year-over-year.
• The net revenue retention rate (NRR) was an impressive 113%.
• Subscription revenue hit $134.5 million, a 14% rise from last year.
• Volume-based revenue reached $132.3 million, showing a 10% increase year-over-year.

Looking Forward: Financial Outlook

Waystar has provided updated guidance for the full fiscal year 2025:

• Total revenue is projected to be between $1.085 billion and $1.093 billion.
• Adjusted EBITDA is expected to range between $451 million and $455 million.
• Non-GAAP net income is anticipated to be between $271 million and $274 million.
• Diluted non-GAAP net income per share is estimated to be between $1.46 and $1.47.

Company Overview

Waystar is dedicated to transforming the healthcare payment landscape. Their software is specifically designed to simplify payments, allowing healthcare providers to focus on patient care while improving their financial health. Currently serving around 30,000 clients, Waystar’s user base includes notable institutions recognized in leading healthcare rankings. Their robust platform processes over 6 billion transactions annually, handling claims worth more than $1.8 trillion across approximately half of the U.S. healthcare system.

Frequently Asked Questions

What are Waystar's key financial highlights for Q3?

Waystar reported $268.7 million in revenue with a 12% year-over-year growth, a net income of $30.6 million, and an adjusted EBITDA margin of 42%.

How many clients contributed to Waystar's revenue growth?

A total of 1,306 clients contributed over $100,000 in LTM revenue, reflecting an 11% growth from the previous year.

What is Waystar's guidance for the full fiscal year 2025?

Waystar expects total revenue between $1.085 billion and $1.093 billion, with adjusted EBITDA forecasted to be between $451 million and $455 million.

What is the significance of the net revenue retention rate (NRR)?

Waystar reported a net revenue retention rate of 113%, indicating strong client loyalty and growth potential within existing customer accounts.

How does Waystar plan to enhance its software?

Waystar is integrating Iodine Software into its platform to leverage AI capabilities for operational efficiencies and better client outcomes.

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