Core Insights - Waystar Holding Corp. reported strong financial performance for Q4 and FY 2025, with Q4 revenue of $304 million, up 24% year-over-year, and FY 2025 revenue of $1,099 million, up 17% year-over-year [1][3] - The company is focusing on AI-powered innovations and has successfully integrated the Iodine acquisition ahead of schedule, indicating robust growth and operational momentum [1][2] - For FY 2026, Waystar expects total revenue between $1.274 billion and $1.294 billion, with diluted non-GAAP net income per share projected between $1.59 and $1.68 [1][2] Financial Highlights - Q4 2025 net income was $20 million, with a net income margin of 7% and adjusted EBITDA margin of 43% [1][3] - FY 2025 non-GAAP net income reached $262.9 million, with a non-GAAP net income margin of 10% and adjusted EBITDA of $462.1 million [1][3] - Cash flow from operations for FY 2025 was $310 million, with unlevered free cash flow of $365 million [1][3] Revenue Breakdown - FY 2025 volume-based revenue was $534.8 million, up 11% year-over-year, while subscription revenue was $558.4 million, up 22% year-over-year [1][3] - Q4 2025 subscription revenue was $167.8 million, reflecting a 38% increase year-over-year [1][3] - The net revenue retention rate (NRR) stood at 112%, with 1,391 clients contributing over $100,000 in last twelve months (LTM) revenue, up 16% year-over-year [1][2] Operational Metrics - The company processed over 7.5 billion healthcare payment transactions annually, amounting to over $2.4 trillion in gross claims, covering approximately 60% of U.S. patients [2][4] - Waystar serves around 30,000 clients, including 16 of the top 20 institutions on the U.S. News Best Hospitals list [2][4] Future Outlook - Waystar's guidance for FY 2026 includes expectations for adjusted EBITDA between $530 million and $540 million, and non-GAAP net income projected between $317 million and $335 million [1][2] - The company emphasizes a strong pipeline and increasing demand for its AI-powered platform, aiming for sustainable, profitable growth [1][2]

Market Position and Client Base - Waystar's software facilitated over 7.5 billion healthcare payment transactions in 2025, representing more than $2.4 trillion in gross claims[33] - The company serves over 30,000 clients, including 16 of the 20 U.S. News Best Hospitals, with the top 10 clients accounting for only 10.8% of total revenue[33] - The total addressable market (TAM) for Waystar's software solutions was estimated at $20 billion in 2025, with a projected 5% CAGR growth to nearly $25 billion by 2030[40] - Waystar's platform processes transactions representing approximately 60% of patients and one-in-three hospital discharges in the U.S.[33] - The client base includes over 1 million providers, with a market opportunity of more than 7.5 million providers who could benefit from the company's solutions[52] - In 2025, 98% of revenue was generated from clients already under contract at the beginning of the year, indicating strong revenue predictability[64] - The company serves over 30,000 clients, with the top 10 clients accounting for only 10.8% of total revenue, showcasing a diversified client base[66] Financial Performance and Growth - The company achieved a Net Revenue Retention Rate of 112% for the year ended December 31, 2025, indicating strong client loyalty and growth[47] - The company aims to double revenue through cross-selling and up-selling to existing clients, leveraging an estimated whitespace within the current client base[52] - The company reported a Net Revenue Retention Rate of 112.0% for the year ended December 31, 2025, reflecting successful client retention and expansion efforts[67] - The platform processes billions of transactions annually and has achieved greater than 99.9% uptime, demonstrating robust operational performance[55] Operational Efficiency and Technology - Approximately 50% of Waystar's solutions leverage AI, enhancing the efficiency and accuracy of healthcare payment processes[42] - Waystar's clients experience quicker payments and increased revenue collection due to streamlined workflows and automation[46] - The company introduced a company-wide AI skills development initiative in 2025 to enhance productivity and operational efficiency[73] - The organization operates a cloud-based platform with infrastructure in Microsoft Azure, Amazon Web Services, and Google Cloud Platform environments[82] - The company has integrated AI and machine learning technologies into its products, which are essential for future success but also introduce various risks[196] Employee Engagement and Culture - The company employs over 1,700 full-time team members, with 85% of employees recommending the company as a great place to work according to the 2025 survey[68] - Employee engagement is assessed annually through a third-party survey, providing insights into training, development opportunities, and overall satisfaction[74] - The organization emphasizes a culture of inclusion and belonging, with initiatives such as quarterly "Waystar Day" focusing on various values[75] - The organization has received multiple workplace awards, including recognition as a Best Company to Work for by U.S. News & World Report[69] Regulatory and Compliance Challenges - The company is subject to various healthcare laws and regulations, which are complex and may change rapidly, impacting business operations[209] - Non-compliance with healthcare laws could result in significant penalties, including fines and exclusion from federal healthcare programs[211] - The evolving healthcare regulatory framework poses uncertainties that could adversely affect the company's financial condition and results of operations[213] - The company is compliant with PCI-DSS, SOC 2, and HITRUST certifications, and failure to maintain these could result in penalties and reputational harm[224] - The company faces increased scrutiny from regulators regarding the processing of health information, particularly with AI-enabled solutions[221] Risks and Challenges - The company must manage risks related to acquisitions, including successful integration and realization of expected benefits[132] - The company faces potential pricing pressures due to competition, which could adversely affect margins and operational results[125] - A reduction in patient visits could lead to decreased fees and lower revenue, particularly during economic downturns[139] - The selling cycle for new client agreements can take from weeks to 18 months, impacting revenue predictability[142] - The company relies on third-party vendors for critical services, including payment processing and claims management, which poses risks to service quality and operational continuity[159] Cybersecurity and Data Privacy - Cybersecurity risks are increasing, with potential attacks on information technology systems that could compromise the confidentiality, integrity, and availability of sensitive data, adversely affecting business operations[177] - The company may incur significant costs related to mitigating data security risks, and existing cybersecurity insurance may not cover all potential losses[183] - Compliance with evolving privacy and data protection laws, such as the CCPA and Washington's My Health My Data Act, could increase operational complexity and costs, impacting business practices[185] - The company may be liable for privacy and security breaches caused by third-party vendors, which could adversely affect business operations[217] Competitive Landscape - The company operates in a highly competitive and fragmented market, facing pressures from both smaller niche companies and large technology firms entering the revenue cycle technology market[122] - The competitive landscape includes various vendors specializing in revenue cycle management, point solutions, and EHR systems, with the company focusing on AI-powered automation for improved performance[80] - The company faces competitive risks from larger technology firms deploying AI tools that could commoditize core functions of its platform[201] Intellectual Property and Innovation - The company has 34 trademark registrations, 35 issued patents, and 24 copyright registrations in the United States[79] - The company's intellectual property rights may not be adequately protected, which could harm its competitive position and brand recognition[187] - Monitoring unauthorized use of intellectual property is challenging, and failure to enforce rights could lead to reduced demand for the company's technology and products[188]

Q4 net income of $20.0M and non-GAAP net income of $70.7M Q4 net income margin of 7%; adjusted EBITDA margin of 43% FY 2025 revenue of $1,099M, up 17% YoY FY net income of $112.1M and non-GAAP net income of $262.9M FY net income margin of 10%; adjusted EBITDA margin of 42% Waystar Reports Fourth Quarter and Fiscal Year 2025 Results, Provides 2026 Guidance Q4 revenue of $304M, up 24% YoY LEHI, Utah and LOUISVILLE, Ky., February 17, 2026 — Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare ...

Core Insights - Waystar has been recognized as an Inc. Best in Business honoree in the Best AI Implementation category, highlighting its excellence in AI execution and significant business impact [1][5] Group 1: AI Implementation and Impact - The rapid market adoption of Waystar AltitudeAI has led to clients preventing $15.5 billion in denials, achieving 95% time savings in denial prevention workflows, and increasing denial overturn rates by double digits [2] - Waystar's AI advantage is based on a mission-critical system of record that integrates financial, clinical, and administrative intelligence, allowing AI agents to resolve payment issues effectively [3] Group 2: Client Success and Growth - Advocate Health, a large nonprofit health system, utilizes Waystar's software to enhance administrative workflows and support rapid growth, emphasizing the positive impact on patient service [4] - Waystar serves over 30,000 clients, representing over 1 million distinct providers, and processes over 7.5 billion healthcare payment transactions annually, amounting to over $2.4 trillion in gross claims [7]

Group 1 - Waystar Holding Corp. (NASDAQ:WAY) is identified as one of the 14 oversold value stocks to invest in currently [1] - Analyst sentiment remains bullish, with a consensus price target of $46.00, indicating a potential upside of 91.70% [2] - Leerink initiated coverage on Waystar with an 'Outperform' rating and a price target of $43, highlighting the company's market reach and growth opportunities, particularly following the Iodine acquisition and advancements in AI capabilities [3] Group 2 - Investor sentiment is cautiously optimistic, despite the stock reaching a 52-week low of $28.08 on January 28, 2026, and a year-over-year decline of 30.68% [4] - Waystar provides cloud-based software solutions for healthcare organizations, aimed at streamlining payments and improving reimbursement processes [5] - The company's broad market reach and technology-led expansion are seen as key factors that could bridge the gap between current market valuation and potential growth [4]

Core Viewpoint - The market anticipates Waystar Holding (WAY) will report a year-over-year increase in earnings driven by higher revenues for the quarter ending December 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Waystar is expected to post quarterly earnings of $0.39 per share, reflecting a year-over-year increase of +34.5% [3]. - Revenues are projected to reach $294.61 million, which is a 20.7% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 1.52% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Waystar is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +1.82%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Waystar currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Waystar exceeded the expected earnings of $0.34 per share by delivering $0.37, resulting in a surprise of +8.82% [13]. - Over the past four quarters, Waystar has beaten consensus EPS estimates three times [14]. Industry Comparison - Another player in the industry, Pinterest (PINS), is expected to report earnings of $0.66 per share, with a year-over-year change of +17.9% and revenues of $1.33 billion, up 15.2% from the previous year [18]. - Pinterest's consensus EPS estimate has been revised down by 60.6% over the last 30 days, leading to an Earnings ESP of -3.64%, making it challenging to predict a beat on the consensus EPS estimate [19].

Core Insights - Waystar has been recognized as Best in KLAS® for Patient Access, marking over a decade of consecutive honors, highlighting its effectiveness in addressing financial challenges in healthcare through its AI-powered platform [1][6] Company Overview - Waystar provides healthcare payment software and serves over 30,000 clients, representing more than 1 million distinct providers, including 16 of the top 20 institutions on the U.S. News Best Hospitals list [7] - The company processes over 7.5 billion healthcare payment transactions annually, amounting to over $2.4 trillion in gross claims, covering approximately 60% of U.S. patients and one in three U.S. hospital discharges [7] Industry Challenges - Healthcare providers face significant financial pressures, with hospitals spending over $10 billion each year to navigate complex payer authorization requirements [2] - 60% of all denials in the industry are attributed to front-end issues, such as eligibility errors and missing authorizations [2] Solutions Offered - Waystar's platform enhances patient access by integrating real-time visibility into insurance coverage and automating authorization processes, achieving a 55% reduction in eligibility-related denials and up to 90% auto-approval rates on prior authorizations [4] - The company helps providers uncover unknown insurance coverage before care begins, achieving a 55% discovery rate for patients previously considered uninsured, which aids in setting clear cost expectations and accelerating collections [5] Leadership Perspective - The CEO of Waystar emphasized the company's commitment to client partnerships and the impact of its AI-powered platform in helping providers receive payments faster and more accurately, while improving the overall experience for both providers and patients [3]

Group 1 - Baron Discovery Fund focuses on long-term, competitively positioned companies with significant potential in untapped markets [1] - In Q4 2025, the Fund generated a return of 0.19%, underperforming the Russell 2000 Growth Index by 1.03 percentage points [1] - For the entire year, the Fund posted a return of 10.96%, while the Index returned 13.01% [1] - The top 10 holdings comprised 26.7% of the Fund's net assets, with cash making up 3.3% [1] - The Fund maintains optimism for a high-growth, low-inflation environment in 2026 [1] Group 2 - Waystar Holding Corp. provides software solutions for healthcare payments and has a market capitalization of $4.687 billion [2] - Waystar's stock closed at $24.50 per share on February 3, 2026, with a -27.26% return in the past month and a -41.61% return over the past twelve months [2] - The company services 30,000 clients, representing over 1 million distinct providers, and processes 6 billion transactions per year [3] - Waystar's estimated 2025 revenues are over $1 billion, with a 50/50 combination of subscription and volume-based revenue [3]

Core Viewpoint - Waystar Holding Corp. (WAY) is recommended as a buy due to its scalable and defensible business model, which is bolstered by its distribution and technical advantages [1] Company Analysis - The company benefits from advancements in AI that enhance its product offerings [1] - The investment strategy focuses on medium to long-term investments while also identifying short-term opportunities for alpha [1] - The analysis emphasizes a bottom-up approach, assessing the fundamental strengths and weaknesses of individual companies [1] Competitive Advantages - Waystar possesses sustainable competitive advantages that contribute to its growth potential [1]

Group 1 - Waystar Holding Corp. is considered one of the best US stocks to buy under $50, with a Buy rating and a $52 price target from BofA Securities [1] - Analysts highlight that 74% of hospitals do not plan to change their revenue cycle vendors, an improvement from 60% in the previous year, indicating a positive outlook for the company [2] - Wells Fargo initiated coverage with an Overweight rating and a $41 price target, describing Waystar as a "rule-of-50 compounder with predictable, high-margin growth" [3] Group 2 - The company provides cloud-based software for healthcare organizations, automating the revenue cycle from patient scheduling to payment collection, utilizing AI and automation to enhance efficiency [4] - More than two-thirds of Waystar's revenue is derived from the ambulatory segment of the healthcare industry, where it holds a dominant position in a fragmented market [3] - The expanding reach of Waystar's services segment is seen as a growing competitive advantage [3]