Financial Data and Key Metrics Changes - The company reported a standalone growth rate of 8% year-over-year for Q4, indicating strength in the business [48] - Revenue mix is approximately 50% subscription and 50% volume-based, allowing the company to capture upside from increased utilization [18] Business Line Data and Key Metrics Changes - The company is seeing significant demand for multiple sales solutions and platform-type opportunities, particularly as clients seek to reduce the number of vendors in their ecosystem [15][16] - The acquisition of Iodine is expected to enhance the company's ability to submit "perfect undeniable claims," improving the overall claims process [10][12] Market Data and Key Metrics Changes - The company has a total addressable market opportunity of over $17 billion, with low penetration in the high single digits [43] - Utilization has been strong, with continued patient engagement leading to increased revenue opportunities for healthcare providers [18] Company Strategy and Development Direction - The company aims to build, buy, or partner in the digital front door market to enhance patient engagement and revenue capture [44] - There is a focus on autonomous coding as a means to improve efficiency and accuracy in claims processing [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining long-term low double-digit revenue growth and strong free cash flow conversion [51] - The company is cautiously optimistic about the future, with no immediate changes expected in growth expectations [51] Other Important Information - The company has a high gross revenue retention rate of 97% and typically sees annual price increases of 3-4% [24] - The generative AI solutions have shown significant early reception, with clients reporting a 70% decrease in prior authorization times and a 90% reduction in time for denials and appeals management [21][22] Q&A Session Summary Question: How has the sales cycle shaped up this year versus prior years? - Management noted strong activity in the pipeline and demand for multiple sales solutions, particularly from health systems and hospitals [14][17] Question: Can you discuss the impact of AI on your technology stack? - The company highlighted the integration of over 160 AI modules from Iodine, which enhance the processing of unstructured data into clinical codes [13] Question: What is the competitive dynamic in the market? - Management emphasized the differentiation in ROI and client experience compared to legacy competitors and new entrants, highlighting the importance of a high-touch client experience [29][30] Question: What are the future opportunities for growth? - The company is exploring opportunities in the digital front door market and autonomous coding, aiming to address client pain points and enhance service offerings [44][45]

Financial Data and Key Metrics Changes - The company reported a strong standalone growth rate of 8% year-over-year for Q4, indicating robust business performance [48] - Revenue mix is approximately 50% subscription and 50% volume-based, allowing the company to capture upside from increased utilization [19] Business Line Data and Key Metrics Changes - The acquisition of Iodine for $1.25 billion enhances the company's capabilities in clinical documentation, contributing to the goal of submitting "perfect undeniable claims" [10][12] - There is a notable uptick in demand for multiple sales solutions and platform-type solutions, particularly as clients seek to reduce the number of vendors in their ecosystem [16][18] Market Data and Key Metrics Changes - The company has seen strong utilization trends over the past five to six quarters, which is expected to continue, contributing positively to revenue growth [19] - The health system and hospital market remains a primary focus, with a significant portion of RFPs coming from these sectors [18] Company Strategy and Development Direction - The company aims to maintain a competitive edge through a high-touch client experience and a focus on ROI, differentiating itself from legacy competitors [30][31] - Future opportunities include expanding into the digital front door market and exploring autonomous coding solutions to enhance efficiency [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of revenue growth, projecting low double-digit growth rates in the long term [52] - The company is focused on leveraging generative AI to improve operational efficiencies and client outcomes, positioning itself as a trusted partner in the healthcare ecosystem [34][42] Other Important Information - The company has a total addressable market opportunity exceeding $17 billion, with low current penetration, indicating significant growth potential [44] - The company maintains strong partnerships with EHR vendors, which helps in navigating the competitive landscape [32] Q&A Session Summary Question: How has the sales cycle shaped up this year versus prior years? - Management noted strong activity in the pipeline and demand for multiple sales solutions, indicating a positive trend in client engagement [16] Question: What is the impact of AI on the competitive dynamic? - Management believes that while AI presents opportunities, it also reinforces the need for trusted vendors like Waystar to navigate the complexities of the healthcare ecosystem [34] Question: Can you comment on the size of the clearinghouse business? - The clearinghouse business is a meaningful portion of revenue, particularly in the ambulatory sector, and there are ongoing cross-sell opportunities [40][38] Question: What are the growth expectations for 2026? - Management reiterated long-term targets of low double-digit revenue growth and strong EBITDA margins, with no significant changes anticipated [52]

Core Viewpoint - Waystar Holding (WAY) has seen a 3% increase in share price over the past four weeks, closing at $36.91, with a potential upside of 34.6% based on Wall Street analysts' mean price target of $49.67 [1][11]. Price Targets and Analyst Estimates - The mean estimate consists of 18 short-term price targets with a standard deviation of $3.11, indicating a consensus among analysts. The lowest estimate is $44.00 (19.2% increase), while the highest is $54.00 (46.3% increase) [2][9]. - Analysts' price targets can often mislead investors, as empirical research shows they rarely indicate actual stock price movements [7][10]. - A low standard deviation in price targets suggests a high degree of agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9]. Earnings Estimates and Analyst Optimism - Analysts have shown growing optimism regarding WAY's earnings prospects, as indicated by a positive trend in earnings estimate revisions. This correlation between earnings revisions and stock price movements supports the expectation of an upside [4][11]. - Over the last 30 days, three earnings estimates for WAY have been revised upward, leading to a 2% increase in the Zacks Consensus Estimate [12]. - WAY holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13]. Conclusion on Price Movement - While the consensus price target may not be a reliable indicator of the extent of potential gains, the implied direction of price movement appears to be a useful guide for investors [14].

Group 1: Artisan Small Cap Fund Overview - Artisan Small Cap Fund's third-quarter 2025 investor letter indicates a strong performance in global equities, with major US indices reaching record highs and double-digit year-to-date gains [1] - The fund's Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX returned 8.75%, and Institutional Class fund APHSX returned 8.73%, compared to a 12.19% return for the Russell 2000 Growth Index [1] Group 2: Waystar Holding Corp. Analysis - Waystar Holding Corp. is highlighted as a key investment, being a cloud-based software solution developer for healthcare payments, with a one-month return of -8.61% and a 52-week gain of 9.80% [2] - As of November 17, 2025, Waystar's stock closed at $34.29 per share, with a market capitalization of $6.56 billion [2] - The fund initiated new positions in Waystar, viewing it as well-positioned to benefit from the fallout of a cyberattack on its largest competitor, Change Healthcare, and from integrating AI capabilities into its software [3] Group 3: Financial Performance of Waystar - In the third quarter of 2025, Waystar recorded revenue of $269 million, reflecting a 12% increase compared to the same period last year, with an adjusted EBITDA margin of 42% [4] - Despite acknowledging Waystar's potential, the fund suggests that certain AI stocks may offer greater upside potential and carry less downside risk [4]

Core Insights - Waystar Holding Corp. is recognized as a leading digital health stock, with Mizuho Securities raising its target price from $48 to $50 following strong Q3 earnings, driven by high demand for its revenue cycle management solutions [1][2] - The company's Q3 report indicated a 12% revenue increase to $268.7 million, with adjusted EBITDA at $112.7 million, reflecting a 42% margin, attributed to steady transaction volume and client adoption [2] - Management has raised full-year revenue targets to between $1.085 billion and $1.093 billion, and adjusted EBITDA targets to between $451 million and $455 million, indicating confidence in future growth [2] Company Overview - Waystar Holding Corp. specializes in healthcare payments and revenue cycle technology, providing cloud-based software for hospitals, physician groups, and care organizations to manage claims processing, billing, and patient financial interactions [3]

Core Insights - Waystar Holding (WAY) reported revenue of $268.65 million for the quarter ended September 2025, marking an 11.9% year-over-year increase and exceeding the Zacks Consensus Estimate of $256.52 million by 4.73% [1] - The company achieved an EPS of $0.37, up from $0.14 a year ago, surpassing the consensus EPS estimate of $0.34 by 8.82% [1] Revenue Breakdown - Subscription revenue reached $134.45 million, exceeding the average estimate of $130.16 million from three analysts [4] - Revenue from implementation services and other totaled $1.86 million, compared to the estimated $1.44 million [4] - Volume-based revenue was reported at $132.34 million, surpassing the average estimate of $123.44 million from three analysts [4] Stock Performance - Over the past month, Waystar's shares have returned +4.1%, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Waystar Holding (WAY) reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing a significant increase from $0.14 per share a year ago, representing an earnings surprise of +8.82% [1] - The company achieved revenues of $268.65 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.73% and increasing from $240.11 million year-over-year [2] - Waystar has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The future performance of Waystar's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $256.63 million, while for the current fiscal year, the estimate is $1.39 on revenues of $1.04 billion [7] Industry Context - The Internet - Software industry, to which Waystar belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

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% [7][20][22] - Adjusted EBITDA increased by 17% year-over-year to $113 million, with the adjusted EBITDA margin exceeding the long-term target of approximately 40% [22][23] - Net revenue retention rate (NRR) was 113%, indicating strong client retention and expansion [21][17] Business Line Data and Key Metrics Changes - Subscription revenue grew to $134 million, a 14% increase year-over-year, while volume-based revenue was $132 million, up 10% year-over-year [22] - The client base generating over $100,000 in trailing 12-month revenue increased by 11% year-over-year to 1,306 clients [17][21] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and enhance innovation capabilities [9][10] - The healthcare financial system is described as complex and fragmented, with a significant opportunity for modernization through Waystar's platform [8][15] Company Strategy and Development Direction - Waystar aims to simplify healthcare payments through a cloud-based platform that integrates clinical, administrative, and financial data [8][10] - The company is focused on leveraging AI to enhance operational efficiencies and client satisfaction, positioning itself as a leader in the healthcare revenue cycle management space [9][15][68] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing rising denial rates and workforce shortages in the healthcare sector, which are pressuring margins [12][60] - The company is optimistic about capturing growth opportunities through the integration of Iodine's capabilities and the ongoing demand for AI-driven solutions [9][10][68] 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 [18] - The company is committed to maintaining high cash flow conversion rates, with unleveraged free cash flow of $96 million in Q3 2025 [24][25] Q&A Session Summary Question: Feedback from Iodine clients during the True North conference - Management reported 100% positive feedback from clients regarding the Iodine acquisition, highlighting the strategic fit and potential benefits for healthcare [31][32] Question: Cadence of replacing legacy processes in RCM - Management noted that Iodine's capabilities will facilitate faster transitions from legacy systems, enhancing the overall efficiency of revenue cycle management [35][36] Question: Patient utilization trends and seasonality - Management indicated that patient utilization is returning to historical levels, with expectations for continued growth in the volume-based revenue segment [41][42] Question: Transition from mail payments to mobile - Management discussed the ongoing shift towards digital payment solutions, emphasizing the long-term transformation in patient financial engagement [46][49] Question: Acceleration of product roadmap due to Iodine acquisition - Management provided examples of how Iodine's clinical data will enhance existing products, potentially accelerating the product development timeline by nearly two years [52][56] Question: Competitive landscape and go-to-market strategy - Management acknowledged increased competition but emphasized Waystar's comprehensive platform approach and strong client relationships as key differentiators [66][68] Question: Sustainability of EBITDA margin efficiencies - Management expressed confidence in maintaining margin efficiencies through ongoing operational improvements and AI-driven solutions [82]

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% [7][20][22] - Adjusted EBITDA for the quarter was $113 million, representing a 17% increase year-over-year [22] - Net Revenue Retention Rate (NRR) was 113%, indicating strong client retention and expansion [21][17] 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 [22] - The number of clients generating over $100,000 in trailing 12-month revenue grew to 1,306, an 11% increase year-over-year [17][21] Market Data and Key Metrics Changes - The acquisition of Iodine Software is expected to expand the total addressable market by over 15% and enhance innovation capabilities [9][10] - The healthcare financial system is described as complex and fragmented, with a significant opportunity for modernization through Waystar's platform [8][15] Company Strategy and Development Direction - Waystar aims to simplify healthcare payments through a cloud-based platform that integrates clinical, financial, and administrative data [8][10] - The company is focused on leveraging AI to enhance operational efficiencies and client outcomes, with a strong emphasis on automation and data integration [11][16][75] - Waystar's strategy includes continuous innovation, with hundreds of new capabilities launched each quarter to improve automation and accuracy [15][17] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of addressing rising utilization, denial rates, and workforce shortages as key challenges in the healthcare sector [12][13] - The company remains optimistic about capturing growth opportunities, driven by its AI-powered solutions and strong client relationships [9][18] 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 [18] - The company ended the quarter with $421 million in cash and equivalents and a leverage ratio of 1.9 times, down from earlier in the year [24][25] Q&A Session Summary Question: Feedback on Iodine Software and client introduction - Management reported overwhelmingly positive feedback from clients regarding the Iodine acquisition, highlighting its strategic fit and potential benefits [30][31] Question: Cadence of replacing legacy processes in RCM - Management discussed the integration of Iodine's capabilities into Waystar's platform, which is expected to accelerate the transition from legacy systems [34][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 [40][42] Question: Transition from mail payments to mobile - Management emphasized the ongoing shift towards digital payment solutions, which are expected to enhance efficiency and client satisfaction [46][49] Question: Acceleration of product roadmap with Iodine - Management provided examples of how Iodine's capabilities will enhance Waystar's offerings, particularly in prior authorizations and claims management [52][56] Question: Competitive landscape and go-to-market strategy - Management acknowledged increased competition but emphasized Waystar's unique platform approach and strong client relationships as key differentiators [66][68] Question: Monetization strategy for AI capabilities - Management outlined multiple monetization strategies, including pricing to value and introducing new software modules [71][75] Question: Sustainability of EBITDA margin trends - Management expressed confidence in maintaining margin efficiencies through ongoing operational improvements and AI integration [83]

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]