Waystar Holding Corp.

What they do

Waystar sells enterprise software that automates the healthcare payment workflow from pre-encounter eligibility checks and prior authorization through coding, claims submission, denial recovery, and patient payment collection. Its platform is used by physician practices, clinics, surgical centers, laboratories, hospitals, and health systems, and in 2025 it facilitated over 7.5 billion healthcare payment transactions spanning over $2.4 trillion in gross claims volume. More than 99% of revenue is recurring subscription or volume-based.

Revenue drivers

• Provider revenue — Largest segment: $231.8 million in Q2 2026, up 23% year-over-year, covering software sold to hospitals, health systems and physician groups.
• Patient revenue — Second segment: $87.9 million in Q2 2026, up 7% year-over-year, tied to patient payment and billing workflows.
• Subscription revenue — Recurring software fees: $176.3 million in Q2 2026, up 34% year-over-year, reflecting client adoption of additional modules.
• Volume-based revenue — $142.1 million in Q2 2026, up 3% year-over-year, tied to claims and transaction volumes processed through the platform.

Recent performance

Q2 2026 revenue was $319.7 million, up 18% year-over-year, with net income of $40.9 million, or $0.21 per diluted share, and 13% net income margin. Adjusted EBITDA was $136.7 million at a 43% margin, with cash flow from operations of $59.4 million. For the first half of 2026, revenue rose 20.2% to $633.5 million and net income rose 36.9% to $84.2 million. Net revenue retention was 108.3% for the twelve months ended June 30, 2026, and clients contributing over $100,000 in LTM revenue increased 15% year-over-year to 1,453.

Strategy

Waystar is investing in its Waystar AltitudeAI engine, which uses machine learning, large language models and generative and agentic AI to automate payment workflows. The company emphasizes network effects from transaction data to continuously improve the platform and expand client adoption across sites of care. Growth has been supplemented by the Iodine acquisition, with the company leveraging its scale and data to expand into clinical integrity and revenue capture. Management has also been active in secondary offerings, closing three in 2025 on behalf of Institutional Investors, though Waystar received no proceeds.

Risks

• Intense competition — Waystar faces competition from smaller niche vendors and large, well-funded technology companies increasingly entering the revenue cycle technology market.
• Client concentration modest but relevant — Top 10 clients represented 10.8% of 2025 revenue, so loss of a major hospital system could materially affect results.
• Regulatory and payer complexity — The business depends on navigating constantly evolving healthcare regulations and payer contract rules, which could increase costs or reduce transaction volumes.
• Leverage and low cash balance — As of June 30, 2026, Waystar had $1.45 billion in long-term debt against only $12.6 million in cash, limiting financial flexibility.

Outlook

Management raised full-year 2026 guidance on July 29, 2026, expecting total revenue of $1.276 billion to $1.294 billion and Adjusted EBITDA of $535 million to $545 million. Non-GAAP net income is guided to $322 million to $340 million, or $1.61 to $1.70 per diluted share. The company did not reconcile forward-looking adjusted EBITDA or non-GAAP net income to GAAP due to variability in items such as stock-based compensation and transaction expenses.