0001990354-25-000031
SEC filingWaystar's revenue grew 13.8% to $795.7M for 9M 2025, with net income turning positive at $92.1M.
For the nine months ended September 30, 2025, revenue increased 13.8% to $795.7 million, driven by subscription revenue growth of 16.1% ($54.2 million) and volume-based revenue growth of 11.7% ($41.8 million). Subscription revenue, nearly all from provider solutions, benefited from new client acquisitions and expansions. Volume-based growth was led by patient payment solutions. Cost of revenue (exclusive of D&A) grew 8.2%, slower than revenue, as third-party costs for payment solutions rose but were partially offset by lower provider solution costs. Operating income surged to $190.3 million (23.9% margin) from $70.6 million (10.1% margin) a year ago, largely due to a 32.6% decline in depreciation and amortization from fully amortized intangibles and a 57.5% drop in interest expense from $1.0 billion in debt paydowns. Net income turned positive at $92.1 million compared to a net loss of $38.2 million. Adjusted EBITDA grew 17.5% to $333.0 million, with margin expanding 130 bps to 41.8%.
The MD&A does not provide formal segment P&L but indicates provider solutions comprise approximately 70% of total revenue, with patient payment solutions making up the remainder. Subscription revenue (largely provider solutions) grew 16.1% in the nine-month period. Volume-based revenue is roughly split between provider and patient payment solutions; in Q3 2025, provider solutions contributed $5.9 million of volume growth and patient payments $5.7 million. Third-party costs for patient payment solutions were about 60% of their revenue, while provider solution costs were 6-8% of associated revenue, highlighting margin differences. The Net Revenue Retention Rate improved to 113.1% from 109.4%, indicating strong cross-sell and upsell momentum, and the count of clients with >$100k revenue rose to 1,306 from 1,173.
Management’s outlook focuses on expanding client relationships, cross-selling, and growing the client base. The acquisition of Iodine (closed October 1, 2025) for $1.25 billion aims to enhance AI-driven clinical intelligence and automation. The company expects ongoing benefits from debt repricings and lower interest expense, and it maintains a strong liquidity position with $243.0 million in operating cash flow for the nine-month period. No specific quantitative guidance was provided for future periods.
As of September 30, 2025, Waystar held $421.1 million in cash and cash equivalents, a significant increase from $182.1 million at December 31, 2024. Total assets were $4.75 billion, up from $4.58 billion. The company had $1.23 billion in total debt (gross), including a $1.15 billion first lien term loan and an $80.0 million receivables facility. Net debt (total debt less cash) was approximately $813.7 million. Shareholders' equity grew to $3.22 billion from $3.08 billion, driven by net income and stock-based compensation.
The Notes disclose no material purchase commitments. The company's primary contractual obligations are its debt and lease liabilities. Total future minimum lease payments were $19.3 million for operating leases and $14.7 million for finance leases. The company also has a $75.4 million backlog of remaining performance obligations (RPO), with $60.4 million expected to be recognized within 12 months.
Waystar did not repurchase any shares in 2025; the $0.8 million in repurchases occurred in 2024. No dividends were paid. Capital expenditures (including capitalized software) totaled $17.1 million for the nine months ended September 30, 2025, representing 2.1% of revenue. The company reduced its debt by $8.8 million through scheduled principal payments. On October 1, 2025, the company completed the acquisition of Iodine for $458.6 million in cash and 16.6 million shares, and increased its credit facility by $250.0 million, drawing $30.0 million on the revolver to fund the acquisition.
Waystar operates as a single reportable segment. The CODM (CEO) uses consolidated net income as the key profitability metric. Revenue is disaggregated into subscription ($390.6M), volume-based ($400.6M), and implementation/other ($4.6M) for the nine months ended September 30, 2025. No geographic mix is disclosed.
Operating cash flow (CFO) of $243.0M significantly exceeded net income of $92.1M, indicating strong cash conversion. The primary non-cash add-backs were depreciation and amortization ($100.1M) and stock-based compensation ($29.9M). Working capital changes were modest, with accounts receivable decreasing by $3.0M and deferred costs declining by $7.1M, both favorable for cash flow.
Capital expenditures (capex) of $17.1M were moderate, resulting in free cash flow (FCF) of $225.9M. The company did not repurchase shares or pay dividends, so FCF was retained or used for debt reduction ($8.8M in debt payments).
Anomalies: The prior period included a large loss on extinguishment of debt ($20.3M) and a significant deferred tax benefit ($58.0M), which did not recur in 2025. The investing section shows a $206.4M purchase and sale of investment securities, netting to zero, indicating short-term treasury management. Overall, cash flow quality is high, with CFO covering capex and debt service comfortably.