0001990354-26-000011
SEC filingRevenue grew 16.5% to $1.10B, driven by subscription gains and Iodine acquisition, with net income turning positive to $112.1M.
Waystar describes itself as a provider of mission-critical AI-powered software that simplifies healthcare payments for providers across the continuum of care. The company's cloud-based platform streamlines the complex processes providers must manage to ensure accurate reimbursement and improves the payments experience for providers, patients, and payers. Waystar leverages internally developed AI and proprietary algorithms to automate payment-related workflow tasks, enhancing claim and billing accuracy, strengthening data integrity, and reducing labor costs. The company estimates its total addressable market (TAM) with respect to its current software solution set was $20 billion in 2025, with potential to grow to nearly $25 billion by 2030.
The filing does not present formal reporting segments but provides a revenue breakdown by client type: approximately one-third of revenue comes from hospitals and health systems, while two-thirds comes from ambulatory and alternate sites of care (physician practices, clinics, surgical centers, and laboratories). This distinction reflects the different sales cycles and go-to-market approaches for each group.
Waystar's platform includes several named solution suites: Financial Clearance (insurance verification, prior authorization, price transparency), Patient Financial Care (electronic statements, patient portal, omni-channel payment), Claims and Payer Payment Management (claim submission, remittance processing, claim scrubbing), Denials Prevention and Recovery (AI-powered appeal prioritization, generative AI appeal letters, root cause analysis), Clinical Integrity and Revenue Capture (coding accuracy, DRG underpayment detection, missing charge identification), and Analytics and Reporting (customizable dashboards, business intelligence). The company's proprietary AI engine is called Waystar AltitudeAI, which uses a multi-model approach incorporating machine learning, large language models (including Google Cloud's Gemini), generative AI, and agentic AI. Approximately 50% of Waystar's solutions leverage AI. The company also acquired Iodine in 2025, an AI-powered clinical intelligence platform.
Waystar sells through a direct sales force of over 100 representatives, organized by client segment (ambulatory vs. hospital/health system). The ambulatory approach employs a higher-velocity, shorter sales cycle, while the hospital/health system approach involves a longer sales cycle. The company also leverages channel partnerships with over 500 partners, including leading EHR and PM providers, outsourced RCM and billing service providers. A client success organization supports retention and expansion, with dedicated client success managers for clients generating almost half of revenue. Waystar serves over 30,000 clients representing over one million distinct providers, including 16 of 20 U.S. News Best Hospitals. The client base is highly diversified: top 10 clients accounted for only 10.8% of total revenue in 2025. The company's Net Revenue Retention Rate was 112.0% for the year ended December 31, 2025.
The market is highly fragmented. Principal competitors include revenue cycle technology vendors (varying scale, legacy technology), point solution vendors (specializing in specific workflow steps), EHR and PM systems providers (some are strategic partners), and internally developed software or manual processes. Competitive factors include leading-edge technology and AI capabilities, breadth/depth of solutions, ability to deliver financial and operational performance improvement, quality/reliability, ease of use, brand recognition, price, and integration capabilities. Waystar claims an average 85% win rate against competitors for fiscal years 2023 through 2025 in situations where the client ultimately elected to switch vendors or purchase a new solution.
Waystar's growth strategy has five pillars: (1) expand relationships with existing clients through business growth, cross-selling, and up-selling (estimating opportunity to approximately double revenue through cross-sell and up-sell); (2) grow client base by targeting over 7.5 million providers that can benefit from solutions; (3) deepen and expand relationships with strategic channel partners; (4) innovate and develop adjacent solutions, leveraging agentic AI to move toward an autonomous revenue cycle; and (5) selectively pursue strategic acquisitions (ten completed since 2018, including Iodine in 2025).
As of December 31, 2025, Waystar employed over 1,700 full-time team members, all located in the United States. None are covered by a collective bargaining agreement. The research and development team comprises more than 340 full-time team members. The company reports a 2025 Great Place to Work Trust Index Survey result of 85% of participating team members indicating they would recommend working at Waystar. Waystar has received numerous workplace awards including being named a Best Company to Work for by U.S. News & World Report and achieving Great Place to Work recertification.
For the year ended December 31, 2025, Waystar reported revenue of $1,099.3 million, a 16.5% increase from $943.5 million in 2024. This growth was primarily driven by subscription revenue, which rose 21.9% to $558.4 million, fueled by new client additions, existing client expansion, and the inclusion of approximately $30 million from the Iodine acquisition. Volume-based revenue grew 11.4% to $534.8 million, with provider solutions contributing $21.2 million and patient payment solutions adding $33.6 million. Net income swung from a loss of $19.1 million in 2024 to a profit of $112.1 million in 2025, largely due to a 101.5% increase in operating income to $249.3 million and a 47% reduction in interest expense to $77.5 million following debt repayments from the IPO. Operating margin improved to 22.7% from 13.1% in the prior year, reflecting operating leverage and lower depreciation. Adjusted EBITDA grew 20.5% to $462.1 million, with margin expanding 140 basis points to 42.0%.
Subscription revenue now represents 50.8% of total revenue, up from 48.5% in 2024, as the company continues to shift toward higher-margin recurring revenue. Volume-based revenue comprised 48.6%, with patient payment solutions growing faster than provider solutions. The Net Revenue Retention Rate improved to 112.0% from 110.1%, indicating strong upsell and cross-sell momentum. The number of clients generating over $100,000 in annual revenue increased to 1,391 from 1,203, including 44 from Iodine. The Iodine acquisition, closed in October 2025, is expected to bolster AI capabilities and contribute to future subscription growth.
Management's outlook focuses on sustained growth through client expansion, cross-selling, and product innovation with AI. The Iodine acquisition is expected to enhance automation and revenue cycle management. Guidance was not explicitly provided, but the company highlighted strong visibility given over 99% recurring revenue and a Net Revenue Retention Rate above 110%. Key risks include the lingering impact of the competitor cybersecurity incident (which generated $11 million in 2025 versus $34 million in 2024) and integration costs from Iodine. The company plans to continue investing in R&D and sales to capture market share while managing leverage through debt repayments and lower interest costs.
Waystar ended 2025 with $61.4M in cash and cash equivalents, down sharply from $182.1M a year earlier, plus $15.5M in restricted cash and $24.9M in short-term investment securities. The combined cash and equivalents of $76.8M (including restricted cash) reflected heavy cash outflows for the Iodine acquisition. Total assets grew 26% to $5.79B, driven by a $997M increase in goodwill to $4.02B and a $254M rise in intangible assets to $1.29B. Accounts receivable (net) expanded to $177.0M from $145.2M, with the allowance for doubtful accounts rising modestly to $6.2M.
On the liability side, total debt (including current and long-term portions) stood at $1.48B, consisting of $1.40B under the First Lien Credit Facility and $80.0M drawn on the receivables facility. Deferred tax liabilities more than doubled to $211.3M, largely due to the Iodine acquisition. Stockholders' equity increased to $3.88B from $3.08B, aided by $620.8M in equity issued for Iodine and net income of $112.1M.
Waystar's only disclosed contractual commitments are operating leases, with total future minimum payments of $19.8M as of December 31, 2025. These are scheduled as $6.8M due in 2026, $4.6M in 2027, $4.3M in 2028, $2.8M in 2029, and $1.3M in 2030. There are no finance lease obligations remaining after the early termination of a previous office lease. No other material purchase commitments, such as supply or capacity agreements, were disclosed.
Waystar did not engage in share buybacks or pay dividends during 2025. Capital expenditures (including capitalized software) totaled $26.5M, representing 2.4% of revenue. Net debt increased by $237.7M, with $390.1M in new debt issued (primarily the $250M First Lien increase in October 2025) offset by $152.4M in repayments. The company also incurred $42M in third-party fees related to debt amendments. There were no stock repurchase programs active.
Waystar operates as a single reportable segment. The CODM (CEO) evaluates performance using consolidated net income. All revenue is generated in the United States and its territories. No disaggregation by geography or client type is provided beyond the revenue type breakdown (subscription, volume-based, and other).
Waystar faces intense competition from well-funded large technology companies and EHR/PM providers that may integrate competing solutions. The company must retain clients through high satisfaction and competitive pricing, but contract renewals are subject to many factors including performance, price, and regulatory changes. Industry consolidation among healthcare providers could erode Waystar's client base and bargaining power.
The healthcare industry is heavily regulated, with complex fraud and abuse laws (AKS, FCA, Stark Law) and evolving data privacy laws (HIPAA, CCPA, state health data acts). Non-compliance could result in significant penalties, exclusion from government programs, and reputational harm. The No Surprises Act and value-based care trends may reduce transaction volumes or pricing. Rapidly evolving AI regulation, such as Utah's and Colorado's AI laws, creates compliance uncertainty for Waystar's AI-enabled solutions.
Waystar depends on third-party vendors for clearinghouse, payment processing, and cloud infrastructure. Any disruption could cause platform unavailability and client losses. The company must continuously innovate to keep pace with technological change, especially in AI, where competitors with greater resources may deploy more advanced solutions. Cybersecurity threats are increasing, and a data breach involving PHI or payment data could lead to substantial liability and loss of trust.
As of December 2025, Waystar has approximately $1.5 billion in debt, with variable-rate exposure and restrictive covenants. This limits financial flexibility and could strain cash flows if interest rates rise. Goodwill and intangible assets represent 92% of total assets, making the company susceptible to impairment charges if expected cash flows are not achieved. The company does not plan to pay dividends, so stock returns depend on price appreciation.
Concentrated ownership by certain investors may influence decisions that are not aligned with other stockholders. The stock price has been volatile since its IPO, and future sales of shares could depress the price. As a public company, Waystar incurs significant compliance costs, and failure to maintain effective internal controls could harm investor confidence.
Operating cash flow (CFO) of $295.2 million in 2025 exceeded net income of $44.0 million, indicating strong cash conversion. The primary driver was non-cash charges (depreciation/amortization of $196.5M and stock-based compensation of $89.3M) and a $30.8M benefit from changes in operating assets and liabilities. Capex intensity rose to 27.9% of CFO (from 23.6% in 2024), reflecting increased investment in property and equipment. Free cash flow (CFO minus capex) of $212.9 million covered no capital returns, as the company did not repurchase shares or pay dividends. The large investing outflow of $1,310.0 million was primarily due to the acquisition of Iodine Software Holdings, Inc. for $1,259.8 million, partially offset by $32.2M in other investing activities. Financing cash flow of $1,015.0 million included $1,000.0M in proceeds from debt issuance and $15.0M in other financing activities. No anomalies were noted in working capital; the change in operating assets and liabilities was driven by normal fluctuations in accounts receivable, prepaid expenses, and accrued liabilities.