0001990354-26-000025
SEC filingWaystar delivered 22.4% revenue growth and 47.9% net income increase, driven by subscription expansion and Iodine acquisition.
For the three months ended March 31, 2026, Waystar reported revenue of $313.9 million, a 22.4% increase from $256.4 million in the prior-year period. Growth was led by subscription revenue, which surged 37.7% to $172.2 million, driven by organic expansion from existing clients and contributions from the Iodine acquisition (closed October 1, 2025). Volume-based revenue grew 7.3% to $139.5 million, primarily from higher usage in provider solutions (+$6.4M) and patient payment solutions (+$3.2M). Services and other revenue was modest at $2.2 million.
Net income rose 47.9% to $43.3 million, expanding net income margin to 13.8% from 11.4%. Operating income increased 23.4% to $80.5 million, with operating margin improving slightly to 25.6% from 25.4%. Adjusted EBITDA grew 25.7% to $135.4 million, with margin up 110 basis points to 43.1%, reflecting effective cost management and revenue mix shift toward higher-margin subscription revenue.
Waystar reports two primary solution categories: provider solutions and patient payment solutions. Provider solutions generated approximately 70% of total revenue, or roughly $219.7 million, encompassing both subscription and volume-based fees. Patient payment solutions contributed the remaining 30%, about $94.2 million, largely volume-based. Third-party costs as a percentage of segment revenue remained stable: ~60% for patient payment solutions and 6–7% for provider solutions. The Iodine acquisition, which enhances AI-powered clinical intelligence, is expected to strengthen provider solutions over time.
Management's outlook focuses on continuing to expand relationships with existing clients (Net Revenue Retention Rate of 110.5% for the 12 months ended March 31, 2026, down from 113.5% a year earlier) and growing the client base (1,433 clients with >$100K revenue, up from 1,244). The company expects subscription revenue to remain the primary growth driver, with patient payment solutions gaining a slightly larger mix. Strategic priorities include cross-selling, up-selling, and integrating acquisitions (notably Iodine) to bolster AI capabilities. No formal quantitative guidance was provided. The company believes existing cash, operating cash flows ($84.9M in Q1 2026), and available borrowings are sufficient for at least the next 12 months.
As of March 31, 2026, Waystar held $34.3M in cash and equivalents, plus $124.6M in short-term investment securities (commercial paper, corporate notes, U.S. treasuries and agencies), providing total liquidity of $158.9M. Restricted cash of $28.4M is separate. Accounts receivable (net $172.5M) declined slightly from $177.0M at year-end. Total assets grew to $5.84B, driven by investment securities and deferred costs. Total debt stood at $1.47B (including $68.0M related party), down $3.1M from Q4 2025, with a net debt-to-equity ratio of 0.37x. The Receivables Facility was upsized to $100M with a lower spread, and $20M of First Lien debt was repaid. All debt covenants were complied with.
No explicit purchase commitments or supply agreements were disclosed in the Notes. Lease obligations total $18.0M in undiscounted future payments, with $5.0M due in 2026. The weighted-average lease term is 3.4 years. Debt maturities are concentrated in 2029 ($1.44B). Remaining performance obligations (RPO) from client contracts amount to $117.4M, with $78.8M recognized within 12 months.
Waystar did not repurchase shares or pay dividends during the quarter. The company raised $19.8M in debt (net proceeds from Receivables Facility) and repaid $23.5M (including the $20M First Lien paydown). Capital expenditures were $15.3M, primarily for capitalized software development ($7.9M) and computer hardware. Capex as a percentage of revenue was 4.9%. Stock-based compensation totaled $11.4M, recorded across operating expense lines. No preferred stock is outstanding.
Waystar operates as a single reportable segment. The CODM (CEO) reviews consolidated net income as the key profitability metric. The disaggregated revenue breakdown shows subscription revenue of $172.2M (54.9% of total), volume-based revenue of $139.5M (44.4%), and implementation/other of $2.2M (0.7%). All revenue originates from U.S. clients, with no geographic segmentation disclosed. The company's platform serves healthcare providers across all care settings.
Operating cash flow (CFO) of $84.9M significantly exceeded net income of $43.3M, reflecting strong cash conversion driven by $41.5M in depreciation and amortization and $11.4M in stock-based compensation. Working capital changes were mixed: accounts receivable decreased $3.2M (favorable), but accounts payable and accrued expenses fell $9.7M, and deferred revenue declined $3.5M. Capex of $15.3M represented an 18% cash flow reinvestment rate, up from 8.4% a year ago. Investing activities also included $99.2M net outflows for investment securities, resulting in negative free cash flow if excluding securities. Financing activities provided $13.5M, primarily from debt proceeds offset by repayments. No share repurchases or dividends were reported. Overall, CFO quality is high, but elevated capital allocation to securities and capex may pressure liquidity.