Waystar Holding Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $325.6 million, representing a 21% year-over-year increase.
• GAAP net income was $31.0 million ($0.16 per diluted share), with a net income margin of 10%.
• Non-GAAP net income was $87.1 million ($0.44 per diluted share).
• Adjusted EBITDA was $139.3 million, with an adjusted EBITDA margin of 43%.
• Cash flow from operations was $103.9 million, and unlevered free cash flow was $114.8 million.
• Subscription revenue was $180.7 million (up 34% year-over-year).
• Volume-based revenue was $142.9 million (up 8% year-over-year).
• Provider revenue was $243.4 million (up 28% year-over-year).
• Patient revenue was $82.2 million (up 5% year-over-year).
• Nine months ended September 30, 2026, total revenue was $959.2 million.
• Nine months ended September 30, 2026, GAAP net income was $115.2 million.
• Nine months ended September 30, 2026, Adjusted EBITDA was $411.4 million.
• Nine months ended September 30, 2026, Unlevered free cash flow was $269.0 million.
• Net debt was $1.19 billion as of September 30, 2026, compared to $813.7 million in September 2025.
• Adjusted gross leverage ratio was 2.7x as of September 30, 2026, compared to 2.9x in September 2025.
• Adjusted net leverage ratio was 2.2x as of September 30, 2026, compared to 1.9x in September 2025.
• Trailing twelve months (TTM) Adjusted EBITDA was $540.6 million.

Guidance and Future Outlook:

• Full fiscal year 2026 total revenue is expected to be between $1.277 billion and $1.287 billion.
• Full fiscal year 2026 Adjusted EBITDA is expected to be between $543 million and $549 million.
• Full fiscal year 2026 Non-GAAP net income is expected to be between $322 million and $337 million.
• Full fiscal year 2026 diluted non-GAAP net income per share is expected to be between $1.63 and $1.71.
• Management noted variability and low visibility regarding future GAAP results due to incentive compensation, transaction-related expenses, and fair value measurements.

Business Segments and Product Lines:

• The number of clients contributing over $100,000 in trailing twelve-month (LTM) revenue was 1,488, up 14% year-over-year.
• Net revenue retention rate (NRR) was 108%.
• Providers are consolidating more revenue cycle management onto Waystar's connected platform.
• Clients are adopting more of the company's AI-powered capabilities.
• The company serves approximately 30,000 clients representing approximately 1.5 million distinct providers.
• Waystar's platform annually processes over 8.5 billion healthcare payment transactions, including over $3.0 trillion in annual gross claims.
• The platform spans approximately 60% of U.S. patients.

Market and Competitive Landscape:

• Waystar serves 16 of the 20 institutions on the U.S. News Best Hospitals list.
• The company operates in a highly competitive industry with a focus on market leadership through AI and agentic capabilities.
• Management highlighted robust bookings and healthy demand across the business.

Risks and Challenges:

• A cybersecurity incident occurred, with related costs totaling $1.4 million in Q3 2026 and $3.0 million for the nine months ended September 30, 2026.
• Executive severance costs totaled $1.1 million in Q3 2026 and $1.1 million for the nine months ended September 30, 2026.
• Asset and lease impairments of $1.99 million were recorded for the nine months ended September 30, 2026.
• The company faces risks related to healthcare regulatory changes, data privacy laws, and cybersecurity breaches.
• Risks include the potential for embezzlement, identity theft, or illegal behavior by employees or vendors.
• The company holds substantial debt with restrictive covenants in its credit facilities.

Management Commentary and Tone:

• Matt Hawkins, CEO, stated the company delivered "another quarter of robust bookings and healthy demand."
• Management emphasized deepening relationships with new and existing clients through the adoption of AI-powered capabilities.
• The company is focused on executing against opportunities to extend market leadership by leveraging AI and agentic capabilities to reshape the revenue cycle.

Other Key Points:

• Waystar repurchased common stock for $33.5 million during the nine months ended September 30, 2026.
• Proceeds from the issuance of debt, net of creditor fees, were $19.8 million for the nine months ended September 30, 2026.
• Payments on debt totaled $30.6 million for the nine months ended September 30, 2026.
• Stock-based compensation expense was $24.4 million for Q3 2026 and $49.7 million for the nine months ended September 30, 2026.
• Acquisition, integration, and transaction costs were $9.6 million for Q3 2026 and $13.2 million for the nine months ended September 30, 2026.
• Deferred revenue was $64.8 million as of September 30, 2026, down from $67.9 million as of December 31, 2025.
• Cash and cash equivalents decreased to $30.8 million as of September 30, 2026, from $61.4 million as of December 31, 2025.
• Investment securities increased to $246.1 million as of September 30, 2026, from $24.9 million as of December 31, 2025.