Waystar Holding Corp.

Previous wording

We have demonstrated an ability to drive recurring, predictable, and profitable growth. Over 99% of our revenue is either recurring subscription or based on highly predictable volumes. For the twelve months ended March 31, 2025, our Net Revenue Retention Rate was 113.5% and we have 1,244 clients as of March 31, 2025 generating over $100,000 over the same twelve-month period. For the three months ended March 31, 2025, we generated revenue of $256.4 million (reflecting a 14.1% increase compared to revenue of $224.8 million for the same period in the prior year), net income of $29.3 million (compared to net loss of $15.9 million for the same period in the prior year), and Adjusted EBITDA of $107.7 million (reflecting a 16.2% increase compared to Adjusted EBITDA of $92.8 million for the same period in the prior year).

Current wording

We have demonstrated an ability to drive recurring, predictable, and profitable growth. Over 99% of our revenue is either recurring subscription or based on highly predictable volumes. For the twelve months ended June 30, 2025, our Net Revenue Retention Rate was 114.6% and we have 1,268 clients as of June 30, 2025 generating over $100,000 over the same twelve month period. For the six months ended June 30, 2025, we generated revenue of $527.1 million (reflecting a 14.8% increase compared to revenue of $459.3 million for the same period in the prior year), net income of $61.5 million compared to net loss of $43.6 million for the same period in the prior year, and Adjusted EBITDA of $220.3 million (reflecting a 18.0% increase compared to Adjusted EBITDA of $186.7 million for the same period in the prior year).

Previous wording

In June 2024, we completed an initial public offering (the “IPO”) of 45,000,000 shares of common stock at a price of $21.50 per share. After underwriting discounts and commissions of $53.2 million, we received total proceeds from the offering of $914.3 million. On July 5, 2024, pursuant to the option granted to the underwriters for a period of 30 days from the date of the Prospectus to purchase up to 6,750,000 additional shares of common stock from us at the IPO price less the underwriting discount, the underwriters exercised the right to purchase 5,059,010 additional shares of common stock, resulting in additional net proceeds of $102.8 million, after deducting underwriting discounts and commissions of $6.0 million. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period. See Item 1, Financial Statements, Note 1 (Business) in the 2024 Form 10-K for more information.

Current wording

In June 2024, we completed an initial public offering (the “IPO”) of 45,000,000 shares of common stock at a price of $21.50 per share. After underwriting discounts and commissions of $53.2 million, we received total proceeds from the offering of $914.3 million. On July 5, 2024, pursuant to the option granted to the underwriters for a period of 30 days from the date of the IPO Prospectus to purchase up to 6,750,000 additional shares of common stock from us at the IPO price less the underwriting discount, the underwriters exercised the right to purchase 5,059,010 additional shares of common stock, resulting in additional net proceeds of $102.8 million, after deducting underwriting discounts and commissions of $6.0 million. The remaining option to purchase additional shares expired unexercised at the end of the 30-day period. See Item 1, Financial Statements, Note 1 (Business) in the 2024 Form 10-K for more information.

Previous wording

On February 24, 2025, the Institutional Investors closed an underwritten public offering of 23,000,000 shares of our common stock (inclusive of the underwriters’ option to purchase additional shares) (the “Secondary Offering”). The Company did not sell any shares in the offering or receive any proceeds from the offering. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, dated as of June 10, 2024, by and among the Company, the Institutional Investors, and certain other parties thereto, we paid $1.4 million in certain expenses on behalf of the selling stockholders related to this offering, while the selling stockholders paid all applicable underwriting discounts and commissions.

Current wording

On February 24, 2025, the Institutional Investors closed an underwritten public offering of 23,000,000 shares of our common stock (inclusive of the underwriters’ option to purchase additional shares) (the “First Secondary Offering”). Additionally on May 15, 2025, the Institutional Investors closed another underwritten public offering of 14,375,000 shares of our common stock (inclusive of the underwriters' option to purchase additional shares) (the "Second Secondary Offering"). The Company did not sell any shares in these offerings or receive any proceeds from these offerings. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, dated as of June 10, 2024, by and among the Company, the Institutional Investors, and certain other parties thereto, we paid $1.8 million and $3.2 million in certain expenses on behalf of the selling stockholders related to these offerings for the three and six months ended June 30, 2025, respectively, while the selling stockholders paid all applicable underwriting discounts and commissions.

Previous wording

We also derive revenue from implementation fees for our software, as well as hardware sales to facilitate patient payments. Our implementation fees are billed upfront and the revenue is recognized ratably over the contract term.

Current wording

We also derive revenue from implementation fees for our software, as well as hardware sales to facilitate patient payments. Our implementation fees are billed upfront and the revenue is recognized ratably over the customer's life.

Previous wording

Cost of revenue includes salaries, stock-based compensation, and benefits (“personnel costs”) for our team members who are focused on implementation, support, and other client-focused operations, as well as team members focused on enhancing and developing our platform. Cost of revenue also includes costs for third-party technology such as interchange fees and infrastructure related to the operations of our platform, including communicating and processing patient payments, and services to support the delivery of our solutions. Third-party costs for patient payments solutions are approximately 60% of the revenue generated from these solutions, while third-party costs for provider solutions are approximately 6% to 8% of the associated revenue, in each case, for the three months ended March 31, 2025 and 2024.

Current wording

Cost of revenue includes salaries, stock-based compensation, and benefits (“personnel costs”) for our team members who are focused on implementation, support, and other client-focused operations, as well as team members focused on enhancing and developing our platform. Cost of revenue also includes costs for third-party technology such as interchange fees and infrastructure related to the operations of our platform, including communicating and processing patient payments, and services to support the delivery of our solutions. Third-party costs for patient payments solutions are approximately 60% of the revenue generated from these solutions, while third-party costs for provider solutions are approximately 6% to 8% of the associated revenue, in each case, for both the three and six months ended June 30, 2025 and 2024.

Previous wording

Other expense consists primarily of interest expense and related-party interest expense, inclusive of the impact of interest rate swaps.

Current wording

Other expense consists primarily of interest expense and related-party interest expense, inclusive of the impact of interest rate swaps and net of interest income.

Previous wording

Revenue was $256.4 million for the three months ended March 31, 2025 as compared to $224.8 million for the three months ended March 31, 2024, an increase of $31.6 million, or 14.1%, of which $19.0 million was attributed to subscription revenue from new and existing clients, almost all of which was generated by provider solutions. Another $12.8 million was attributed to volume-based revenue primarily related to expansion of existing client usage and acquired clients, almost all of which was generated by patient payments solutions.

Current wording

Revenue was $270.7 million for the three months ended June 30, 2025 as compared to $234.5 million for the three months ended June 30, 2024, an increase of $36.1 million, or 15.4%, of which $18.8 million was attributed to subscription revenue from new and existing clients, almost all of which was generated by provider solutions. Another $17.4 million was attributed to volume-based revenue primarily related to expansion of existing client usage, of which $11.2 million was generated by patient payments solutions and $6.2 million was generated by provider solutions.

Previous wording

Cost of revenue was $83.3 million for the three months ended March 31, 2025 as compared to $75.2 million for the three months ended March 31, 2024, an increase of $8.2 million, or 10.8%. The increase was primarily driven by $6.3 million in increased costs stemming from higher transaction volumes and associated third-party costs, including higher platform usage, of which approximately $8.6 million was from costs associated with patient payment solutions, offset by a decrease of $2.3 million decrease from costs associated with provider solutions, primarily from timing of prior acquisition synergy attainment.

Current wording

Cost of revenue was $87.0 million for the three months ended June 30, 2025 as compared to $80.5 million for the three months ended June 30, 2024, an increase of $6.6 million, or 8.2%. The increase was primarily driven by $5.5 million in increased costs stemming from higher transaction volumes and associated third-party costs, including higher platform usage, of which approximately $6.9 million was from costs associated with payment solutions offset by a decrease of $1.5 million from costs associated with provider solutions, primarily from timing of prior acquisition synergy attainment.

Previous wording

Depreciation and amortization expense was $33.4 million for the three months ended March 31, 2025, as compared to $44.2 million for the three months ended March 31, 2024, a decrease of $10.8 million, or 24.4%. The decrease was due to several intangible assets becoming fully amortized in the three months ended December 31, 2024, driving a decrease in intangible amortization.

Current wording

Depreciation and amortization expense was $33.4 million for the three months ended June 30, 2025, as compared to $44.3 million for the three months ended June 30, 2024, a decrease of $10.9 million, or 24.5%. The decrease was due to several intangible assets becoming fully amortized in the prior year, driving a decrease in intangible amortization.

Previous wording

Total interest expense was $18.9 million for the three months ended March 31, 2025 as compared to $57.2 million for the three months ended March 31, 2024, a decrease of $38.3 million, or 66.9%. $27.6 million of the decrease, net of the impact of interest rate swaps, was driven by First Lien Credit Facility paydowns during 2024 totaling $1.0 billion. Additionally, $8.9 million of the decrease was due to a loss on extinguishment of debt that occurred during the three months ended March 31, 2024.

Current wording

Total interest expense was $18.3 million for the three months ended June 30, 2025 as compared to $50.5 million for the three months ended June 30, 2024, a decrease of $32.3 million, or 63.9%. $27.6 million of the decrease, net of the impact of interest rate swaps, was driven by First Lien Credit Facility paydowns during 2024 totaling $1.0 billion.

Previous wording

Income tax expense was $17.0 million for the three months ended March 31, 2025, as compared to an income tax benefit of $6.1 million for the three months ended March 31, 2024, an increase of $23.1 million. The increase was primarily driven by the increase in pre-tax income/(loss), as well as additional deferred tax expense related to non-deductible stock-based compensation expense recognized in the current period.

Current wording

Income tax expense was $14.4 million for the three months ended June 30, 2025, as compared to an income tax benefit of $14.6 million for the three months ended June 30, 2024, an increase of $29.0 million. The increase was primarily driven by the increase in pre-tax income/(loss).

Previous wording

Sales and marketing expense was $40.1 million for the three months ended March 31, 2025 as compared to $33.8 million for the three months ended March 31, 2024, an increase of $6.3 million, or 18.8%. The increase was driven by an increase in channel partner fees and amortization of the internal sales commission deferred contract costs assets of $4.5 million associated with revenue growth. Additionally, there was an increase of $1.0 million in personnel costs and $0.9 million in stock-based compensation expense.

Current wording

Sales and marketing expense was $83.6 million for the six months ended June 30, 2025 as compared to $79.5 million for the six months ended June 30, 2024, an increase of $4.2 million, or 5.2%. The increase was primarily driven by an increase in channel partner fees and amortization of the internal commission deferred contract costs asset of $8.0 million associated with revenue growth and increased personnel costs of $2.2 million. This was offset by a decrease in stock-based compensation of $5.6 million attributable to the recognition of performance condition options that did not recur during the six months ended June 30, 2025 (see “Impacts of IPO” section above).

Previous wording

We present adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per share as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP financial measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses these to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

Current wording

We present adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income/(loss), and non-GAAP net income/(loss) per share as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP. We believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP financial measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses these to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

Previous wording

Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, and non-GAAP net income per share are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or net income (loss) margin as measures of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. A reconciliation is provided below for our non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Current wording

Adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income / (loss), and non-GAAP net income / (loss) per share are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or net income (loss) margin as measures of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. A reconciliation is provided below for our non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Previous wording

We define adjusted EBITDA as net income / (loss) before interest expense, net, income tax expense / (benefit), depreciation and amortization, and as further adjusted for stock-based compensation expense, acquisition and integration costs, asset and lease impairments, costs related to amended debt agreements, and costs related to our IPO and the Secondary Offering. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.

Current wording

We define adjusted EBITDA as net income / (loss) before interest expense, net, income tax expense / (benefit), depreciation and amortization, and as further adjusted for stock-based compensation expense, acquisition and integration costs, asset and lease impairments, costs related to amended debt agreements, and costs related to our IPO and the Secondary Offerings. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of revenue.

Previous wording

We define non-GAAP net income as GAAP net income / (loss) excluding the impact of stock-based compensation, acquisition and integration costs, asset and lease impairments, costs related to our IPO, and the Secondary Offering, and costs related to amended debt agreements and amortization of intangibles. The tax effects of the adjustments are calculated using a management estimated annual effective non-GAAP tax rate of 21%, which is based on our statutory federal tax rate and provides consistency across interim reporting periods by eliminating the effects of non-recurring and period specific items. Due to the differences in the tax treatment of items excluded from non-GAAP net income, our estimate tax rate on non-GAAP net income may differ from our GAAP tax rate.

Current wording

We define non-GAAP net income as GAAP net income / (loss) excluding the impact of stock-based compensation, acquisition and integration costs, asset and lease impairments, costs related to our IPO, and the Secondary Offerings, and costs related to amended debt agreements and amortization of intangibles. The tax effects of the adjustments are calculated using a management estimated annual effective non-GAAP tax rate of 21%, which is based on our statutory federal tax rate and provides consistency across interim reporting periods by eliminating the effects of non-recurring and period specific items. Due to the differences in the tax treatment of items excluded from non-GAAP net income, our estimated tax rate on non-GAAP net income may differ from our GAAP tax rate.

Previous wording

The following table presents a reconciliation of net income/(loss) to non-GAAP net income and non-GAAP net income per share for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents a reconciliation of net loss to non-GAAP net income / (loss) and non-GAAP net income / (loss) per share for the three and six months ended June 30, 2025 and 2024:

Previous wording

On March 31, 2025 and December 31, 2024, we had restricted cash of $25.7 million and $22.4 million, respectively, which consists of cash deposited in lockbox accounts owned by us which are contractually required to be disbursed to participating clients on the following day, as well as cash collected on behalf of healthcare providers from patients that have not yet been remitted to providers. These funds payable are not available for our use and liquidity and are offset on our balance sheet by an aggregated funds payable liability.

Current wording

On June 30, 2025 and December 31, 2024, we had restricted cash of $21.2 million and $22.4 million, respectively, which consists of cash deposited in lockbox accounts owned by us which are contractually required to be disbursed to participating clients on the following day, as well as cash collected on behalf of healthcare providers from patients that have not yet been remitted to providers. These funds payable are not available for our use and liquidity, and are offset on our balance sheet by an aggregated funds payable liability.

Previous wording

Cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024, are summarized in the following table:

Current wording

Cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and June 30, 2024, are summarized in the following table:

Previous wording

Cash flows provided by operating activities were $64.2 million for the three months ended March 31, 2025 as compared to $10.7 million for the three months ended March 31, 2024, an increase of $53.5 million. This increase is largely driven by the increases in revenue and net income and changes in working capital.

Current wording

Cash flows provided by operating activities were $161.0 million for the six months ended June 30, 2025 as compared to $26.2 million for the six months ended June 30, 2024, an increase of $134.8 million. This increase is largely driven by increases in revenue and net income, as well as changes in working capital.

Previous wording

Cash flows used in investing activities were $29.9 million for the three months ended March 31, 2025 as compared to $5.6 million for the three months ended March 31, 2024, an increase in cash used of $24.3 million. Cash flows used in investing activities increased due to the purchase of short-term investments totaling $24.4 million during the quarter-ended March 31, 2025.

Current wording

Cash flows used in investing activities were $61.7 million for the six months ended June 30, 2025 as compared to $12.4 million for the six months ended June 30, 2024 an increase of cash used of $49.3 million. Cash flows used in investing activities increased due to the purchase of short-term investments totaling $50.5 million during the six months ended June 30, 2025.